\n 38. Financial risk management\n
\n\n Maximum exposure to credit risk before collateral held or other credit enhancements\n
\nThe following table outlines the maximum exposure to credit risk before collateral held or other credit enhancements in respect of the Group\u2019s financial assets as at the statement of financial position date.
\n| \n \n | \n \n \n Notes\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n 20 \n | \n
| \n Loans and advances to banks (iii) \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments (ii) \n | \n \n 16 \n | \n \n \n -\n \n | \n \n 1 \n | \n
| \n Debt securities (i) \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
| \n Loans and advances to customers (iv) \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n 14,256 \n | \n
| \n \n | \n \n \n | \n \n \n 24,991\n \n | \n \n 21,002 \n | \n
| \n Commitments and contingencies \n | \n \n 43 \n | \n \n \n 1,342\n \n | \n \n 1,181 \n | \n
| \n \n | \n \n \n | \n \n \n 26,333\n \n | \n \n 22,183 \n | \n
\n The following tables outline the Group\u2019s exposure to credit risk by asset class\n
\n\n (i) Debt securities\n
\nThe Group is exposed to the credit risk on third parties where the Group holds debt securities (primarily sovereign debt). These exposures are subject to the limitations contained within Board approved policies, with sovereign debt restricted to those countries that have an External Credit Assessment Institution (ECAI) rating of investment grade.
\nThe following table gives an indication of the level of the credit worthiness of the Group\u2019s debt securities and is based on the Group\u2019s internal rating policy which was approved by the CBI. The inputs to the ratings used in the table below are those prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the EU.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating\n \n | \n \n \n | \n \n \n | \n
| \n Aaa \n | \n \n \n 49\n \n | \n \n 60 \n | \n
| \n AA+ \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n Aa2 \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n A1 \n | \n \n \n 1,734\n \n | \n \n - \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 1,463 \n | \n
| \n Baa1 \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n Baa2 \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Baa3 \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
The following table discloses, by country, the Group\u2019s exposure to sovereign debt and corporate debt as at:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Country\n \n | \n \n \n | \n \n \n | \n
| \n Ireland \n | \n \n \n 1,783\n \n | \n \n 1,523 \n | \n
| \n Portugal \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Spain \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n France \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n Italy \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n EU \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
\n (ii) Derivative financial instruments\n
\nThe Group has executed standard ISDA agreements with all of its counterparties. The Group has also executed CSAs with all of its counterparties in respect of the majority of derivative instruments to mitigate its credit risk. As part of these agreements, the Group exchanges collateral in line with movements in the market values of derivative positions daily. FX forward derivatives are settled gross. The cumulative positive market value of derivative assets at 31 December 2022 was \u20acnil (31 December 2021: \u20ac1m). The Group manages its collateral derivative positions with counterparties on a net basis. The uncollaterised derivative positions are all held with investment grade counterparties.
\n\n (iii) Loans and advances to banks\n
\nThe Group has a policy to ensure that, where possible, loans and advances to banks are held with investment grade counterparties with any exceptions subject to prior approval by the BRCC. The following table gives an indication of the level of creditworthiness of the Group\u2019s loans and advances to banks and is based on the ratings prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the CBI.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating \n \n | \n \n \n | \n \n \n | \n
| \n AAA \n | \n \n \n 1,620\n \n | \n \n 3,709 \n | \n
| \n Aa2 \n | \n \n \n 199\n \n | \n \n 199 \n | \n
| \n Aa3 \n | \n \n \n 286\n \n | \n \n 258 \n | \n
| \n A1 \n | \n \n \n 10\n \n | \n \n 2 \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 6 \n | \n
| \n Ba1 \n | \n \n \n 8\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
The following sections detail additional disclosures on asset quality.
\n\n (iv) Loans and advances to customers\n
\n\n Gross customer loans and advances\n
\nThe tables below outline total loans and advances to customers for the Group analysed by home loan, buy-to-let, commercial and consumer finance.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n Measured at amortised cost\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Residential mortgages: \n | \n \n \n | \n \n \n | \n
| \n Home loan \n | \n \n \n 18,340\n \n | \n \n 12,568 \n | \n
| \n Buy-to-let \n | \n \n \n 824\n \n | \n \n 1,623 \n | \n
| \n \n Total residential mortgages\n \n | \n \n \n 19,164\n \n | \n \n 14,191 \n | \n
| \n Commercial \n | \n \n \n 239\n \n | \n \n 196 \n | \n
| \n Consumer finance \n | \n \n \n 401\n \n | \n \n 358 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Analysed by ECL staging:\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 17,455 \n \n | \n \n 11,689 \n | \n
| \n Stage 2 \n | \n \n \n 1,699 \n \n | \n \n 2,239 \n | \n
| \n Stage 3 \n | \n \n \n 649\n \n | \n \n 815 \n | \n
| \n POCI \n | \n \n \n 1\n \n | \n \n 2 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Of which at the reporting date \n \n | \n \n \n | \n \n \n | \n
| \n Neither past due nor Stage 3 \n | \n \n \n 19,118\n \n | \n \n 13,885 \n | \n
| \n Past due but not Stage 3 \n | \n \n \n 36\n \n | \n \n 43 \n | \n
| \n Stage 3 \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n Of which are reported as non-performing loans\n \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Deferred fees, discounts and fair value adjustments\n \n | \n \n \n 310\n \n | \n \n 115 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n \n Asset quality*\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 1\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 12,826\n \n | \n \n \n 65\n \n | \n \n \n 12,891\n \n | \n \n \n 11\n \n | \n \n \n 143\n \n | \n \n \n 13,045\n \n | \n
| \n Satisfactory \n | \n \n \n 4,064\n \n | \n \n \n 141\n \n | \n \n \n 4,205\n \n | \n \n \n 17\n \n | \n \n \n 61\n \n | \n \n \n 4,283\n \n | \n
| \n Fair \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 21\n \n | \n \n \n 43\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 84\n \n | \n \n \n 84\n \n | \n
| \n \n | \n \n \n 16,912\n \n | \n \n \n 206\n \n | \n \n \n 17,118\n \n | \n \n \n 28\n \n | \n \n \n 309\n \n | \n \n \n 17,455\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 79\n \n | \n \n \n 44\n \n | \n \n \n 123\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n 128\n \n | \n
| \n Satisfactory \n | \n \n \n 296\n \n | \n \n \n 107\n \n | \n \n \n 403\n \n | \n \n \n 27\n \n | \n \n \n 21\n \n | \n \n \n 451\n \n | \n
| \n Fair \n | \n \n \n 711\n \n | \n \n \n 197\n \n | \n \n \n 908\n \n | \n \n \n 161\n \n | \n \n \n 26\n \n | \n \n \n 1,095\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 25\n \n | \n \n \n 25\n \n | \n
| \n \n | \n \n \n 1,086\n \n | \n \n \n 348\n \n | \n \n \n 1,434\n \n | \n \n \n 188\n \n | \n \n \n 77\n \n | \n \n \n 1,699\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n Total measured at amortised cost \n | \n \n \n 18,340\n \n | \n \n \n 824\n \n | \n \n \n 19,164\n \n | \n \n \n 239\n \n | \n \n \n 401\n \n | \n \n \n 19,804\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n Asset quality* \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 7,096 \n | \n \n 184 \n | \n \n 7,280 \n | \n \n 1 \n | \n \n 160 \n | \n \n 7,441 \n | \n
| \n Satisfactory \n | \n \n 3,807 \n | \n \n 289 \n | \n \n 4,096 \n | \n \n 10 \n | \n \n 65 \n | \n \n 4,171 \n | \n
| \n Fair \n | \n \n 20 \n | \n \n 1 \n | \n \n 21 \n | \n \n - \n | \n \n 6 \n | \n \n 27 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 50 \n | \n \n 50 \n | \n
| \n \n | \n \n 10,923 \n | \n \n 474 \n | \n \n 11,397 \n | \n \n 11 \n | \n \n 281 \n | \n \n 11,689 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 146 \n | \n \n 209 \n | \n \n 355 \n | \n \n 7 \n | \n \n 2 \n | \n \n 364 \n | \n
| \n Satisfactory \n | \n \n 344 \n | \n \n 334 \n | \n \n 678 \n | \n \n 58 \n | \n \n 17 \n | \n \n 753 \n | \n
| \n Fair \n | \n \n 735 \n | \n \n 267 \n | \n \n 1,002 \n | \n \n 76 \n | \n \n 29 \n | \n \n 1,107 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 15 \n | \n \n 15 \n | \n
| \n \n | \n \n 1,225 \n | \n \n 810 \n | \n \n 2,035 \n | \n \n 141 \n | \n \n 63 \n | \n \n 2,239 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Total measured at amortised cost \n | \n \n 12,568 \n | \n \n 1,623 \n | \n \n 14,191 \n | \n \n 196 \n | \n \n 358 \n | \n \n 14,745 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s independent auditor.
\n \n \n \n \n \nThe following table provides an aged analysis of customer loans and advances which are past due but not Stage 3.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n Fair value of collateral held \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
Collateral held against residential mortgages is principally comprised of residential properties; their fair value has been estimated based upon the last actual valuation, adjusted to take into account subsequent movement in house prices and is capped at the lower of the loan balance or the valuation amount.
\n\n Non-performing loans\n
\nNon-performing loans (NPLs) are loans which are credit impaired or loans which are classified as defaulted in accordance with the Group\u2019s definition of default. The Group\u2019s definition of default considers objective indicators of default including the 90 days past due criterion, evidence of exercise of concessions or modifications to terms and conditions is designed to be consistent with European Banking Authority (EBA) guidance on the definition of forbearance.
\nForeclosed assets are assets held on the balance sheet which are obtained by taking possession of collateral or by calling on similar credit enhancements.
\n \n \n \n \n \nNon-performing assets are defined as NPLs plus foreclosed assets.
\n| \n \n 31 December 2022\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n \n 175\n \n | \n \n \n 118\n \n | \n \n \n 17\n \n | \n \n \n 2\n \n | \n \n \n 312\n \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n \n 31\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n 3\n \n | \n \n \n 49\n \n | \n
| \n NPL is 1-2 years past due \n | \n \n \n 31\n \n | \n \n \n 80\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 113\n \n | \n
| \n NPL is 2-5 years past due \n | \n \n \n 51\n \n | \n \n \n 28\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 81\n \n | \n
| \n NPL is > 5 years past due \n | \n \n \n 54\n \n | \n \n \n 29\n \n | \n \n \n 6\n \n | \n \n \n 5\n \n | \n \n \n 94\n \n | \n
| \n POCI \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n
| \n \n Non-performing loans\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n \n Foreclosed assets\n \n | \n \n \n 3\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n \n Non-performing assets\n \n | \n \n \n 345\n \n | \n \n \n 285\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 668\n \n | \n
| \n \n NPLs as % of gross loans\n \n | \n \n \n 1.9%\n \n | \n \n \n 32.8%\n \n | \n \n \n 9.6%\n \n | \n \n \n 3.7%\n \n | \n \n \n 3.3%\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n 251 \n | \n \n 177 \n | \n \n 40 \n | \n \n 1 \n | \n \n 469 \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n 32 \n | \n \n 89 \n | \n \n 1 \n | \n \n 6 \n | \n \n 128 \n | \n
| \n NPL is 1-2 years past due \n | \n \n 39 \n | \n \n 25 \n | \n \n - \n | \n \n 2 \n | \n \n 66 \n | \n
| \n NPL is 2-5 years past due \n | \n \n 36 \n | \n \n 10 \n | \n \n - \n | \n \n 1 \n | \n \n 47 \n | \n
| \n NPL is > 5 years past due \n | \n \n 62 \n | \n \n 38 \n | \n \n 3 \n | \n \n 2 \n | \n \n 105 \n | \n
| \n POCI \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 2 \n | \n \n 2 \n | \n
| \n Non-performing loans \n | \n \n 420 \n | \n \n 339 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Foreclosed assets \n | \n \n 4 \n | \n \n 24 \n | \n \n - \n | \n \n - \n | \n \n 28 \n | \n
| \n Non-performing assets \n | \n \n 424 \n | \n \n 363 \n | \n \n 44 \n | \n \n 14 \n | \n \n 845 \n | \n
| \n NPLs as % of gross loans \n | \n \n 3.3% \n | \n \n 20.9% \n | \n \n 22.5% \n | \n \n 3.9% \n | \n \n 5.5% \n | \n
Non-performing loans as a percentage of total loans and advances was 3.3% at 31 December 2022, a reduction from 5.5% at 31 December 2021.
\n\n Total portfolio loss allowance: statement of financial position\n
\nThe tables below outline the ECL loss allowance total at 31 December 2022 in respect of total customer loans and advances.
\nThe impairment charge in respect of the total loans and advances for year ended 31 December 2022 is \u20ac7m, compared to a write-back of \u20ac1m for the year ended 31 December 2021.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Loss allowance - statement of financial position\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 136 \n \n | \n \n 61 \n | \n
| \n Stage 2 \n | \n \n \n 163 \n \n | \n \n 238 \n | \n
| \n Stage 3 \n | \n \n \n 222 \n \n | \n \n 305 \n | \n
| \n \n Total loss allowance\n \n | \n \n \n 521\n \n | \n \n 604 \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Provision coverage ratio*\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 0.8%\n \n | \n \n 0.5% \n | \n
| \n Stage 2 \n | \n \n \n 9.6%\n \n | \n \n 10.6% \n | \n
| \n Stage 3 \n | \n \n \n 34.1%\n \n | \n \n 37.3% \n | \n
| \n \n Total provisions/total loans\n \n | \n \n \n 2.6%\n \n | \n \n 4.1% \n | \n
*Provision coverage ratio is calculated as loss allowance/impairment provision as a percentage of gross loan balance.
\n\n Origination profile\n
\nLoan origination profile of the residential mortgage loan portfolio before provision for impairment:
\nThe table below illustrates that \u20ac2bn or 11% of the residential mortgage portfolio originated before 2006. Between 2006 and 2008 origination was \u20ac5bn or 24% of the residential mortgages. The residual of 65% of the residential mortgages were originated between 2009 and 2022.
\n| \n \n 31 December 2022\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1999 and before \n | \n \n 1,786 \n | \n \n 30 \n | \n \n 113 \n | \n \n 4 \n | \n
| \n 2000 \n | \n \n 1,483 \n | \n \n 40 \n | \n \n 57 \n | \n \n 3 \n | \n
| \n 2001 \n | \n \n 1,938 \n | \n \n 66 \n | \n \n 79 \n | \n \n 4 \n | \n
| \n 2002 \n | \n \n 2,801 \n | \n \n 127 \n | \n \n 99 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,360 \n | \n \n 255 \n | \n \n 166 \n | \n \n 14 \n | \n
| \n 2004 \n | \n \n 7,729 \n | \n \n 514 \n | \n \n 220 \n | \n \n 23 \n | \n
| \n 2005 \n | \n \n 11,134 \n | \n \n 1,006 \n | \n \n 397 \n | \n \n 57 \n | \n
| \n 2006 \n | \n \n 14,396 \n | \n \n 1,796 \n | \n \n 723 \n | \n \n 169 \n | \n
| \n 2007 \n | \n \n 12,439 \n | \n \n 1,730 \n | \n \n 740 \n | \n \n 203 \n | \n
| \n 2008 \n | \n \n 7,912 \n | \n \n 1,006 \n | \n \n 408 \n | \n \n 90 \n | \n
| \n 2009 \n | \n \n 2,301 \n | \n \n 213 \n | \n \n 65 \n | \n \n 7 \n | \n
| \n 2010 \n | \n \n 936 \n | \n \n 70 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2011 \n | \n \n 819 \n | \n \n 69 \n | \n \n 5 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 1,190 \n | \n \n 110 \n | \n \n 3 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 1,673 \n | \n \n 163 \n | \n \n 4 \n | \n \n - \n | \n
| \n 2014 \n | \n \n 2,960 \n | \n \n 316 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 4,058 \n | \n \n 471 \n | \n \n 29 \n | \n \n 1 \n | \n
| \n 2016 \n | \n \n 4,664 \n | \n \n 639 \n | \n \n 23 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 5,804 \n | \n \n 899 \n | \n \n 24 \n | \n \n 4 \n | \n
| \n 2018 \n | \n \n 7,607 \n | \n \n 1,345 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n 2019 \n | \n \n 9,633 \n | \n \n 1,863 \n | \n \n 37 \n | \n \n 7 \n | \n
| \n 2020 \n | \n \n 7,940 \n | \n \n 1,735 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 8,871 \n | \n \n 2,164 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2022 \n | \n \n 9,409 \n | \n \n 2,537 \n | \n \n 4 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 134,843\n \n | \n \n \n 19,164\n \n | \n \n \n 3,297\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1998 and before \n | \n \n 967 \n | \n \n 13 \n | \n \n 75 \n | \n \n 2 \n | \n
| \n 1999 \n | \n \n 754 \n | \n \n 18 \n | \n \n 53 \n | \n \n 2 \n | \n
| \n 2000 \n | \n \n 1,204 \n | \n \n 38 \n | \n \n 73 \n | \n \n 4 \n | \n
| \n 2001 \n | \n \n 1,561 \n | \n \n 61 \n | \n \n 103 \n | \n \n 6 \n | \n
| \n 2002 \n | \n \n 3,485 \n | \n \n 132 \n | \n \n 120 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,145 \n | \n \n 273 \n | \n \n 189 \n | \n \n 18 \n | \n
| \n 2004 \n | \n \n 7,697 \n | \n \n 574 \n | \n \n 259 \n | \n \n 32 \n | \n
| \n 2005 \n | \n \n 11,173 \n | \n \n 1,105 \n | \n \n 487 \n | \n \n 76 \n | \n
| \n 2006 \n | \n \n 15,474 \n | \n \n 2,125 \n | \n \n 881 \n | \n \n 215 \n | \n
| \n 2007 \n | \n \n 13,532 \n | \n \n 2,005 \n | \n \n 842 \n | \n \n 239 \n | \n
| \n 2008 \n | \n \n 8,712 \n | \n \n 1,207 \n | \n \n 513 \n | \n \n 111 \n | \n
| \n 2009 \n | \n \n 2,135 \n | \n \n 193 \n | \n \n 79 \n | \n \n 8 \n | \n
| \n 2010 \n | \n \n 889 \n | \n \n 67 \n | \n \n 23 \n | \n \n 3 \n | \n
| \n 2011 \n | \n \n 550 \n | \n \n 44 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 315 \n | \n \n 21 \n | \n \n 5 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 716 \n | \n \n 67 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2014 \n | \n \n 1,497 \n | \n \n 156 \n | \n \n 14 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 1,648 \n | \n \n 179 \n | \n \n 39 \n | \n \n 3 \n | \n
| \n 2016 \n | \n \n 1,811 \n | \n \n 227 \n | \n \n 25 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 3,202 \n | \n \n 487 \n | \n \n 31 \n | \n \n 5 \n | \n
| \n 2018 \n | \n \n 4,974 \n | \n \n 924 \n | \n \n 48 \n | \n \n 10 \n | \n
| \n 2019 \n | \n \n 6,282 \n | \n \n 1,306 \n | \n \n 40 \n | \n \n 8 \n | \n
| \n 2020 \n | \n \n 5,153 \n | \n \n 1,184 \n | \n \n 21 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 7,099 \n | \n \n 1,785 \n | \n \n 18 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 105,975\n \n | \n \n \n 14,191\n \n | \n \n \n 3,954\n \n | \n \n \n 759\n \n | \n
\n Loan-to-value profile\n
\n\n Loan-to-value (LTV) of mortgage lending (index linked):\n
\nThe LTV ratio is calculated at a property level and is the average of indexed property values in proportion to the outstanding loan balance. LTV is a key input to the impairment provisioning process. The tables below outline the composition of this ratio for the residential loan portfolio.
\n\n Actual and average LTVs across principal mortgage portfolios:\n
\nThe tables below outline the weighted average LTVs for the total residential mortgage portfolios analysed across home loan and buy-to-let facilities by value. The weighted average LTV on the existing residential mortgage portfolios is 54% at 31 December 2022 compared to 58% at 31 December 2021.
\nThe Group\u2019s residential mortgage lending LTVs at December 2022 reflect updated valuations obtained on high-exposure NPLs (largely impacting on high-exposure buy-to-let properties).
\n \n \n \n \n \n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 44%\n \n | \n \n \n 32%\n \n | \n \n \n 44%\n \n | \n
| \n 50% to 70% \n | \n \n \n 40%\n \n | \n \n \n 18%\n \n | \n \n \n 39%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 24%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n 1%\n \n | \n \n \n 8%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 99%\n \n | \n \n \n 82%\n \n | \n \n \n 98%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 1%\n \n | \n \n \n 5%\n \n | \n \n \n 1%\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 3%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 1%\n \n | \n \n \n 18%\n \n | \n \n \n 2%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of existing residential mortgages \n | \n \n \n 53%\n \n | \n \n \n 76%\n \n | \n \n \n 54%\n \n | \n
| \n New residential mortgages \n | \n \n \n 68%\n \n | \n \n \n 58%\n \n | \n \n \n 68%\n \n | \n
| \n Acquired residential mortgages \n | \n \n \n 47%\n \n | \n \n \n 39%\n \n | \n \n \n 47%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 74%\n \n | \n \n \n 100%\n \n | \n \n \n 85%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 38% \n | \n \n 32% \n | \n \n 37% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 16% \n | \n \n 32% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 21% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 11% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 98% \n | \n \n 80% \n | \n \n 96% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 6% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 4% \n | \n \n 1% \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 3% \n | \n \n 1% \n | \n
| \n 131% to 140% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 2% \n | \n \n 20% \n | \n \n 4% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 56% \n | \n \n 74% \n | \n \n 58% \n | \n
| \n New residential mortgages \n | \n \n 69% \n | \n \n 54% \n | \n \n 69% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 105% \n | \n \n 90% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is neither past due nor Stage 3:\n
\nThe tables below illustrates that 100% of residential home loan mortgages (31 December 2021: 99%) and 94% of residential buy-to-let mortgages (31 December 2021: 87%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 45%\n \n | \n \n \n 44%\n \n | \n \n \n 45%\n \n | \n
| \n 50% to 70% \n | \n \n \n 41%\n \n | \n \n \n 23%\n \n | \n \n \n 40%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 23%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 100%\n \n | \n \n \n 94%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n Subtotal \n | \n \n \n -\n \n | \n \n \n 6%\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 39% \n | \n \n 39% \n | \n \n 39% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 19% \n | \n \n 34% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 20% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 9% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 99% \n | \n \n 87% \n | \n \n 99% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 5% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 3% \n | \n \n - \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n 131% to 140% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 1% \n | \n \n 13% \n | \n \n 1% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is classified as Stage 3:\n
\nThe tables below illustrates that 79% of residential home loan mortgages (31 December 2021: 75%) and 55% of residential buy-to-let mortgages (31 December 2021: 53%) that are classified as Stage 3 are in positive equity as at 31 December 2022
\n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 33%\n \n | \n \n \n 7%\n \n | \n \n \n 22%\n \n | \n
| \n 50% to 70% \n | \n \n \n 22%\n \n | \n \n \n 8%\n \n | \n \n \n 16%\n \n | \n
| \n 71% to 90% \n | \n \n \n 19%\n \n | \n \n \n 27%\n \n | \n \n \n 22%\n \n | \n
| \n 91% to 100% \n | \n \n \n 5%\n \n | \n \n \n 13%\n \n | \n \n \n 8%\n \n | \n
| \n Subtotal \n | \n \n \n 79%\n \n | \n \n \n 55%\n \n | \n \n \n 68%\n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 12%\n \n | \n \n \n 7%\n \n | \n
| \n 111% to 120% \n | \n \n \n 5%\n \n | \n \n \n 10%\n \n | \n \n \n 7%\n \n | \n
| \n 121% to 130% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 6%\n \n | \n
| \n 131% to 140% \n | \n \n \n 2%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 2%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n Greater than 180% \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n
| \n Subtotal \n | \n \n \n 21%\n \n | \n \n \n 45%\n \n | \n \n \n 32%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Stage 3\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 29% \n | \n \n 7% \n | \n \n 19% \n | \n
| \n 50% to 70% \n | \n \n 19% \n | \n \n 8% \n | \n \n 14% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 21% \n | \n \n 20% \n | \n
| \n 91% to 100% \n | \n \n 7% \n | \n \n 17% \n | \n \n 11% \n | \n
| \n Subtotal \n | \n \n 75% \n | \n \n 53% \n | \n \n 64% \n | \n
| \n 101% to 110% \n | \n \n 6% \n | \n \n 12% \n | \n \n 9% \n | \n
| \n 111% to 120% \n | \n \n 4% \n | \n \n 6% \n | \n \n 5% \n | \n
| \n 121% to 130% \n | \n \n 4% \n | \n \n 8% \n | \n \n 6% \n | \n
| \n 131% to 140% \n | \n \n 3% \n | \n \n 6% \n | \n \n 4% \n | \n
| \n 141% to 150% \n | \n \n 2% \n | \n \n 4% \n | \n \n 3% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 3% \n | \n \n 2% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 4% \n | \n \n 5% \n | \n \n 5% \n | \n
| \n Subtotal \n | \n \n 25% \n | \n \n 47% \n | \n \n 36% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \u20acm \n | \n \n \u20acm \n | \n \n \u20acm \n | \n
| \n Stage 3 \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n
\n (v) Group portfolios: Collateral in possession\n
\nCollateral in possession occurs where the obligor either (i) voluntarily surrenders the property or (ii) the Group takes legal ownership due to the non-repayment of the loan facility. The following tables outline the main movements in this category during the year.
\n \n \n \n \n \n \n \n\n Stock of collateral in possession\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n
| \n \n Residential collateral in possession\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 14\n \n | \n \n \n 7\n \n | \n \n 27 \n | \n \n 10 \n | \n
| \n Buy-to-let \n | \n \n \n 105\n \n | \n \n \n 27\n \n | \n \n 165 \n | \n \n 42 \n | \n
| \n \n Total\n \n | \n \n \n 119\n \n | \n \n \n 34\n \n | \n \n 192 \n | \n \n 52 \n | \n
Collateral in possession assets are sold as soon as practicable. These assets which total \u20ac18m as at 31 December 2022 (31 December 2021: \u20ac28m) are included in assets held for sale (see note 18 for further details).
\nDuring the year the ownership of 16 properties were transferred to the Group.
\nThe details of the transfers are provided in the table below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n - \n | \n
| \n Buy-to-let \n | \n \n 16 \n | \n
| \n \n Total\n \n | \n \n 16 \n | \n
During the year 89 properties were disposed. The details of the disposals are provided in the tables below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 13 \n | \n
| \n Buy-to-let \n | \n \n 76 \n | \n
| \n Total \n | \n \n 89 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at \n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 13 \n \n | \n \n \n 3 \n \n | \n \n \n 2 \n \n | \n \n \n -\n \n | \n \n \n 1 \n \n | \n
| \n Buy-to-let \n | \n \n \n 76 \n \n | \n \n \n 18 \n \n | \n \n \n 13 \n \n | \n \n \n 1 \n \n | \n \n \n 6 \n \n | \n
| \n \n Year ended 31 December 2022\n \n | \n \n \n 89 \n \n | \n \n \n 21 \n \n | \n \n \n 15 \n \n | \n \n \n 1 \n \n | \n \n \n 7 \n \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n| \n \n 31 December 2021\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at\n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 23 \n | \n \n 7 \n | \n \n 5 \n | \n \n - \n | \n \n 2 \n | \n
| \n Buy-to-let \n | \n \n 114 \n | \n \n 25 \n | \n \n 16 \n | \n \n 1 \n | \n \n 10 \n | \n
| \n Year ended 31 December 2021 \n | \n \n 137 \n | \n \n 32 \n | \n \n 21 \n | \n \n 1 \n | \n \n 12 \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n \n \n \n \n \n\n (vi) Additional disclosures on forborne loans\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with the current Code of Conduct on Mortgages Arrears (CCMA).
\nThe tables below set out the asset quality and volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers for the years ended 31 December 2022 and 2021. The number and balances of loans in forbearance arrangements for residential home loan mortgages and buy-to-let residential mortgages are analysed below.
\n\n (a) Asset quality\n
\nThe method of splitting the forborne loans and advances to customers over the different asset quality categories:
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n *Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n Satisfactory \n | \n \n \n 33\n \n | \n \n \n 5\n \n | \n \n \n 38\n \n | \n \n \n 1\n \n | \n \n \n 39\n \n | \n
| \n Fair \n | \n \n \n 92\n \n | \n \n \n 26\n \n | \n \n \n 118\n \n | \n \n \n 1\n \n | \n \n \n 119\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n 130\n \n | \n \n \n 31\n \n | \n \n \n 161\n \n | \n \n \n 2\n \n | \n \n \n 163\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 228\n \n | \n \n \n 68\n \n | \n \n \n 296\n \n | \n \n \n 6\n \n | \n \n \n 302\n \n | \n
| \n \n Total measured at amortised costs \n \n | \n \n \n 358\n \n | \n \n \n 99\n \n | \n \n \n 457\n \n | \n \n \n 8\n \n | \n \n \n 465\n \n | \n
Where a borrower has been granted a forbearance treatment, the loan is considered to have experienced a significant increase in credit risk and is classified as Stage 2 for Expected Credit Loss assessment purposes under IFRS 9.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential Mortgages \n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n * Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 6 \n | \n \n 5 \n | \n \n 11 \n | \n \n 1 \n | \n \n 12 \n | \n
| \n Satisfactory \n | \n \n 76 \n | \n \n 37 \n | \n \n 113 \n | \n \n - \n | \n \n 113 \n | \n
| \n Fair \n | \n \n 96 \n | \n \n 30 \n | \n \n 126 \n | \n \n 3 \n | \n \n 129 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n \n | \n \n 178 \n | \n \n 72 \n | \n \n 250 \n | \n \n 4 \n | \n \n 254 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 289 \n | \n \n 94 \n | \n \n 383 \n | \n \n 33 \n | \n \n 416 \n | \n
| \n Total measured at amortised costs \n | \n \n 467 \n | \n \n 166 \n | \n \n 633 \n | \n \n 37 \n | \n \n 670 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s Independent Auditor.
\n \n \n \n \n \n\n (b) Weighted Average - LTV\n
\n\n LTV on total portfolio in forbearance\n
\nThe tables below illustrates that 85% of residential home loan mortgages (31 December 2021: 84%) and 69% of residential buy-to-let mortgages (31 December 2021: 67%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 37%\n \n | \n \n \n 7%\n \n | \n \n \n 31%\n \n | \n
| \n 50% to 70% \n | \n \n \n 27%\n \n | \n \n \n 11%\n \n | \n \n \n 24%\n \n | \n
| \n 71% to 90% \n | \n \n \n 17%\n \n | \n \n \n 42%\n \n | \n \n \n 23%\n \n | \n
| \n 91% to 100% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 5%\n \n | \n
| \n Subtotal \n | \n \n \n 85%\n \n | \n \n \n 69%\n \n | \n \n \n 83%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 11%\n \n | \n \n \n 4%\n \n | \n
| \n 111% to 120% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 121% to 130% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 131% to 140% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n \n - \n \n | \n \n \n 1%\n \n | \n \n \n - \n \n | \n
| \n Greater than 180% \n | \n \n \n 2%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n Subtotal \n | \n \n \n 15%\n \n | \n \n \n 31%\n \n | \n \n \n 17%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n \n 66%\n \n | \n \n \n 92%\n \n | \n \n \n 72%\n \n | \n
| \n New residential mortgages \n | \n \n \n 73%\n \n | \n \n \n - \n \n | \n \n \n 73%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 75%\n \n | \n \n \n 97%\n \n | \n \n \n 80%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 33% \n | \n \n 7% \n | \n \n 26% \n | \n
| \n 50% to 70% \n | \n \n 25% \n | \n \n 11% \n | \n \n 21% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 30% \n | \n \n 23% \n | \n
| \n 91% to 100% \n | \n \n 6% \n | \n \n 19% \n | \n \n 9% \n | \n
| \n Subtotal \n | \n \n 84% \n | \n \n 67% \n | \n \n 79% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 4% \n | \n \n 12% \n | \n \n 6% \n | \n
| \n 111% to 120% \n | \n \n 3% \n | \n \n 8% \n | \n \n 4% \n | \n
| \n 121% to 130% \n | \n \n 2% \n | \n \n 1% \n | \n \n 2% \n | \n
| \n 131% to 140% \n | \n \n 2% \n | \n \n 4% \n | \n \n 2% \n | \n
| \n 141% to 150% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 2% \n | \n \n 3% \n | \n \n 3% \n | \n
| \n Subtotal \n | \n \n 16% \n | \n \n 33% \n | \n \n 21% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 70% \n | \n \n 95% \n | \n \n 76% \n | \n
| \n New residential mortgages \n | \n \n 47% \n | \n \n - \n | \n \n 47% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 104% \n | \n \n 84% \n | \n
\n (c) Forbearance arrangements - residential mortgages\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with existing CCMA. These are set out in the table below.
\n\n Residential mortgages\n
\nThe tables below set out the volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers as at 31 December 2022 and 31 December 2021.
\n\n (i) Residential home loan mortgages:\n
\nThe incidence of the main type of forbearance arrangements for owner occupied residential mortgages are analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 21\n \n | \n \n \n 6\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Reduced payment (less than interest only) \n | \n \n \n 34\n \n | \n \n \n 3\n \n | \n \n \n 22\n \n | \n \n \n 2\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 1,369\n \n | \n \n \n 192\n \n | \n \n \n 782\n \n | \n \n \n 120\n \n | \n
| \n Payment moratorium \n | \n \n \n 32\n \n | \n \n \n 5\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 433\n \n | \n \n \n 53\n \n | \n \n \n 252\n \n | \n \n \n 31\n \n | \n
| \n Term extension \n | \n \n \n 428\n \n | \n \n \n 32\n \n | \n \n \n 209\n \n | \n \n \n 17\n \n | \n
| \n Hybrid* \n | \n \n \n 277\n \n | \n \n \n 41\n \n | \n \n \n 178\n \n | \n \n \n 26\n \n | \n
| \n Split mortgages \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n
| \n \n Total\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 61 \n | \n \n 12 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n Reduced payment (less than interest only) \n | \n \n 35 \n | \n \n 5 \n | \n \n 33 \n | \n \n 5 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 1,815 \n | \n \n 255 \n | \n \n 1,015 \n | \n \n 157 \n | \n
| \n Payment moratorium \n | \n \n 64 \n | \n \n 8 \n | \n \n 47 \n | \n \n 6 \n | \n
| \n Arrears capitalisation \n | \n \n 524 \n | \n \n 66 \n | \n \n 264 \n | \n \n 36 \n | \n
| \n Term extension \n | \n \n 483 \n | \n \n 38 \n | \n \n 245 \n | \n \n 20 \n | \n
| \n Hybrid* \n | \n \n 378 \n | \n \n 55 \n | \n \n 190 \n | \n \n 29 \n | \n
| \n Split mortgages \n | \n \n 164 \n | \n \n 28 \n | \n \n 164 \n | \n \n 28 \n | \n
| \n Total \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 2,010 \n | \n \n 289 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 777 cases in the year to 31 December 2022 for the Group in the number of residential home loan mortgages in forbearance arrangements, a decrease of \u20ac109m. The average balance of forborne loans is \u20ac0.130m at 31 December 2022 (31 December 2021: \u20ac0.133m).
\n \n \n \n \n \n\n (ii) Residential buy-to-let mortgages:\n
\nThe incidence of the main type of forbearance arrangements for residential buy-to-let mortgages only is analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 19\n \n | \n \n \n 8\n \n | \n \n \n 17\n \n | \n \n \n 7\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 99\n \n | \n \n \n 29\n \n | \n \n \n 76\n \n | \n \n \n 24\n \n | \n
| \n Payment moratorium \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 18\n \n | \n \n \n 8\n \n | \n \n \n 10\n \n | \n \n \n 4\n \n | \n
| \n Term extension \n | \n \n \n 27\n \n | \n \n \n 6\n \n | \n \n \n 12\n \n | \n \n \n 3\n \n | \n
| \n Hybrid* \n | \n \n \n 70\n \n | \n \n \n 41\n \n | \n \n \n 51\n \n | \n \n \n 23\n \n | \n
| \n Split mortgages \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n
| \n \n Total\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 188\n \n | \n \n \n 68\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 54 \n | \n \n 27 \n | \n \n 31 \n | \n \n 15 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 190 \n | \n \n 58 \n | \n \n 121 \n | \n \n 38 \n | \n
| \n Payment moratorium \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n 62 \n | \n \n 31 \n | \n \n 21 \n | \n \n 11 \n | \n
| \n Term extension \n | \n \n 32 \n | \n \n 6 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n Hybrid* \n | \n \n 86 \n | \n \n 37 \n | \n \n 56 \n | \n \n 20 \n | \n
| \n Split mortgages \n | \n \n 23 \n | \n \n 7 \n | \n \n 23 \n | \n \n 7 \n | \n
| \n Total \n | \n \n 449 \n | \n \n 166 \n | \n \n 267 \n | \n \n 94 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 193 cases in the year to 31 December 2022 for the Group in the number of residential buy-to-let in forbearance arrangements, a decrease of \u20ac67m in balances. The average balance of forborne loans is \u20ac0.39m at 31 December 2022 (31 December 2021: \u20ac0.37m).
\n\n Commercial mortgages\n
\nThe incidence of the main type of forbearance arrangements for commercial mortgages are analysed below:
\n| \n \n Commercial mortgages\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 11\n \n | \n \n \n 5\n \n | \n \n 13 \n | \n \n 23 \n | \n
| \n Payment moratorium \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n \n 5 \n | \n \n 7 \n | \n
| \n Term extension \n | \n \n \n 7\n \n | \n \n \n 1\n \n | \n \n 9 \n | \n \n 4 \n | \n
| \n Hybrid* \n | \n \n \n 6\n \n | \n \n \n 1\n \n | \n \n 10 \n | \n \n 3 \n | \n
| \n Split mortgages \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n 37 \n | \n \n 37 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe table above reflects a decrease of 12 cases in the year to 31 December 2022 for the Group in the number of commercial mortgages in forbearance arrangements, a decrease of \u20ac29m in balances.
\n \n \n \n \n \n\n (d) Reconciliation of movement in forborne loans for all classes\n
\nThe tables below provide an analysis of the movement of total forborne loans and Stage 3 forborne loans during the year. It outlines the number and balances of forbearance treatments offered, expired and loans paid down during the year.
\n\n (i) Reconciliation of movement of total forborne loans\n
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2022\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 3,524\n \n | \n \n \n 467\n \n | \n \n \n 449\n \n | \n \n \n 166\n \n | \n \n \n 37\n \n | \n \n \n 37\n \n | \n \n \n 4,010\n \n | \n \n \n 670\n \n | \n
| \n New forbearance extended during the year* \n | \n \n \n 307\n \n | \n \n \n 39\n \n | \n \n \n 30\n \n | \n \n \n 17\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 337\n \n | \n \n \n 56\n \n | \n
| \n Deleveraged loans \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (138)\n \n | \n \n \n (51)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (141)\n \n | \n \n \n (52)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n \n (18)\n \n | \n \n \n (3)\n \n | \n \n \n (7)\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (25)\n \n | \n \n \n (7)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (816)\n \n | \n \n \n (106)\n \n | \n \n \n (34)\n \n | \n \n \n (13)\n \n | \n \n \n (4)\n \n | \n \n \n (21)\n \n | \n \n \n (854)\n \n | \n \n \n (140)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (247)\n \n | \n \n \n (25)\n \n | \n \n \n (44)\n \n | \n \n \n (12)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (299)\n \n | \n \n \n (45)\n \n | \n
| \n Balance shift** \n | \n \n \n -\n \n | \n \n \n (13)\n \n | \n \n \n -\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (17)\n \n | \n
| \n \n Closing balance of loans in forbearance as at 31 December 2022\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n \n 3,028\n \n | \n \n \n 465\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2021\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 5,066 \n | \n \n 726 \n | \n \n 679 \n | \n \n 231 \n | \n \n 44 \n | \n \n 20 \n | \n \n 5,789 \n | \n \n 977 \n | \n
| \n New forbearance extended during the year* \n | \n \n 458 \n | \n \n 62 \n | \n \n 76 \n | \n \n 30 \n | \n \n 7 \n | \n \n 24 \n | \n \n 541 \n | \n \n 116 \n | \n
| \n Deleveraged loans \n | \n \n (845) \n | \n \n (115) \n | \n \n (214) \n | \n \n (48) \n | \n \n (4) \n | \n \n (3) \n | \n \n (1,063) \n | \n \n (166) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n (16) \n | \n \n (3) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (17) \n | \n \n (3) \n | \n
| \n - expired forbearance treatment \n | \n \n (753) \n | \n \n (139) \n | \n \n (58) \n | \n \n (29) \n | \n \n (3) \n | \n \n (1) \n | \n \n (814) \n | \n \n (169) \n | \n
| \n - expired loan paid down \n | \n \n (386) \n | \n \n (49) \n | \n \n (33) \n | \n \n (13) \n | \n \n (7) \n | \n \n (2) \n | \n \n (426) \n | \n \n (64) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (15) \n | \n \n - \n | \n \n (5) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n (21) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 449 \n | \n \n 166 \n | \n \n 37 \n | \n \n 37 \n | \n \n 4,010 \n | \n \n 670 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n \n \n \n \n \n\n (ii) Reconciliation of movement in forborne loans Stage 3\n
\n| \n \n 31 December 2022\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 2,010 \n \n | \n \n \n 289 \n \n | \n \n \n 267 \n \n | \n \n \n 94 \n \n | \n \n \n 32 \n \n | \n \n \n 33 \n \n | \n \n \n 2,309 \n \n | \n \n \n 416 \n \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n \n 354 \n \n | \n \n \n 43 \n \n | \n \n \n 29 \n \n | \n \n \n 15 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 383 \n \n | \n \n \n 58 \n \n | \n
| \n Deleveraged loans \n | \n \n \n (3) \n \n | \n \n \n (1) \n \n | \n \n \n (32) \n \n | \n \n \n (10) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (35) \n \n | \n \n \n (11) \n \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n \n (550)\n \n | \n \n \n (70)\n \n | \n \n \n (29)\n \n | \n \n \n (11)\n \n | \n \n \n (4)\n \n | \n \n \n (1)\n \n | \n \n \n (583)\n \n | \n \n \n (82)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n \n (10)\n \n | \n \n \n (2)\n \n | \n \n \n (4)\n \n | \n \n \n (4)\n \n | \n \n - \n | \n \n \n - \n \n | \n \n \n (14)\n \n | \n \n \n (6)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (19)\n \n | \n \n \n (9)\n \n | \n \n \n (4)\n \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (17)\n \n | \n \n \n (24)\n \n | \n \n \n (29)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (148)\n \n | \n \n \n (18)\n \n | \n \n \n (39)\n \n | \n \n \n (11)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (195)\n \n | \n \n \n (37)\n \n | \n
| \n Balance shift** \n | \n \n \n - \n \n | \n \n \n (4)\n \n | \n \n \n - \n \n | \n \n \n (2)\n \n | \n \n \n - \n \n | \n \n \n (1) \n \n | \n \n \n - \n \n | \n \n \n (7)\n \n | \n
| \n \n Closing balance loans in forbearance as at 31 December 2022\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n \n \n 188 \n \n | \n \n \n 68\n \n | \n \n \n 19\n \n | \n \n \n 6\n \n | \n \n \n 1,841\n \n | \n \n \n 302\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n 31 December 2021\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 2,850 \n | \n \n 438 \n | \n \n 478 \n | \n \n 151 \n | \n \n 36 \n | \n \n 14 \n | \n \n 3,364 \n | \n \n 603 \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n 538 \n | \n \n 74 \n | \n \n 77 \n | \n \n 31 \n | \n \n 6 \n | \n \n 25 \n | \n \n 621 \n | \n \n 130 \n | \n
| \n Deleveraged loans \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n (392) \n | \n \n (46) \n | \n \n (32) \n | \n \n (13) \n | \n \n (1) \n | \n \n (1) \n | \n \n (425) \n | \n \n (60) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n (12) \n | \n \n (2) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (13) \n | \n \n (2) \n | \n
| \n - expired forbearance treatment \n | \n \n (112) \n | \n \n (25) \n | \n \n (76) \n | \n \n (19) \n | \n \n (1) \n | \n \n (1) \n | \n \n (189) \n | \n \n (45) \n | \n
| \n - expired loan paid down \n | \n \n (862) \n | \n \n (146) \n | \n \n (179) \n | \n \n (55) \n | \n \n (8) \n | \n \n (4) \n | \n \n (1,049) \n | \n \n (205) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (4) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (5) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 2,010 \n | \n \n 289 \n | \n \n 267 \n | \n \n 94 \n | \n \n 32 \n | \n \n 33 \n | \n \n 2,309 \n | \n \n 416 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n\n (vii) Funding profile\n
\nThe ALCO monitors sources of funding and their respective maturities with a focus on establishing a stable and cost effective funding profile. Excluding equity, the Group\u2019s funding profile as at the 31 December 2022 can be broken down into the below component parts:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Customer accounts \n | \n \n \n 93\n \n | \n \n 94 \n | \n
| \n Long-term debt \n | \n \n \n 4\n \n | \n \n 4 \n | \n
| \n Short-term debt \n | \n \n \n 3\n \n | \n \n 2 \n | \n
| \n \u00a0 \n | \n \n \n 100 \n \n | \n \n 100 \n | \n
Long-term debt refers to debt with a maturity greater than 12 months from year-end and short-term debt is that which has a maturity of less than 12 months from year-end.
\n \n \n \n \n \nIn accordance with IFRS 7, Financial Instruments: Disclosures, the following tables present the maturity analysis of financial liabilities on an undiscounted basis, by remaining contractual maturity at the statement of financial position date. These will not agree directly with the balances on the consolidated statement of financial position due to the inclusion of future interest payments.
\n| \n \n 31 December 2022\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n \n 614 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614 \n \n | \n
| \n Customer accounts \n | \n \n \n 19,906 \n \n | \n \n \n 689 \n \n | \n \n \n 261 \n \n | \n \n \n 385 \n \n | \n \n \n 157 \n \n | \n \n \n 342 \n \n | \n \n \n 21,740 \n \n | \n
| \n Debt securities in issue \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 6 \n \n | \n \n \n 11 \n \n | \n \n \n 371 \n \n | \n \n \n 308 \n \n | \n \n \n 702 \n \n | \n
| \n Derivative financial instruments \n | \n \n \n 10 \n \n | \n \n \n 169\n \n | \n \n \n 1,343 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1,522 \n \n | \n
| \n Subordinated liabilities \n | \n \n \n 1 \n \n | \n \n \n 1 \n \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 7 \n \n | \n \n \n 300 \n \n | \n \n \n 315 \n \n | \n
| \n Other financial liabilities \n | \n \n \n 145\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 3\n \n | \n \n \n 6\n \n | \n \n \n 27\n \n | \n \n \n 183\n \n | \n
| \n \n Total liabilities\n \n | \n \n \n 20,678 \n \n | \n \n \n 863 \n \n | \n \n \n 1,614 \n \n | \n \n \n 403 \n \n | \n \n \n 541 \n \n | \n \n \n 977 \n \n | \n \n \n 25,076 \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 16,032 \n | \n \n 1,416 \n | \n \n 454 \n | \n \n 575 \n | \n \n 221 \n | \n \n 405 \n | \n \n 19,103 \n | \n
| \n Debt securities in issue \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 537 \n | \n \n 552 \n | \n
| \n Derivative financial instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Subordinated liabilities \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 304 \n | \n \n 319 \n | \n
| \n Other financial liabilities \n | \n \n 92 \n | \n \n 48 \n | \n \n 1 \n | \n \n 3 \n | \n \n 4 \n | \n \n 22 \n | \n \n 170 \n | \n
| \n Total liabilities \n | \n \n 16,473 \n | \n \n 1,466 \n | \n \n 459 \n | \n \n 586 \n | \n \n 239 \n | \n \n 1,268 \n | \n \n 20,491 \n | \n
When managing the Group\u2019s liquidity and funding profile, for products where the contractual maturity date may be different from actual behaviour, the Group uses statistical methodologies to manage liquidity on an expected or behaviourally adjusted basis.
\n\n
The following table details the Group\u2019s liquidity analysis for derivative instruments that do not qualify as hedging instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates from the yield curves at the end of the reporting year. These will not agree directly with the balances on the consolidated statement of financial position.
\n| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n 82 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 82 \n \n | \n
| \n - outflow \n | \n \n \n (83)\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (83)\n \n | \n
| \n Business combinations forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n -\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n -\n \n | \n
| \n - outflow \n | \n \n \n (9)\n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,521)\n \n | \n
| \n \n Balance at 31 December 2022\n \n | \n \n \n (10) \n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,522) \n \n | \n
| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n - outflow \n | \n \n (84) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (84) \n | \n
| \n Balance at 31 December 2021 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n (viii) Interest rate gap position\n
\nGap analysis is a technique for measuring the Group\u2019s interest rate risk exposure beginning with a maturity/re-pricing schedule that distributes interest sensitive assets, liabilities, and derivative positions into \u201ctime bands\u201d according to their maturity (if fixed rate), time remaining to their next re-pricing (if floating rate) or behavioural convention in order to identify any sources of significant mismatches. The below December 2022 IRRBB profile also includes interest cash flows based on the next re-price date i.e. one month\u2019s interest included for variable rate products and lifetime interest for fixed rate products.
\nA summary of the Group\u2019s interest rate gap position is as follows:
\n\n Interest rate re-pricing\n
\n| \n \n 31 December 2022\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Assets\n \n | \n \n \n 9,884\n \n | \n \n \n 697\n \n | \n \n \n 1,757\n \n | \n \n \n 11,516\n \n | \n \n \n 2,148\n \n | \n \n \n 26,002\n \n | \n
| \n \n Liabilities\n \n | \n \n \n (6,048)\n \n | \n \n \n (996)\n \n | \n \n \n (2,425)\n \n | \n \n \n (12,932)\n \n | \n \n \n (2,836)\n \n | \n \n \n (25,237)\n \n | \n
| \n \n Derivatives \n \n | \n \n \n 81\n \n | \n \n \n -\n \n | \n \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 81\n \n | \n
| \n \n Interest rate re-pricing gap \n \n | \n \n \n 3,917\n \n | \n \n \n (299)\n \n | \n \n \n (668)\n \n | \n \n \n (1,416)\n \n | \n \n \n (688)\n \n | \n \n \n 846\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Cumulative interest rate re-pricing gap\n \n | \n \n \n 3,917\n \n | \n \n \n 3,618\n \n | \n \n \n 2,950\n \n | \n \n \n 1,534\n \n | \n \n \n 846\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Assets \n | \n \n 12,608 \n | \n \n 587 \n | \n \n 1264 \n | \n \n 6505 \n | \n \n 1079 \n | \n \n 22043 \n | \n
| \n Liabilities \n | \n \n (11,769) \n | \n \n (973) \n | \n \n (1,395) \n | \n \n (6,137) \n | \n \n (1,546) \n | \n \n -21820 \n | \n
| \n Derivatives \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n Interest rate re-pricing gap \n | \n \n 923 \n | \n \n (386) \n | \n \n (131) \n | \n \n 368 \n | \n \n (467) \n | \n \n 307 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cumulative interest rate re-pricing gap \n | \n \n 923 \n | \n \n 537 \n | \n \n 406 \n | \n \n 774 \n | \n \n 307 \n | \n \n \n | \n
An increase in ECB interest rates of 100bps would increase net interest income by \u20ac58m and a decrease in ECB interest rates of 100bps would decrease net interest income by \u20ac58m.
\n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f93691": { "value": "\n\n 38. Financial risk management\n
\n\n Maximum exposure to credit risk before collateral held or other credit enhancements\n
\nThe following table outlines the maximum exposure to credit risk before collateral held or other credit enhancements in respect of the Group\u2019s financial assets as at the statement of financial position date.
\n| \n \n | \n \n \n Notes\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n 20 \n | \n
| \n Loans and advances to banks (iii) \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments (ii) \n | \n \n 16 \n | \n \n \n -\n \n | \n \n 1 \n | \n
| \n Debt securities (i) \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
| \n Loans and advances to customers (iv) \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n 14,256 \n | \n
| \n \n | \n \n \n | \n \n \n 24,991\n \n | \n \n 21,002 \n | \n
| \n Commitments and contingencies \n | \n \n 43 \n | \n \n \n 1,342\n \n | \n \n 1,181 \n | \n
| \n \n | \n \n \n | \n \n \n 26,333\n \n | \n \n 22,183 \n | \n
\n The following tables outline the Group\u2019s exposure to credit risk by asset class\n
\n\n (i) Debt securities\n
\nThe Group is exposed to the credit risk on third parties where the Group holds debt securities (primarily sovereign debt). These exposures are subject to the limitations contained within Board approved policies, with sovereign debt restricted to those countries that have an External Credit Assessment Institution (ECAI) rating of investment grade.
\nThe following table gives an indication of the level of the credit worthiness of the Group\u2019s debt securities and is based on the Group\u2019s internal rating policy which was approved by the CBI. The inputs to the ratings used in the table below are those prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the EU.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating\n \n | \n \n \n | \n \n \n | \n
| \n Aaa \n | \n \n \n 49\n \n | \n \n 60 \n | \n
| \n AA+ \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n Aa2 \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n A1 \n | \n \n \n 1,734\n \n | \n \n - \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 1,463 \n | \n
| \n Baa1 \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n Baa2 \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Baa3 \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
The following table discloses, by country, the Group\u2019s exposure to sovereign debt and corporate debt as at:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Country\n \n | \n \n \n | \n \n \n | \n
| \n Ireland \n | \n \n \n 1,783\n \n | \n \n 1,523 \n | \n
| \n Portugal \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Spain \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n France \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n Italy \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n EU \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
\n (ii) Derivative financial instruments\n
\nThe Group has executed standard ISDA agreements with all of its counterparties. The Group has also executed CSAs with all of its counterparties in respect of the majority of derivative instruments to mitigate its credit risk. As part of these agreements, the Group exchanges collateral in line with movements in the market values of derivative positions daily. FX forward derivatives are settled gross. The cumulative positive market value of derivative assets at 31 December 2022 was \u20acnil (31 December 2021: \u20ac1m). The Group manages its collateral derivative positions with counterparties on a net basis. The uncollaterised derivative positions are all held with investment grade counterparties.
\n\n (iii) Loans and advances to banks\n
\nThe Group has a policy to ensure that, where possible, loans and advances to banks are held with investment grade counterparties with any exceptions subject to prior approval by the BRCC. The following table gives an indication of the level of creditworthiness of the Group\u2019s loans and advances to banks and is based on the ratings prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the CBI.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating \n \n | \n \n \n | \n \n \n | \n
| \n AAA \n | \n \n \n 1,620\n \n | \n \n 3,709 \n | \n
| \n Aa2 \n | \n \n \n 199\n \n | \n \n 199 \n | \n
| \n Aa3 \n | \n \n \n 286\n \n | \n \n 258 \n | \n
| \n A1 \n | \n \n \n 10\n \n | \n \n 2 \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 6 \n | \n
| \n Ba1 \n | \n \n \n 8\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
The following sections detail additional disclosures on asset quality.
\n\n (iv) Loans and advances to customers\n
\n\n Gross customer loans and advances\n
\nThe tables below outline total loans and advances to customers for the Group analysed by home loan, buy-to-let, commercial and consumer finance.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n Measured at amortised cost\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Residential mortgages: \n | \n \n \n | \n \n \n | \n
| \n Home loan \n | \n \n \n 18,340\n \n | \n \n 12,568 \n | \n
| \n Buy-to-let \n | \n \n \n 824\n \n | \n \n 1,623 \n | \n
| \n \n Total residential mortgages\n \n | \n \n \n 19,164\n \n | \n \n 14,191 \n | \n
| \n Commercial \n | \n \n \n 239\n \n | \n \n 196 \n | \n
| \n Consumer finance \n | \n \n \n 401\n \n | \n \n 358 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Analysed by ECL staging:\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 17,455 \n \n | \n \n 11,689 \n | \n
| \n Stage 2 \n | \n \n \n 1,699 \n \n | \n \n 2,239 \n | \n
| \n Stage 3 \n | \n \n \n 649\n \n | \n \n 815 \n | \n
| \n POCI \n | \n \n \n 1\n \n | \n \n 2 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Of which at the reporting date \n \n | \n \n \n | \n \n \n | \n
| \n Neither past due nor Stage 3 \n | \n \n \n 19,118\n \n | \n \n 13,885 \n | \n
| \n Past due but not Stage 3 \n | \n \n \n 36\n \n | \n \n 43 \n | \n
| \n Stage 3 \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n Of which are reported as non-performing loans\n \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Deferred fees, discounts and fair value adjustments\n \n | \n \n \n 310\n \n | \n \n 115 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n \n Asset quality*\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 1\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 12,826\n \n | \n \n \n 65\n \n | \n \n \n 12,891\n \n | \n \n \n 11\n \n | \n \n \n 143\n \n | \n \n \n 13,045\n \n | \n
| \n Satisfactory \n | \n \n \n 4,064\n \n | \n \n \n 141\n \n | \n \n \n 4,205\n \n | \n \n \n 17\n \n | \n \n \n 61\n \n | \n \n \n 4,283\n \n | \n
| \n Fair \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 21\n \n | \n \n \n 43\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 84\n \n | \n \n \n 84\n \n | \n
| \n \n | \n \n \n 16,912\n \n | \n \n \n 206\n \n | \n \n \n 17,118\n \n | \n \n \n 28\n \n | \n \n \n 309\n \n | \n \n \n 17,455\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 79\n \n | \n \n \n 44\n \n | \n \n \n 123\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n 128\n \n | \n
| \n Satisfactory \n | \n \n \n 296\n \n | \n \n \n 107\n \n | \n \n \n 403\n \n | \n \n \n 27\n \n | \n \n \n 21\n \n | \n \n \n 451\n \n | \n
| \n Fair \n | \n \n \n 711\n \n | \n \n \n 197\n \n | \n \n \n 908\n \n | \n \n \n 161\n \n | \n \n \n 26\n \n | \n \n \n 1,095\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 25\n \n | \n \n \n 25\n \n | \n
| \n \n | \n \n \n 1,086\n \n | \n \n \n 348\n \n | \n \n \n 1,434\n \n | \n \n \n 188\n \n | \n \n \n 77\n \n | \n \n \n 1,699\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n Total measured at amortised cost \n | \n \n \n 18,340\n \n | \n \n \n 824\n \n | \n \n \n 19,164\n \n | \n \n \n 239\n \n | \n \n \n 401\n \n | \n \n \n 19,804\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n Asset quality* \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 7,096 \n | \n \n 184 \n | \n \n 7,280 \n | \n \n 1 \n | \n \n 160 \n | \n \n 7,441 \n | \n
| \n Satisfactory \n | \n \n 3,807 \n | \n \n 289 \n | \n \n 4,096 \n | \n \n 10 \n | \n \n 65 \n | \n \n 4,171 \n | \n
| \n Fair \n | \n \n 20 \n | \n \n 1 \n | \n \n 21 \n | \n \n - \n | \n \n 6 \n | \n \n 27 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 50 \n | \n \n 50 \n | \n
| \n \n | \n \n 10,923 \n | \n \n 474 \n | \n \n 11,397 \n | \n \n 11 \n | \n \n 281 \n | \n \n 11,689 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 146 \n | \n \n 209 \n | \n \n 355 \n | \n \n 7 \n | \n \n 2 \n | \n \n 364 \n | \n
| \n Satisfactory \n | \n \n 344 \n | \n \n 334 \n | \n \n 678 \n | \n \n 58 \n | \n \n 17 \n | \n \n 753 \n | \n
| \n Fair \n | \n \n 735 \n | \n \n 267 \n | \n \n 1,002 \n | \n \n 76 \n | \n \n 29 \n | \n \n 1,107 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 15 \n | \n \n 15 \n | \n
| \n \n | \n \n 1,225 \n | \n \n 810 \n | \n \n 2,035 \n | \n \n 141 \n | \n \n 63 \n | \n \n 2,239 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Total measured at amortised cost \n | \n \n 12,568 \n | \n \n 1,623 \n | \n \n 14,191 \n | \n \n 196 \n | \n \n 358 \n | \n \n 14,745 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s independent auditor.
\n \n \n \nThe following table provides an aged analysis of customer loans and advances which are past due but not Stage 3.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n Fair value of collateral held \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
Collateral held against residential mortgages is principally comprised of residential properties; their fair value has been estimated based upon the last actual valuation, adjusted to take into account subsequent movement in house prices and is capped at the lower of the loan balance or the valuation amount.
\n\n Non-performing loans\n
\nNon-performing loans (NPLs) are loans which are credit impaired or loans which are classified as defaulted in accordance with the Group\u2019s definition of default. The Group\u2019s definition of default considers objective indicators of default including the 90 days past due criterion, evidence of exercise of concessions or modifications to terms and conditions is designed to be consistent with European Banking Authority (EBA) guidance on the definition of forbearance.
\nForeclosed assets are assets held on the balance sheet which are obtained by taking possession of collateral or by calling on similar credit enhancements.
\n \n \n \nNon-performing assets are defined as NPLs plus foreclosed assets.
\n| \n \n 31 December 2022\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n \n 175\n \n | \n \n \n 118\n \n | \n \n \n 17\n \n | \n \n \n 2\n \n | \n \n \n 312\n \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n \n 31\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n 3\n \n | \n \n \n 49\n \n | \n
| \n NPL is 1-2 years past due \n | \n \n \n 31\n \n | \n \n \n 80\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 113\n \n | \n
| \n NPL is 2-5 years past due \n | \n \n \n 51\n \n | \n \n \n 28\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 81\n \n | \n
| \n NPL is > 5 years past due \n | \n \n \n 54\n \n | \n \n \n 29\n \n | \n \n \n 6\n \n | \n \n \n 5\n \n | \n \n \n 94\n \n | \n
| \n POCI \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n
| \n \n Non-performing loans\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n \n Foreclosed assets\n \n | \n \n \n 3\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n \n Non-performing assets\n \n | \n \n \n 345\n \n | \n \n \n 285\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 668\n \n | \n
| \n \n NPLs as % of gross loans\n \n | \n \n \n 1.9%\n \n | \n \n \n 32.8%\n \n | \n \n \n 9.6%\n \n | \n \n \n 3.7%\n \n | \n \n \n 3.3%\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n 251 \n | \n \n 177 \n | \n \n 40 \n | \n \n 1 \n | \n \n 469 \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n 32 \n | \n \n 89 \n | \n \n 1 \n | \n \n 6 \n | \n \n 128 \n | \n
| \n NPL is 1-2 years past due \n | \n \n 39 \n | \n \n 25 \n | \n \n - \n | \n \n 2 \n | \n \n 66 \n | \n
| \n NPL is 2-5 years past due \n | \n \n 36 \n | \n \n 10 \n | \n \n - \n | \n \n 1 \n | \n \n 47 \n | \n
| \n NPL is > 5 years past due \n | \n \n 62 \n | \n \n 38 \n | \n \n 3 \n | \n \n 2 \n | \n \n 105 \n | \n
| \n POCI \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 2 \n | \n \n 2 \n | \n
| \n Non-performing loans \n | \n \n 420 \n | \n \n 339 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Foreclosed assets \n | \n \n 4 \n | \n \n 24 \n | \n \n - \n | \n \n - \n | \n \n 28 \n | \n
| \n Non-performing assets \n | \n \n 424 \n | \n \n 363 \n | \n \n 44 \n | \n \n 14 \n | \n \n 845 \n | \n
| \n NPLs as % of gross loans \n | \n \n 3.3% \n | \n \n 20.9% \n | \n \n 22.5% \n | \n \n 3.9% \n | \n \n 5.5% \n | \n
Non-performing loans as a percentage of total loans and advances was 3.3% at 31 December 2022, a reduction from 5.5% at 31 December 2021.
\n\n Total portfolio loss allowance: statement of financial position\n
\nThe tables below outline the ECL loss allowance total at 31 December 2022 in respect of total customer loans and advances.
\nThe impairment charge in respect of the total loans and advances for year ended 31 December 2022 is \u20ac7m, compared to a write-back of \u20ac1m for the year ended 31 December 2021.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Loss allowance - statement of financial position\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 136 \n \n | \n \n 61 \n | \n
| \n Stage 2 \n | \n \n \n 163 \n \n | \n \n 238 \n | \n
| \n Stage 3 \n | \n \n \n 222 \n \n | \n \n 305 \n | \n
| \n \n Total loss allowance\n \n | \n \n \n 521\n \n | \n \n 604 \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Provision coverage ratio*\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 0.8%\n \n | \n \n 0.5% \n | \n
| \n Stage 2 \n | \n \n \n 9.6%\n \n | \n \n 10.6% \n | \n
| \n Stage 3 \n | \n \n \n 34.1%\n \n | \n \n 37.3% \n | \n
| \n \n Total provisions/total loans\n \n | \n \n \n 2.6%\n \n | \n \n 4.1% \n | \n
*Provision coverage ratio is calculated as loss allowance/impairment provision as a percentage of gross loan balance.
\n\n Origination profile\n
\nLoan origination profile of the residential mortgage loan portfolio before provision for impairment:
\nThe table below illustrates that \u20ac2bn or 11% of the residential mortgage portfolio originated before 2006. Between 2006 and 2008 origination was \u20ac5bn or 24% of the residential mortgages. The residual of 65% of the residential mortgages were originated between 2009 and 2022.
\n| \n \n 31 December 2022\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1999 and before \n | \n \n 1,786 \n | \n \n 30 \n | \n \n 113 \n | \n \n 4 \n | \n
| \n 2000 \n | \n \n 1,483 \n | \n \n 40 \n | \n \n 57 \n | \n \n 3 \n | \n
| \n 2001 \n | \n \n 1,938 \n | \n \n 66 \n | \n \n 79 \n | \n \n 4 \n | \n
| \n 2002 \n | \n \n 2,801 \n | \n \n 127 \n | \n \n 99 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,360 \n | \n \n 255 \n | \n \n 166 \n | \n \n 14 \n | \n
| \n 2004 \n | \n \n 7,729 \n | \n \n 514 \n | \n \n 220 \n | \n \n 23 \n | \n
| \n 2005 \n | \n \n 11,134 \n | \n \n 1,006 \n | \n \n 397 \n | \n \n 57 \n | \n
| \n 2006 \n | \n \n 14,396 \n | \n \n 1,796 \n | \n \n 723 \n | \n \n 169 \n | \n
| \n 2007 \n | \n \n 12,439 \n | \n \n 1,730 \n | \n \n 740 \n | \n \n 203 \n | \n
| \n 2008 \n | \n \n 7,912 \n | \n \n 1,006 \n | \n \n 408 \n | \n \n 90 \n | \n
| \n 2009 \n | \n \n 2,301 \n | \n \n 213 \n | \n \n 65 \n | \n \n 7 \n | \n
| \n 2010 \n | \n \n 936 \n | \n \n 70 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2011 \n | \n \n 819 \n | \n \n 69 \n | \n \n 5 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 1,190 \n | \n \n 110 \n | \n \n 3 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 1,673 \n | \n \n 163 \n | \n \n 4 \n | \n \n - \n | \n
| \n 2014 \n | \n \n 2,960 \n | \n \n 316 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 4,058 \n | \n \n 471 \n | \n \n 29 \n | \n \n 1 \n | \n
| \n 2016 \n | \n \n 4,664 \n | \n \n 639 \n | \n \n 23 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 5,804 \n | \n \n 899 \n | \n \n 24 \n | \n \n 4 \n | \n
| \n 2018 \n | \n \n 7,607 \n | \n \n 1,345 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n 2019 \n | \n \n 9,633 \n | \n \n 1,863 \n | \n \n 37 \n | \n \n 7 \n | \n
| \n 2020 \n | \n \n 7,940 \n | \n \n 1,735 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 8,871 \n | \n \n 2,164 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2022 \n | \n \n 9,409 \n | \n \n 2,537 \n | \n \n 4 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 134,843\n \n | \n \n \n 19,164\n \n | \n \n \n 3,297\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1998 and before \n | \n \n 967 \n | \n \n 13 \n | \n \n 75 \n | \n \n 2 \n | \n
| \n 1999 \n | \n \n 754 \n | \n \n 18 \n | \n \n 53 \n | \n \n 2 \n | \n
| \n 2000 \n | \n \n 1,204 \n | \n \n 38 \n | \n \n 73 \n | \n \n 4 \n | \n
| \n 2001 \n | \n \n 1,561 \n | \n \n 61 \n | \n \n 103 \n | \n \n 6 \n | \n
| \n 2002 \n | \n \n 3,485 \n | \n \n 132 \n | \n \n 120 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,145 \n | \n \n 273 \n | \n \n 189 \n | \n \n 18 \n | \n
| \n 2004 \n | \n \n 7,697 \n | \n \n 574 \n | \n \n 259 \n | \n \n 32 \n | \n
| \n 2005 \n | \n \n 11,173 \n | \n \n 1,105 \n | \n \n 487 \n | \n \n 76 \n | \n
| \n 2006 \n | \n \n 15,474 \n | \n \n 2,125 \n | \n \n 881 \n | \n \n 215 \n | \n
| \n 2007 \n | \n \n 13,532 \n | \n \n 2,005 \n | \n \n 842 \n | \n \n 239 \n | \n
| \n 2008 \n | \n \n 8,712 \n | \n \n 1,207 \n | \n \n 513 \n | \n \n 111 \n | \n
| \n 2009 \n | \n \n 2,135 \n | \n \n 193 \n | \n \n 79 \n | \n \n 8 \n | \n
| \n 2010 \n | \n \n 889 \n | \n \n 67 \n | \n \n 23 \n | \n \n 3 \n | \n
| \n 2011 \n | \n \n 550 \n | \n \n 44 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 315 \n | \n \n 21 \n | \n \n 5 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 716 \n | \n \n 67 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2014 \n | \n \n 1,497 \n | \n \n 156 \n | \n \n 14 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 1,648 \n | \n \n 179 \n | \n \n 39 \n | \n \n 3 \n | \n
| \n 2016 \n | \n \n 1,811 \n | \n \n 227 \n | \n \n 25 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 3,202 \n | \n \n 487 \n | \n \n 31 \n | \n \n 5 \n | \n
| \n 2018 \n | \n \n 4,974 \n | \n \n 924 \n | \n \n 48 \n | \n \n 10 \n | \n
| \n 2019 \n | \n \n 6,282 \n | \n \n 1,306 \n | \n \n 40 \n | \n \n 8 \n | \n
| \n 2020 \n | \n \n 5,153 \n | \n \n 1,184 \n | \n \n 21 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 7,099 \n | \n \n 1,785 \n | \n \n 18 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 105,975\n \n | \n \n \n 14,191\n \n | \n \n \n 3,954\n \n | \n \n \n 759\n \n | \n
\n Loan-to-value profile\n
\n\n Loan-to-value (LTV) of mortgage lending (index linked):\n
\nThe LTV ratio is calculated at a property level and is the average of indexed property values in proportion to the outstanding loan balance. LTV is a key input to the impairment provisioning process. The tables below outline the composition of this ratio for the residential loan portfolio.
\n\n Actual and average LTVs across principal mortgage portfolios:\n
\nThe tables below outline the weighted average LTVs for the total residential mortgage portfolios analysed across home loan and buy-to-let facilities by value. The weighted average LTV on the existing residential mortgage portfolios is 54% at 31 December 2022 compared to 58% at 31 December 2021.
\nThe Group\u2019s residential mortgage lending LTVs at December 2022 reflect updated valuations obtained on high-exposure NPLs (largely impacting on high-exposure buy-to-let properties).
\n \n \n \n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 44%\n \n | \n \n \n 32%\n \n | \n \n \n 44%\n \n | \n
| \n 50% to 70% \n | \n \n \n 40%\n \n | \n \n \n 18%\n \n | \n \n \n 39%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 24%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n 1%\n \n | \n \n \n 8%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 99%\n \n | \n \n \n 82%\n \n | \n \n \n 98%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 1%\n \n | \n \n \n 5%\n \n | \n \n \n 1%\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 3%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 1%\n \n | \n \n \n 18%\n \n | \n \n \n 2%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of existing residential mortgages \n | \n \n \n 53%\n \n | \n \n \n 76%\n \n | \n \n \n 54%\n \n | \n
| \n New residential mortgages \n | \n \n \n 68%\n \n | \n \n \n 58%\n \n | \n \n \n 68%\n \n | \n
| \n Acquired residential mortgages \n | \n \n \n 47%\n \n | \n \n \n 39%\n \n | \n \n \n 47%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 74%\n \n | \n \n \n 100%\n \n | \n \n \n 85%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 38% \n | \n \n 32% \n | \n \n 37% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 16% \n | \n \n 32% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 21% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 11% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 98% \n | \n \n 80% \n | \n \n 96% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 6% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 4% \n | \n \n 1% \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 3% \n | \n \n 1% \n | \n
| \n 131% to 140% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 2% \n | \n \n 20% \n | \n \n 4% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 56% \n | \n \n 74% \n | \n \n 58% \n | \n
| \n New residential mortgages \n | \n \n 69% \n | \n \n 54% \n | \n \n 69% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 105% \n | \n \n 90% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is neither past due nor Stage 3:\n
\nThe tables below illustrates that 100% of residential home loan mortgages (31 December 2021: 99%) and 94% of residential buy-to-let mortgages (31 December 2021: 87%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 45%\n \n | \n \n \n 44%\n \n | \n \n \n 45%\n \n | \n
| \n 50% to 70% \n | \n \n \n 41%\n \n | \n \n \n 23%\n \n | \n \n \n 40%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 23%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 100%\n \n | \n \n \n 94%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n Subtotal \n | \n \n \n -\n \n | \n \n \n 6%\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 39% \n | \n \n 39% \n | \n \n 39% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 19% \n | \n \n 34% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 20% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 9% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 99% \n | \n \n 87% \n | \n \n 99% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 5% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 3% \n | \n \n - \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n 131% to 140% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 1% \n | \n \n 13% \n | \n \n 1% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is classified as Stage 3:\n
\nThe tables below illustrates that 79% of residential home loan mortgages (31 December 2021: 75%) and 55% of residential buy-to-let mortgages (31 December 2021: 53%) that are classified as Stage 3 are in positive equity as at 31 December 2022
\n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 33%\n \n | \n \n \n 7%\n \n | \n \n \n 22%\n \n | \n
| \n 50% to 70% \n | \n \n \n 22%\n \n | \n \n \n 8%\n \n | \n \n \n 16%\n \n | \n
| \n 71% to 90% \n | \n \n \n 19%\n \n | \n \n \n 27%\n \n | \n \n \n 22%\n \n | \n
| \n 91% to 100% \n | \n \n \n 5%\n \n | \n \n \n 13%\n \n | \n \n \n 8%\n \n | \n
| \n Subtotal \n | \n \n \n 79%\n \n | \n \n \n 55%\n \n | \n \n \n 68%\n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 12%\n \n | \n \n \n 7%\n \n | \n
| \n 111% to 120% \n | \n \n \n 5%\n \n | \n \n \n 10%\n \n | \n \n \n 7%\n \n | \n
| \n 121% to 130% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 6%\n \n | \n
| \n 131% to 140% \n | \n \n \n 2%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 2%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n Greater than 180% \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n
| \n Subtotal \n | \n \n \n 21%\n \n | \n \n \n 45%\n \n | \n \n \n 32%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Stage 3\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 29% \n | \n \n 7% \n | \n \n 19% \n | \n
| \n 50% to 70% \n | \n \n 19% \n | \n \n 8% \n | \n \n 14% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 21% \n | \n \n 20% \n | \n
| \n 91% to 100% \n | \n \n 7% \n | \n \n 17% \n | \n \n 11% \n | \n
| \n Subtotal \n | \n \n 75% \n | \n \n 53% \n | \n \n 64% \n | \n
| \n 101% to 110% \n | \n \n 6% \n | \n \n 12% \n | \n \n 9% \n | \n
| \n 111% to 120% \n | \n \n 4% \n | \n \n 6% \n | \n \n 5% \n | \n
| \n 121% to 130% \n | \n \n 4% \n | \n \n 8% \n | \n \n 6% \n | \n
| \n 131% to 140% \n | \n \n 3% \n | \n \n 6% \n | \n \n 4% \n | \n
| \n 141% to 150% \n | \n \n 2% \n | \n \n 4% \n | \n \n 3% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 3% \n | \n \n 2% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 4% \n | \n \n 5% \n | \n \n 5% \n | \n
| \n Subtotal \n | \n \n 25% \n | \n \n 47% \n | \n \n 36% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \u20acm \n | \n \n \u20acm \n | \n \n \u20acm \n | \n
| \n Stage 3 \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n
\n (v) Group portfolios: Collateral in possession\n
\nCollateral in possession occurs where the obligor either (i) voluntarily surrenders the property or (ii) the Group takes legal ownership due to the non-repayment of the loan facility. The following tables outline the main movements in this category during the year.
\n \n \n \n \n \n\n Stock of collateral in possession\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n
| \n \n Residential collateral in possession\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 14\n \n | \n \n \n 7\n \n | \n \n 27 \n | \n \n 10 \n | \n
| \n Buy-to-let \n | \n \n \n 105\n \n | \n \n \n 27\n \n | \n \n 165 \n | \n \n 42 \n | \n
| \n \n Total\n \n | \n \n \n 119\n \n | \n \n \n 34\n \n | \n \n 192 \n | \n \n 52 \n | \n
Collateral in possession assets are sold as soon as practicable. These assets which total \u20ac18m as at 31 December 2022 (31 December 2021: \u20ac28m) are included in assets held for sale (see note 18 for further details).
\nDuring the year the ownership of 16 properties were transferred to the Group.
\nThe details of the transfers are provided in the table below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n - \n | \n
| \n Buy-to-let \n | \n \n 16 \n | \n
| \n \n Total\n \n | \n \n 16 \n | \n
During the year 89 properties were disposed. The details of the disposals are provided in the tables below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 13 \n | \n
| \n Buy-to-let \n | \n \n 76 \n | \n
| \n Total \n | \n \n 89 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at \n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 13 \n \n | \n \n \n 3 \n \n | \n \n \n 2 \n \n | \n \n \n -\n \n | \n \n \n 1 \n \n | \n
| \n Buy-to-let \n | \n \n \n 76 \n \n | \n \n \n 18 \n \n | \n \n \n 13 \n \n | \n \n \n 1 \n \n | \n \n \n 6 \n \n | \n
| \n \n Year ended 31 December 2022\n \n | \n \n \n 89 \n \n | \n \n \n 21 \n \n | \n \n \n 15 \n \n | \n \n \n 1 \n \n | \n \n \n 7 \n \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n| \n \n 31 December 2021\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at\n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 23 \n | \n \n 7 \n | \n \n 5 \n | \n \n - \n | \n \n 2 \n | \n
| \n Buy-to-let \n | \n \n 114 \n | \n \n 25 \n | \n \n 16 \n | \n \n 1 \n | \n \n 10 \n | \n
| \n Year ended 31 December 2021 \n | \n \n 137 \n | \n \n 32 \n | \n \n 21 \n | \n \n 1 \n | \n \n 12 \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n \n \n \n\n (vi) Additional disclosures on forborne loans\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with the current Code of Conduct on Mortgages Arrears (CCMA).
\nThe tables below set out the asset quality and volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers for the years ended 31 December 2022 and 2021. The number and balances of loans in forbearance arrangements for residential home loan mortgages and buy-to-let residential mortgages are analysed below.
\n\n (a) Asset quality\n
\nThe method of splitting the forborne loans and advances to customers over the different asset quality categories:
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n *Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n Satisfactory \n | \n \n \n 33\n \n | \n \n \n 5\n \n | \n \n \n 38\n \n | \n \n \n 1\n \n | \n \n \n 39\n \n | \n
| \n Fair \n | \n \n \n 92\n \n | \n \n \n 26\n \n | \n \n \n 118\n \n | \n \n \n 1\n \n | \n \n \n 119\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n 130\n \n | \n \n \n 31\n \n | \n \n \n 161\n \n | \n \n \n 2\n \n | \n \n \n 163\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 228\n \n | \n \n \n 68\n \n | \n \n \n 296\n \n | \n \n \n 6\n \n | \n \n \n 302\n \n | \n
| \n \n Total measured at amortised costs \n \n | \n \n \n 358\n \n | \n \n \n 99\n \n | \n \n \n 457\n \n | \n \n \n 8\n \n | \n \n \n 465\n \n | \n
Where a borrower has been granted a forbearance treatment, the loan is considered to have experienced a significant increase in credit risk and is classified as Stage 2 for Expected Credit Loss assessment purposes under IFRS 9.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential Mortgages \n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n * Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 6 \n | \n \n 5 \n | \n \n 11 \n | \n \n 1 \n | \n \n 12 \n | \n
| \n Satisfactory \n | \n \n 76 \n | \n \n 37 \n | \n \n 113 \n | \n \n - \n | \n \n 113 \n | \n
| \n Fair \n | \n \n 96 \n | \n \n 30 \n | \n \n 126 \n | \n \n 3 \n | \n \n 129 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n \n | \n \n 178 \n | \n \n 72 \n | \n \n 250 \n | \n \n 4 \n | \n \n 254 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 289 \n | \n \n 94 \n | \n \n 383 \n | \n \n 33 \n | \n \n 416 \n | \n
| \n Total measured at amortised costs \n | \n \n 467 \n | \n \n 166 \n | \n \n 633 \n | \n \n 37 \n | \n \n 670 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s Independent Auditor.
\n \n \n \n\n (b) Weighted Average - LTV\n
\n\n LTV on total portfolio in forbearance\n
\nThe tables below illustrates that 85% of residential home loan mortgages (31 December 2021: 84%) and 69% of residential buy-to-let mortgages (31 December 2021: 67%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 37%\n \n | \n \n \n 7%\n \n | \n \n \n 31%\n \n | \n
| \n 50% to 70% \n | \n \n \n 27%\n \n | \n \n \n 11%\n \n | \n \n \n 24%\n \n | \n
| \n 71% to 90% \n | \n \n \n 17%\n \n | \n \n \n 42%\n \n | \n \n \n 23%\n \n | \n
| \n 91% to 100% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 5%\n \n | \n
| \n Subtotal \n | \n \n \n 85%\n \n | \n \n \n 69%\n \n | \n \n \n 83%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 11%\n \n | \n \n \n 4%\n \n | \n
| \n 111% to 120% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 121% to 130% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 131% to 140% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n \n - \n \n | \n \n \n 1%\n \n | \n \n \n - \n \n | \n
| \n Greater than 180% \n | \n \n \n 2%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n Subtotal \n | \n \n \n 15%\n \n | \n \n \n 31%\n \n | \n \n \n 17%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n \n 66%\n \n | \n \n \n 92%\n \n | \n \n \n 72%\n \n | \n
| \n New residential mortgages \n | \n \n \n 73%\n \n | \n \n \n - \n \n | \n \n \n 73%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 75%\n \n | \n \n \n 97%\n \n | \n \n \n 80%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 33% \n | \n \n 7% \n | \n \n 26% \n | \n
| \n 50% to 70% \n | \n \n 25% \n | \n \n 11% \n | \n \n 21% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 30% \n | \n \n 23% \n | \n
| \n 91% to 100% \n | \n \n 6% \n | \n \n 19% \n | \n \n 9% \n | \n
| \n Subtotal \n | \n \n 84% \n | \n \n 67% \n | \n \n 79% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 4% \n | \n \n 12% \n | \n \n 6% \n | \n
| \n 111% to 120% \n | \n \n 3% \n | \n \n 8% \n | \n \n 4% \n | \n
| \n 121% to 130% \n | \n \n 2% \n | \n \n 1% \n | \n \n 2% \n | \n
| \n 131% to 140% \n | \n \n 2% \n | \n \n 4% \n | \n \n 2% \n | \n
| \n 141% to 150% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 2% \n | \n \n 3% \n | \n \n 3% \n | \n
| \n Subtotal \n | \n \n 16% \n | \n \n 33% \n | \n \n 21% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 70% \n | \n \n 95% \n | \n \n 76% \n | \n
| \n New residential mortgages \n | \n \n 47% \n | \n \n - \n | \n \n 47% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 104% \n | \n \n 84% \n | \n
\n (c) Forbearance arrangements - residential mortgages\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with existing CCMA. These are set out in the table below.
\n\n Residential mortgages\n
\nThe tables below set out the volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers as at 31 December 2022 and 31 December 2021.
\n\n (i) Residential home loan mortgages:\n
\nThe incidence of the main type of forbearance arrangements for owner occupied residential mortgages are analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 21\n \n | \n \n \n 6\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Reduced payment (less than interest only) \n | \n \n \n 34\n \n | \n \n \n 3\n \n | \n \n \n 22\n \n | \n \n \n 2\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 1,369\n \n | \n \n \n 192\n \n | \n \n \n 782\n \n | \n \n \n 120\n \n | \n
| \n Payment moratorium \n | \n \n \n 32\n \n | \n \n \n 5\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 433\n \n | \n \n \n 53\n \n | \n \n \n 252\n \n | \n \n \n 31\n \n | \n
| \n Term extension \n | \n \n \n 428\n \n | \n \n \n 32\n \n | \n \n \n 209\n \n | \n \n \n 17\n \n | \n
| \n Hybrid* \n | \n \n \n 277\n \n | \n \n \n 41\n \n | \n \n \n 178\n \n | \n \n \n 26\n \n | \n
| \n Split mortgages \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n
| \n \n Total\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 61 \n | \n \n 12 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n Reduced payment (less than interest only) \n | \n \n 35 \n | \n \n 5 \n | \n \n 33 \n | \n \n 5 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 1,815 \n | \n \n 255 \n | \n \n 1,015 \n | \n \n 157 \n | \n
| \n Payment moratorium \n | \n \n 64 \n | \n \n 8 \n | \n \n 47 \n | \n \n 6 \n | \n
| \n Arrears capitalisation \n | \n \n 524 \n | \n \n 66 \n | \n \n 264 \n | \n \n 36 \n | \n
| \n Term extension \n | \n \n 483 \n | \n \n 38 \n | \n \n 245 \n | \n \n 20 \n | \n
| \n Hybrid* \n | \n \n 378 \n | \n \n 55 \n | \n \n 190 \n | \n \n 29 \n | \n
| \n Split mortgages \n | \n \n 164 \n | \n \n 28 \n | \n \n 164 \n | \n \n 28 \n | \n
| \n Total \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 2,010 \n | \n \n 289 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 777 cases in the year to 31 December 2022 for the Group in the number of residential home loan mortgages in forbearance arrangements, a decrease of \u20ac109m. The average balance of forborne loans is \u20ac0.130m at 31 December 2022 (31 December 2021: \u20ac0.133m).
\n \n \n \n\n (ii) Residential buy-to-let mortgages:\n
\nThe incidence of the main type of forbearance arrangements for residential buy-to-let mortgages only is analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 19\n \n | \n \n \n 8\n \n | \n \n \n 17\n \n | \n \n \n 7\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 99\n \n | \n \n \n 29\n \n | \n \n \n 76\n \n | \n \n \n 24\n \n | \n
| \n Payment moratorium \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 18\n \n | \n \n \n 8\n \n | \n \n \n 10\n \n | \n \n \n 4\n \n | \n
| \n Term extension \n | \n \n \n 27\n \n | \n \n \n 6\n \n | \n \n \n 12\n \n | \n \n \n 3\n \n | \n
| \n Hybrid* \n | \n \n \n 70\n \n | \n \n \n 41\n \n | \n \n \n 51\n \n | \n \n \n 23\n \n | \n
| \n Split mortgages \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n
| \n \n Total\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 188\n \n | \n \n \n 68\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 54 \n | \n \n 27 \n | \n \n 31 \n | \n \n 15 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 190 \n | \n \n 58 \n | \n \n 121 \n | \n \n 38 \n | \n
| \n Payment moratorium \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n 62 \n | \n \n 31 \n | \n \n 21 \n | \n \n 11 \n | \n
| \n Term extension \n | \n \n 32 \n | \n \n 6 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n Hybrid* \n | \n \n 86 \n | \n \n 37 \n | \n \n 56 \n | \n \n 20 \n | \n
| \n Split mortgages \n | \n \n 23 \n | \n \n 7 \n | \n \n 23 \n | \n \n 7 \n | \n
| \n Total \n | \n \n 449 \n | \n \n 166 \n | \n \n 267 \n | \n \n 94 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 193 cases in the year to 31 December 2022 for the Group in the number of residential buy-to-let in forbearance arrangements, a decrease of \u20ac67m in balances. The average balance of forborne loans is \u20ac0.39m at 31 December 2022 (31 December 2021: \u20ac0.37m).
\n\n Commercial mortgages\n
\nThe incidence of the main type of forbearance arrangements for commercial mortgages are analysed below:
\n| \n \n Commercial mortgages\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 11\n \n | \n \n \n 5\n \n | \n \n 13 \n | \n \n 23 \n | \n
| \n Payment moratorium \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n \n 5 \n | \n \n 7 \n | \n
| \n Term extension \n | \n \n \n 7\n \n | \n \n \n 1\n \n | \n \n 9 \n | \n \n 4 \n | \n
| \n Hybrid* \n | \n \n \n 6\n \n | \n \n \n 1\n \n | \n \n 10 \n | \n \n 3 \n | \n
| \n Split mortgages \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n 37 \n | \n \n 37 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe table above reflects a decrease of 12 cases in the year to 31 December 2022 for the Group in the number of commercial mortgages in forbearance arrangements, a decrease of \u20ac29m in balances.
\n \n \n \n\n (d) Reconciliation of movement in forborne loans for all classes\n
\nThe tables below provide an analysis of the movement of total forborne loans and Stage 3 forborne loans during the year. It outlines the number and balances of forbearance treatments offered, expired and loans paid down during the year.
\n\n (i) Reconciliation of movement of total forborne loans\n
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2022\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 3,524\n \n | \n \n \n 467\n \n | \n \n \n 449\n \n | \n \n \n 166\n \n | \n \n \n 37\n \n | \n \n \n 37\n \n | \n \n \n 4,010\n \n | \n \n \n 670\n \n | \n
| \n New forbearance extended during the year* \n | \n \n \n 307\n \n | \n \n \n 39\n \n | \n \n \n 30\n \n | \n \n \n 17\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 337\n \n | \n \n \n 56\n \n | \n
| \n Deleveraged loans \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (138)\n \n | \n \n \n (51)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (141)\n \n | \n \n \n (52)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n \n (18)\n \n | \n \n \n (3)\n \n | \n \n \n (7)\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (25)\n \n | \n \n \n (7)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (816)\n \n | \n \n \n (106)\n \n | \n \n \n (34)\n \n | \n \n \n (13)\n \n | \n \n \n (4)\n \n | \n \n \n (21)\n \n | \n \n \n (854)\n \n | \n \n \n (140)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (247)\n \n | \n \n \n (25)\n \n | \n \n \n (44)\n \n | \n \n \n (12)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (299)\n \n | \n \n \n (45)\n \n | \n
| \n Balance shift** \n | \n \n \n -\n \n | \n \n \n (13)\n \n | \n \n \n -\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (17)\n \n | \n
| \n \n Closing balance of loans in forbearance as at 31 December 2022\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n \n 3,028\n \n | \n \n \n 465\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2021\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 5,066 \n | \n \n 726 \n | \n \n 679 \n | \n \n 231 \n | \n \n 44 \n | \n \n 20 \n | \n \n 5,789 \n | \n \n 977 \n | \n
| \n New forbearance extended during the year* \n | \n \n 458 \n | \n \n 62 \n | \n \n 76 \n | \n \n 30 \n | \n \n 7 \n | \n \n 24 \n | \n \n 541 \n | \n \n 116 \n | \n
| \n Deleveraged loans \n | \n \n (845) \n | \n \n (115) \n | \n \n (214) \n | \n \n (48) \n | \n \n (4) \n | \n \n (3) \n | \n \n (1,063) \n | \n \n (166) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n (16) \n | \n \n (3) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (17) \n | \n \n (3) \n | \n
| \n - expired forbearance treatment \n | \n \n (753) \n | \n \n (139) \n | \n \n (58) \n | \n \n (29) \n | \n \n (3) \n | \n \n (1) \n | \n \n (814) \n | \n \n (169) \n | \n
| \n - expired loan paid down \n | \n \n (386) \n | \n \n (49) \n | \n \n (33) \n | \n \n (13) \n | \n \n (7) \n | \n \n (2) \n | \n \n (426) \n | \n \n (64) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (15) \n | \n \n - \n | \n \n (5) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n (21) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 449 \n | \n \n 166 \n | \n \n 37 \n | \n \n 37 \n | \n \n 4,010 \n | \n \n 670 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n \n \n \n\n (ii) Reconciliation of movement in forborne loans Stage 3\n
\n| \n \n 31 December 2022\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 2,010 \n \n | \n \n \n 289 \n \n | \n \n \n 267 \n \n | \n \n \n 94 \n \n | \n \n \n 32 \n \n | \n \n \n 33 \n \n | \n \n \n 2,309 \n \n | \n \n \n 416 \n \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n \n 354 \n \n | \n \n \n 43 \n \n | \n \n \n 29 \n \n | \n \n \n 15 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 383 \n \n | \n \n \n 58 \n \n | \n
| \n Deleveraged loans \n | \n \n \n (3) \n \n | \n \n \n (1) \n \n | \n \n \n (32) \n \n | \n \n \n (10) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (35) \n \n | \n \n \n (11) \n \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n \n (550)\n \n | \n \n \n (70)\n \n | \n \n \n (29)\n \n | \n \n \n (11)\n \n | \n \n \n (4)\n \n | \n \n \n (1)\n \n | \n \n \n (583)\n \n | \n \n \n (82)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n \n (10)\n \n | \n \n \n (2)\n \n | \n \n \n (4)\n \n | \n \n \n (4)\n \n | \n \n - \n | \n \n \n - \n \n | \n \n \n (14)\n \n | \n \n \n (6)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (19)\n \n | \n \n \n (9)\n \n | \n \n \n (4)\n \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (17)\n \n | \n \n \n (24)\n \n | \n \n \n (29)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (148)\n \n | \n \n \n (18)\n \n | \n \n \n (39)\n \n | \n \n \n (11)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (195)\n \n | \n \n \n (37)\n \n | \n
| \n Balance shift** \n | \n \n \n - \n \n | \n \n \n (4)\n \n | \n \n \n - \n \n | \n \n \n (2)\n \n | \n \n \n - \n \n | \n \n \n (1) \n \n | \n \n \n - \n \n | \n \n \n (7)\n \n | \n
| \n \n Closing balance loans in forbearance as at 31 December 2022\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n \n \n 188 \n \n | \n \n \n 68\n \n | \n \n \n 19\n \n | \n \n \n 6\n \n | \n \n \n 1,841\n \n | \n \n \n 302\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n 31 December 2021\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 2,850 \n | \n \n 438 \n | \n \n 478 \n | \n \n 151 \n | \n \n 36 \n | \n \n 14 \n | \n \n 3,364 \n | \n \n 603 \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n 538 \n | \n \n 74 \n | \n \n 77 \n | \n \n 31 \n | \n \n 6 \n | \n \n 25 \n | \n \n 621 \n | \n \n 130 \n | \n
| \n Deleveraged loans \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n (392) \n | \n \n (46) \n | \n \n (32) \n | \n \n (13) \n | \n \n (1) \n | \n \n (1) \n | \n \n (425) \n | \n \n (60) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n (12) \n | \n \n (2) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (13) \n | \n \n (2) \n | \n
| \n - expired forbearance treatment \n | \n \n (112) \n | \n \n (25) \n | \n \n (76) \n | \n \n (19) \n | \n \n (1) \n | \n \n (1) \n | \n \n (189) \n | \n \n (45) \n | \n
| \n - expired loan paid down \n | \n \n (862) \n | \n \n (146) \n | \n \n (179) \n | \n \n (55) \n | \n \n (8) \n | \n \n (4) \n | \n \n (1,049) \n | \n \n (205) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (4) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (5) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 2,010 \n | \n \n 289 \n | \n \n 267 \n | \n \n 94 \n | \n \n 32 \n | \n \n 33 \n | \n \n 2,309 \n | \n \n 416 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n\n (vii) Funding profile\n
\nThe ALCO monitors sources of funding and their respective maturities with a focus on establishing a stable and cost effective funding profile. Excluding equity, the Group\u2019s funding profile as at the 31 December 2022 can be broken down into the below component parts:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Customer accounts \n | \n \n \n 93\n \n | \n \n 94 \n | \n
| \n Long-term debt \n | \n \n \n 4\n \n | \n \n 4 \n | \n
| \n Short-term debt \n | \n \n \n 3\n \n | \n \n 2 \n | \n
| \n \u00a0 \n | \n \n \n 100 \n \n | \n \n 100 \n | \n
Long-term debt refers to debt with a maturity greater than 12 months from year-end and short-term debt is that which has a maturity of less than 12 months from year-end.
\n \n \n \nIn accordance with IFRS 7, Financial Instruments: Disclosures, the following tables present the maturity analysis of financial liabilities on an undiscounted basis, by remaining contractual maturity at the statement of financial position date. These will not agree directly with the balances on the consolidated statement of financial position due to the inclusion of future interest payments.
\n| \n \n 31 December 2022\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n \n 614 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614 \n \n | \n
| \n Customer accounts \n | \n \n \n 19,906 \n \n | \n \n \n 689 \n \n | \n \n \n 261 \n \n | \n \n \n 385 \n \n | \n \n \n 157 \n \n | \n \n \n 342 \n \n | \n \n \n 21,740 \n \n | \n
| \n Debt securities in issue \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 6 \n \n | \n \n \n 11 \n \n | \n \n \n 371 \n \n | \n \n \n 308 \n \n | \n \n \n 702 \n \n | \n
| \n Derivative financial instruments \n | \n \n \n 10 \n \n | \n \n \n 169\n \n | \n \n \n 1,343 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1,522 \n \n | \n
| \n Subordinated liabilities \n | \n \n \n 1 \n \n | \n \n \n 1 \n \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 7 \n \n | \n \n \n 300 \n \n | \n \n \n 315 \n \n | \n
| \n Other financial liabilities \n | \n \n \n 145\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 3\n \n | \n \n \n 6\n \n | \n \n \n 27\n \n | \n \n \n 183\n \n | \n
| \n \n Total liabilities\n \n | \n \n \n 20,678 \n \n | \n \n \n 863 \n \n | \n \n \n 1,614 \n \n | \n \n \n 403 \n \n | \n \n \n 541 \n \n | \n \n \n 977 \n \n | \n \n \n 25,076 \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 16,032 \n | \n \n 1,416 \n | \n \n 454 \n | \n \n 575 \n | \n \n 221 \n | \n \n 405 \n | \n \n 19,103 \n | \n
| \n Debt securities in issue \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 537 \n | \n \n 552 \n | \n
| \n Derivative financial instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Subordinated liabilities \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 304 \n | \n \n 319 \n | \n
| \n Other financial liabilities \n | \n \n 92 \n | \n \n 48 \n | \n \n 1 \n | \n \n 3 \n | \n \n 4 \n | \n \n 22 \n | \n \n 170 \n | \n
| \n Total liabilities \n | \n \n 16,473 \n | \n \n 1,466 \n | \n \n 459 \n | \n \n 586 \n | \n \n 239 \n | \n \n 1,268 \n | \n \n 20,491 \n | \n
When managing the Group\u2019s liquidity and funding profile, for products where the contractual maturity date may be different from actual behaviour, the Group uses statistical methodologies to manage liquidity on an expected or behaviourally adjusted basis.
\n\n
The following table details the Group\u2019s liquidity analysis for derivative instruments that do not qualify as hedging instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates from the yield curves at the end of the reporting year. These will not agree directly with the balances on the consolidated statement of financial position.
\n| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n 82 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 82 \n \n | \n
| \n - outflow \n | \n \n \n (83)\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (83)\n \n | \n
| \n Business combinations forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n -\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n -\n \n | \n
| \n - outflow \n | \n \n \n (9)\n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,521)\n \n | \n
| \n \n Balance at 31 December 2022\n \n | \n \n \n (10) \n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,522) \n \n | \n
| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n - outflow \n | \n \n (84) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (84) \n | \n
| \n Balance at 31 December 2021 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n (viii) Interest rate gap position\n
\nGap analysis is a technique for measuring the Group\u2019s interest rate risk exposure beginning with a maturity/re-pricing schedule that distributes interest sensitive assets, liabilities, and derivative positions into \u201ctime bands\u201d according to their maturity (if fixed rate), time remaining to their next re-pricing (if floating rate) or behavioural convention in order to identify any sources of significant mismatches. The below December 2022 IRRBB profile also includes interest cash flows based on the next re-price date i.e. one month\u2019s interest included for variable rate products and lifetime interest for fixed rate products.
\nA summary of the Group\u2019s interest rate gap position is as follows:
\n\n Interest rate re-pricing\n
\n| \n \n 31 December 2022\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Assets\n \n | \n \n \n 9,884\n \n | \n \n \n 697\n \n | \n \n \n 1,757\n \n | \n \n \n 11,516\n \n | \n \n \n 2,148\n \n | \n \n \n 26,002\n \n | \n
| \n \n Liabilities\n \n | \n \n \n (6,048)\n \n | \n \n \n (996)\n \n | \n \n \n (2,425)\n \n | \n \n \n (12,932)\n \n | \n \n \n (2,836)\n \n | \n \n \n (25,237)\n \n | \n
| \n \n Derivatives \n \n | \n \n \n 81\n \n | \n \n \n -\n \n | \n \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 81\n \n | \n
| \n \n Interest rate re-pricing gap \n \n | \n \n \n 3,917\n \n | \n \n \n (299)\n \n | \n \n \n (668)\n \n | \n \n \n (1,416)\n \n | \n \n \n (688)\n \n | \n \n \n 846\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Cumulative interest rate re-pricing gap\n \n | \n \n \n 3,917\n \n | \n \n \n 3,618\n \n | \n \n \n 2,950\n \n | \n \n \n 1,534\n \n | \n \n \n 846\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Assets \n | \n \n 12,608 \n | \n \n 587 \n | \n \n 1264 \n | \n \n 6505 \n | \n \n 1079 \n | \n \n 22043 \n | \n
| \n Liabilities \n | \n \n (11,769) \n | \n \n (973) \n | \n \n (1,395) \n | \n \n (6,137) \n | \n \n (1,546) \n | \n \n -21820 \n | \n
| \n Derivatives \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n Interest rate re-pricing gap \n | \n \n 923 \n | \n \n (386) \n | \n \n (131) \n | \n \n 368 \n | \n \n (467) \n | \n \n 307 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cumulative interest rate re-pricing gap \n | \n \n 923 \n | \n \n 537 \n | \n \n 406 \n | \n \n 774 \n | \n \n 307 \n | \n \n \n | \n
An increase in ECB interest rates of 100bps would increase net interest income by \u20ac58m and a decrease in ECB interest rates of 100bps would decrease net interest income by \u20ac58m.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f96702": { "value": "\n\n 38. Financial risk management\n
\n\n Maximum exposure to credit risk before collateral held or other credit enhancements\n
\nThe following table outlines the maximum exposure to credit risk before collateral held or other credit enhancements in respect of the Group\u2019s financial assets as at the statement of financial position date.
\n| \n \n | \n \n \n Notes\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n 20 \n | \n
| \n Loans and advances to banks (iii) \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments (ii) \n | \n \n 16 \n | \n \n \n -\n \n | \n \n 1 \n | \n
| \n Debt securities (i) \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
| \n Loans and advances to customers (iv) \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n 14,256 \n | \n
| \n \n | \n \n \n | \n \n \n 24,991\n \n | \n \n 21,002 \n | \n
| \n Commitments and contingencies \n | \n \n 43 \n | \n \n \n 1,342\n \n | \n \n 1,181 \n | \n
| \n \n | \n \n \n | \n \n \n 26,333\n \n | \n \n 22,183 \n | \n
\n The following tables outline the Group\u2019s exposure to credit risk by asset class\n
\n\n (i) Debt securities\n
\nThe Group is exposed to the credit risk on third parties where the Group holds debt securities (primarily sovereign debt). These exposures are subject to the limitations contained within Board approved policies, with sovereign debt restricted to those countries that have an External Credit Assessment Institution (ECAI) rating of investment grade.
\nThe following table gives an indication of the level of the credit worthiness of the Group\u2019s debt securities and is based on the Group\u2019s internal rating policy which was approved by the CBI. The inputs to the ratings used in the table below are those prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the EU.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating\n \n | \n \n \n | \n \n \n | \n
| \n Aaa \n | \n \n \n 49\n \n | \n \n 60 \n | \n
| \n AA+ \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n Aa2 \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n A1 \n | \n \n \n 1,734\n \n | \n \n - \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 1,463 \n | \n
| \n Baa1 \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n Baa2 \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Baa3 \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
The following table discloses, by country, the Group\u2019s exposure to sovereign debt and corporate debt as at:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Country\n \n | \n \n \n | \n \n \n | \n
| \n Ireland \n | \n \n \n 1,783\n \n | \n \n 1,523 \n | \n
| \n Portugal \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Spain \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n France \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n Italy \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n EU \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
\n (ii) Derivative financial instruments\n
\nThe Group has executed standard ISDA agreements with all of its counterparties. The Group has also executed CSAs with all of its counterparties in respect of the majority of derivative instruments to mitigate its credit risk. As part of these agreements, the Group exchanges collateral in line with movements in the market values of derivative positions daily. FX forward derivatives are settled gross. The cumulative positive market value of derivative assets at 31 December 2022 was \u20acnil (31 December 2021: \u20ac1m). The Group manages its collateral derivative positions with counterparties on a net basis. The uncollaterised derivative positions are all held with investment grade counterparties.
\n\n (iii) Loans and advances to banks\n
\nThe Group has a policy to ensure that, where possible, loans and advances to banks are held with investment grade counterparties with any exceptions subject to prior approval by the BRCC. The following table gives an indication of the level of creditworthiness of the Group\u2019s loans and advances to banks and is based on the ratings prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the CBI.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating \n \n | \n \n \n | \n \n \n | \n
| \n AAA \n | \n \n \n 1,620\n \n | \n \n 3,709 \n | \n
| \n Aa2 \n | \n \n \n 199\n \n | \n \n 199 \n | \n
| \n Aa3 \n | \n \n \n 286\n \n | \n \n 258 \n | \n
| \n A1 \n | \n \n \n 10\n \n | \n \n 2 \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 6 \n | \n
| \n Ba1 \n | \n \n \n 8\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
The following sections detail additional disclosures on asset quality.
\n\n (iv) Loans and advances to customers\n
\n\n Gross customer loans and advances\n
\nThe tables below outline total loans and advances to customers for the Group analysed by home loan, buy-to-let, commercial and consumer finance.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n Measured at amortised cost\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Residential mortgages: \n | \n \n \n | \n \n \n | \n
| \n Home loan \n | \n \n \n 18,340\n \n | \n \n 12,568 \n | \n
| \n Buy-to-let \n | \n \n \n 824\n \n | \n \n 1,623 \n | \n
| \n \n Total residential mortgages\n \n | \n \n \n 19,164\n \n | \n \n 14,191 \n | \n
| \n Commercial \n | \n \n \n 239\n \n | \n \n 196 \n | \n
| \n Consumer finance \n | \n \n \n 401\n \n | \n \n 358 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Analysed by ECL staging:\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 17,455 \n \n | \n \n 11,689 \n | \n
| \n Stage 2 \n | \n \n \n 1,699 \n \n | \n \n 2,239 \n | \n
| \n Stage 3 \n | \n \n \n 649\n \n | \n \n 815 \n | \n
| \n POCI \n | \n \n \n 1\n \n | \n \n 2 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Of which at the reporting date \n \n | \n \n \n | \n \n \n | \n
| \n Neither past due nor Stage 3 \n | \n \n \n 19,118\n \n | \n \n 13,885 \n | \n
| \n Past due but not Stage 3 \n | \n \n \n 36\n \n | \n \n 43 \n | \n
| \n Stage 3 \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n Of which are reported as non-performing loans\n \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Deferred fees, discounts and fair value adjustments\n \n | \n \n \n 310\n \n | \n \n 115 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n \n Asset quality*\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 1\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 12,826\n \n | \n \n \n 65\n \n | \n \n \n 12,891\n \n | \n \n \n 11\n \n | \n \n \n 143\n \n | \n \n \n 13,045\n \n | \n
| \n Satisfactory \n | \n \n \n 4,064\n \n | \n \n \n 141\n \n | \n \n \n 4,205\n \n | \n \n \n 17\n \n | \n \n \n 61\n \n | \n \n \n 4,283\n \n | \n
| \n Fair \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 21\n \n | \n \n \n 43\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 84\n \n | \n \n \n 84\n \n | \n
| \n \n | \n \n \n 16,912\n \n | \n \n \n 206\n \n | \n \n \n 17,118\n \n | \n \n \n 28\n \n | \n \n \n 309\n \n | \n \n \n 17,455\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 79\n \n | \n \n \n 44\n \n | \n \n \n 123\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n 128\n \n | \n
| \n Satisfactory \n | \n \n \n 296\n \n | \n \n \n 107\n \n | \n \n \n 403\n \n | \n \n \n 27\n \n | \n \n \n 21\n \n | \n \n \n 451\n \n | \n
| \n Fair \n | \n \n \n 711\n \n | \n \n \n 197\n \n | \n \n \n 908\n \n | \n \n \n 161\n \n | \n \n \n 26\n \n | \n \n \n 1,095\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 25\n \n | \n \n \n 25\n \n | \n
| \n \n | \n \n \n 1,086\n \n | \n \n \n 348\n \n | \n \n \n 1,434\n \n | \n \n \n 188\n \n | \n \n \n 77\n \n | \n \n \n 1,699\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n Total measured at amortised cost \n | \n \n \n 18,340\n \n | \n \n \n 824\n \n | \n \n \n 19,164\n \n | \n \n \n 239\n \n | \n \n \n 401\n \n | \n \n \n 19,804\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n Asset quality* \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 7,096 \n | \n \n 184 \n | \n \n 7,280 \n | \n \n 1 \n | \n \n 160 \n | \n \n 7,441 \n | \n
| \n Satisfactory \n | \n \n 3,807 \n | \n \n 289 \n | \n \n 4,096 \n | \n \n 10 \n | \n \n 65 \n | \n \n 4,171 \n | \n
| \n Fair \n | \n \n 20 \n | \n \n 1 \n | \n \n 21 \n | \n \n - \n | \n \n 6 \n | \n \n 27 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 50 \n | \n \n 50 \n | \n
| \n \n | \n \n 10,923 \n | \n \n 474 \n | \n \n 11,397 \n | \n \n 11 \n | \n \n 281 \n | \n \n 11,689 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 146 \n | \n \n 209 \n | \n \n 355 \n | \n \n 7 \n | \n \n 2 \n | \n \n 364 \n | \n
| \n Satisfactory \n | \n \n 344 \n | \n \n 334 \n | \n \n 678 \n | \n \n 58 \n | \n \n 17 \n | \n \n 753 \n | \n
| \n Fair \n | \n \n 735 \n | \n \n 267 \n | \n \n 1,002 \n | \n \n 76 \n | \n \n 29 \n | \n \n 1,107 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 15 \n | \n \n 15 \n | \n
| \n \n | \n \n 1,225 \n | \n \n 810 \n | \n \n 2,035 \n | \n \n 141 \n | \n \n 63 \n | \n \n 2,239 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Total measured at amortised cost \n | \n \n 12,568 \n | \n \n 1,623 \n | \n \n 14,191 \n | \n \n 196 \n | \n \n 358 \n | \n \n 14,745 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s independent auditor.
\n \nThe following table provides an aged analysis of customer loans and advances which are past due but not Stage 3.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n Fair value of collateral held \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
Collateral held against residential mortgages is principally comprised of residential properties; their fair value has been estimated based upon the last actual valuation, adjusted to take into account subsequent movement in house prices and is capped at the lower of the loan balance or the valuation amount.
\n\n Non-performing loans\n
\nNon-performing loans (NPLs) are loans which are credit impaired or loans which are classified as defaulted in accordance with the Group\u2019s definition of default. The Group\u2019s definition of default considers objective indicators of default including the 90 days past due criterion, evidence of exercise of concessions or modifications to terms and conditions is designed to be consistent with European Banking Authority (EBA) guidance on the definition of forbearance.
\nForeclosed assets are assets held on the balance sheet which are obtained by taking possession of collateral or by calling on similar credit enhancements.
\n \nNon-performing assets are defined as NPLs plus foreclosed assets.
\n| \n \n 31 December 2022\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n \n 175\n \n | \n \n \n 118\n \n | \n \n \n 17\n \n | \n \n \n 2\n \n | \n \n \n 312\n \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n \n 31\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n 3\n \n | \n \n \n 49\n \n | \n
| \n NPL is 1-2 years past due \n | \n \n \n 31\n \n | \n \n \n 80\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 113\n \n | \n
| \n NPL is 2-5 years past due \n | \n \n \n 51\n \n | \n \n \n 28\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 81\n \n | \n
| \n NPL is > 5 years past due \n | \n \n \n 54\n \n | \n \n \n 29\n \n | \n \n \n 6\n \n | \n \n \n 5\n \n | \n \n \n 94\n \n | \n
| \n POCI \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n
| \n \n Non-performing loans\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n \n Foreclosed assets\n \n | \n \n \n 3\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n \n Non-performing assets\n \n | \n \n \n 345\n \n | \n \n \n 285\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 668\n \n | \n
| \n \n NPLs as % of gross loans\n \n | \n \n \n 1.9%\n \n | \n \n \n 32.8%\n \n | \n \n \n 9.6%\n \n | \n \n \n 3.7%\n \n | \n \n \n 3.3%\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n 251 \n | \n \n 177 \n | \n \n 40 \n | \n \n 1 \n | \n \n 469 \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n 32 \n | \n \n 89 \n | \n \n 1 \n | \n \n 6 \n | \n \n 128 \n | \n
| \n NPL is 1-2 years past due \n | \n \n 39 \n | \n \n 25 \n | \n \n - \n | \n \n 2 \n | \n \n 66 \n | \n
| \n NPL is 2-5 years past due \n | \n \n 36 \n | \n \n 10 \n | \n \n - \n | \n \n 1 \n | \n \n 47 \n | \n
| \n NPL is > 5 years past due \n | \n \n 62 \n | \n \n 38 \n | \n \n 3 \n | \n \n 2 \n | \n \n 105 \n | \n
| \n POCI \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 2 \n | \n \n 2 \n | \n
| \n Non-performing loans \n | \n \n 420 \n | \n \n 339 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Foreclosed assets \n | \n \n 4 \n | \n \n 24 \n | \n \n - \n | \n \n - \n | \n \n 28 \n | \n
| \n Non-performing assets \n | \n \n 424 \n | \n \n 363 \n | \n \n 44 \n | \n \n 14 \n | \n \n 845 \n | \n
| \n NPLs as % of gross loans \n | \n \n 3.3% \n | \n \n 20.9% \n | \n \n 22.5% \n | \n \n 3.9% \n | \n \n 5.5% \n | \n
Non-performing loans as a percentage of total loans and advances was 3.3% at 31 December 2022, a reduction from 5.5% at 31 December 2021.
\n\n Total portfolio loss allowance: statement of financial position\n
\nThe tables below outline the ECL loss allowance total at 31 December 2022 in respect of total customer loans and advances.
\nThe impairment charge in respect of the total loans and advances for year ended 31 December 2022 is \u20ac7m, compared to a write-back of \u20ac1m for the year ended 31 December 2021.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Loss allowance - statement of financial position\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 136 \n \n | \n \n 61 \n | \n
| \n Stage 2 \n | \n \n \n 163 \n \n | \n \n 238 \n | \n
| \n Stage 3 \n | \n \n \n 222 \n \n | \n \n 305 \n | \n
| \n \n Total loss allowance\n \n | \n \n \n 521\n \n | \n \n 604 \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Provision coverage ratio*\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 0.8%\n \n | \n \n 0.5% \n | \n
| \n Stage 2 \n | \n \n \n 9.6%\n \n | \n \n 10.6% \n | \n
| \n Stage 3 \n | \n \n \n 34.1%\n \n | \n \n 37.3% \n | \n
| \n \n Total provisions/total loans\n \n | \n \n \n 2.6%\n \n | \n \n 4.1% \n | \n
*Provision coverage ratio is calculated as loss allowance/impairment provision as a percentage of gross loan balance.
\n\n Origination profile\n
\nLoan origination profile of the residential mortgage loan portfolio before provision for impairment:
\nThe table below illustrates that \u20ac2bn or 11% of the residential mortgage portfolio originated before 2006. Between 2006 and 2008 origination was \u20ac5bn or 24% of the residential mortgages. The residual of 65% of the residential mortgages were originated between 2009 and 2022.
\n| \n \n 31 December 2022\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1999 and before \n | \n \n 1,786 \n | \n \n 30 \n | \n \n 113 \n | \n \n 4 \n | \n
| \n 2000 \n | \n \n 1,483 \n | \n \n 40 \n | \n \n 57 \n | \n \n 3 \n | \n
| \n 2001 \n | \n \n 1,938 \n | \n \n 66 \n | \n \n 79 \n | \n \n 4 \n | \n
| \n 2002 \n | \n \n 2,801 \n | \n \n 127 \n | \n \n 99 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,360 \n | \n \n 255 \n | \n \n 166 \n | \n \n 14 \n | \n
| \n 2004 \n | \n \n 7,729 \n | \n \n 514 \n | \n \n 220 \n | \n \n 23 \n | \n
| \n 2005 \n | \n \n 11,134 \n | \n \n 1,006 \n | \n \n 397 \n | \n \n 57 \n | \n
| \n 2006 \n | \n \n 14,396 \n | \n \n 1,796 \n | \n \n 723 \n | \n \n 169 \n | \n
| \n 2007 \n | \n \n 12,439 \n | \n \n 1,730 \n | \n \n 740 \n | \n \n 203 \n | \n
| \n 2008 \n | \n \n 7,912 \n | \n \n 1,006 \n | \n \n 408 \n | \n \n 90 \n | \n
| \n 2009 \n | \n \n 2,301 \n | \n \n 213 \n | \n \n 65 \n | \n \n 7 \n | \n
| \n 2010 \n | \n \n 936 \n | \n \n 70 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2011 \n | \n \n 819 \n | \n \n 69 \n | \n \n 5 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 1,190 \n | \n \n 110 \n | \n \n 3 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 1,673 \n | \n \n 163 \n | \n \n 4 \n | \n \n - \n | \n
| \n 2014 \n | \n \n 2,960 \n | \n \n 316 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 4,058 \n | \n \n 471 \n | \n \n 29 \n | \n \n 1 \n | \n
| \n 2016 \n | \n \n 4,664 \n | \n \n 639 \n | \n \n 23 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 5,804 \n | \n \n 899 \n | \n \n 24 \n | \n \n 4 \n | \n
| \n 2018 \n | \n \n 7,607 \n | \n \n 1,345 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n 2019 \n | \n \n 9,633 \n | \n \n 1,863 \n | \n \n 37 \n | \n \n 7 \n | \n
| \n 2020 \n | \n \n 7,940 \n | \n \n 1,735 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 8,871 \n | \n \n 2,164 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2022 \n | \n \n 9,409 \n | \n \n 2,537 \n | \n \n 4 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 134,843\n \n | \n \n \n 19,164\n \n | \n \n \n 3,297\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1998 and before \n | \n \n 967 \n | \n \n 13 \n | \n \n 75 \n | \n \n 2 \n | \n
| \n 1999 \n | \n \n 754 \n | \n \n 18 \n | \n \n 53 \n | \n \n 2 \n | \n
| \n 2000 \n | \n \n 1,204 \n | \n \n 38 \n | \n \n 73 \n | \n \n 4 \n | \n
| \n 2001 \n | \n \n 1,561 \n | \n \n 61 \n | \n \n 103 \n | \n \n 6 \n | \n
| \n 2002 \n | \n \n 3,485 \n | \n \n 132 \n | \n \n 120 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,145 \n | \n \n 273 \n | \n \n 189 \n | \n \n 18 \n | \n
| \n 2004 \n | \n \n 7,697 \n | \n \n 574 \n | \n \n 259 \n | \n \n 32 \n | \n
| \n 2005 \n | \n \n 11,173 \n | \n \n 1,105 \n | \n \n 487 \n | \n \n 76 \n | \n
| \n 2006 \n | \n \n 15,474 \n | \n \n 2,125 \n | \n \n 881 \n | \n \n 215 \n | \n
| \n 2007 \n | \n \n 13,532 \n | \n \n 2,005 \n | \n \n 842 \n | \n \n 239 \n | \n
| \n 2008 \n | \n \n 8,712 \n | \n \n 1,207 \n | \n \n 513 \n | \n \n 111 \n | \n
| \n 2009 \n | \n \n 2,135 \n | \n \n 193 \n | \n \n 79 \n | \n \n 8 \n | \n
| \n 2010 \n | \n \n 889 \n | \n \n 67 \n | \n \n 23 \n | \n \n 3 \n | \n
| \n 2011 \n | \n \n 550 \n | \n \n 44 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 315 \n | \n \n 21 \n | \n \n 5 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 716 \n | \n \n 67 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2014 \n | \n \n 1,497 \n | \n \n 156 \n | \n \n 14 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 1,648 \n | \n \n 179 \n | \n \n 39 \n | \n \n 3 \n | \n
| \n 2016 \n | \n \n 1,811 \n | \n \n 227 \n | \n \n 25 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 3,202 \n | \n \n 487 \n | \n \n 31 \n | \n \n 5 \n | \n
| \n 2018 \n | \n \n 4,974 \n | \n \n 924 \n | \n \n 48 \n | \n \n 10 \n | \n
| \n 2019 \n | \n \n 6,282 \n | \n \n 1,306 \n | \n \n 40 \n | \n \n 8 \n | \n
| \n 2020 \n | \n \n 5,153 \n | \n \n 1,184 \n | \n \n 21 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 7,099 \n | \n \n 1,785 \n | \n \n 18 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 105,975\n \n | \n \n \n 14,191\n \n | \n \n \n 3,954\n \n | \n \n \n 759\n \n | \n
\n Loan-to-value profile\n
\n\n Loan-to-value (LTV) of mortgage lending (index linked):\n
\nThe LTV ratio is calculated at a property level and is the average of indexed property values in proportion to the outstanding loan balance. LTV is a key input to the impairment provisioning process. The tables below outline the composition of this ratio for the residential loan portfolio.
\n\n Actual and average LTVs across principal mortgage portfolios:\n
\nThe tables below outline the weighted average LTVs for the total residential mortgage portfolios analysed across home loan and buy-to-let facilities by value. The weighted average LTV on the existing residential mortgage portfolios is 54% at 31 December 2022 compared to 58% at 31 December 2021.
\nThe Group\u2019s residential mortgage lending LTVs at December 2022 reflect updated valuations obtained on high-exposure NPLs (largely impacting on high-exposure buy-to-let properties).
\n \n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 44%\n \n | \n \n \n 32%\n \n | \n \n \n 44%\n \n | \n
| \n 50% to 70% \n | \n \n \n 40%\n \n | \n \n \n 18%\n \n | \n \n \n 39%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 24%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n 1%\n \n | \n \n \n 8%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 99%\n \n | \n \n \n 82%\n \n | \n \n \n 98%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 1%\n \n | \n \n \n 5%\n \n | \n \n \n 1%\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 3%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 1%\n \n | \n \n \n 18%\n \n | \n \n \n 2%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of existing residential mortgages \n | \n \n \n 53%\n \n | \n \n \n 76%\n \n | \n \n \n 54%\n \n | \n
| \n New residential mortgages \n | \n \n \n 68%\n \n | \n \n \n 58%\n \n | \n \n \n 68%\n \n | \n
| \n Acquired residential mortgages \n | \n \n \n 47%\n \n | \n \n \n 39%\n \n | \n \n \n 47%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 74%\n \n | \n \n \n 100%\n \n | \n \n \n 85%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 38% \n | \n \n 32% \n | \n \n 37% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 16% \n | \n \n 32% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 21% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 11% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 98% \n | \n \n 80% \n | \n \n 96% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 6% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 4% \n | \n \n 1% \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 3% \n | \n \n 1% \n | \n
| \n 131% to 140% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 2% \n | \n \n 20% \n | \n \n 4% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 56% \n | \n \n 74% \n | \n \n 58% \n | \n
| \n New residential mortgages \n | \n \n 69% \n | \n \n 54% \n | \n \n 69% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 105% \n | \n \n 90% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is neither past due nor Stage 3:\n
\nThe tables below illustrates that 100% of residential home loan mortgages (31 December 2021: 99%) and 94% of residential buy-to-let mortgages (31 December 2021: 87%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 45%\n \n | \n \n \n 44%\n \n | \n \n \n 45%\n \n | \n
| \n 50% to 70% \n | \n \n \n 41%\n \n | \n \n \n 23%\n \n | \n \n \n 40%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 23%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 100%\n \n | \n \n \n 94%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n Subtotal \n | \n \n \n -\n \n | \n \n \n 6%\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 39% \n | \n \n 39% \n | \n \n 39% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 19% \n | \n \n 34% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 20% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 9% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 99% \n | \n \n 87% \n | \n \n 99% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 5% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 3% \n | \n \n - \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n 131% to 140% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 1% \n | \n \n 13% \n | \n \n 1% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is classified as Stage 3:\n
\nThe tables below illustrates that 79% of residential home loan mortgages (31 December 2021: 75%) and 55% of residential buy-to-let mortgages (31 December 2021: 53%) that are classified as Stage 3 are in positive equity as at 31 December 2022
\n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 33%\n \n | \n \n \n 7%\n \n | \n \n \n 22%\n \n | \n
| \n 50% to 70% \n | \n \n \n 22%\n \n | \n \n \n 8%\n \n | \n \n \n 16%\n \n | \n
| \n 71% to 90% \n | \n \n \n 19%\n \n | \n \n \n 27%\n \n | \n \n \n 22%\n \n | \n
| \n 91% to 100% \n | \n \n \n 5%\n \n | \n \n \n 13%\n \n | \n \n \n 8%\n \n | \n
| \n Subtotal \n | \n \n \n 79%\n \n | \n \n \n 55%\n \n | \n \n \n 68%\n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 12%\n \n | \n \n \n 7%\n \n | \n
| \n 111% to 120% \n | \n \n \n 5%\n \n | \n \n \n 10%\n \n | \n \n \n 7%\n \n | \n
| \n 121% to 130% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 6%\n \n | \n
| \n 131% to 140% \n | \n \n \n 2%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 2%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n Greater than 180% \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n
| \n Subtotal \n | \n \n \n 21%\n \n | \n \n \n 45%\n \n | \n \n \n 32%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Stage 3\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 29% \n | \n \n 7% \n | \n \n 19% \n | \n
| \n 50% to 70% \n | \n \n 19% \n | \n \n 8% \n | \n \n 14% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 21% \n | \n \n 20% \n | \n
| \n 91% to 100% \n | \n \n 7% \n | \n \n 17% \n | \n \n 11% \n | \n
| \n Subtotal \n | \n \n 75% \n | \n \n 53% \n | \n \n 64% \n | \n
| \n 101% to 110% \n | \n \n 6% \n | \n \n 12% \n | \n \n 9% \n | \n
| \n 111% to 120% \n | \n \n 4% \n | \n \n 6% \n | \n \n 5% \n | \n
| \n 121% to 130% \n | \n \n 4% \n | \n \n 8% \n | \n \n 6% \n | \n
| \n 131% to 140% \n | \n \n 3% \n | \n \n 6% \n | \n \n 4% \n | \n
| \n 141% to 150% \n | \n \n 2% \n | \n \n 4% \n | \n \n 3% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 3% \n | \n \n 2% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 4% \n | \n \n 5% \n | \n \n 5% \n | \n
| \n Subtotal \n | \n \n 25% \n | \n \n 47% \n | \n \n 36% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \u20acm \n | \n \n \u20acm \n | \n \n \u20acm \n | \n
| \n Stage 3 \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n
\n (v) Group portfolios: Collateral in possession\n
\nCollateral in possession occurs where the obligor either (i) voluntarily surrenders the property or (ii) the Group takes legal ownership due to the non-repayment of the loan facility. The following tables outline the main movements in this category during the year.
\n \n \n \n\n Stock of collateral in possession\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n
| \n \n Residential collateral in possession\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 14\n \n | \n \n \n 7\n \n | \n \n 27 \n | \n \n 10 \n | \n
| \n Buy-to-let \n | \n \n \n 105\n \n | \n \n \n 27\n \n | \n \n 165 \n | \n \n 42 \n | \n
| \n \n Total\n \n | \n \n \n 119\n \n | \n \n \n 34\n \n | \n \n 192 \n | \n \n 52 \n | \n
Collateral in possession assets are sold as soon as practicable. These assets which total \u20ac18m as at 31 December 2022 (31 December 2021: \u20ac28m) are included in assets held for sale (see note 18 for further details).
\nDuring the year the ownership of 16 properties were transferred to the Group.
\nThe details of the transfers are provided in the table below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n - \n | \n
| \n Buy-to-let \n | \n \n 16 \n | \n
| \n \n Total\n \n | \n \n 16 \n | \n
During the year 89 properties were disposed. The details of the disposals are provided in the tables below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 13 \n | \n
| \n Buy-to-let \n | \n \n 76 \n | \n
| \n Total \n | \n \n 89 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at \n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 13 \n \n | \n \n \n 3 \n \n | \n \n \n 2 \n \n | \n \n \n -\n \n | \n \n \n 1 \n \n | \n
| \n Buy-to-let \n | \n \n \n 76 \n \n | \n \n \n 18 \n \n | \n \n \n 13 \n \n | \n \n \n 1 \n \n | \n \n \n 6 \n \n | \n
| \n \n Year ended 31 December 2022\n \n | \n \n \n 89 \n \n | \n \n \n 21 \n \n | \n \n \n 15 \n \n | \n \n \n 1 \n \n | \n \n \n 7 \n \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n| \n \n 31 December 2021\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at\n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 23 \n | \n \n 7 \n | \n \n 5 \n | \n \n - \n | \n \n 2 \n | \n
| \n Buy-to-let \n | \n \n 114 \n | \n \n 25 \n | \n \n 16 \n | \n \n 1 \n | \n \n 10 \n | \n
| \n Year ended 31 December 2021 \n | \n \n 137 \n | \n \n 32 \n | \n \n 21 \n | \n \n 1 \n | \n \n 12 \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n \n\n (vi) Additional disclosures on forborne loans\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with the current Code of Conduct on Mortgages Arrears (CCMA).
\nThe tables below set out the asset quality and volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers for the years ended 31 December 2022 and 2021. The number and balances of loans in forbearance arrangements for residential home loan mortgages and buy-to-let residential mortgages are analysed below.
\n\n (a) Asset quality\n
\nThe method of splitting the forborne loans and advances to customers over the different asset quality categories:
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n *Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n Satisfactory \n | \n \n \n 33\n \n | \n \n \n 5\n \n | \n \n \n 38\n \n | \n \n \n 1\n \n | \n \n \n 39\n \n | \n
| \n Fair \n | \n \n \n 92\n \n | \n \n \n 26\n \n | \n \n \n 118\n \n | \n \n \n 1\n \n | \n \n \n 119\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n 130\n \n | \n \n \n 31\n \n | \n \n \n 161\n \n | \n \n \n 2\n \n | \n \n \n 163\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 228\n \n | \n \n \n 68\n \n | \n \n \n 296\n \n | \n \n \n 6\n \n | \n \n \n 302\n \n | \n
| \n \n Total measured at amortised costs \n \n | \n \n \n 358\n \n | \n \n \n 99\n \n | \n \n \n 457\n \n | \n \n \n 8\n \n | \n \n \n 465\n \n | \n
Where a borrower has been granted a forbearance treatment, the loan is considered to have experienced a significant increase in credit risk and is classified as Stage 2 for Expected Credit Loss assessment purposes under IFRS 9.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential Mortgages \n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n * Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 6 \n | \n \n 5 \n | \n \n 11 \n | \n \n 1 \n | \n \n 12 \n | \n
| \n Satisfactory \n | \n \n 76 \n | \n \n 37 \n | \n \n 113 \n | \n \n - \n | \n \n 113 \n | \n
| \n Fair \n | \n \n 96 \n | \n \n 30 \n | \n \n 126 \n | \n \n 3 \n | \n \n 129 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n \n | \n \n 178 \n | \n \n 72 \n | \n \n 250 \n | \n \n 4 \n | \n \n 254 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 289 \n | \n \n 94 \n | \n \n 383 \n | \n \n 33 \n | \n \n 416 \n | \n
| \n Total measured at amortised costs \n | \n \n 467 \n | \n \n 166 \n | \n \n 633 \n | \n \n 37 \n | \n \n 670 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s Independent Auditor.
\n \n\n (b) Weighted Average - LTV\n
\n\n LTV on total portfolio in forbearance\n
\nThe tables below illustrates that 85% of residential home loan mortgages (31 December 2021: 84%) and 69% of residential buy-to-let mortgages (31 December 2021: 67%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 37%\n \n | \n \n \n 7%\n \n | \n \n \n 31%\n \n | \n
| \n 50% to 70% \n | \n \n \n 27%\n \n | \n \n \n 11%\n \n | \n \n \n 24%\n \n | \n
| \n 71% to 90% \n | \n \n \n 17%\n \n | \n \n \n 42%\n \n | \n \n \n 23%\n \n | \n
| \n 91% to 100% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 5%\n \n | \n
| \n Subtotal \n | \n \n \n 85%\n \n | \n \n \n 69%\n \n | \n \n \n 83%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 11%\n \n | \n \n \n 4%\n \n | \n
| \n 111% to 120% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 121% to 130% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 131% to 140% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n \n - \n \n | \n \n \n 1%\n \n | \n \n \n - \n \n | \n
| \n Greater than 180% \n | \n \n \n 2%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n Subtotal \n | \n \n \n 15%\n \n | \n \n \n 31%\n \n | \n \n \n 17%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n \n 66%\n \n | \n \n \n 92%\n \n | \n \n \n 72%\n \n | \n
| \n New residential mortgages \n | \n \n \n 73%\n \n | \n \n \n - \n \n | \n \n \n 73%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 75%\n \n | \n \n \n 97%\n \n | \n \n \n 80%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 33% \n | \n \n 7% \n | \n \n 26% \n | \n
| \n 50% to 70% \n | \n \n 25% \n | \n \n 11% \n | \n \n 21% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 30% \n | \n \n 23% \n | \n
| \n 91% to 100% \n | \n \n 6% \n | \n \n 19% \n | \n \n 9% \n | \n
| \n Subtotal \n | \n \n 84% \n | \n \n 67% \n | \n \n 79% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 4% \n | \n \n 12% \n | \n \n 6% \n | \n
| \n 111% to 120% \n | \n \n 3% \n | \n \n 8% \n | \n \n 4% \n | \n
| \n 121% to 130% \n | \n \n 2% \n | \n \n 1% \n | \n \n 2% \n | \n
| \n 131% to 140% \n | \n \n 2% \n | \n \n 4% \n | \n \n 2% \n | \n
| \n 141% to 150% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 2% \n | \n \n 3% \n | \n \n 3% \n | \n
| \n Subtotal \n | \n \n 16% \n | \n \n 33% \n | \n \n 21% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 70% \n | \n \n 95% \n | \n \n 76% \n | \n
| \n New residential mortgages \n | \n \n 47% \n | \n \n - \n | \n \n 47% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 104% \n | \n \n 84% \n | \n
\n (c) Forbearance arrangements - residential mortgages\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with existing CCMA. These are set out in the table below.
\n\n Residential mortgages\n
\nThe tables below set out the volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers as at 31 December 2022 and 31 December 2021.
\n\n (i) Residential home loan mortgages:\n
\nThe incidence of the main type of forbearance arrangements for owner occupied residential mortgages are analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 21\n \n | \n \n \n 6\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Reduced payment (less than interest only) \n | \n \n \n 34\n \n | \n \n \n 3\n \n | \n \n \n 22\n \n | \n \n \n 2\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 1,369\n \n | \n \n \n 192\n \n | \n \n \n 782\n \n | \n \n \n 120\n \n | \n
| \n Payment moratorium \n | \n \n \n 32\n \n | \n \n \n 5\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 433\n \n | \n \n \n 53\n \n | \n \n \n 252\n \n | \n \n \n 31\n \n | \n
| \n Term extension \n | \n \n \n 428\n \n | \n \n \n 32\n \n | \n \n \n 209\n \n | \n \n \n 17\n \n | \n
| \n Hybrid* \n | \n \n \n 277\n \n | \n \n \n 41\n \n | \n \n \n 178\n \n | \n \n \n 26\n \n | \n
| \n Split mortgages \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n
| \n \n Total\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 61 \n | \n \n 12 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n Reduced payment (less than interest only) \n | \n \n 35 \n | \n \n 5 \n | \n \n 33 \n | \n \n 5 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 1,815 \n | \n \n 255 \n | \n \n 1,015 \n | \n \n 157 \n | \n
| \n Payment moratorium \n | \n \n 64 \n | \n \n 8 \n | \n \n 47 \n | \n \n 6 \n | \n
| \n Arrears capitalisation \n | \n \n 524 \n | \n \n 66 \n | \n \n 264 \n | \n \n 36 \n | \n
| \n Term extension \n | \n \n 483 \n | \n \n 38 \n | \n \n 245 \n | \n \n 20 \n | \n
| \n Hybrid* \n | \n \n 378 \n | \n \n 55 \n | \n \n 190 \n | \n \n 29 \n | \n
| \n Split mortgages \n | \n \n 164 \n | \n \n 28 \n | \n \n 164 \n | \n \n 28 \n | \n
| \n Total \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 2,010 \n | \n \n 289 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 777 cases in the year to 31 December 2022 for the Group in the number of residential home loan mortgages in forbearance arrangements, a decrease of \u20ac109m. The average balance of forborne loans is \u20ac0.130m at 31 December 2022 (31 December 2021: \u20ac0.133m).
\n \n\n (ii) Residential buy-to-let mortgages:\n
\nThe incidence of the main type of forbearance arrangements for residential buy-to-let mortgages only is analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 19\n \n | \n \n \n 8\n \n | \n \n \n 17\n \n | \n \n \n 7\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 99\n \n | \n \n \n 29\n \n | \n \n \n 76\n \n | \n \n \n 24\n \n | \n
| \n Payment moratorium \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 18\n \n | \n \n \n 8\n \n | \n \n \n 10\n \n | \n \n \n 4\n \n | \n
| \n Term extension \n | \n \n \n 27\n \n | \n \n \n 6\n \n | \n \n \n 12\n \n | \n \n \n 3\n \n | \n
| \n Hybrid* \n | \n \n \n 70\n \n | \n \n \n 41\n \n | \n \n \n 51\n \n | \n \n \n 23\n \n | \n
| \n Split mortgages \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n
| \n \n Total\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 188\n \n | \n \n \n 68\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 54 \n | \n \n 27 \n | \n \n 31 \n | \n \n 15 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 190 \n | \n \n 58 \n | \n \n 121 \n | \n \n 38 \n | \n
| \n Payment moratorium \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n 62 \n | \n \n 31 \n | \n \n 21 \n | \n \n 11 \n | \n
| \n Term extension \n | \n \n 32 \n | \n \n 6 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n Hybrid* \n | \n \n 86 \n | \n \n 37 \n | \n \n 56 \n | \n \n 20 \n | \n
| \n Split mortgages \n | \n \n 23 \n | \n \n 7 \n | \n \n 23 \n | \n \n 7 \n | \n
| \n Total \n | \n \n 449 \n | \n \n 166 \n | \n \n 267 \n | \n \n 94 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 193 cases in the year to 31 December 2022 for the Group in the number of residential buy-to-let in forbearance arrangements, a decrease of \u20ac67m in balances. The average balance of forborne loans is \u20ac0.39m at 31 December 2022 (31 December 2021: \u20ac0.37m).
\n\n Commercial mortgages\n
\nThe incidence of the main type of forbearance arrangements for commercial mortgages are analysed below:
\n| \n \n Commercial mortgages\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 11\n \n | \n \n \n 5\n \n | \n \n 13 \n | \n \n 23 \n | \n
| \n Payment moratorium \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n \n 5 \n | \n \n 7 \n | \n
| \n Term extension \n | \n \n \n 7\n \n | \n \n \n 1\n \n | \n \n 9 \n | \n \n 4 \n | \n
| \n Hybrid* \n | \n \n \n 6\n \n | \n \n \n 1\n \n | \n \n 10 \n | \n \n 3 \n | \n
| \n Split mortgages \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n 37 \n | \n \n 37 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe table above reflects a decrease of 12 cases in the year to 31 December 2022 for the Group in the number of commercial mortgages in forbearance arrangements, a decrease of \u20ac29m in balances.
\n \n\n (d) Reconciliation of movement in forborne loans for all classes\n
\nThe tables below provide an analysis of the movement of total forborne loans and Stage 3 forborne loans during the year. It outlines the number and balances of forbearance treatments offered, expired and loans paid down during the year.
\n\n (i) Reconciliation of movement of total forborne loans\n
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2022\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 3,524\n \n | \n \n \n 467\n \n | \n \n \n 449\n \n | \n \n \n 166\n \n | \n \n \n 37\n \n | \n \n \n 37\n \n | \n \n \n 4,010\n \n | \n \n \n 670\n \n | \n
| \n New forbearance extended during the year* \n | \n \n \n 307\n \n | \n \n \n 39\n \n | \n \n \n 30\n \n | \n \n \n 17\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 337\n \n | \n \n \n 56\n \n | \n
| \n Deleveraged loans \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (138)\n \n | \n \n \n (51)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (141)\n \n | \n \n \n (52)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n \n (18)\n \n | \n \n \n (3)\n \n | \n \n \n (7)\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (25)\n \n | \n \n \n (7)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (816)\n \n | \n \n \n (106)\n \n | \n \n \n (34)\n \n | \n \n \n (13)\n \n | \n \n \n (4)\n \n | \n \n \n (21)\n \n | \n \n \n (854)\n \n | \n \n \n (140)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (247)\n \n | \n \n \n (25)\n \n | \n \n \n (44)\n \n | \n \n \n (12)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (299)\n \n | \n \n \n (45)\n \n | \n
| \n Balance shift** \n | \n \n \n -\n \n | \n \n \n (13)\n \n | \n \n \n -\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (17)\n \n | \n
| \n \n Closing balance of loans in forbearance as at 31 December 2022\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n \n 3,028\n \n | \n \n \n 465\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2021\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 5,066 \n | \n \n 726 \n | \n \n 679 \n | \n \n 231 \n | \n \n 44 \n | \n \n 20 \n | \n \n 5,789 \n | \n \n 977 \n | \n
| \n New forbearance extended during the year* \n | \n \n 458 \n | \n \n 62 \n | \n \n 76 \n | \n \n 30 \n | \n \n 7 \n | \n \n 24 \n | \n \n 541 \n | \n \n 116 \n | \n
| \n Deleveraged loans \n | \n \n (845) \n | \n \n (115) \n | \n \n (214) \n | \n \n (48) \n | \n \n (4) \n | \n \n (3) \n | \n \n (1,063) \n | \n \n (166) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n (16) \n | \n \n (3) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (17) \n | \n \n (3) \n | \n
| \n - expired forbearance treatment \n | \n \n (753) \n | \n \n (139) \n | \n \n (58) \n | \n \n (29) \n | \n \n (3) \n | \n \n (1) \n | \n \n (814) \n | \n \n (169) \n | \n
| \n - expired loan paid down \n | \n \n (386) \n | \n \n (49) \n | \n \n (33) \n | \n \n (13) \n | \n \n (7) \n | \n \n (2) \n | \n \n (426) \n | \n \n (64) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (15) \n | \n \n - \n | \n \n (5) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n (21) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 449 \n | \n \n 166 \n | \n \n 37 \n | \n \n 37 \n | \n \n 4,010 \n | \n \n 670 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n \n\n (ii) Reconciliation of movement in forborne loans Stage 3\n
\n| \n \n 31 December 2022\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 2,010 \n \n | \n \n \n 289 \n \n | \n \n \n 267 \n \n | \n \n \n 94 \n \n | \n \n \n 32 \n \n | \n \n \n 33 \n \n | \n \n \n 2,309 \n \n | \n \n \n 416 \n \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n \n 354 \n \n | \n \n \n 43 \n \n | \n \n \n 29 \n \n | \n \n \n 15 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 383 \n \n | \n \n \n 58 \n \n | \n
| \n Deleveraged loans \n | \n \n \n (3) \n \n | \n \n \n (1) \n \n | \n \n \n (32) \n \n | \n \n \n (10) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (35) \n \n | \n \n \n (11) \n \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n \n (550)\n \n | \n \n \n (70)\n \n | \n \n \n (29)\n \n | \n \n \n (11)\n \n | \n \n \n (4)\n \n | \n \n \n (1)\n \n | \n \n \n (583)\n \n | \n \n \n (82)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n \n (10)\n \n | \n \n \n (2)\n \n | \n \n \n (4)\n \n | \n \n \n (4)\n \n | \n \n - \n | \n \n \n - \n \n | \n \n \n (14)\n \n | \n \n \n (6)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (19)\n \n | \n \n \n (9)\n \n | \n \n \n (4)\n \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (17)\n \n | \n \n \n (24)\n \n | \n \n \n (29)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (148)\n \n | \n \n \n (18)\n \n | \n \n \n (39)\n \n | \n \n \n (11)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (195)\n \n | \n \n \n (37)\n \n | \n
| \n Balance shift** \n | \n \n \n - \n \n | \n \n \n (4)\n \n | \n \n \n - \n \n | \n \n \n (2)\n \n | \n \n \n - \n \n | \n \n \n (1) \n \n | \n \n \n - \n \n | \n \n \n (7)\n \n | \n
| \n \n Closing balance loans in forbearance as at 31 December 2022\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n \n \n 188 \n \n | \n \n \n 68\n \n | \n \n \n 19\n \n | \n \n \n 6\n \n | \n \n \n 1,841\n \n | \n \n \n 302\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n 31 December 2021\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 2,850 \n | \n \n 438 \n | \n \n 478 \n | \n \n 151 \n | \n \n 36 \n | \n \n 14 \n | \n \n 3,364 \n | \n \n 603 \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n 538 \n | \n \n 74 \n | \n \n 77 \n | \n \n 31 \n | \n \n 6 \n | \n \n 25 \n | \n \n 621 \n | \n \n 130 \n | \n
| \n Deleveraged loans \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n (392) \n | \n \n (46) \n | \n \n (32) \n | \n \n (13) \n | \n \n (1) \n | \n \n (1) \n | \n \n (425) \n | \n \n (60) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n (12) \n | \n \n (2) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (13) \n | \n \n (2) \n | \n
| \n - expired forbearance treatment \n | \n \n (112) \n | \n \n (25) \n | \n \n (76) \n | \n \n (19) \n | \n \n (1) \n | \n \n (1) \n | \n \n (189) \n | \n \n (45) \n | \n
| \n - expired loan paid down \n | \n \n (862) \n | \n \n (146) \n | \n \n (179) \n | \n \n (55) \n | \n \n (8) \n | \n \n (4) \n | \n \n (1,049) \n | \n \n (205) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (4) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (5) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 2,010 \n | \n \n 289 \n | \n \n 267 \n | \n \n 94 \n | \n \n 32 \n | \n \n 33 \n | \n \n 2,309 \n | \n \n 416 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n\n (vii) Funding profile\n
\nThe ALCO monitors sources of funding and their respective maturities with a focus on establishing a stable and cost effective funding profile. Excluding equity, the Group\u2019s funding profile as at the 31 December 2022 can be broken down into the below component parts:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Customer accounts \n | \n \n \n 93\n \n | \n \n 94 \n | \n
| \n Long-term debt \n | \n \n \n 4\n \n | \n \n 4 \n | \n
| \n Short-term debt \n | \n \n \n 3\n \n | \n \n 2 \n | \n
| \n \u00a0 \n | \n \n \n 100 \n \n | \n \n 100 \n | \n
Long-term debt refers to debt with a maturity greater than 12 months from year-end and short-term debt is that which has a maturity of less than 12 months from year-end.
\n \nIn accordance with IFRS 7, Financial Instruments: Disclosures, the following tables present the maturity analysis of financial liabilities on an undiscounted basis, by remaining contractual maturity at the statement of financial position date. These will not agree directly with the balances on the consolidated statement of financial position due to the inclusion of future interest payments.
\n| \n \n 31 December 2022\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n \n 614 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614 \n \n | \n
| \n Customer accounts \n | \n \n \n 19,906 \n \n | \n \n \n 689 \n \n | \n \n \n 261 \n \n | \n \n \n 385 \n \n | \n \n \n 157 \n \n | \n \n \n 342 \n \n | \n \n \n 21,740 \n \n | \n
| \n Debt securities in issue \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 6 \n \n | \n \n \n 11 \n \n | \n \n \n 371 \n \n | \n \n \n 308 \n \n | \n \n \n 702 \n \n | \n
| \n Derivative financial instruments \n | \n \n \n 10 \n \n | \n \n \n 169\n \n | \n \n \n 1,343 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1,522 \n \n | \n
| \n Subordinated liabilities \n | \n \n \n 1 \n \n | \n \n \n 1 \n \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 7 \n \n | \n \n \n 300 \n \n | \n \n \n 315 \n \n | \n
| \n Other financial liabilities \n | \n \n \n 145\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 3\n \n | \n \n \n 6\n \n | \n \n \n 27\n \n | \n \n \n 183\n \n | \n
| \n \n Total liabilities\n \n | \n \n \n 20,678 \n \n | \n \n \n 863 \n \n | \n \n \n 1,614 \n \n | \n \n \n 403 \n \n | \n \n \n 541 \n \n | \n \n \n 977 \n \n | \n \n \n 25,076 \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 16,032 \n | \n \n 1,416 \n | \n \n 454 \n | \n \n 575 \n | \n \n 221 \n | \n \n 405 \n | \n \n 19,103 \n | \n
| \n Debt securities in issue \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 537 \n | \n \n 552 \n | \n
| \n Derivative financial instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Subordinated liabilities \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 304 \n | \n \n 319 \n | \n
| \n Other financial liabilities \n | \n \n 92 \n | \n \n 48 \n | \n \n 1 \n | \n \n 3 \n | \n \n 4 \n | \n \n 22 \n | \n \n 170 \n | \n
| \n Total liabilities \n | \n \n 16,473 \n | \n \n 1,466 \n | \n \n 459 \n | \n \n 586 \n | \n \n 239 \n | \n \n 1,268 \n | \n \n 20,491 \n | \n
When managing the Group\u2019s liquidity and funding profile, for products where the contractual maturity date may be different from actual behaviour, the Group uses statistical methodologies to manage liquidity on an expected or behaviourally adjusted basis.
\n\n
The following table details the Group\u2019s liquidity analysis for derivative instruments that do not qualify as hedging instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates from the yield curves at the end of the reporting year. These will not agree directly with the balances on the consolidated statement of financial position.
\n| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n 82 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 82 \n \n | \n
| \n - outflow \n | \n \n \n (83)\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (83)\n \n | \n
| \n Business combinations forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n -\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n -\n \n | \n
| \n - outflow \n | \n \n \n (9)\n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,521)\n \n | \n
| \n \n Balance at 31 December 2022\n \n | \n \n \n (10) \n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,522) \n \n | \n
| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n - outflow \n | \n \n (84) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (84) \n | \n
| \n Balance at 31 December 2021 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n (viii) Interest rate gap position\n
\nGap analysis is a technique for measuring the Group\u2019s interest rate risk exposure beginning with a maturity/re-pricing schedule that distributes interest sensitive assets, liabilities, and derivative positions into \u201ctime bands\u201d according to their maturity (if fixed rate), time remaining to their next re-pricing (if floating rate) or behavioural convention in order to identify any sources of significant mismatches. The below December 2022 IRRBB profile also includes interest cash flows based on the next re-price date i.e. one month\u2019s interest included for variable rate products and lifetime interest for fixed rate products.
\nA summary of the Group\u2019s interest rate gap position is as follows:
\n\n Interest rate re-pricing\n
\n| \n \n 31 December 2022\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Assets\n \n | \n \n \n 9,884\n \n | \n \n \n 697\n \n | \n \n \n 1,757\n \n | \n \n \n 11,516\n \n | \n \n \n 2,148\n \n | \n \n \n 26,002\n \n | \n
| \n \n Liabilities\n \n | \n \n \n (6,048)\n \n | \n \n \n (996)\n \n | \n \n \n (2,425)\n \n | \n \n \n (12,932)\n \n | \n \n \n (2,836)\n \n | \n \n \n (25,237)\n \n | \n
| \n \n Derivatives \n \n | \n \n \n 81\n \n | \n \n \n -\n \n | \n \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 81\n \n | \n
| \n \n Interest rate re-pricing gap \n \n | \n \n \n 3,917\n \n | \n \n \n (299)\n \n | \n \n \n (668)\n \n | \n \n \n (1,416)\n \n | \n \n \n (688)\n \n | \n \n \n 846\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Cumulative interest rate re-pricing gap\n \n | \n \n \n 3,917\n \n | \n \n \n 3,618\n \n | \n \n \n 2,950\n \n | \n \n \n 1,534\n \n | \n \n \n 846\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Assets \n | \n \n 12,608 \n | \n \n 587 \n | \n \n 1264 \n | \n \n 6505 \n | \n \n 1079 \n | \n \n 22043 \n | \n
| \n Liabilities \n | \n \n (11,769) \n | \n \n (973) \n | \n \n (1,395) \n | \n \n (6,137) \n | \n \n (1,546) \n | \n \n -21820 \n | \n
| \n Derivatives \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n Interest rate re-pricing gap \n | \n \n 923 \n | \n \n (386) \n | \n \n (131) \n | \n \n 368 \n | \n \n (467) \n | \n \n 307 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cumulative interest rate re-pricing gap \n | \n \n 923 \n | \n \n 537 \n | \n \n 406 \n | \n \n 774 \n | \n \n 307 \n | \n \n \n | \n
An increase in ECB interest rates of 100bps would increase net interest income by \u20ac58m and a decrease in ECB interest rates of 100bps would decrease net interest income by \u20ac58m.
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"concept": "ifrs-full:ExpenseOfRestructuringActivities", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f179302": { "value": "14000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ExpenseOfRestructuringActivities", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f179311": { "value": "92000000", "decimals": -6, "dimensions": { "concept": "ptsb:CostsIncurredInRelationToTheUlsterBankBusinessCombination", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f179314": { "value": "28000000", "decimals": -6, "dimensions": { "concept": "ptsb:CostsIncurredInRelationToTheUlsterBankBusinessCombination", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f179324": { "value": "509000000", "decimals": -6, 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Corporate information, basis of preparation and significant accounting policies\n
\n \n\n 1.1 Corporate information \n
\nPermanent TSB Group Holdings plc (the Company) is a holding company domiciled in Ireland (registration number 474438). Its registered office is situated at 56 - 59, St. Stephen\u2019s Green, Dublin 2, Ireland. The Company\u2019s shares are listed on the main market of the Irish and London Stock Exchanges.
\nThe consolidated financial statements include the financial statements of the Company and its subsidiaries (together referred to as the Group) and are prepared up to the end of the financial year, 31 December 2022.
\nPermanent TSB plc (PTSB), a 100% owned subsidiary of the Company, is the main trading entity of the Group which is involved in retail banking.
\n \nThese consolidated financial statements for the year ended 31 December 2022 were approved by the Board and authorised for issue by the Directors on 28 February 2023.
\n \nThe accounting policies applied in the preparation of the financial statements for the year ended 31 December 2022 are set out below.
\n \n \n\n 1.2 Basis of preparation\n
\n \n\n Statement of compliance\n
\nThese consolidated financial statements comprise of the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows, the Company SOFP, the Company statement of changes in equity, the Company statement of cash flows and the notes to the consolidated and the Company financial statements have been prepared in accordance with IFRS and interpretations issued by the IFR Interpretations Committee (IFRIC) as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and EU (Credit Institutions: Financial Statements) Regulations 2015.
\nThe accounting policies have been consistently applied by the Group entities and are consistent with the previous year.
\nThe financial statements include the information that is described as being an integral part of the audited financial statements contained in the Directors\u2019 Report on Remuneration and in Risk Management. Certain tables and related information in the notes to the financial statements, included in boxes and clearly identified as unaudited do not form part of the audited financial statements.
\nThe individual financial statements of the holding company have also been prepared in accordance with IFRS and interpretations issued by IFRIC as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS. In accordance with section 304(2) of the Companies Act 2014, the Company is availing of the exemption from presenting its individual income statement and related notes to the AGM and from filing it with the Registrar of Companies. See note 46 for further information.
\n \nThe Company\u2019s profit after tax for the year ended 31 December 2022 was \u20ac708m (31 December 2021: loss \u20ac56m). The Company issued \u20ac250,000,000 Additional Tier 1 securities on 26 October 2022. For further information, see the Company financial statements on pages 263 to 265.
\n\n Basis of measurement\n
\nThe consolidated and Company financial statements have been prepared on the historical cost basis as modified to include the fair valuation of certain financial instruments classified as HTC&S, equity securities classified as FVOCI, derivative financial instruments, assets classified as held for sale, financial assets and liabilities designated as hedged items in qualifying fair value hedge relationships, and land and buildings accounted for using the revaluation model.
\n \n\n Functional and presentation currency\n
\nThese financial statements are presented in Euro, which is the Company\u2019s functional currency. Except where otherwise indicated, financial information presented in Euro has been rounded to the nearest million (m).
\n \n\n Use of estimates and judgements\n
\nThe preparation of these consolidated financial statements, in conformity with IFRS, requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and related disclosures.
\nWhile the actual results may differ from the estimates made, the Directors believe that they are reasonable in the current circumstances based on the best available information at the date of the approval of these consolidated financial statements.
\n \nAdditional information about key assumptions and judgements are disclosed in the relevant notes for the following areas including significant estimation uncertainty:
\nThe estimates and assumptions are reviewed on an on-going basis and where necessary are revised to reflect current conditions. The principal estimates and assumptions made by Management relate to impairment of loans and advances to customers, deferred taxation, impairment of investment in subsidiary undertakings and financial instruments. Judgements made by Management that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 2.
\n \n\n 1.3 Going Concern\n
\nIn considering Management\u2019s assessment of the Group\u2019s and Company\u2019s ability to continue as a going concern, Management considered the principal risks and uncertainties as they might pertain to the going concern assumption, particularly the liquidity, profitability, and capital position. Management considered these items over the course of the year to date and into 2023, their current status, and future projections.
\nIn doing so, Management considered each risk in turn, and the likelihood of the risk precipitating in the going concern assumptions becoming invalid over the period of assessment, being twelve months from the date of the approval of the financial statements for the year ended 31 December 2022. Management considered realistic alternatives, including downside scenarios applied by the Group and Company to test assumptions and potential outcomes.
\n\n Assessment Basis\n
\nThe time that the Directors and Management have considered in evaluating the appropriateness of the going concern basis in preparing the Company consolidated financial statements for the twelve months ended 31 December 2022 is a period of twelve months from the date of approval of these financial statements (28 February 2024).
\nIn making this assessment, the Directors and Management have considered the Group\u2019s and Company\u2019s 2023-2027 MTP, profitability forecasts, funding and capital resource projections. These projections include both base and stress scenarios applied by the Group and Company. Together with a number of factors such as the Irish Economy, Government fiscal policies, the availability of collateral to access funding through third parties and the euro-system, and on-going changes in the regulatory environment.
\n\n Economic and political environment \n
\nThe Irish economy continues to perform strongly with a rapid recovery after the pandemic. Growth is continued to be forecast albeit at a lower rate. Consumer price inflation has risen due to increases in energy prices along with price pressures for other goods and services. To manage inflation, the ECB raised interest rates on a number of occasions during 2022 with further rate increases expected in 2023.
\nFurther to this, the Group and Company continues to be materially reliant on Government and EU policy, and materially impacted by geopolitical events; such as the on-going war in Ukraine, the continuing uncertainty around the Northern Irish Protocol and the introduction of the global minimum corporation tax rate to a sector of the Irish market.
\nThe Group and Company reassessed the financial impacts of the economic and political environment through the Group\u2019s and Company\u2019s integrated planning process and believes it is reasonably well positioned to withstand any volatility from economic events, particularly given the Group\u2019s and Company\u2019s acquisition of certain part of the Ulster Bank business in 2022 and continued management of its financial position through NPL reduction and capital management.
\n\n Funding & Liquidity \n
\nThe Group and Company continued to have sufficient liquidity throughout 2022, and continues to undertake initiatives to improve its liquidity position in the areas of deposits, collateral optimisation, and wholesale markets activity. The Directors and Management have also considered forecasts of the liquidity position over the going concern period, under a range of stress scenarios.
\n \n \nThe Group and Company continues to hold a significant liquidity buffer at 31 December 2022 that can be easily and readily monetised in a period of stress. The Directors and Management are aware that the Group\u2019s and Company\u2019s ability to effectively utilise its contingent counterbalancing capacity is dependent on the underlying collateral remaining eligible. However, the Directors and Management are satisfied, based on a review of funding plans, interaction with wholesale markets and deposit trends that the required liquidity and funding will be available to the Group and Company during the period of assessment.
\nThere are no material uncertainties, which would cast significant doubt on the ability of the Group and Company to continue as a going concern basis over the period of assessment.
\n\n Profitability and Capital Adequacy\n
\nThe Group and Company made a profit for the year ended 31 December 2022. Directors and Management have reviewed the MTP and based on this, the near-term macro-economic conditions of the country and the resolution of legacy issues, the Directors and Management are satisfied that the Group and Company are well positioned to continue to deliver profits in future years.
\nThe Directors and Management have also considered the Group\u2019s and Company\u2019s forecast capital position, including a deterioration in economic conditions due to high inflation and disruptions to the global supply chain. Based on the above considerations, the Directors and Management have assessed and concluded that this does not give rise to a material uncertainty, which would cast significant doubt on the ability of the Group and Company to continue on a going concern basis for the period of assessment.
\n\n Conclusion\n
\nAs required by IFRS as adopted by the EU, the Directors and Management have considered the principal risks and uncertainties facing the Group and Company as outlined above. Based on the latest and projected financial performance and position, and the options available to the Group and Company, the Directors have concluded that the Group and Company have no material uncertainties, which would cast significant doubt on the going concern assumption and have considered it appropriate to prepare the financial statements on a going concern basis.
\n \n\n 1.4 Comparative information\n
\nThe comparative information for 2021 has been prepared on a consistent basis with 2022.
\n \n\n 1.5 Summary of significant accounting policies\n
\n \n\n (i) Basis of consolidation\n
\n \n\n Subsidiaries\n
\nSubsidiaries are those entities (including special purpose entities) controlled by the Group. Control exists when the Group has:
\nThe financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Financial statements of subsidiaries are prepared up to the financial position date. Intercompany transaction balances and unrealised gains/losses on transactions between the Group\u2019s companies are eliminated on consolidation.
\nThe Company carries its investment in its subsidiary undertaking at cost in the Company financial statements and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment\u2019s fair value or its VIU. If impairment occurs, this loss is recognised in the income statement.
\nDetails of principal subsidiaries are included in note 46.
\n \n \n \n \n\n Interest in associated undertakings\n
\nInterest in associated undertakings encompass investments in entities whereby the Group has significant influence over the financial and operating policy decisions of the entity but does not have control. It is presumed that significant influence exists if the Group holds more than 20% of the voting rights in the entity unless it can be demonstrated otherwise. Conversely the Group may hold less than 20% of the voting rights but could be demonstrated to have significant influence.
\n \n \n \nInterest in associated undertakings are initially recognised at cost and subsequently accounted for using the equity method whereby the investment is increased or decreased each year by the Group\u2019s share of the post-acquisition profit or loss of the associate. The Group\u2019s share of the post-acquisition profit or loss of the associate is recognised in profit or loss and OCI.
\nThe Group continues to decrease the carrying amount of the investment for its\u2019 share of post-acquisition losses until the carrying amount is zero unless the Group has incurred a legal or constructive obligation or made payments on behalf of the associate. These additional losses are provided for and a liability is recognised in this instance.
\n \n \n \n\n (ii) Business combinations and goodwill\n
\n \n\n (a) Business combinations\n
\nThe Group accounts for business combinations, other than those under common control, using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group (see 1.5(i)).
\nIn determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.
\nThe consideration transferred in the acquisition is generally measured at the fair value of the assets transferred, the liabilities incurred to the former owners and equity interest issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities (see (vii)(a)). The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the income statement. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured and settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in the income statement.
\nThe results of subsidiaries acquired are included in the consolidated income statement from the date of acquisition. Profits or losses of subsidiary undertakings acquired or sold during the year are included in the consolidated results from the date of gaining control or up to the date of disposal.
\nFor each business combination, the Group elects on a transaction-by-transaction basis whether to measure a non-controlling interest at its fair value or at its proportionate share of the recognised amount of identifiable net assets. The assets and liabilities arising on a business combination are measured at their fair value at the acquisition date.
\n \nBusiness combinations under common control are accounted for prospectively from the date the Group obtains the ownership interest in the acquired entity. Assets and liabilities are initially recognised upon consolidation based on their carrying amount in the financial statements of the acquired entity (or holding entity, if applicable). Any difference between the fair value of the consideration paid and the amounts at which the assets and liabilities are initially recorded is recognised directly in equity in retained earnings.
\n \n \n \n\n (b) Goodwill \n
\nThe Group measures goodwill as the excess of the (i) consideration transferred; (ii) the amount of any non-controlling interest in the acquired entity; and (iii) acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
\nAcquisition costs are expensed to the income statement as incurred. Any contingent consideration to be transferred to the acquirer is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability are recognised in accordance with IFRS 9.
\nGoodwill arising on associates is shown as part of the investment in the associate.
\nGoodwill is subject to an impairment review at least annually, and, if events or changes in circumstances indicate that the carrying amount may not be recoverable, it is written down through the income statement by the amount of any impairment loss identified in the year.
\n \n \n \n\n (iii) Foreign currencies \n
\nForeign currency transactions are translated into the functional currency of the entity, being the currency of the primary environment in which the entity operates at the exchange rate prevailing at the date of the transaction or valuation where items are remeasured. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rates prevailing at the reporting date. Exchange movements are recognised in the income statement. However, exchange movements arising from the translation of the following items are recognised in OCI:
\nNon-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the spot exchange rate at the date on which the fair value is determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated using the spot exchange rate at the date of the transaction.
\nThe results and financial position of the Group\u2019s subsidiaries which have a functional currency different from Euro are translated into Euro as follows:
\nOn consolidation, exchange differences arising from the translation of borrowings and currency instruments designated as hedges of the net investment in overseas subsidiaries, are also recognised in OCI to the extent to which the hedge is deemed to be effective. The ineffective portion of any net investment hedge is recognised in the income statement immediately. On disposal, or partial disposal of an overseas subsidiary, the appropriate portion of the currency translation adjustment reserve is included in the gain or loss on disposal.
\n \n \n \n\n (iv) Recognition of income and expenses\n
\n \n\n (a) Interest and similar income and expenses\n
\nFor all interest bearing financial instruments, interest income or expense is recorded using the EIR method.
\nThe EIR is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
\nThe effective interest rate of a financial asset or financial liability is calculated on initial recognition of a financial asset or a financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. The effective interest rate is also revised for fair value hedge adjustments at the date on which amortisation of the hedge adjustment begins. The calculation of the EIR includes transaction costs, premiums or discounts, and fees paid or received that are an integral part of the EIR. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or financial liability.
\nInterest income is calculated by applying the EIR to the gross carrying amount of financial assets, except for:
\nInterest income and expense calculated using the effective interest method presented in the consolidated income statement includes:
\n\n (b) Fees and commission income and expense \n
\nAs outlined above, fees and commission income and expense that are integral to the EIR on a financial asset or liability are included in the measurement of the EIR.
\nOther fees and commission income are recognised as the related services are performed. Fees and commission expenses relate mainly to transaction and service fees, which are expensed as the services are received.
\n \n \n\n (c) Net trading income/(expense)\n
\nNet trading income/(expense) comprises gains and losses relating to trading assets and trading liabilities and includes all realised and unrealised fair value changes, dividends and FX differences.
\nDividend income is recognised when the right to receive income is established.
\n \n \n\n (d) Exceptional items\n
\nCertain items, by virtue of their nature and amount are disclosed separately in order for the user to obtain appropriate understanding of the financial information. These items would not ordinarily occur while carrying out normal business activities.
\nExceptional items include gains and losses on the disposal of businesses, gain on bargain purchase in respect of business combinations, material restructuring costs and material transaction, integration and restructuring costs associated with acquisitions (including potential acquisitions).
\n \n\n (e) Bank Levy and other regulatory charges\n
\nBank levy and other regulatory charges consist of DGS fees, Central Bank Industry Funding levy, Single Resolution Fund levy, ECB fees and a bank levy.
\nA bank levy payable to the Government, is provided for on the occurrence of the event identified by the legislation that triggers the obligation to pay the levy.
\n \n \n \n\n (v) Employee Benefits \n
\n\n (a) Defined contribution pension plan\n
\nThe Group operates a number of defined contribution pension schemes, under which the Group pays fixed contributions to a separate entity.
\nThe contribution payable to a defined contribution plan is recorded as an expense under administration, staff and other expenses. Unpaid contributions are recorded as a liability.
\n\n (b) Short term employee benefits \n
\nShort term employee benefits, such as salaries and other benefits, are accounted for on an accruals basis over the period in which the employee\u2019s service is rendered. Bonuses are recognised where the Group has a legal or constructive obligation to employees that can be reliably measured.
\n \n\n (c) Termination payments\n
\nTermination benefits may be payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees where the offer is irrevocable. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
\n \n \n \n\n (vi) Current and deferred taxation \n
\nTaxation comprises both current and deferred tax. Taxation is recognised as income or expenses and included in the income statement except to the extent it relates to a business combination, or items recognised in either OCI or equity. In the former case, taxation is recognised in OCI while in the latter case, taxation is recognised directly in equity. In a business combination the tax amounts are recognised as identifiable assets or liabilities at the acquisition date.
\nCurrent tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years (ROI: 12.5% from 1 April 2015).
\nDeferred tax is provided using the liability method on all temporary differences except those arising on goodwill not deductible for tax purposes, or on initial recognition of an asset or liability in a transaction that is not a business combination and which at the time of the transaction affects neither accounting, nor taxable, profit or loss.
\nDeferred tax is measured at the tax rates enacted or substantively enacted by the reporting date that are expected to be applied to the temporary differences when they reverse.
\nDeferred tax liabilities and assets are offset only when they arise in the same tax reporting group and where there is the intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.
\nDTAs and liabilities shall be offset if, and only if:
\nA DTA is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. DTAs are reviewed at each reporting date and are recognised only to the extent that it is probable that the related tax benefit will be realised. Deferred tax assets and liabilities are not discounted in accordance with IAS 12.
\nUnrecognised DTAs are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
\n \n \n \n \n\n (vii) Financial instruments \n
\n \n\n (a) Classification of financial assets \n
\nFinancial assets are recorded at fair value and are classified, on initial recognition, as amortised cost, fair value through OCI (FVOCI), fair value through profit or loss (FVTPL), elected at FVOCI or designated at FVTPL. Purchases and sales of financial assets are recognised on the trade date, being the date on which the Group commits to purchase or sell the asset.
\nWith the exception of assets classified as FVTPL, the initial fair value of a financial asset includes direct and incremental transaction costs. The fair value of assets traded on an active market will be the price that would be received if an asset were to be sold in an orderly transaction between market participants at the measurement date. In the absence of an active market, the Group establishes a fair value using various valuation techniques that use observable and unobservable inputs. These include recent transactions in similar items, discounted cash flow projections, option pricing models and other valuation techniques used by market participants.
\n \n \n \n \nThe classification requirements for debt and equity instruments are described below.
\n \n\n Debt instruments\n
\nDebt instruments, including loans and debt securities, are classified into one of the following measurement categories:
\nClassification and subsequent measurement of debt instruments depend on:
\n(i) The Group\u2019s business model for managing the asset; and
\n(ii) The cash flow characteristics of the asset.
\n\n (i) Business model assessment\n
\nThe business model reflects how the Group manages the assets in order to generate cash flows. That is, whether the Group\u2019s objective is solely to collect the contractual cash flows from the assets (HTC) or is to collect both the contractual cash flows and cash flows arising from the sale of assets (HTC&S). If neither of these is applicable, then the financial assets are classified as part of \u2018other\u2019 business model and measured at FVTPL.
\nThe Group assesses its business model at a portfolio level based on how it manages groups of financial assets to achieve its business objectives. The observable factors considered include:
\n\n (ii) Cash flow characteristics assessment\n
\nThe Group carries out the cash flow characteristics assessment using the contractual features of an instrument to determine if they give rise to cash flows that are consistent with a basic lending arrangement. Contractual cash flows are consistent with a basic lending arrangement if they represent cash flows that are solely payments of principal and interest (the \u2018SPPI\u2019 test). Principal, for the purpose of this test, is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset, for example, due to repayments or amortisation of the premium/discount. Interest is defined as the consideration for the time value of money and credit risk, which are the most significant elements of interest within a lending arrangement. If the Group identifies any contractual features that could significantly modify the cash flows of the instrument such that they introduce exposures to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at FVTPL.
\nThe Group carries out the SPPI test based on an assessment of the contractual features of each product on origination and subsequently at every reporting period. Derivative instruments and equity instruments are not covered by this assessment as they are held at FVTPL (except when equities are accounted for at FVOCI).
\nBased on the above assessments, the Group classifies its debt instruments into one of the following four measurement categories:
\n\n (i) Debt instruments measured at amortised cost\n
\nDebt instruments are measured at amortised cost if they are held within a business model whose objective is to hold the assets to collect contractual cash flows, where those cash flows represent solely payments of principal and interest. After initial measurement, debt instruments in this category are measured at amortised cost. Interest income on these instruments is recognised in interest income using the EIR method.
\n \n \n \nThe EIR is the rate that discounts estimated future cash payments or receipts through the expected life of a financial asset to the gross carrying amount of a financial asset. Amortised cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the EIR.
\nImpairment on debt instruments measured at amortised cost is calculated using the ECL approach. Loans and debt securities measured at amortised cost are presented net of allowance for ECL in the SOFP.
\n\n (ii) Debt instruments measured at FVOCI\n
\nDebt instruments are measured at FVOCI if they are held within a business model whose objective is to both hold the assets to collect contractual cash flows and to sell the financial assets, where the assets\u2019 cash flows represent payments that are solely payments of principal and interest. Subsequent to initial recognition, unrealised gains and losses on debt instruments measured at FVOCI are recorded in OCI, unless the instrument is designated in a fair value hedge relationship. When designated in a fair value hedge relationship, any changes in fair value due to changes in the hedged risk are recognised in interest income in the income statement. On derecognition, realised gains and losses are reclassified from OCI and recorded in other operating income in the statement of comprehensive income. FX gains and losses that relate to the amortised cost of the debt instrument are recognised in the income statement. Premiums, discounts and related transaction costs are amortised over the expected life of the instrument to interest income in the income statement using the EIR method.
\nImpairment on debt instruments measured at FVOCI is calculated using the ECL approach. The ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at its fair value. Instead, an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to provision for credit losses in the income statement. The accumulated allowance recognised in OCI is recycled to the income statement on derecognition of the debt instrument.
\n\n (iii) Debt instruments measured at FVTPL\n
\nDebt instruments measured at FVTPL include assets held for trading purposes, assets held as part of a portfolio managed on a fair value basis and assets whose cash flows do not represent payments that are solely payments of principal and interest. These instruments are measured at fair value in the SOFP, with transaction costs recognised immediately in the income statement as part of net trading income. Realised and unrealised gains and losses are recognised as part of other operating income in the income statement.
\n\n (iv) Debt instruments designated at FVTPL\n
\nDebt instruments are designated at FVTPL only if doing so eliminates, or significantly reduces, an accounting mismatch that would otherwise arise. The designation is only available on initial recognition and the designation is irrevocable. Debt instruments designated at FVTPL are recorded in the SOFP at fair value and changes in fair value are recorded in the income statement.
\n\n Equity instruments\n
\nEquity instruments are measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase. For equity instruments measured at FVTPL, changes in fair value are recognised as part of other operating income in the income statement. The Group can elect to classify non-trading equity instruments at FVOCI. The FVOCI election is made upon initial recognition, on an instrument-by-instrument basis and once made is irrevocable. Gains and losses on these instruments including when derecognised/sold are recorded in OCI and are not subsequently reclassified to the income statement. Dividend received is recorded in the income statement.
\n \n\n Reclassifications\n
\nFinancial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets.
\n \n \n\n (b) Impairment of financial assets \n
\nThe Group recognises loss allowances for ECL for the following financial instruments that are not measured at FVTPL:
\n\n Measurement\n
\nECL is measured by the Group in a way that reflects:
\nThe amount of ECL recognised as a loss allowance depends on the change in credit risk of the financial instrument since origination and whether the credit risk on those financial instruments has increased significantly since initial recognition. In order to determine the appropriate ECL, a financial instrument is allocated to a stage dependent on the credit risk relative to when the financial instrument was originated:
\nThe Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture life-time expected losses, the Group also models early redemptions as a separate component within the ECL calculation.
\nThe expected cash flows included in the ECL calculation are derived from a) the loan contract b) on the disposal of collateral or c) sale of loans arising from deleveraging of NPLs which are included in the ECL calculation from the point that they meet the following three conditions:
\nCredit loss is the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original EIR.
\n\n Purchased or originated credit-impaired assets (POCI)\n
\nPOCI are excluded from the general 3 stage impairment model in IFRS 9. POCI assets are financial assets that are credit-impaired on initial recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognised on a credit-adjusted EIR basis. ECL are only recognised or released to the extent that there is a subsequent change in ECL.
\n\n Expected life\n
\nWhen measuring ECL, the Group must consider the maximum contractual period over which the Group is exposed to credit risk. All contractual terms should be considered when determining the expected life, including prepayment options, extension and rollover options. For most instruments, the expected life is limited to the remaining contractual life, adjusted as applicable for expected prepayments.
\nFor certain revolving credit facilities that do not have a fixed maturity (e.g. credit cards and overdrafts), the expected life is estimated based on the period over which the Group is exposed to credit risk and where the credit losses would not be mitigated by Management actions.
\nFor instruments in Stage 2 or Stage 3, loss allowances will cover ECL over the expected remaining life of the instrument.
\n \n \n \n \n\n Expert Credit Judgement\n
\nThe Group\u2019s ECL accounting framework methodology, in line with the requirements of the standard, requires the Group to use its experienced credit judgement to incorporate the estimated impact of factors not captured in the modelled ECL results, in all reporting periods.
\n\n Effective Interest Rate\n
\nThe discount rate used by the Group in measuring ECL is the EIR (or \u2018credit-adjusted effective interest rate\u2019 for a POCI financial assets) or an approximation thereof.
\nFor undrawn commitments, the EIR, or an approximation thereof, is applied when recognising the financial assets resulting from the loan commitment.
\n\n Low credit risk exemption\n
\nThe Group applied the low credit risk exemption to sovereign debt securities, reverse repurchase agreements, loans and advances to banks and certain intercompany positions in scope for impairment under IFRS 9.
\nThe Group considers credit risk on a financial instrument low if it meets the following conditions:
\nThese exposures are in Stage 1 with a very low credit risk requiring 12-month ECL and contributing minimally to overall ECL.
\n\n Modification Policy for Financial Assets\n
\nThe Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Group assesses whether or not the new items are substantially different to the original terms. The Group does this by considering, among others, the following factors:
\nIf the terms are substantially different, the Group derecognises the original financial asset and recognises a new asset at fair value and recalculates a new EIR for the asset. The date of renegotiation of the new financial asset is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a SICR has occurred. However, the Group also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount are also recognised in profit or loss as a gain or loss on derecognition.
\nIf the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group calculates the gross carrying amount based on the revised cash flows of the financial asset and recognises a modification gain or loss in profit or loss. The new gross carrying amount is recalculated by discounting the modified cash flows at the original EIR (or credit-adjusted EIR for POCI financial assets).
\n \n \n \n \n\n Write-off policy\n
\nThe Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. Indicators that there is no prospect of recovery include the borrower being deemed unable to pay due to their financial circumstances or the cost to be incurred in seeking recovery is likely to exceed the amount of the write-off. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation. Write-off on those financial assets subject to enforcement activity will take place on conclusion of the enforcement process.
\nIn subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the income statement.
\n\n Presentation of ECL allowance in the statement of financial position\n
\nThe ECL on financial assets measured at amortised cost is presented as a deduction from the gross carrying amount.
\nThe ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at fair value. Instead an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to provision for credit losses in the income statement.
\nOff-balance sheet credit risks include certain undrawn lending commitments, letters of credit and letters of guarantee as a provision in the SOFP.
\n \n \n\n (c) Financial liabilities and equity \n
\nFinancial liabilities are classified at amortised cost unless mandatorily required to be classified at FVTPL, for example derivatives, or designated at FVTPL.
\n\n Financial liabilities measured at amortised cost\n
\nFinancial liabilities include deposits by banks (including Central Banks), customer accounts, debt securities and subordinated debt. Derivative liabilities are dealt with under separate accounting policies.
\nDebt securities and subordinated debt issued are initially recognised on the date that they originated, while all other financial liabilities are recognised initially on the trade date. Both the date of origination and the trade date is the date the Group becomes a party to the contractual provisions of the instrument.
\nAll financial liabilities are recognised initially at fair value, less any directly attributable transaction costs and are subsequently measured at amortised cost and the related interest expense is recognised in the income statement using the EIR method.
\n \n \n\n Financial liabilities designated at FVTPL\n
\nFinancial liabilities classified in this category are those that have been designated by the Group on initial recognition.
\nFinancial liabilities are designated at FVTPL when one of the following criteria is met:
\nFinancial liabilities designated at FVTPL are recorded in the SOFP. For liabilities designated at FVTPL, changes in fair value are recognised in non-interest income in the income statement, with the exception of movements in own credit.
\nFor financial liabilities designated at FVTPL, gains or losses attributable to changes in own credit are presented in OCI. The Group has not and does not expect to invoke the fair value option for financial liabilities.
\nThe classification of instruments as a financial liability or an equity instrument is dependent upon the substance of the contractual arrangement. Instruments which carry a contractual obligation to deliver cash or another financial asset to another entity are classified as financial liabilities. The coupons on these instruments are recognised in the income statement as interest expense using the effective interest method. Where the Group has absolute discretion in relation to the payment of coupons and repayment of principal, the instrument is classified as equity and any coupon payments are classified as distributions in the period in which they are made.
\nIf the Group purchases its own debt, it is removed from the balance sheet and the difference between the carrying amount of the liability and the consideration paid is included in other operating income, net of any costs or fees incurred.
\n \n \n \n \n\n Equity\n
\nFinancial instruments classified as equity are accounted for directly in equity less any transaction costs deducted directly from equity. Transaction costs are incremented costs directly attributable to the equity transaction that otherwise would have been avoided. Equity instruments are not subsequently re-measured. Any coupon payments on the instrument are treated as dividends and accounted for, when declared as a distribution out of retained earnings. Equity instruments are issued at arm\u2019s length.
\n \n\n (d) Derecognition of Financial instruments\n
\n\n Financial assets\n
\nThe Group derecognises a financial asset when the contractual right to the cash flow from the financial asset expires, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. Control over the assets is represented by the practical ability to sell the transferred asset.
\nOn derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
\nAny cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVOCI is not recognised in profit or loss on derecognition of such securities. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a separate asset or liability.
\nThe Group enters into transactions whereby it transfers assets recognised on its SOFP, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. In such cases, the transferred assets are not derecognised. Examples of such transactions are securities lending and sale-and-repurchase transactions.
\nWhen assets are sold to a third party with a concurrent total rate of return swap on the transferred assets, the transaction is accounted for as a secured financing transaction similar to sale-and-repurchase transactions, because the Group retains all or substantially all of the risks and rewards of ownership of such assets.
\nIn transactions in which the Group neither retains nor transfers substantially all of the risks and rewards of ownership of a financial asset and it retains control over the asset, the Group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset.
\nIn certain transactions, the Group retains the obligation to service the transferred financial asset for a fee. The transferred asset is derecognised if it meets the derecognition criteria. An asset or liability is recognised for the servicing contract if the servicing fee is more than adequate (asset) or is less than adequate (liability) for performing the servicing.
\nThe Group sells loans and advances to customers to SEs that in turn issue notes to investors which are collateralised by the purchased assets. For the purpose of disclosure, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the transfer of financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in the form of the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes. The securitisation is generally retained in the form of senior or subordinated tranches, or other residual interests (retained interests) however, these securitisations may also occur with entities external to the Group. Retained interests are recognised as debt securities. The Group sells loans and advances to customers to SEs that are not consolidated SEs and the Group retains no interest in these assets and they are derecognised in their entirety.
\n \n \n \n \n\n Financial liabilities\n
\nThe Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire. This may happen when payment is made to the lender; the borrower legally is released from primary responsibility for the financial liability; or if there is an exchange of debt instruments with substantially different terms or a substantial modification of the terms of an existing debt instrument. Derecognition conditions are also satisfied when an entity repurchases its own debt instruments issued previously. When a financial liability is extinguished, any difference between the carrying amount of the financial liability and the consideration paid is recognised in the income statement.
\n \n \n\n (e) Determination of fair value of financial instruments and other assets\n
\nThe Group measures financial instruments, such as, derivative financial instruments, trading financial instruments and other financial instruments at FVTPL. Certain risks in hedged financial instruments, financial assets classified as FVOCI, property and equipment, and collateral in possession are measured at fair value on initial recognition.
\nFair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset, or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability which is accessible to the Group.
\nThe Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
\nAll assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole and is described as follows:
\nFor assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.
\nAn analysis of the fair values of financial instruments, and further details as to how they are measured, are provided in note 37.
\n \n \n \n \n \n\n (viii) Derivative instruments and hedging \n
\nThe Group follows the IFRS 9 model for hedge accounting.
\nDerivative instruments used by the Group primarily comprise interest rate swaps and currency forward rate contracts. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
\nFor the purpose of hedge accounting, hedges are classified as:
\nAt the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
\nCertain derivative instruments do not fulfil the hedge accounting criteria under IFRS 9 and are consequently classified as held for trading. The fair value movement and any interest income/(expense) are included in Net trading income/(expense).
\nHedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below:
\n \n\n (a) Fair value hedges \n
\nThe change in the fair value of a hedging instrument is recognised in the consolidated income statement as NII. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the consolidated income statement as NII.
\nFor fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term of the hedge using the EIR method. The EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
\nIf the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss.
\n \n\n (b) Embedded derivatives\n
\nA derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if:
\nEmbedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the FVTPL category.
\nA derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host, together with the embedded derivative, is required to be classified in its entirety as a financial asset at FVTPL.
\n\n (c) Credit valuation adjustment\n
\nThe Group is engaged in over the counter (OTC) derivative transactions and considers whether a fair value adjustment for credit risk is required. CVA is considered to reflect the counterparty\u2019s default risk and debit valuation adjustment (DVA) to reflect own credit risk. There is no specific guidance on the methods used to calculate CVA or DVA which creates challenges in estimation.
\n \n \n \nAs a result, IFRS 13 requires entities to consider the effects of credit risk when determining a fair value measurement, e.g. by calculating a CVA on their derivatives. Estimation can be complex and requires the use of significant judgement which is often influenced by various qualitative factors, such as:
\nThe Group mitigates the majority of its derivative positions through the use of netting and Credit Support Annex collateral arrangements. The Group do not operationally net positions. The netting and collateral arrangements may be called upon in the event of a default. This allows a counterparty to net all assets and liabilities outstanding with the defaulting counterparty, subject to the agreement when the default event occurs. The collateral arrangements in place require the counterparty in a liability position to place collateral to cover that shortfall. The Group considers and discounts the necessity for any amendments to the valuations to reflect the CVA when calculating the fair value of the derivative positions.
\nThe Group monitors this position at every reporting period and assesses if material CVAs become appropriate to be recognised.
\n \n \n \n\n (ix) Cash and cash equivalents \n
\nCash comprises cash on hand and demand deposits and cash equivalents include liquid investments that are readily convertible to known amounts of cash which are subject to an insignificant risk of change in value and with an original maturity of less than three months.
\n \n \n\n (x) Leases\n
\n\n (a) Classification of Leases \n
\nAt inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
\nUnless the lease is of short-term and of low-value assets, where the Group has the right to obtain substantially all of the economic benefits from use of identified assets and has the right to direct the use of the identified asset, a right-of-use asset is recognised in property and equipment and a lease liability is recognised in other liabilities.
\nIf a lease is assumed as part of a business combination the Group, subject to not meeting the recognition exemptions as detailed below, will recognise a right-of-use asset and a lease liability as if the lease were a new lease at the acquisition date. The right-of-use assets and lease liability are then measured consistently with the Groups accounting policy as detailed above with the lease commencement date being the acquisition date.
\n \n \n\n As a lessee\n
\nThe Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
\nThe right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
\nThe lease liability is measured at amortised cost using the incremental borrowing rate. Incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right of use asset in a similar economic environment. For its incremental borrowing rate, the Group uses its FTP, which comprises its base cost of funds with add-ons related to regulatory requirements, and term liquidity premium based on the slope of swap curve as a proxy of time value of money. The Group FTP is fully reflective of its funding profile and therefore considers it an appropriate reflection of the Group\u2019s borrowing cost. For retail properties, property yield is added as a lease specific adjustment.
\nLease payments included in the measurement of the lease liability comprise the following:
\nThe lease liability is remeasured, if there is a change in future lease payments arising from a change in index-linked considerations, if there is a change in the Group\u2019s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.
\nWhen the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
\n\n Short-term leases and leases of low-value assets\n
\nThe Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of vehicles that have a lease term of twelve months or less and leases of low-value assets, including office equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
\n\n As a lessor\n
\nWhen the Group acts as a lessor, it determines at lease inception, whether each lease is a finance lease or an operating lease.
\nTo classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as, whether the lease is for the major part of the economic life of the asset.
\nWhen the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.
\nIf an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract.
\nThe Group recognises lease payments received under operating leases as income, on a straight-line basis, over the lease term, as part of other income.
\n \n \nThe accounting policies applicable to the Group as a lessor in the comparative period were not different from IFRS 16. However, when the Group was an intermediate lessor the sub-leases were classified with reference to the underlying asset.
\nThe Group presents right-of-use assets in property and equipment and lease liabilities in other liabilities in the SOFP.
\n \n \n \n\n (xi) Property and equipment \n
\nLeasehold premises with initial lease terms of less than 50 years and all other equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is calculated on a straight-line basis to write off the costs of such assets to their residual value over their estimated useful lives, which are assessed annually.
\nFreehold premises (including land) are revalued at least annually by external professional valuers. Any accumulated depreciation (on freehold premises excluding land) at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. Any resulting increase in value is credited to OCI and shown as revaluation reserves in shareholders\u2019 equity. Any decrease in value that offsets previous increases of the same asset are charged in OCI and debited against the revaluation reserves directly in equity while all other decreases are charged to the income statement. The revalued premises, excluding the land element, are depreciated to their residual values over their estimated useful lives, which are assessed annually.
\nSubsequent costs are included in the asset\u2019s carrying amount, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Property and equipment are assessed for impairment where there is an indication of impairment. Where impairment exists, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognised against the revaluation reserve to the extent it is available and any remainder is recognised in the income statement. The depreciation charge for the asset is then adjusted to reflect the asset\u2019s revised carrying amount.
\nIf an item of property, plant and equipment is disposed of, any gains or losses are recognised in the profit or loss before tax. If the asset being disposed of had previously been revalued then any amount in OCI relating to that asset is reclassified directly to retained earnings on disposal rather than the income statement.
\nThe estimated useful lives are as follows:
\n| \n Freehold Buildings \n | \n \n 50 years \n | \n
| \n Leasehold Buildings \n | \n \n 50 years or term of lease if less than 50 years \n | \n
| \n Office Equipment \n | \n \n 5 \u2013 15 years \n | \n
| \n Computer Hardware \n | \n \n 3 \u2013 10 years \n | \n
| \n Motor Vehicles \n | \n \n 5 years \n | \n
\n (xii) Intangible assets (other than goodwill)\n
\nAcquired computer software is stated at cost, less amortisation and provision for impairment, if any. The external costs and identifiable internal costs of bringing to use the computer software are capitalised where it is probable that future economic benefits that exceed its cost will flow from its use over more than one year.
\nCapitalised computer software has a finite life and is amortised on a straight-line basis over a period of between three to seven years.
\nExpenditure on internally developed software is recognised as an asset when the Group is able to demonstrate: that the product is technically and commercially feasible, its intention and ability to complete the development and use the software in a manner that will generate future economic benefits, and that it can reliably measure the costs to complete the development. The capitalised costs of internally developed software include all costs directly attributable to developing the software and capitalised borrowing costs, and are amortised over its useful life. Internally developed software is stated at capitalised cost less accumulated amortisation and any accumulated impairment losses
\nSoftware is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An asset\u2019s carrying value is written down immediately to its recoverable amount if the asset\u2019s carrying amount is greater than its estimated recoverable amount. The estimated recoverable amount is the higher of the asset\u2019s fair value less costs to sell or VIU.
\nCosts associated with research activities or maintaining computer software programmes are recognised as an expense as incurred.
\n \n \n\n Acquired intangible assets\n
\nCustomer related intangible assets and brands acquired in a business combination are recognised at fair value at acquisition date. Customer related intangible assets and brands have a finite useful life and are carried at cost less accumulated amortisation and provision for impairment, if any. Amortisation is calculated using the straight line basis to allocate the cost over their estimated useful life.
\n \n \n\n (xiii) Collateral in possession\n
\nIn certain circumstances, property is repossessed following foreclosure on loans that are in default. When a property is repossessed, the associated loan relating to that property is derecognised and any provision on that loan is reversed. On initial recognition the collateral in possession is valued at its fair value.
\nSubsequent to initial recognition, the property is carried at the lower of its cost or net realisable value.
\n \n \n\n (xiv) Assets and liabilities classified as held for sale\n
\nAn asset or a disposal group is classified as held for sale if the following criteria are met:
\nWhen assets (or disposal groups), other than financial assets as classified under IFRS 9, or rights under an insurance contract, are initially classified as held for sale, they are measured at the lower of the carrying amount or fair value less costs to sell at the date of reclassification.
\nImpairment losses subsequent to classification of such assets (or disposal groups) are recognised in the income statement. Increases in fair value less costs to sell of such assets (or disposal groups) that have been classified as held for sale are recognised in the income statement to the extent that the increase is not in excess of any cumulative loss previously recognised in respect of the asset (or disposal group).
\nWhere the above conditions cease to be met, the assets (or disposal group) are reclassified out of held for sale and included under the appropriate SOFP classifications.
\nFinancial assets within the scope of IFRS 9, DTAs and income taxes within the scope of IAS 12 continue to be measured in accordance with these standards.
\n \n \n \n\n (xv) Provisions\n
\nA provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
\nA restructuring provision is recognised when there is an approved detailed and formal Restructuring Plan, and the restructuring either has commenced or has been publicly announced. Future operating losses are not permitted to be recognised.
\nPresent obligations arising under onerous contracts are recognised and measured as provisions at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. An onerous contract is a contract in which the unavoidable cost of meeting the obligation under the contract exceeds the economic benefits expected to be received under it.
\nContingent liabilities are either possible obligations that arise from past events whose existence is dependent on whether some uncertain future events occur which are not wholly within the control of the entity or are a present obligation that arises from a past event but is not recognised because:
\nContingent liabilities are not recognised but are disclosed unless the probability of their occurrence is remote.
\n \nFinancial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss that it incurs because a specified debtor fails to make payment when it is due in accordance with the terms of a debt instrument.
\n \n \n \n \nLoan commitments are firm commitments to provide credit under pre-specified terms and conditions.
\nThe maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.
\nECL held against commitments are reported under loans and advances to customers.
\n \nFinancial guarantees issued or commitments to provide a loan at a below-market interest rate are initially measured at fair value. Subsequently, they are measured at the higher of the loss allowance determined in accordance with IFRS 9 and the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15.
\n \nOther loan commitments issued are measured at the sum of (i) the loss allowance determined in accordance with IFRS 9 and (ii) the amount of any fees received, less, if the commitment is unlikely to result in a specific lending arrangement, the cumulative amount of income recognised. Derecognition policies in 1(d) are applied to loan commitments issued and held.
\nThe Group has issued no loan commitments that are measured at FVTPL
\n \n \n \n\n (xvi) Dividends \n
\nFinal dividends on ordinary shares are recognised in equity in the period in which they are approved by the Company\u2019s shareholders. Interim dividends are recognised in equity in the period in which they are paid.
\n \n\n (xvii) Operating segments\n
\nAn operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group\u2019s other components, whose operating results are reviewed regularly by the Group Executive Committee (being the chief operating decision maker (CODM)) to make decisions about resources allocated to each segment and assess its performance, and for which discrete financial information is available. Transactions between the operating segments are on normal commercial terms and conditions unless stated otherwise. Internal charges and transfer pricing adjustments have been reflected in the performance of each segment. Revenue from external parties is measured in a manner consistent with the income recognition policy of the Group.
\n \n\n (xviii) Sales and repurchase agreements \n
\nFinancial assets may be lent for a fee or sold subject to a commitment to repurchase them (\u201crepos\u201d). Such assets are retained on the SOFP when substantially all the risks and rewards of ownership remain with the Group. The assets are reclassified as pledged assets when the transferee has the right by contract to sell or repledge the collateral. The liability to the counterparty is included separately on the SOFP as appropriate in either Deposits by banks or Customer accounts.
\nSimilarly, where financial assets are purchased with a commitment to resell (\u201creverse repos\u201d), or where the Group borrows financial assets but does not acquire the risks and rewards of ownership, the transactions are treated as collateralised loans, and the financial assets are not included in the SOFP. The collateralised loan asset is included separately on the SOFP as appropriate in either Loans and advances to banks or Loans and advances to customers.
\nThe difference between the sale and repurchase price is recognised in the income statement over the life of the agreements using the EIR. Fees earned on stock lending are recognised in the income statement over the term of the lending agreement. Securities lent to counterparties are also retained on the SOFP.
\n \nIn certain circumstances, the Group pledges collateral in respect of liabilities or borrowings. Collateral pledged in the form of securities or loans and advances continues to be recorded on the SOFP. Collateral placed in the form of cash is recorded in loans and advances to banks or customers. Any interest receivable arising is recorded as interest income.
\n \n\n (xix) Collateral\n
\nThe Group enters into master agreements with counterparties to ensure that in the event of a default, all amounts outstanding with those counterparties will be settled on a net basis. The Group obtains collateral in respect of customer liabilities where this is considered appropriate. The collateral normally takes the form of a lien over the customers\u2019 assets and gives the Group a claim on these assets for both existing and future liabilities. The collateral is not recorded on the Group\u2019s SOFP.
\nThe Group also receives collateral in the form of cash or securities in respect of other credit instruments, such as stock borrowing contracts and derivative contracts, in order to reduce credit risk. Collateral received in the form of securities is not recorded on the SOFP. Collateral received in the form of cash is recorded on the SOFP, with a corresponding liability recognised within deposits from banks or deposits from customers. Any interest payable arising is recorded as interest expense.
\n \n\n (xx) Offsetting\n
\nFinancial assets and liabilities are offset and the net amount reported in the balance sheet when there is currently a legally enforceable right of set off and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. No impairment loss allowance for ECL is recognised on a financial asset, or portion thereof, which has been offset.
\n \n \n\n 1.6 Application of new and revised IFRSs\n
\nIn 2022, the Group assessed the impact of new and revised pronouncement of IFRSs which took effect during the year. The changes to IFRS during 2022 did not have a material impact on the Group\u2019s financial statements. The Group has not early adopted any of the changes described below.
\n\n 1.7 Impact of other accounting standards with effective periods beginning on or after 1 January 2022\n
\n| \n \n Accounting Standard\n \n\n Update\n \n | \n \n \n Description of Change\n \n | \n \n \n Key impacts for PTSB\n \n | \n \n \n Effective\n \n\n Date\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Amendments to IFRS 3 \u2013 Reference to the Conceptual Framework\n \n | \n \n Updates certain references to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. \n | \n \n Annual periods beginning on or after 1 January 2022. \n | \n
| \n \n Amendments to IAS 16 \u2013 Property, Plant and Equipment: Proceeds before Intended Use\n \n | \n \n Requires amounts received from selling items produced while the company is preparing the asset for its intended use to be recognised in profit or loss, and not as an adjustment to the cost of the asset. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. \n | \n \n Annual periods beginning on or after 1 January 2022. \n | \n
| \n \n Amendments to IAS 37 \u2013 Onerous Contracts: Cost of Fulfilling a Contract\n \n | \n \n Specifies which costs to include when assessing whether a contract will be loss-making. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. \n | \n \n Annual periods beginning on or after 1 January 2022. \n | \n
| \n \n Annual Improvements to IFRS Standards 2018-2020 Cycle\n \n | \n \n Minor amendments to IFRS 1, IFRS 16, IFRS 9 and IAS 41. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. \n | \n \n Annual periods beginning on or after 1 January 2022. \n | \n
\n 1. Corporate information, basis of preparation and significant accounting policies (continued)\n
\n\n The following table outlines the new pronouncements coming into effect for accounting periods on or after 1 January 2023 and are not deemed to have a significant impact on the financial statements\n
\n| \n \n Accounting Standard\n \n\n Update\n \n | \n \n \n Description of Change\n \n | \n \n \n Key impacts for PTSB\n \n | \n \n \n Effective\n \n\n Date\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n IFRS 17 \u2018Insurance Contracts\u2019\n \n | \n \n IFRS 17 will come into effect for 2023. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. PTSB has no insurance contracts. \n | \n \n Annual periods beginning on or after 1 January 2023. \n | \n
| \n \n Amendments to IFRS 17 (Insurance contracts)\n \n | \n \n Amendments are intended to clarify some of the implementation challenges faced in the implementation of IFRS 17 Insurance contracts. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. \n | \n \n Annual periods beginning on or after 1 January 2023. \n | \n
| \n \n Amendment to IAS 1 \u2013 Classification of Liabilities as Current or Non-current\n \n | \n \n Clarifies that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. \n | \n \n Annual periods beginning on or after 1 January 2023. Not yet endorsed by the EU. \n | \n
| \n \n Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)\n \n | \n \n Amendments are intended to help preparers in deciding which accounting policies to disclose in their financial statements. \n | \n \n This amendment is expected to have no significant impact on current or future reporting \n | \n \n Annual periods beginning on or after 1 January 2023. \n | \n
| \n \n Amendments to IAS 8 \u2013 Definition of Accounting Estimates\n \n | \n \n Distinguishes between accounting policies and accounting estimates. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. \n | \n \n Annual periods beginning on or after 1 January 2023. \n\u00a0 \n | \n
| \n \n Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction\n \n | \n \n Clarifies how to account for deferred tax on transactions such as leases and decommissioning obligations. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. \n | \n \n Annual periods beginning on or after 1 January 2023. \n | \n
| \n \n Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)\n \n | \n \n Clarifies how to measure sales in a sales and lease back agreement. The aim is to ensure it meets the requirements of IFRS15 revenue recognition. \n | \n \n This amendment is expected to have no significant impact on current or future reporting. \n | \n \n Annual periods beginning on or after 1 January 2024. Not yet endorsed for use in the EU. \n | \n
\n 2. Critical accounting estimates and judgements\n
\nThe preparation of these consolidated financial statements, in conformity with IFRS, requires Management to make assumptions, estimates and judgements that affect the reported amounts of income, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that may require a material adjustment to the carrying amount of the assets or liabilities affected in future periods.
\nThe current economic climate, with interest rate increases and high inflation, elevates the uncertainty associated with judgements, estimates and assumptions made by Management. The Irish economy demonstrated recovery post Covid and resilience in the current economic climate in 2022. The results of the actions taken by the Government, EBA and CBI point toward a positive trajectory of recovery. The Directors and Management, however, remain cautious and risk remains in the medium to long-term that the Irish Banking sector will continue to face challenges, particularly due to higher capital requirements and new and emerging risks.
\nWhile the actual results may differ from the estimates made, the Directors believe that they are reasonable in the current circumstances based on the best available information at the date of the approval of these consolidated financial statements.
\nAssumptions, estimates and judgements are revised on an ongoing basis and where necessary are revised to reflect current conditions and updated information.
\nCritical accounting estimates and judgements made by Management in applying accounting policies are set out below.
\n\n (a) Allowance for credit losses under IFRS 9 \n
\nIFRS 9 requires an impairment allowance to be recorded for ECL on financial assets regardless of whether there has been an actual loss event. There is a requirement to track and assess changes in credit risk on financial instruments since origination and determine whether the credit risk on those financial instruments has increased significantly since initial recognition.
\nGovernment-led customer support initiatives in response to the pandemic have weakened established relationships between model inputs and outputs, reducing the ability to forecast using models alone. In addition, models are constructed based on a single economic cycle. As a result a greater level of management judgement is required to reflect the current nature and uncertainty of the economic outlook.
\nThe following concepts introduce significant judgement within impairment and have a tangible impact on the level of ECL allowances.
\n\n Determination of significant increase in credit risk (SICR)\n
\nThe determination of whether a loan has experienced a significant increase in credit risk may have a material impact on the level of ECL impairment allowance as a 12-month ECL is recognised for Stage 1 loans whereas a lifetime ECL is recognised for Stage 2 loans.
\nMigration of loans between Stage 1 and Stage 2 can cause some volatility in the amount of the recognised ECL allowances and the provision for expected credit losses in any accounting period.
\nThe Group has relied on a number of measures including delinquency, forborne status, risk grade, change in remaining lifetime Probability of Default (PD) and PD at maturity to determine SICR.
\nAt December 2022, management judgement has been applied to specified non-standard mortgages classified as Stage 1 by Impairment models and these loans were transferred to Stage 2 with a lifetime impairment loss allowance applied. The impact of this staging adjustment is a c.\u20ac138m increase in Stage 2 volumes.
\n\n Forward Looking Information (FLI)\n
\nThe Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture lifetime ECL, the Group also modelled early redemptions as a separate component within the ECL calculation.
\nJudgement is combined with statistical evidence in determining which forward-looking variables are relevant for the Group\u2019s loan portfolios and in determining the extent by which through-the-cycle parameters should be adjusted for FLI to determine point-in-time parameters.
\nChanges in FLI variables applied to convert through-the-cycle PD and LGD into point-in-time parameters can either increase or decrease ECL impairment allowances in a particular accounting period. On update, increases in the level of optimism in the FLI variables will cause a decrease in ECL while increases in the level of pessimism in the FLI variables will cause an increase in ECL. These movements could be significant in the accounting period of update.
\n \n \n \nThe estimation and application of FLI requires significant judgement. In its calculation of ECL, the Group considers multiple scenarios and possible outcomes together with their probability of occurrence. Scenarios are designed to capture a range of possible outcomes. Each macroeconomic scenario in the Group\u2019s ECL calculation includes a projection of all relevant macroeconomic variables applied in the models for a five year period (where the relevant period extends to five years), subsequently reverting to long-run averages.
\nThe Group\u2019s approach applies extreme-but-plausible economic scenarios (i.e. underpinned by historical evidence) to estimate the distribution of ECL to which the Group is exposed. Using statistical techniques combined with expert credit judgement the Group then formulates an unbiased probability weighted estimate of ECL at the reporting date.
\nThree scenarios are currently considered in the Group\u2019s calculation of ECL. The base scenario is used for financial planning purposes. The Group considers one scenario that represents a macroeconomic environment that is more favourable to the central scenario and one scenario that represents a macroeconomic environment that is less favourable to the central scenario. Three scenarios are currently considered in the Group\u2019s calculation of ECL at the reporting date.
\nThe following table details the key macroeconomic variables applied to model credit losses together with the associated percentiles and probability weightings for Stages 1 and 2 at 31 December 2022. Macroeconomic scenarios were most recently updated in December 2022. The update in the Base Case Scenario reflects a deterioration in the outlook for the Irish economy in future years as a result of higher inflation, with lower forecast HPI and GDP growth.
\nIFRS 9 Upside and Downside scenarios have been updated to present extreme \u20181-in-20\u2019 scenarios relative to the updated Base scenario. Given the severity of these scenarios (5th Percentile upside and 95% Percentile downside), their combination captures the macroeconomic uncertainty arising from the current economic environment.
\n\u00a0
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||||
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n Base Case\n \n | \n \n \n Upside Scenario\n \n | \n \n \n Down side Scenario\n \n | \n \n \u00a0 \n | \n \n \n Base Case\n \n | \n \n \n Upside Scenario\n \n | \n \n \n Down side Scenario\n \n | \n
| \n \u00a0 \n | \n \n \n Average value over Year 1\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value for the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over Year 1\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Percentile \n | \n \n \u00a0 \n | \n \n \n 50th\n \n | \n \n \n 5th\n \n | \n \n \n 95th\n \n | \n \n \u00a0 \n | \n \n 50th \n | \n \n 5th \n | \n \n 95th \n | \n
| \n Scenario Probability Weighting \n | \n \n \u00a0 \n | \n \n \n 54%\n \n | \n \n \n 23%\n \n | \n \n \n 23%\n \n | \n \n \u00a0 \n | \n \n 54% \n | \n \n 23% \n | \n \n 23% \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Irish Residential House Prices \n | \n \n \n 0%\n \n | \n \n \n 2%\n \n | \n \n \n 12%\n \n | \n \n \n -10%\n \n | \n \n 4% \n | \n \n 3% \n | \n \n 13% \n | \n \n -8% \n | \n
| \n Irish Unemployment \n | \n \n \n 7%\n \n | \n \n \n 5%\n \n | \n \n \n 4%\n \n | \n \n \n 11%\n \n | \n \n 7% \n | \n \n 6% \n | \n \n 4% \n | \n \n 12% \n | \n
| \n Irish GDP \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n \n \n 6%\n \n | \n \n \n -2%\n \n | \n \n 6% \n | \n \n 4% \n | \n \n 6% \n | \n \n -1% \n | \n
| \n Consumer Price Index \n | \n \n \n 6%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n \n \n 4%\n \n | \n \n 3% \n | \n \n 2% \n | \n \n 2% \n | \n \n 3% \n | \n
| \n ECB Base Rate \n | \n \n \n 3%\n \n | \n \n \n 3%\n \n | \n \n \n 1%\n \n | \n \n \n 3%\n \n | \n \n 0% \n | \n \n 0% \n | \n \n 0% \n | \n \n 2% \n | \n
The Base, Upside and Downside scenarios are described as follows:
\n\n Base scenario\n
\nIn the base scenario, the outlook for the global economy is one of slower growth and more uncertainty in 2023, as the economic rebound from the impact of Covid lockdowns in 2020 and 2021 dissipates, and the remaining inflationary shock drives the most aggressive response from global central banks for the past 30 years.
\nA forceful series of interest rate increases to stem burgeoning inflation, marks the end of the zero-rate environment and highly accommodative global monetary policy of the past decade. With fallout from the Russian invasion of Ukraine continuing to drive price instability in key energy and agri-food markets and combined with the Covid driven global supply chain issues, the inflation outlook continues to be highly uncertain, leading to a period of much greater economic uncertainty.
\n \n \n \nProperty prices have now reached the peak last seen in April 2007, although wages are significantly ahead of that period in 2022, and the number of households in the economy has grown by c.400,000 with new housing supply meeting a fraction of demand. Underlying driving forces, such as a) decade of under supply of housing (with 2022 falling short of output forecasts), b) strong population growth through inward migration, c) record rental values, d) an influx of Ukrainian war refugees and e) exceptionally strong construction price increases, are expected to hold property prices at current levels in 2023.
\nOn unemployment, the Baseline model reflects both the expectation of better than expected unemployment numbers in the end of 2022, and a rise in forecast unemployment level for 2023 to 6.5% (up 1%).
\n\n Upside scenario\n
\nThis is an extreme positive scenario developed to reflect a much stronger outcome for the Irish economy than in the base scenario. There is both historical context and statistical backing to the key forecasts, but at a positive extremity.
\nAverage GDP growth over the forecast period is 6%, which is higher than the average of 3.9% for the Irish economy since 1950. The outlook reflects an extreme positive of effective full employment.
\nConsistent with the longer term nominal house price average gain of 9.3% since 1970 ( Irish property prices are 50X higher than in 1970 in nominal terms) and 6.4% globally during that period, the HPI forecast for the extreme positive scenario, puts average HPI increases during the scenario under review, at 12% per annum.
\nSubstantially below trend CPI growth returns in the Irish economy over the forecast horizon, with inflation trends remaining highly supportive of economic growth.
\n\n Downside scenario\n
\nThe Downside scenario is an extreme scenario backed by Irish historical context and international comparatives. The scenario captures a statistical extreme in unemployment, GDP and HPI, while maintaining credibility as a single scenario. A prolonged period of mid teen unemployment, extends quickly, reaching a peak of 15% in 2024.
\nFive years of sub normal growth across the forecast horizon in 2022 to 2027, shows a sharp reversal from current expected growth levels and is significantly below the 3.9% average GDP growth seen in the Irish economy since 1950. GDP falls a low point of minus 11.5% over the forecast period.
\nThe threat of CPI moving ahead at a much faster pace than expected, is a key feature of this 1 in 20 scenario for this period, acknowledging the weakness in the global supply chain, and the impact of the Ukraine /Russian conflict which has pushed inflationary forces to 40 year highs.
\nThe Group applies statistical techniques combined with expert credit judgement to formulate an unbiased probability weighted estimate of ECL at the reporting date. A review of the methodology to calculate the final weighted estimate of ECL based on three scenario inputs (Base, Upside and Downside scenarios) by reference to challenger methods and supplementary benchmarks was conducted in H2 2022. The review concluded that the methodology remains in compliance with IFRS 9.
\nGiven the relative sizes of the portfolios, the key judgemental area for the Group is in relation to the level of ECL calculated for the residential mortgage portfolio.
\nDetermining probability weightings of the scenarios and forecasting FLI in respect of those scenarios requires a significant degree of Management judgement. The reported ECL allowance is impacted by the probability weighting attributed to each macroeconomic scenario.
\nIf the Group were to only use its Base Case Scenario for the measurement of ECL for the secured mortgage portfolio, excluding Management\u2019s adjustment to modelled outcomes, the ECL impairment allowance would be \u20ac98m less than reported at 31 December 2022.
\n \n \n \nSimilarly, excluding Management\u2019s adjustment to modelled outcomes, if the Group were to only apply its Upside Scenario for the measurement of ECL for the secured mortgage portfolio, the ECL impairment allowance would be \u20ac126m less than reported at 31 December 2022. Whereas, if the Group were to only use its Downside Scenario, the ECL impairment allowance would be \u20ac336m greater than reported at December 2022.
\nThe adequacy of ECL allowance is reviewed by the BAC on a half-yearly basis. At 31 December 2022, the total impairment provision included \u20ac137m of management\u2019s adjustments to modelled outcomes (31 December 2021: \u20ac118m) which primarily comprises the following:
\nAt December 2022, management judgement has been applied to specified non-standard mortgages classified as Stage 1 by Impairment models and these loans were transferred to Stage 2 with a lifetime impairment loss allowance applied. The impact of this staging adjustment is a c. \u20ac138m increase in Stage 2 volumes.
\n\n (b) Deferred taxation\n
\nAt 31 December 2022, the Group had a net deferred tax asset of \u20ac309m (31 December 2021: \u20ac350m). See note 27 for further details.
\nDeferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. The recognition of a deferred tax asset relies on Management\u2019s judgements surrounding the probability and adequacy of future taxable profits and the reversals of existing taxable temporary differences.
\nThe most important judgement relates to Management\u2019s assessment of the recoverability of the deferred tax asset relating to carried forward tax losses, being \u20ac334m at 31 December 2022. It should be noted that the full deferred tax asset on tax losses relates to tax losses generated in the PTSB legal entity (i.e. no deferred tax asset is being recognised on tax losses carried forward in any other Group company).
\nThe assessment of recoverability of this asset requires significant judgements to be made about the projection of long-term profitability because of the period over which recovery extends. In addition, given PTSB\u2019s history of recent losses, in accordance with IAS 12, there must be convincing other evidence to underpin this assessment.
\n \n \n \nIn making the assessment, the Board considered the following factors:
\nTaking the above factors into account, and in the absence of any expiry date for the utilisation of carried forward tax losses in Ireland, the Board have concluded that it is more likely than not that there will be sufficient taxable profits against which the losses can be utilised and on the basis of the assessment above, continue to recognise \u20ac334m of a deferred tax asset on tax losses on the statement of financial position as at 31 December 2022.
\nIn this regard, the Group has carried out an exercise to determine the likely number of years required to utilise the deferred tax asset arising on tax losses carried forward. Based on the Group\u2019s latest forecast plans to 2027 and assuming a level of profitability growth consistent with GDP growth of approximately 2.5%, it will take c. 10 years for the deferred tax asset on tax losses of \u20ac334m to be utilised. A level of profitability consistent with GDP growth continues to be considered by Management to be appropriate given the Group\u2019s primarily domestic retail focus and the expectation arising therefrom that, over the long-term, the Group\u2019s performance would be expected to broadly track the performance of the Irish economy. While the geopolitical uncertainty has significantly impacted GDP in the short-term it is expected that, over the medium-term, GDP will recover and Management are of the view that a long-term assumed growth rate of 2.5% is not unreasonable in this context.
\nIFRS does not allow for the deferred tax asset recognised to be discounted notwithstanding that it is likely to take a number of years for it to be recovered.
\nThe expected period of time to full utilisation of the deferred tax asset has decreased since 31 December 2021 from 22 to 10 years. This is mainly due to forecast interest rate rises and the impact of the Ulster Bank transaction. These revised profitability figures also impact the assumed long-term projections for the Group with the result that the expected utilisation period has decreased.
\n \n \n \nIt should be noted that Management make certain judgements in the process of applying the Group\u2019s accounting policies which may impact on amounts recognised in the financial statements and consequently on taxable profits and the utilisation of tax losses. As set out in note 27, analysis carried out demonstrates that were certain adverse events to arise (see below for further detail of the adverse events considered) it continues to be Management\u2019s view that there would be sufficient future taxable profits against which the full quantum of tax losses carried forward could be utilised, albeit that the period of time over which such utilisation would occur would be extended.
\nIt should be further noted that the analysis of the estimated utilisation of the deferred tax asset arising on tax losses carried forward in PTSB is based on the current business model of the Group.
\nThe recognition of this asset is dependent on the Group earning sufficient profits to utilise the tax losses. The quantum of and timing of these profits is a source of significant estimation uncertainty. However, as a principle, the Group is expecting to be profitable in the medium term. Consequently the key uncertainty relates principally to the time period over which these profits will be earned. Whilst the Group may be more or less profitable in certain periods owing to various factors such as the interest rate environment, loan loss provisions, operating costs and the regulatory environment, Management expect that, notwithstanding these, the Group will be profitable over the long term. Consequently, any change to these factors which would ultimately impact on profitability, are highly subjective, but will only impact on the time period over which this asset is recovered.
\nAs set out above, in assessing the appropriateness of recognising a deferred tax asset on tax losses carried forward, Management has considered the impact of various stress case scenarios on the period of recoverability. The three scenarios identified as having potentially significant implications for the deferred tax asset recoverability are (i) adverse changes in the interest rate environment, (ii) increased impairment charges and (iii) increases in operating costs. These sensitivity case scenarios are intended to simulate a situation where there is an economic downturn. If any one of the stress case scenarios were to occur, within a reasonably possible range, it is our expectation that the time period over which these assets might be recovered could extend by 1 year. If all adverse assumptions were to arise the period of recoverability would be extended by 1 year (i.e. full utilisation by 2033). However, Management consider this scenario unlikely. Changes in these assumptions are most impacted by changes to house prices and unemployment, which represent the majority of any expected stress loss which could occur. This position will continue to be reviewed for each reporting period; however, much of this estimation uncertainty may not be resolved for a number of years. However, as noted, based on the Group\u2019s latest forecast plan, it is Management estimate that the expected time period for recovery of the deferred tax asset on tax losses to be 10 years, i.e. full utilisation is expected by 2032.
\n\n (c) Fair Value of Financial instruments\n
\nThe Group\u2019s accounting policy for the determination of fair value of financial instruments is set out in note 1(vii)(e). The best evidence of fair value is quoted prices in an active market. The absence of quoted prices increases reliance on valuation techniques and requires the use of judgement in the estimation of fair value. This judgement includes evaluating available market data, determining the expected cash flows for the instruments, as well as identifying and applying an appropriate discount rate and credit spread.
\nValuation techniques that rely on non-observable data require a higher level of Management judgement in estimating the fair value compared to those based on observable data.
\nThe quality of market data, valuation techniques and other inputs into the valuation models used are subject to internal review and approval.
\nThe Group carries certain financial assets at fair value. In estimating the fair value of these assets and derivatives, the Group seeks to use quoted market prices (level 1). Where quoted market prices are not available, the Group uses internally developed valuation models and valuations from external experts. Inputs to these models are taken from observable market data where possible (level 2) but where this is not possible, a degree of judgement is used (level 3). Such judgement considerations typically include items such as interest rate yield curves, equity prices, option volatilities and currency rates.
\nFurther details of the fair value of financial assets and liabilities are set out in note 37.
\n \n \n \n\n (d) Impairment review of its subsidiary undertaking\n
\nThe Company carries its investment in its subsidiary undertaking at cost and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment\u2019s fair value or its value-in-use (VIU).
\nAn impairment charge arises if the carrying value exceeds the recoverable amount and where the carrying value is not supported by the estimated discounted future cash flows of the underlying business. Management note that the market capitalisation of the Group is lower than its net assets. The depressed share price is a result of the overall subdued banking environment currently in which the entity operates along with various entity specific factors that affect the liquidity of the shares. The recoverable amount of the investment is the higher of its fair value less costs to sell or it\u2019s VIU. The carrying value of the investment in PTSB plc was \u20ac888m as at 31 December 2021. During 2022, an AT1 issuance of \u20ac245m (net of transaction costs) and a share issuance related to Project Sun of \u20ac516m occurred which brought the carrying value to \u20ac1,649m. The recoverable amount based on the VIU is in excess of the carrying amount after the reversal of previous impairment charges. On the basis that the VIU in in excess of the carrying value no impairment charge is required (31 December 2021: impairment charge of \u20ac66m). Management have considered whether a reversal of impairment charge from previous years is appropriate. Having reviewed external and internal information management noted that there had been a significant change in the value of the asset, primarily due to the increased forecast profitability as a result of the Ulster Bank transaction and increased interest rates. On this basis, management were satisfied there was sufficient headroom to take a full write back of the previous impairment charges of \u20ac697m.
\nThe VIU is the present value of the future free cash flows expected to be derived from the investment, based upon a VIU calculation discounted at an appropriate rate for the investment.
\nThe recoverable amount reflecting Management\u2019s best estimate is sensitive to changes in the following key assumptions:
\n\n Cash flow forecasts\n
\nCash flow forecasts are based on internal management information used for strategic planning for a period of up to five years, after which a long-term growth rate appropriate for the business is applied. The key cash flows in these forecasts are as follows:
\nThe projected cash flows are stress tested with actual performance and verifiable economic data annually to reflect current market conditions and Management\u2019s best estimates of future projections.
\n\n Growth rate\n
\nGrowth rate is determined by reference to long-term economic growth and does not exceed the relevant long-term average growth rate of the industry in which it operates. A growth rate of 2.5% was used.
\n\n Discount rate\n
\nThe discount rate used is a post-tax weighted average cost of capital of the Group of 10% (2020: 10%) as the cash flows used in impairment assessment are post tax cash flows. The discount rate includes an additional risk premium to account for various specific risks. These specific risks are not reflected in the cash flows projected for impairment analysis.
\nThe discount rate is used for various internal pricing models and is benchmarked with the industry averages to cater for the any changes in risk profile of the Group.
\nThe Group uses post-tax discount rate as the cash flows generated by the subsidiary are post tax cash flows.
\n \n \n \n\n Sensitivity analysis\n
\nThe impact of changes in the growth rate, the discount rate and cash flows has been assessed by the Directors:
\n\n (e) IFRS 3 Business Combination Accounting (BCA) including fair value of acquired net assets \n
\nOn 17 December 2021, PTSB entered into a conditional agreement to acquire a business from Ulster Bank consisting of certain elements of its non-tracker residential mortgage portfolio, SME portfolio and asset finance portfolio. The acquisition also included 25 branches and the workforce associated with the various businesses and branches. The agreement was effected through a series of linked contracts and became unconditional on 7 November 2022. For operational reasons, the above businesses/ assets will not transfer to the group on a single date. The group took possession of the majority of the mortgage book and its associated workforce on 7 November 2022 (the Principal Completion Date). The branches and associated workforce transferred in January 2023 and the SME assets (including associated employees) transferred in February 2023. The remainder of the mortgage book, and the asset finance assets (including associated employees) are expected to transfer to the group in the first half of 2023.
\nThis agreement was accounted for as a business combination on the Principal Completion Date with the purchase price allocation (PPA) and fair value of the net assets acquired being determined on that date. This gave rise to gain on bargain purchase of \u20ac362m. The forward purchase of the loans yet to be transferred under the contract is accounted for as a derivative from that date. See note 3 for further details.
\nThe accounting for this transaction required Management to make certain critical accounting judgements and estimates.
\n\n Critical Accounting Judgement\n
\nManagement had to make the following accounting judgements:
\nManagement considered these judgements in detail and concluded as follows:
\n| \n \n Judgement\n \n | \n \n \n Conclusion\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n How many transactions are there?\n \n | \n \n Management considered the requirements of IFRS 3 and IFRS 9 and believe that the group should account for this agreement as one overall transaction due to following reasons: \n
| \n
| \n \n Judgement\n \n | \n \n \n Conclusion\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n What is PTSB acquiring \u2013 a business or assets?\n \n | \n \n Management considered the requirements of IFRS 3 and concluded that this transaction collectively constitutes the acquisition of a business on the basis it includes acquired inputs (the loan books) and substantive processes which are embodied in the key individuals transferring (credit risk, underwriting and customer relationship management) along with sufficient support staff. The assessment of whether an acquired set of activities and assets constitutes a business must include, at a minimum, an input and substantive process and whether when these are applied to an input or inputs it is critical to the ability to continue producing outputs. This assessment must be performed from the perspective of a market participant. The mere existence of an output (e.g. interest income) doesn\u2019t indicate that both an input and a substantive process have been acquired. Management considerd substantive processes to include strategic, operational and resource management processes in order to be considered a business. These processes are usually documented but the intellectual capacity of an organised workforce with the necessary skills and experience also provide the necessary processes to determine the acquired set of assets and activities as a business. Management determined that the acquisition of the organised workforce from Ulster Bank that included key individuals with the necessary skills and experience to direct the substantive processes within credit risk, underwriting and customer relationship management met the requirements of IFRS 3. As a result, the entire transaction was accounted for as a business combination. \n | \n
| \n \n When is the acquisition accounted for?\n \n | \n \n Management considered the requirements of IFRS 3 and concluded that there is one business combination date and that this takes place at the Principal Completion Date i.e., when the mortgage business (being the majority of the mortgage book and workforce (including key mortgage employees)) transfers. The fact that certain parts of the business do not transfer for operational reasons at this date does not change this judgement. As noted above this is one unconditional, interrelated transaction. The mortgage business, which amounts to the vast majority of the overall business, is irreversibly transferred on this date with the rest of the assets and workforce being contractually obliged to follow. As a result, the business combination is accounted for as at this date. \n | \n
| \n \n What is measured?\n \n | \n \n The Directors considered the requirements of IFRS 3 and IFRS 9 and concluded that what is measured is the fair value of the net assets transferred at the Principal Completion Date and that the contractual obligation for assets to be transferred after the Principal Completion Date creates derivatives (forward purchase) which are fair valued at the date. These derivatives are accounted for a fair value until the actual transfer of the underlying assets \n | \n
This transaction has been accounted for as a business combination under IFRS 3 (as described above). If this transaction was not accounted for as a business combination no gain on bargain purchase would be recognised and the timing of asset recognition and associated measurement including subsequent EIR would be significantly different.
\n\n Critical Accounting Estimates\n
\nBusiness combination accounting required Management to make certain critical accounting estimates being the fair value of the assets acquired including derivatives. Management engaged the services of independent third-party valuers to provide valuations of the assets being transferred in the transaction. The fair value of the branch properties was determined using the open market prices. As there was no observable market price for the loans (Level 3), their fair value was calculated using discounted cashflow model and included calculating the expected contractual cash flows of the assets and applying the following to the portfolio of assets; prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio.
\nSee notes 3 and 37 for sensitivities relating to the fair values.
\n \n \n \n\n 3. Business combination\n
\nOn 17 December 2021, PTSB entered into a legally binding agreement with NatWest Group Plc (\u2018NatWest\u2019) to acquire certain elements of the Retail mortgage lending, Asset Financing and SME businesses, including 25 branch properties and staff of Ulster Bank Ireland DAC (\u2018Ulster\u2019) in the Republic of Ireland. On 7 November 2022 the transaction was completed when \u20ac5.2bn of the Retail business assets and significant processes were acquired by the Bank thereby legally binding the Bank to acquire the remaining Retail, Asset Financing and SME assets. No voting interest in Ulster was acquired as part of the acquisition. The remaining Retail, Asset Financing and SME assets are envisioned to be acquired by the Bank on subsequent dates in the first half of 2023.See note 2(e) for further details on this transaction.
\nThe acquisition of the Ulster business was accounted for under IFRS 3: Business Combinations and therefore, any resulting negative goodwill/gain on bargain purchase is calculated as the excess of the fair value of the identifiable assets acquired and the liabilities assumed over the fair value of the consideration transferred. In this transaction a gain on bargain purchase arose because the fair value of the assets and liabilities acquired exceeded the fair value of the consideration paid. This is as a result of a number of external factor\u2019s including NatWest\u2019s decision to leave the Irish market therefore the Bank acquired the assets at a discount to their fair value. The accounting for the business acquisition was completed on 7 November 2022 when business combination accounting was achieved.
\nThe details of the business combination are as follows:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Fair value of consideration transferred\n \n | \n \n \u00a0 \n | \n
| \n Amount settled in cash \n | \n \n \n 4,816 \n \n | \n
| \n Equity consideration \n | \n \n \n 155 \n \n | \n
| \n Contingent consideration \n | \n \n \n 37 \n \n | \n
| \n \n Total\n \n | \n \n \n 5,008\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Recognised amounts of identifiable net assets \u2013 at fair value\n \n | \n \n \u00a0 \n | \n
| \n Retail mortgage lending \n | \n \n \n 5,386 \n \n | \n
| \n Forward Contract Derivatives \n | \n \n \n (16) \n \n | \n
| \n \n Total\n \n | \n \n \n 5,370\n \n | \n
| \n \n Gain on bargain purchase\n \n | \n \n \n (362)\n \n | \n
The total fair value of the consideration transferred on the acquisition date was \u20ac5,008m and consists of;
\nThe liability for contingent consideration consists of a liability to pay an equity cash consideration amount based on 4.04% of the Banks ordinary shares (after the issuance of shares on the acquisition date described below) using a volume weighted average price (VWAP) of the Banks ordinary shares for a period of 60 days post the acquisition date. On the acquisition date the liability is measured using the closing share price on 4 November 2022 of \u20ac1.70. The undiscounted range of outcomes based on the highest and lowest VWAP in the 60 day period are \u20ac37m and \u20ac41m. The contingent consideration is accounted for at fair value until settlement. This liability was settled in January 2023 when cash of \u20ac41m was paid to NatWest.
\nThe total fair value of the net assets acquired on the acquisition date was \u20ac5,370m and consists of;
\nThe fair value measurements were performed by independent professional valuers having appropriate qualifications and recent experience in the fair value measurement of loans and properties in the locations and categories being valued.
\n \nA discounted cash flow model was used to estimate the fair value of the acquired retail mortgage assets. This included calculating the expected contractual cash flows of the assets and applying the following to the portfolio of assets; prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio.
\nThe forward contract derivatives represent the remaining Retail lending assets and the entirety of the Asset Financing and SME assets and Branch Properties that will not be transferred until a later date and therefore the Bank have not acquired control of these assets. As the business combination was accounted for on 7 November 2022, the Group is required to account for derivatives for the forward purchase of the remaining Retail lending assets and the entirety of the Asset Financing and SME assets and Branch Properties on that date. The forward contract derivatives are measured as the net of the fair value of the assets based on the above discounted cash flow model and the fair value of the consideration to be transferred i.e. the gross outstanding balance. The same discounted cash flow model was used to estimate the fair value of the remaining assets to be acquired. The Branch Properties were measured at their open market prices.
\nThe gross fair value of the assets to be acquired as at the acquisition date included as part of the forward contract derivatives are as follows. These are based on an estimate of the outstanding balance of these loans on their expected transfer date.
\nThe gross fair value of the consideration to be transferred as at the acquisition date included as part of the forward contract derivatives are as follows. These are based on an estimate of the outstanding balance of these loans on their expected transfer date.
\nSee note 37 for further detail on fair value of the forward contract derivatives as at 31 December 2022 and the related sensitives.
\nThe Branch Properties (including associated employees) transferred in January 2023 and \u20ac9m cash was paid to NatWest. The SME assets (including associated employees) transferred in February 2023 and \u20ac162m cash was paid to NatWest.
\nIn accordance with IFRS 3 as the fair value of the assets acquired and the liabilities assumed (\u20ac5,008m) is in excess of the fair value of the consideration transferred (\u20ac5,370m) a gain on bargain purchase of \u20ac362m was recognised on the acquisition date in the Income Statement. Management recognised this gain in Exceptional Items.
\nAn assessment of sensitivity to changes in the discount rates used in the discounted cash flow model was performed. A 25 basis point increase in the discount rate results in a reduction of the gross fair value of the business combination of \u20ac87m, a 25 basis point decrease in the discount rate results in an increase of the gross fair value of the business combination of \u20ac90m.
\nUnder section 71 of the Companies Act 2014 as the consideration for the acquisition of the Ulster business includes the issuance of ordinary shares, Company law requires that the share premium be recognised as the difference between the nominal value of shares and the fair value of the consideration received. This results in the shares being issued at \u20ac5.68 per share as part of the consideration transferred. The share price on the issuance date was \u20ac1.70 per share with \u20ac0.50 being recognised in Share Capital and \u20ac1.20 being recognised in Share Premium. As the remaining fair value of the consideration received is in excess of the fair value of the shares this excess is required by law to be included in share premium and is, therefore, reclassified directly in equity between Retained Earnings and Share Premium. The excess amount is the gain on bargain purchase of \u20ac362m.
\nThe acquired retail assets incurred a pre-tax loss of \u20ac21m from the acquisition date to the reporting date primarily due to initial recognition of ECL on the acquired loans. Revenue from the acquisition date to 31 December 2022 was \u20ac16m. The day 1 ECL recognised of this transaction was \u20ac30m. This is not included in the gain on bargain purchase.
\n \nIf the business assets (including retail, SME and asset finance) had been acquired on 1 January 2022, revenue of the Group for 2022 would have increased by \u20ac167m, and pre-tax profit for the year would have increased by \u20ac57m. The basis for this is estimate is data received on the loan assets since the acquisition date.
\nAcquisition-related costs amounting to \u20ac92m are not included as part of consideration transferred and have been recognised as an expense in the consolidated income statement, as part of exceptional items within total operating expenses. \u20ac1m of transaction costs were incurred as part of the share issuance to NatWest. These are recognised in Share Premium.
\n \n\n 4. Operating segments\n
\n \nThe Group reports one operating segment which is in accordance with IFRS 8 \u2018Operating segments\u2019.
\nIn line with IFRS 8, the Group also reports revenue from external customers for each major group of products and services. The amount of revenue reported is based on the financial information used to produce the Group\u2019s financial statements. The Group also reports revenue and non-current assets on a geographical basis; Ireland and Isle of Man (IOM)
\n \nThe ExCo as the Chief Operating Decision Maker (CCDM) is responsible for implementing the strategic management of the Group as guided by the Board. The ExCo reviews key performance indicators and internal management reports on a monthly basis.
\n \n \n\n 4.1 Revenue from external customers split by products and services\n
\nThe sources from which the Group earns external revenue are: interest income, fee and commission income, net trading income, and other operating income. Total revenue from external customers was \u20ac501m (2021: \u20ac431m). The main products from which the Group earns external revenue include: mortgages; consumer finance; and treasury assets. The interest income from these products is set out in the table below. Net interest income from external customers split by product:
\n\u00a0
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Mortgages \n | \n \n \n 354\n \n | \n \n 315 \n | \n
| \n Consumer finance* \n | \n \n \n 33\n \n | \n \n 31 \n | \n
| \n Treasury assets \n | \n \n \n 11\n \n | \n \n 7 \n | \n
| \n Wholesale funding \n | \n \n \n 19\n \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 417\n \n | \n \n 354 \n | \n
*Consumer finance comprises income from term loans, credit cards and overdrafts.
\n \n \n\n 4.2 Profit for the year based on geographical location\n
\nDuring the years ended 31 December 2022 and 31 December 2021, the majority of the Group's profit/(loss) was incurred in Ireland. Immaterial losses (less than \u20ac1m) were incurred outside of Ireland in the Group's IOM subsidiary PBI Ltd during the years ended 31 December 2022 and 31 December 2021.
\n\n 4.3 Assets and liabilities based on geographical location\n
\n| \n \u00a0 \n | \n \n \n Ireland\n \n | \n \n \n IOM*\n \n | \n \n \n Of which inter-group balances\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Assets\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Held for sale \n | \n \n \n 18\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n Other assets \n | \n \n \n 25,914\n \n | \n \n \n 1\n \n | \n \n \n (56)\n \n | \n \n \n 25,915\n \n | \n
| \n \n Total segment assets\n \n | \n \n \n 25,932\n \n | \n \n \n 1\n \n | \n \n \n (56)\n \n | \n \n \n 25,933\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Total segment liabilities\n \n | \n \n \n 23,534\n \n | \n \n \n 1\n \n | \n \n \n (56)\n \n | \n \n \n 23,535\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \u00a0 \n | \n
| \n \n Capital expenditure\n \n | \n \n \n 112\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 112\n \n | \n
*This is based on geographical locations and reflects Group intercompany activity with PBI Ltd.
\n \n| \n \u00a0 \n | \n \n \n Ireland\n \n | \n \n \n IOM*\n \n | \n \n \n Of which inter-group balances\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Assets \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Held for sale \n | \n \n 28 \n | \n \n - \n | \n \n - \n | \n \n 28 \n | \n
| \n Other assets \n | \n \n 22,205 \n | \n \n 2 \n | \n \n (59) \n | \n \n 22,207 \n | \n
| \n Total segment assets \n | \n \n 22,233 \n | \n \n 2 \n | \n \n (59) \n | \n \n 22,235 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Total segment liabilities \n | \n \n 20,444 \n | \n \n 2 \n | \n \n (59) \n | \n \n 20,446 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Capital expenditure \n | \n \n 65 \n | \n \n - \n | \n \n - \n | \n \n 65 \n | \n
*This is based on geographical locations and reflects Group intercompany activity with PBI Ltd.
\n \n\n 5. Net interest income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Interest income\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Loans and advances to customers \n | \n \n \n 387 \n \n | \n \n 346 \n | \n
| \n Loans and advances to banks \n | \n \n \n 15 \n \n | \n \n - \n | \n
| \n Debt securities and other fixed-income securities \n | \n \n \n 11\n \n | \n \n 7 \n | \n
| \n Deposits from banks \n | \n \n \n 4\n \n | \n \n 1 \n | \n
| \n \u00a0 \n | \n \n \n 417 \n \n | \n \n 354 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Interest expense\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deposits from banks \n | \n \n \n (10)\n \n | \n \n - \n | \n
| \n Due to customers \n | \n \n \n (10)\n \n | \n \n (14) \n | \n
| \n Debt securities in issue \n | \n \n \n (16)\n \n | \n \n (8) \n | \n
| \n Loans and advances to banks \n | \n \n \n (10)\n \n | \n \n (14) \n | \n
| \n Subordinated liabilities \n | \n \n \n (9)\n \n | \n \n (5) \n | \n
| \n \u00a0 \n | \n \n \n (55)\n \n | \n \n (41) \n | \n
| \n \n Net interest income\n \n | \n \n \n 362 \n \n | \n \n 313 \n | \n
Net interest income includes a charge of \u20ac22m in respect of deferred acquisition costs and \u20ac4m amortisation on the day 1 gain generated by the migration of the mortgages as a result of the Ulster Bank business combination(31 December 2021: deferred acquisition costs of \u20ac17m).
\n\n 6. Fees and commission income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Fees and commission income\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Retail banking and credit card fees \n | \n \n \n 65 \n \n | \n \n 52 \n | \n
| \n Brokerage and insurance commission \n | \n \n \n 9 \n \n | \n \n 11 \n | \n
| \n Other fees and commission income \n | \n \n \n 1 \n \n | \n \n 1 \n | \n
| \n \n Fees and commission income\n \n | \n \n \n 75 \n \n | \n \n 64 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Fees and commission expense *\n \n | \n \n \n (33)\n \n | \n \n (29) \n | \n
| \n \n Net fees and commission income\n \n | \n \n \n 42 \n \n | \n \n 35 \n | \n
* Fees and commission expenses primarily comprises retail banking and credit cards fees.
\n \n\n 7. Net trading Income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Held-for-trading\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Foreign exchange gains \n | \n \n \n 3 \n \n | \n \n 2 \n | \n
| \n \n Net trading income\n \n | \n \n \n 3 \n \n | \n \n 2 \n | \n
\n 8. Net other operating income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Other income \n | \n \n \n 6\n \n | \n \n 11 \n | \n
| \n \n Net other operating income\n \n | \n \n \n 6\n \n | \n \n 11 \n | \n
\n 9. Administrative, staff and other expenses (excluding exceptional items)\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Staff costs (as detailed below) \n | \n \n \n 152\n \n | \n \n 142 \n | \n
| \n Other general and administrative expenses \n | \n \n \n 150\n \n | \n \n 121 \n | \n
| \n \n Administrative, staff and other expenses (excluding exceptional items)\n \n | \n \n \n 302\n \n | \n \n 263 \n | \n
Administrative, staff and other expenses (excluding exceptional items) includes costs of \u20ac4m in relation to legacy legal cases in 2022 (31 December 2021: \u20ac15m).
\n \n\n Fees paid to the Group\u2019s auditors for services outlined below\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Statutory auditor\u2019s remuneration (including expenses and excluding VAT) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Audit of the individual and the Group financial statements \n | \n \n \n 1.4\n \n | \n \n 1.1 \n | \n
| \n - Other assurance services \n | \n \n \n 0.1\n \n | \n \n 0.1 \n | \n
| \n - Other non-audit services* \n | \n \n \n 0.8\n \n | \n \n 0.3 \n | \n
* Other non-audit services for 2022 primarily relate to the Project Sun Class 1 Circular to shareholders and comfort letters and other services in relation to the Group\u2019s Euro Notes Programme and subsequent debt issuance, the AT1 issuance and the Fastnet securitisations. Other non-audit services in 2021 include comfort letters and other services in relation to the Fastnet securitisations, the Group\u2019s Euro Note Programme and subsequent debt and capital issuances.
\n \n \n \n \n\n Staff costs\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Wages and salaries (including commission payable to sales staff) \n | \n \n \n 124\n \n | \n \n 115 \n | \n
| \n Social insurance \n | \n \n \n 15\n \n | \n \n 14 \n | \n
| \n Pension costs \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
\n
| \n \n \n 13\n \n | \n \n 13 \n | \n
| \n \n Total staff costs\n \n | \n \n \n 152\n \n | \n \n 142 \n | \n
Staff redundancy costs associated with exceptional items for the year ended 31 December 2022 and 31 December 2021 are included as part of note 11 exceptional Items.
\nStaff costs of \u20ac13m (31 December 2021: \u20ac13m), have been capitalised to Intangible assets (see note 26), as the cost incurred was directly related to developing software and it is probable that future economic benefits that exceed its cost will flow from its use over more than one year. Therefore these costs are not included in this note.
\n \n\n Staff numbers\n
\nClosing and average number of staff (including Executive Directors) employed during the year are as follows:
\n| \n \u00a0 \n | \n \n \n Closing staff numbers*\n \n | \n \n \n Average staff numbers\n \n | \n ||
| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Ireland \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
| \n \n Total number of staff\n \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
*Closing staff numbers are calculated on a full time equivalent (FTE) basis. Includes 126 closing and 70.6 average staff numbers working on the Ulster Bank transaction.
\n \n \n \n \n\n 10. Bank levy and other regulatory charges\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Bank levy \n | \n \n \n 22\n \n | \n \n 22 \n | \n
| \n Other regulatory charges \n | \n \n \n 29\n \n | \n \n 28 \n | \n
| \n \n Bank levy and other regulatory charges\n \n | \n \n \n 51\n \n | \n \n 50 \n | \n
Other regulatory charges include \u20ac19m for the Deposit Guarantee Scheme (DGS) (31 December 2021: \u20ac17m), \u20ac5m for the Single Resolution Fund (SRF) (31 December 2021: \u20ac4m), \u20ac4m for the Central Bank Industry Funding Levy (31 December 2021: \u20ac5m) and \u20ac1m related to other regulatory charges (31 December 2021: \u20ac2m).
\n\n 11. Exceptional items\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Gain on bargain purchase (a) \n | \n \n \n 362\n \n | \n \n - \n | \n
| \n Costs incurred in relation to the Ulster Bank transaction (b) \n | \n \n \n (92) \n \n | \n \n (28) \n | \n
| \n Restructuring and other costs (c) \n | \n \n \n (13) \n \n | \n \n (14) \n | \n
| \n Impairment arising from deleveraging of loans (d) \n | \n \n \n 8\n \n | \n \n 19 \n | \n
| \n \n Exceptional items\n \n | \n \n \n 265\n \n | \n \n (23) \n | \n
(a) The Group recognised a gain on bargain purchase of \u20ac362m in respect of the Ulster Bank transaction. This was treated as an exceptional gain in the Income Statement. Please see notes 2 and 3 for further information.
\n(b) During 2022, the Group incurred costs of \u20ac92m in relation to the Ulster Bank transaction.
\nThe Group incurred costs of \u20ac28m on the transaction in 2021, these costs were also recognised as exceptional costs in the income statement.
\nThe Group has incurred total costs of \u20ac120m on the Transaction during 2021 and 2022.
\n(c) Restructuring and other costs of \u20ac13m (31 December 2021: \u20ac14m) relate to additional costs incurred as a result of phase 2 of the Group\u2019s Enterprise Transformation Programme which was originally announced in 2020 and costs arising in respect of a previous disposal of a business.
\n(d) The definition of exceptional items was refined to exclude profit or loss on material loan deleveraging post 31 December 2021 (including any increase in impairment arising solely as a result of the sale of loans) due to the sale of loans becoming part of the Group\u2019s normal recovery strategy.
\nDuring 2022, warranty provisions and accruals of \u20ac8m were released in relation to loan transactions that the Group executed in prior years.
\nDuring 2021, an impairment write-back of \u20ac11m was recognised as a result of the sale of the Glenbeigh III mortgage portfolio which met the conditions as noted above. Warranty provisions of \u20ac4m were written back in relation to loan transactions which the Group executed in prior years. An indemnity provision of \u20ac4m was also released relating to the sale of the Glenbeigh II loan sale.
\nThe Group considers these releases as exceptional as the warranty and indemnity provisions were previously recorded through exceptional impairment. This treatment is consistent with the treatment of losses on deleveraging of loans in prior years.
\n\n 12. Taxation\n
\n\n (a) Analysis of taxation charge\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Current taxation\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Charge for current year \n | \n \n \n 2\n \n | \n \n 1 \n | \n
| \n \u00a0 \n | \n \n \n 2\n \n | \n \n 1 \n | \n
| \n \n Deferred taxation\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Origination and reversal of temporary differences \n | \n \n \n 42\n \n | \n \n (2) \n | \n
| \n \n Deferred taxation recognised in the income statement (note 27)\n \n | \n \n \n 42\n \n | \n \n (2) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Taxation charged/(credited) to income statement\n \n | \n \n \n 44\n \n | \n \n (1) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Effective tax rate\n \n | \n \n \n 16%\n \n | \n \n 5% \n | \n
The Group taxation charge for the year ended 31 December 2022 was \u20ac44m (31 December 2021: \u20ac1m credit) of which \u20ac39m was in respect of a corporation tax charge on exceptional items. The main drivers of this charge/credit include (i) a current tax charge of \u20ac2m arising on trading and non-trading income, (ii) a current year deferred tax charge of \u20ac39m arising from the utilisation of tax losses carried forward to shelter tax adjusted profits arising in the year, and (iii) the partial release of a DTA of \u20ac3m created on the introduction of IFRS 9.
\n\n (b) Reconciliation of standard to effective tax rate\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Profit/(loss) on the Group activities before tax\n \n | \n \n \n 267\n \n | \n \n (21) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Tax calculated at standard ROI corporation tax rate of 12.5% (2021: 12.5%) \n | \n \n \n 33\n \n | \n \n (3) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Tax effect of non-deductible expenses and non-trading income \n | \n \n \n 10\n \n | \n \n 2 \n | \n
| \n Other \n | \n \n \n 1\n \n | \n \n - \n | \n
| \n Adjustment to tax losses carried forward \n | \n \n \n -\n \n | \n \n - \n | \n
| \n \n Taxation charged/(credited) to income statement\n \n | \n \n \n 44\n \n | \n \n (1) \n | \n
\n (c) Tax effects of each component of other comprehensive income\n
\n| \n \u00a0 \n | \n \n \n Year ended 31 December 2022\n \n | \n ||
| \n \u00a0 \n | \n \n \n Gross\n \n | \n \n \n Tax\n \n | \n \n \n Net\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Revaluation of property \n | \n \n \n (8)\n \n | \n \n \n 2\n \n | \n \n \n (6)\n \n | \n
| \n Fair value reserve: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Change in fair value of equity instruments \n | \n \n \n 3\n \n | \n \n \n (1)\n \n | \n \n \n 2\n \n | \n
| \n - Change in fair value of debt instruments \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n - Transfer to income statement on asset disposal \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n (5)\n \n | \n \n \n 1\n \n | \n \n \n (4)\n \n | \n
| \n \u00a0 \n | \n \n \n Year ended 31 December 2021\n \n | \n ||
| \n \u00a0 \n | \n \n \n Gross\n \n | \n \n \n Tax\n \n | \n \n \n Net\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Revaluation of property \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n
| \n Fair value reserve: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Change in fair value of equity instruments \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n
| \n -Change in fair value of debt instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n - Transfer to income statement on asset disposal \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 31 December 2021 \n | \n \n 4 \n | \n \n - \n | \n \n 4 \n | \n
\n 13. Earnings/(loss) per ordinary share\n
\n\n (a) Basic earnings/(loss) per ordinary share\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Weighted average number of ordinary shares in issue and ranking for dividend excluding treasury shares \n | \n \n \n 468,387,212\n \n | \n \n 454,690,912 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Profit/(loss) for the year attributable to equity holders \n | \n \n \n \u20ac223m\n \n | \n \n (\u20ac20m) \n | \n
| \n Less AT1 coupon paid (see note 35) \n | \n \n \n (\u20ac10m)\n \n | \n \n (\u20ac21m) \n | \n
| \n Profit/(loss) for the year attributable to equity holders less AT1 coupon paid \n | \n \n \n \u20ac213m\n \n | \n \n (\u20ac41m) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Basic earnings/(loss) per ordinary share (\u20ac cent) \n \n | \n \n \n 45.4\n \n | \n \n (9.0) \n | \n
\n (b) Diluted earnings/(loss) per ordinary share\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Weighted average number of ordinary shares excluding treasury shares held under employee benefit trust used in the calculation of diluted earnings per share \n | \n \n \n 468,387,212\n \n | \n \n 454,690,912 \n | \n
| \n \n Diluted earnings/(loss) per ordinary share (\u20ac cent)\n \n | \n \n \n 45.4 \n \n | \n \n (9.0) \n | \n
Diluted earnings/(loss) per ordinary share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
\nNo adjustment to the weighted average number of ordinary shares for the effects of dilutive potential ordinary shares was required for the year ended 31 December 2022 or 31 December 2021 as the AT1 securities issued in 2020 and 2022 have no conversion features. The AT1 securities issued in 2015 was assessed due to the conversion feature within the security, and was found to have an anti-dilutive effect. It was redeemed on the first call of 1 April 2021.
\n\n Weighted average number of ordinary shares*\n
\n| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Number of ordinary shares in issue at 1 January (note 35) \n | \n \n \n 454,695,492\n \n | \n \n 454,695,492 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Treasury shares held (note 35) \n | \n \n \n (4,580)\n \n | \n \n (4,580) \n | \n
| \n \n Net movements during the year\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Weighted average shares redesignated \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Weighted average shares issued \n | \n \n \n 13,696,300 \n \n | \n \n - \n | \n
| \n \n Weighted average number of ordinary shares\n \n | \n \n \n 468,387,212\n \n | \n \n 454,690,912 \n | \n
* When calculating the earnings/(loss) per share the weighted average number of ordinary shares outstanding during the year and all years presented shall be adjusted for events other than the conversion of potential ordinary shares that have changed the number of ordinary shares without a corresponding change in reserves.
\n \nOn 7 November 2022, the Group issued 90,893,627 shares as part of the consideration transferred for the retail mortgage activities and significant processes of Ulster Bank. See notes 2 and 3 for further details.
\nThere are no instruments with a potential to be converted to ordinary shares at 31 December 2021 as the AT1 security issued in 2015 was redeemed on the first call date of 1 April 2021 (see note 35 for further detail). The AT1 securities issued in 2022 and 2020 have no conversion features within the securities.
\n \n\n 14. Cash and cash equivalents\n
\nFor the purpose of the statement of cash flows, cash and cash equivalents comprise of following:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Cash at bank \n | \n \n \n 58 \n \n | \n \n 57 \n | \n
| \n Items in the course of collection \n | \n \n \n 40 \n \n | \n \n 20 \n | \n
| \n Loans and advances to banks repayable on demand (maturity of less than 3 months) (note 15) \n | \n \n \n 2,123 \n \n | \n \n 4,174 \n | \n
| \n \n Cash and cash equivalents as per statement of cash flows\n \n | \n \n \n 2,221 \n \n | \n \n 4,251 \n | \n
At 31 December 2022, restricted cash of \u20ac408m (31 December 2021: \u20ac330m) consists of cash of \u20ac405m (31 December 2021: \u20ac329m) held by the Group\u2019s securitisation entities and \u20ac3m (31 December 2021: \u20ac1m) which relates to cash collateral placed with counterparties in relation to derivative positions and repurchase agreements.
\nThe following contractual restrictions apply to our securitisation vehicles cash balances;
\n\u2022 Each vehicle must hold an amount equal to a percentage of the outstanding notes in a reserve account on demand as part of the credit enhancement and liquidity support rules. These funds can only be used to fund any revenue shortfall for contractual payments and must be replenished as soon as additional funds are available. When the notes are fully repaid these reserve funds can be used to pay outstanding principal on the subordinated loan.
\nAs a result of these restrictions, the group excluded these balances from cash and cash equivalents in prior period cash flow statements.
\nHowever, the group reviewed this treatment on foot of a decision taken by IFRIC in 2022. This IFRIC decision clarified that such balances should be included in cash and cash equivalents and removed inconsistencies in accounting treatment in the market place. As a result, the group are including these balances in cash and cash equivalents in the cash flow statement for both 2022 and 2021.
\n \n \n \n\n 15. Loans and advances to banks\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Held at amortised cost\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Placed with central banks \n | \n \n \n 1,619 \n \n | \n \n 3,709 \n | \n
| \n Placed with other banks \n | \n \n \n 504 \n \n | \n \n 465 \n | \n
| \n \n Loans and advances to banks\n \n | \n \n \n 2,123 \n \n | \n \n 4,174 \n | \n
Placements with other banks includes restricted cash of \u20ac408m (31 December 2021: \u20ac330m) of which \u20ac405m (31 December 2021: \u20ac329m) is held by the Group\u2019s securitisation entities and \u20ac3m (31 December 2021: \u20ac1m) which relates to cash collateral placed with counterparties in relation to derivative positions and repurchase agreements. The fair value of collateral pledged by counterparties in relation to reverse repurchase agreements at 31 December 2022 is \u20ac8m (31 December 2021: \u20ac433m).
\nLoans and advances to banks amounting to \u20ac2,123m (31 December 2021: \u20ac4,174m) have a maturity of less than three months and therefore have been treated as cash and cash equivalents, with the exception of restricted cash as noted above.
\n \n \n\n 16. Derivative financial instruments\n
\nDerivative instruments are primarily used by the Group to hedge against foreign currency risk.
\nCertain derivative instruments do not fulfil the hedge accounting criteria under IFRS 9 and are consequently classified as held for trading (HFT). All derivatives are carried at fair value.
\nThe derivative instruments used by the Group include currency forward rate contracts, which are commitments to purchase and sell currencies, including undelivered spot transactions.
\nAs disclosed in note 3 the forward contract derivatives represent the remaining Retail lending assets and the entirety of the Asset Financing and SME assets and branch properties that will not be transferred until a later date. The forward contract derivatives are measured as the net of the fair value of the assets and the fair value of the consideration to be transferred i.e. the gross outstanding balance. The forward contract derivative was valued as a liability of \u20ac12m as at 31 December 2022. See notes 2 and 3 for further detail.
\nFurther details on the Group\u2019s risk management policies are set out in the Risk Management Report.
\nDerivatives held by the Group are analysed as follows:
\n \n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||
| \n \u00a0 \n | \n \n \n Contract/\n \n\n notional amount\n \n | \n \n \n Fair \n \n\n value \n \n\n asset\n \n | \n \n \n Fair \n \n\n value \n \n\n liability\n \n | \n \n \n Contract/ notional amount\n \n | \n \n \n Fair \n \n\n value \n \n\n asset\n \n | \n \n \n Fair \n \n\n value \n \n\n liability\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Held for trading\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Forwards \n | \n \n \n 82\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n 84 \n | \n \n 1 \n | \n \n - \n | \n
| \n Business combination forwards \n | \n \n \n 1,520\n \n | \n \n \n -\n \n | \n \n \n 12\n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 1,602\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n 84 \n | \n \n 1 \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Derivative financial instruments as per the statement of financial position\n \n | \n \n \n 1,602\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n 84 \n | \n \n 1 \n | \n \n - \n | \n
\n 17. Other assets\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Loan sale receivable \n | \n \n \n -\n \n | \n \n 310 \n | \n
| \n Other \n | \n \n \n 1 \n \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 1 \n \n | \n \n 310 \n | \n
Loan sale receivable at 31 December 2021 relates to the amount due from the purchaser of the Glenbeigh III portfolio, which was received in the first quarter of 2022.
\nOther assets include accruals for miscellaneous debtors of \u20ac1m at 31 December 2022 (31 December 2021:\u20acnil).
\n \n\n 18. Assets classified as held for sale\n
\nAt 31 December 2022, assets classified as held for sale amounted to \u20ac18m (31 December 2021: \u20ac28m). This relates to collateral in possession. These properties are expected to be sold within the next 12 months.
\n \n \n\n 19. Debt securities\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n Total HTC\n \n | \n \n \n Total HTC\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Government bonds \n | \n \n \n 3,128\n \n | \n \n 2,434 \n | \n
| \n Corporate bonds \n | \n \n \n 49\n \n | \n \n 60 \n | \n
| \n \n Gross debt securities\n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
As at 31 December 2022, all unpledged debt securities are available to be used and are eligible as collateral (though eligibility will depend on the criteria of the counterparty) in sale and repurchase agreements.
\nDebt securities that are managed on a HTC business model basis are accounted for at amortised cost. Debt securities that are managed on a HTC&S basis are accounted for at FVOCI.
\nGovernment bonds of \u20ac3.1bn (31 December 2021: \u20ac2.4bn) comprise Irish, Spanish, Portuguese, French, Italian and EU government bonds which are designated as HTC. Corporate bonds of \u20ac49m (31 December 2021: \u20ac60m) comprise Residential Mortgage Backed Securities (RMBS) and are designated as HTC. The HTC securities represent a portfolio of securities purchased for the purpose of collecting contractual cashflows to maturity. The Group has no HTC&S securities as at 31 December 2022 (31 December 2021: \u20acnil).
\nAt 31 December 2022, debt securities at amortised cost with a fair value of \u20ac654m (31 December 2021: \u20ac732m) had been pledged to third parties in sale and repurchase agreements. The Group has not derecognised any securities delivered in such sale and repurchase agreements on the statement of financial position.
\nAll debt securities at 31 December 2022 are stage 1 for ECL purposes.
\n\n (a) HTC\n
\nThe movement in HTC securities is classified as follows:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n HTC\n \n | \n \n \n HTC\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n As at 1 January\n \n | \n \n \n 2,494 \n \n | \n \n 2,583 \n | \n
| \n Additions \n | \n \n \n 972 \n \n | \n \n - \n | \n
| \n Maturities \n | \n \n \n (251)\n \n | \n \n (46) \n | \n
| \n Interest net of cash receipts \n | \n \n \n 3 \n \n | \n \n - \n | \n
| \n Amortisation of premium/(discount) \n | \n \n \n (41)\n \n | \n \n (43) \n | \n
| \n \n Total\n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
\n (b) Amounts arising from impairment provisioning on debt securities:\n
\n\n Held at amortised cost\n
\nAs at 31 December 2022, the amount arising from ECL on debt securities measured at amortised cost is \u20ac0.6m (31 December 2021: \u20ac0.7m). The ECL on debt instruments measured at amortised cost is offset against the carrying amount of the assets in the statement of financial position.
\n \n\n 20. Equity securities\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n As at 1 January \n | \n \n \n 26\n \n | \n \n 24 \n | \n
| \n Revaluation \n | \n \n \n 4\n \n | \n \n 2 \n | \n
| \n \n Total equity securities\n \n | \n \n \n 30\n \n | \n \n 26 \n | \n
The carrying value of equity securities can be analysed as follows:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Unlisted \n | \n \n \n 30\n \n | \n \n 26 \n | \n
| \n \n Gross equity securities\n \n | \n \n \n 30\n \n | \n \n 26 \n | \n
PTSB Group holds Series A and Series B preferred stock in Visa Inc. at 31 December 2022 with a value of \u20ac30m. The Series A preferred stock was initially acquired during 2020 upon the conversion of Series B preferred stock by Visa Inc (the latest conversion occurred in July 2022). These were fair valued at \u20ac26m and \u20ac4m respectively at 31 December 2022 (31 December 2021: \u20ac17m and \u20ac9m) and are recognised in the statement of financial position at FVOCI.
\nThe fair value of the preferred stock Series A is classified as Level 1 and the fair value of the preferred stock Series B is classified as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data (refer to note 37 for details).
\n\n 21. Prepayments and accrued income\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Visa prepayments \n | \n \n \n 175 \n \n | \n \n 182 \n | \n
| \n Other prepayments \n | \n \n \n 32 \n \n | \n \n 23 \n | \n
| \n \u00a0 \n | \n \n \n 207 \n \n | \n \n 205 \n | \n
\n 22. Loans and advances to customers\n
\nLoans and advances by category are set out below:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Residential mortgages\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Held through special purpose entities \n | \n \n \n 7,915 \n \n | \n \n 7,337 \n | \n
| \n - Held directly \n | \n \n \n 11,249 \n \n | \n \n 6,854 \n | \n
| \n \u00a0 \n | \n \n \n 19,164 \n \n | \n \n 14,191 \n | \n
| \n \n Commercial mortgage loans\n \n | \n \n \n 239 \n \n | \n \n 196 \n | \n
| \n \n Consumer finance (term loans/other)\n \n | \n \n \n 401 \n \n | \n \n 358 \n | \n
| \n \n Gross loans and advances to customers\n \n | \n \n \n 19,804 \n \n | \n \n 14,745 \n | \n
| \n Less: provision for impairment (note 23) \n | \n \n \n (521)\n \n | \n \n (604) \n | \n
| \n \n Deferred fees, discounts and fair value adjustments\n \n | \n \n \n 310 \n \n | \n \n 115 \n | \n
| \n \n Net loans and advances to customers\n \n | \n \n \n 19,593 \n \n | \n \n 14,256 \n | \n
Loans and advances can be analysed into tracker, fixed and variable rate loans as follows:
\n| \n \u00a0 \n | \n \n \n Gross loans and advances to customers\n \n | \n \n \n Net loans and advances to customers\n \n | \n ||
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Tracker rate \n | \n \n \n 4,378 \n \n | \n \n 6,027 \n | \n \n \n 4,099 \n \n | \n \n 5,605 \n | \n
| \n Variable rate \n | \n \n \n 2,788 \n \n | \n \n 2,820 \n | \n \n \n 2,665 \n \n | \n \n 2,688 \n | \n
| \n Fixed rate \n | \n \n \n 12,638 \n \n | \n \n 5,898 \n | \n \n \n 12,519 \n \n | \n \n 5,848 \n | \n
| \n \u00a0 \n | \n \n \n 19,804 \n \n | \n \n 14,745 \n | \n \n \n 19,283 \n \n | \n \n 14,141 \n | \n
| \n Deferred fees, discounts and fair value adjustments \n | \n \n \n 310 \n \n | \n \n 115 \n | \n \n \n 310 \n \n | \n \n 115 \n | \n
| \n \n Total\n \n | \n \n \n 20,114 \n \n | \n \n 14,860 \n | \n \n \n 19,593 \n \n | \n \n 14,256 \n | \n
The Group has established a number of securitisation entities. This involved transferring the Group\u2019s interest in pools of residential mortgages to a number of special purpose entities which issued mortgage-backed floating-rate notes to fund the purchase of the interest in the mortgage pools. The notes are secured by a first fixed charge over the residential mortgages in each pool and may be sold to investors or held by the Group and used as collateral for borrowings.
\nDetails of the residential mortgage pools sold to special purpose entities and the notes issued by the special purpose entities are included below:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acbn\n \n | \n \n \n \u20acbn\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Residential mortgages held through special purpose entities \n | \n \n \n 7.9\n \n | \n \n 7.3 \n | \n
| \n Notes issued by special purpose entities \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - rated \n | \n \n \n 6.7\n \n | \n \n 6.1 \n | \n
| \n - unrated \n | \n \n \n 1.2\n \n | \n \n 1.2 \n | \n
The notes issued by these special purpose entities comprise the following:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acbn\n \n | \n \n \n \u20acbn\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Sold to third parties and included within debt securities in issue (non-recourse) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n on the Statement of financial position (note 30) \n | \n \n \n -\n \n | \n \n 0.2 \n | \n
| \n Held by other banks and institutions as part of collateralised lending or sale and \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n repurchase agreements (note 28) \n | \n \n \n 0.3\n \n | \n \n - \n | \n
| \n Available collateral* \n | \n \n \n 5.6\n \n | \n \n 5.3 \n | \n
| \n Rated notes, unavailable for collateral \n | \n \n \n 0.8\n \n | \n \n 0.6 \n | \n
| \n Unrated notes \n | \n \n \n 1.2\n \n | \n \n 1.2 \n | \n
| \n \n Total\n \n | \n \n \n 7.9\n \n | \n \n 7.3 \n | \n
*The eligibility of available collateral will depend on the criteria of the counterparty.
\n \nLoans and advances balance movement for the year ended 31 December 2022 and the year ended 31 December 2021 is set out in the following tables:
\n| \n \u00a0 \n | \n \n \n Non-credit impaired\n \n | \n \n \n Credit impaired\n \n | \n \n \n Total\n \n | \n ||
| \n \u00a0 \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n POCI\n \n | \n \n \u00a0 \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Balance as at 1 January 2022\n \n | \n \n \n 11,689\n \n | \n \n \n 2,239\n \n | \n \n \n 815\n \n | \n \n \n 2\n \n | \n \n \n 14,745\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n New assets originated* \n | \n \n \n 2,586\n \n | \n \n \n 111\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,697\n \n | \n
| \n Loans acquired \n | \n \n \n 5,063\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5,063\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Stage Transfers:\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfers from Stage 1 to Stage 2 \n | \n \n \n (296)\n \n | \n \n \n 296\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Transfers to Stage 3 \n | \n \n \n (16)\n \n | \n \n \n (119)\n \n | \n \n \n 135\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Transfers from Stage 2 to Stage 1 \n | \n \n \n 344\n \n | \n \n \n (344)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Transfers from Stage 3 \n | \n \n \n 2\n \n | \n \n \n 155\n \n | \n \n \n (157)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n Net movement arising from transfer of Stage\n \n | \n \n \n 34\n \n | \n \n \n (12)\n \n | \n \n \n (22)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n \n (1,575)\n \n | \n \n \n (242)\n \n | \n \n \n (62)\n \n | \n \n \n -\n \n | \n \n \n (1,879)\n \n | \n
| \n Decrease due to write offs \n | \n \n \n (1)\n \n | \n \n \n (2)\n \n | \n \n \n (40)\n \n | \n \n \n -\n \n | \n \n \n (43)\n \n | \n
| \n Disposals \n | \n \n \n (341)\n \n | \n \n \n (395)\n \n | \n \n \n (42)\n \n | \n \n \n -\n \n | \n \n \n (778)\n \n | \n
| \n Other movements \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n (1)\n \n | \n
| \n \n Balance as at 31 December 2022\n \n | \n \n \n 17,455\n \n | \n \n \n 1,699\n \n | \n \n \n 649\n \n | \n \n \n 1\n \n | \n \n \n 19,804\n \n | \n
* Loan originations are net of repayments in the year
\n| \n \u00a0 \n | \n \n \n Non-credit impaired\n \n | \n \n \n Credit impaired\n \n | \n \n \n Total\n \n | \n ||
| \n \u00a0 \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n POCI\n \n | \n \n \u00a0 \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Balance as at 1 January 2021 \n | \n \n 10,575 \n | \n \n 3,152 \n | \n \n 1,127 \n | \n \n 1 \n | \n \n 14,855 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n New assets originated* \n | \n \n 1,843 \n | \n \n 111 \n | \n \n 2 \n | \n \n - \n | \n \n 1,956 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Stage Transfers: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfers from Stage 1 to Stage 2 \n | \n \n (311) \n | \n \n 311 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Transfers to Stage 3 \n | \n \n (23) \n | \n \n (257) \n | \n \n 280 \n | \n \n - \n | \n \n - \n | \n
| \n Transfers from Stage 2 to Stage 1 \n | \n \n 875 \n | \n \n (875) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Transfers from Stage 3 \n | \n \n 5 \n | \n \n 185 \n | \n \n (190) \n | \n \n - \n | \n \n - \n | \n
| \n Net movement arising from transfer of Stage \n | \n \n 546 \n | \n \n (636) \n | \n \n 90 \n | \n \n - \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n (1,270) \n | \n \n (259) \n | \n \n (78) \n | \n \n - \n | \n \n (1,607) \n | \n
| \n Decrease due to write offs \n | \n \n - \n | \n \n (5) \n | \n \n (60) \n | \n \n - \n | \n \n (65) \n | \n
| \n Disposals \n | \n \n (5) \n | \n \n (124) \n | \n \n (266) \n | \n \n - \n | \n \n (395) \n | \n
| \n Other movements \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n \n 1 \n | \n
| \n Balance as at 31 December 2021 \n | \n \n 11,689 \n | \n \n 2,239 \n | \n \n 815 \n | \n \n 2 \n | \n \n 14,745 \n | \n
* Loan originations are net of repayments in the year
\nDuring 2021 Stage 2 balances declined by \u20ac636 million. The decline is primarily attributable to:
\n\u2022 PD refinements incorporating greater segmentation of default information for mortgage customers distinguishing between nonstandard mortgage defaults and standard mortgage defaults (\u20ac404m move to stage 1); and
\n\u2022 Improvements in risk grade and reduction in forborne accounts (\u20ac163m move to stage 1).
\n \n\n 23. Impairment provisions\n
\n\n Loans and advances to customers\n
\nThe following table reflects non-performing loans for which ECL provisions are held and an analysis of Stage 1, Stage 2 and Stage 3 ECL provisions across the loans and advances to customers portfolio.
\nThe non-performing loan balance as at 31 December 2022 was \u20ac650m (31 December 2021: \u20ac817m). Refer to note 38 for further details.
\n| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n ECL provisions\n \n | \n \n \n Total ECL provisions as % of total loans\n \n | \n |||
| \n \n 31 December 2022\n \n | \n \n \n Loans and advances to customers\n \n | \n \n \n NPLs \n \n | \n \n \n NPL % of total loans\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n |
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n %\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n % \n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Residential: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Home loans \n | \n \n \n 18,340\n \n | \n \n \n 342\n \n | \n \n \n 1.9%\n \n | \n \n \n 127\n \n | \n \n \n 50\n \n | \n \n \n 103\n \n | \n \n \n 280\n \n | \n \n \n 1.5%\n \n | \n
| \n -Buy-to-let \n | \n \n \n 824\n \n | \n \n \n 270\n \n | \n \n \n 32.8%\n \n | \n \n \n 3\n \n | \n \n \n 68\n \n | \n \n \n 96\n \n | \n \n \n 167\n \n | \n \n \n 20.3%\n \n | \n
| \n Commercial \n | \n \n \n 239\n \n | \n \n \n 23\n \n | \n \n \n 9.6%\n \n | \n \n \n 1\n \n | \n \n \n 30\n \n | \n \n \n 9\n \n | \n \n \n 40\n \n | \n \n \n 16.7%\n \n | \n
| \n Consumer Finance: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Term loans/other \n | \n \n \n 401\n \n | \n \n \n 15\n \n | \n \n \n 3.7%\n \n | \n \n \n 5\n \n | \n \n \n 15\n \n | \n \n \n 14\n \n | \n \n \n 34\n \n | \n \n \n 8.5%\n \n | \n
| \n Total gross loans \n | \n \n \n 19,804\n \n | \n \n \n 650\n \n | \n \n \n 3.3%\n \n | \n \n \n 136\n \n | \n \n \n 163\n \n | \n \n \n 222\n \n | \n \n \n 521\n \n | \n \n \n 2.6%\n \n | \n
| \n Impairment provision \n | \n \n \n (521)\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deferred fees, discounts and fair value adjustments \n | \n \n \n 310\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Balance as at 31 December 2022\n \n | \n \n \n 19,593\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n ECL provisions\n \n | \n \n \u00a0 \n | \n |||
| \n \n 31 December 2021\n \n | \n \n \n Loans and advances to customers\n \n | \n \n \n NPLs \n \n | \n \n \n NPL % of total loans\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n \n \n Total ECL provisions as % of total loans\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n %\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n % \n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Residential: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Home loans \n | \n \n 12,568 \n | \n \n 420 \n | \n \n 3.3% \n | \n \n 55 \n | \n \n 45 \n | \n \n 127 \n | \n \n 227 \n | \n \n 1.8% \n | \n
| \n -Buy-to-let \n | \n \n 1,623 \n | \n \n 339 \n | \n \n 20.9% \n | \n \n 1 \n | \n \n 152 \n | \n \n 145 \n | \n \n 298 \n | \n \n 18.4% \n | \n
| \n Commercial \n | \n \n 196 \n | \n \n 44 \n | \n \n 22.5% \n | \n \n - \n | \n \n 30 \n | \n \n 23 \n | \n \n 53 \n | \n \n 27.0% \n | \n
| \n Consumer Finance: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Term loans/other \n | \n \n 358 \n | \n \n 14 \n | \n \n 3.9% \n | \n \n 5 \n | \n \n 11 \n | \n \n 10 \n | \n \n 26 \n | \n \n 7.3% \n | \n
| \n Total gross loans \n | \n \n 14,745 \n | \n \n 817 \n | \n \n 5.5% \n | \n \n 61 \n | \n \n 238 \n | \n \n 305 \n | \n \n 604 \n | \n \n 4.1% \n | \n
| \n Impairment provision \n | \n \n (604) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deferred fees, discounts and fair value adjustments \n | \n \n 115 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Balance as at 31 December 2021 \n | \n \n 14,256 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
A reconciliation of the provision for impairment losses for loans and advances is as follows:
\n| \n \n 2022\n \n | \n \n \n Residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Total by portfolio\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 1 January 2022\n \n | \n \n \n 525\n \n | \n \n \n 53\n \n | \n \n \n 26\n \n | \n \n \n 604\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n \n (18)\n \n | \n \n \n (9)\n \n | \n \n \n (1)\n \n | \n \n \n (28)\n \n | \n
| \n Net remeasurement of loss allowance \n | \n \n \n (41)\n \n | \n \n \n (16)\n \n | \n \n \n 5\n \n | \n \n \n (52)\n \n | \n
| \n Loan originations \n | \n \n \n 34\n \n | \n \n \n 13\n \n | \n \n \n 7\n \n | \n \n \n 54\n \n | \n
| \n Loans acquired \n | \n \n \n 37\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 37\n \n | \n
| \n \n Net movement excluding derecognition\n \n | \n \n \n 12\n \n | \n \n \n (12)\n \n | \n \n \n 11\n \n | \n \n \n 11\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n \n (64)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (64)\n \n | \n
| \n Derecognition-repossessions \n | \n \n \n (3)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (3)\n \n | \n
| \n Derecognition-write offs* \n | \n \n \n (23)\n \n | \n \n \n (1)\n \n | \n \n \n (3)\n \n | \n \n \n (27)\n \n | \n
| \n \n Derecognition\n \n | \n \n \n (90)\n \n | \n \n \n (1)\n \n | \n \n \n (3)\n \n | \n \n \n (94)\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 31 December 2022\n \n | \n \n \n 447\n \n | \n \n \n 40\n \n | \n \n \n 34\n \n | \n \n \n 521\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Net movement excluding derecognition (from above)\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 11\n \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n (8)\n \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 4\n \n | \n
| \n \n Impairment charge on loans and advances to customers for the year ended 31 December 2022\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 7\n \n | \n
* The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation.
\n| \n \n 2021\n \n | \n \n \n Residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Total by portfolio \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 1 January 2021 \n | \n \n 639 \n | \n \n 53 \n | \n \n 36 \n | \n \n 728 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n (45) \n | \n \n (4) \n | \n \n (3) \n | \n \n (52) \n | \n
| \n Net remeasurement of loss allowance \n | \n \n 35 \n | \n \n (4) \n | \n \n (8) \n | \n \n 23 \n | \n
| \n Loan originations \n | \n \n 16 \n | \n \n 13 \n | \n \n 5 \n | \n \n 34 \n | \n
| \n Net movement excluding derecognition \n | \n \n 6 \n | \n \n 5 \n | \n \n (6) \n | \n \n 5 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n (84) \n | \n \n (2) \n | \n \n - \n | \n \n (86) \n | \n
| \n Derecognition-repossessions \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n (1) \n | \n
| \n Derecognition-write offs* \n | \n \n (35) \n | \n \n (3) \n | \n \n (4) \n | \n \n (42) \n | \n
| \n Derecognition \n | \n \n (120) \n | \n \n (5) \n | \n \n (4) \n | \n \n (129) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 31 December 2021 \n | \n \n 525 \n | \n \n 53 \n | \n \n 26 \n | \n \n 604 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Net movement excluding derecognition (from above) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 5 \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (8) \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 2 \n | \n
| \n Impairment write-back on loans and advances to customers for the year ended 31 December 2021 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (1) \n | \n
* The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation.
\n \n \n| \n \n Total by stage\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 1 January 2022\n \n | \n \n \n 61\n \n | \n \n \n 238\n \n | \n \n \n 305\n \n | \n \n \n 604\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfer to Stage 1 \n | \n \n \n 13\n \n | \n \n \n (13)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Transfer to Stage 2 \n | \n \n \n (3)\n \n | \n \n \n 39\n \n | \n \n \n (36)\n \n | \n \n \n -\n \n | \n
| \n Transfer to Stage 3 \n | \n \n \n -\n \n | \n \n \n (19)\n \n | \n \n \n 19\n \n | \n \n \n -\n \n | \n
| \n \n Stage transfers\n \n | \n \n \n 10\n \n | \n \n \n 7\n \n | \n \n \n (17)\n \n | \n \n \n -\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n \n (5)\n \n | \n \n \n (11)\n \n | \n \n \n (12)\n \n | \n \n \n (28)\n \n | \n
| \n Net remeasurement of loss allowance \n | \n \n \n -\n \n | \n \n \n (34)\n \n | \n \n \n (18)\n \n | \n \n \n (52)\n \n | \n
| \n Loan originations \n | \n \n \n 34\n \n | \n \n \n 20\n \n | \n \n \n -\n \n | \n \n \n 54\n \n | \n
| \n Loans Acquired \n | \n \n \n 37\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 37\n \n | \n
| \n \n Net movement excluding derecognition\n \n | \n \n \n 66\n \n | \n \n \n (25)\n \n | \n \n \n (30)\n \n | \n \n \n 11\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n \n (1)\n \n | \n \n \n (56)\n \n | \n \n \n (7)\n \n | \n \n \n (64)\n \n | \n
| \n Derecognition-repossessions \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (3)\n \n | \n \n \n (3)\n \n | \n
| \n Derecognition-write offs* \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n (26)\n \n | \n \n \n (27)\n \n | \n
| \n \n Derecognition\n \n | \n \n \n (1)\n \n | \n \n \n (57)\n \n | \n \n \n (36)\n \n | \n \n \n (94)\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 31 December 2022\n \n | \n \n \n 136\n \n | \n \n \n 163\n \n | \n \n \n 222\n \n | \n \n \n 521\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Net movement excluding derecognition (from above)\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 11\n \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n (8)\n \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 4\n \n | \n
| \n \n Impairment charge on loans and advances to customers for the year ended 31 December 2022\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 7\n \n | \n
* The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write off may be earlier than collateral realisation.
\n \n \n| \n \n Total by stage\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 1 January 2021 \n | \n \n 55 \n | \n \n 286 \n | \n \n 387 \n | \n \n 728 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfer to Stage 1 \n | \n \n 23 \n | \n \n (23) \n | \n \n - \n | \n \n - \n | \n
| \n Transfer to Stage 2 \n | \n \n (4) \n | \n \n 42 \n | \n \n (38) \n | \n \n - \n | \n
| \n Transfer to Stage 3 \n | \n \n - \n | \n \n (44) \n | \n \n 44 \n | \n \n - \n | \n
| \n Stage transfers \n | \n \n 19 \n | \n \n (25) \n | \n \n 6 \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n (4) \n | \n \n (27) \n | \n \n (21) \n | \n \n (52) \n | \n
| \n Net remeasurement of loss allowance \n | \n \n (26) \n | \n \n (9) \n | \n \n 58 \n | \n \n 23 \n | \n
| \n Loan originations \n | \n \n 17 \n | \n \n 17 \n | \n \n - \n | \n \n 34 \n | \n
| \n Net movement excluding derecognition \n | \n \n (13) \n | \n \n (19) \n | \n \n 37 \n | \n \n 5 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n - \n | \n \n (2) \n | \n \n (84) \n | \n \n (86) \n | \n
| \n Derecognition-repossessions \n | \n \n - \n | \n \n - \n | \n \n (1) \n | \n \n (1) \n | \n
| \n Derecognition-write offs* \n | \n \n - \n | \n \n (2) \n | \n \n (40) \n | \n \n (42) \n | \n
| \n Derecognition \n | \n \n - \n | \n \n (4) \n | \n \n (125) \n | \n \n (129) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 31 December 2021 \n | \n \n 61 \n | \n \n 238 \n | \n \n 305 \n | \n \n 604 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Net movement excluding derecognition (from above) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 5 \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (8) \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 2 \n | \n
| \n Impairment write-back on loans and advances to customers for the year ended 31 December 2021 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (1) \n | \n
*The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write off may be earlier than collateral realisation.
\n\n Modified Financial Assets\n
\nAt 31 December 2022 there have been no significant modified financial assets for which the loss allowance has changed from lifetime to
\n12-month ECL.
\nFrom time to time, the original terms of a customer\u2019s loan is modified either as part of the ongoing relationship or arising from changes in the customer\u2019s circumstances such as when that customer is unable to make the agreed original contractual repayments. The risk of default of such assets after modification is assessed at the reporting date and compared with the risk under the original terms at initial recognition, when the modification is not substantial and so does not result in de-recognition of the original asset.
\nThe gross carrying amount of modified financial assets for which impairment loss allowance has changed from lifetime to 12-month expected credit losses during the year is \u20ac52m.
\n \n \n\n 24. Interest in associated undertakings\n
\n| \n \u00a0 \n | \n \n \n 31 December\n \n | \n \n \n 31 December\n \n | \n
| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Synch Payments and Clearpay \n | \n \n \n 3 \n \n | \n \n 2 \n | \n
| \n First Home Scheme Ireland \n | \n \n \n 10 \n \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 13 \n \n | \n \n 2 \n | \n
The Group owns a non-controlling interest in Synch Payments DAC (25%) and Clearpay DAC (33%). These investments are accounted for under the equity method in the consolidated financial statements and have a carrying value of \u20ac3m at 31 December 2022 (31 December 2021: \u20ac2m). Post-acquisition costs of \u20ac0.4m have been capitalised in 2022.
\nThese investments will be increased or decreased by the Group\u2019s share of the profit or loss which will be assessed annually.
\nOn 1 July 2022, The Group entered into a joint venture with First Home Scheme Ireland DAC. This investment is accounted for under the equity method in the consolidated financial statements and was initially recognised at \u20ac11m, post-acquisition losses of \u20ac1m have been recognised.
\nIn presenting details of the associates of the Group, the exemption permitted by Section 316 of the Companies Act 2014 has been availed of and the Group will annex a full listing of associates to its annual return to the Companies Registration Office.
\n \n \n \n\n 25. Property and equipment \n
\n| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n Right-of-use assets*\n \n | \n \n \n | \n |
| \n \n 2022\n \n | \n \n \n Held at fair value land and buildings\n \n | \n \n \n Held at cost buildings\n \n | \n \n \n Held at cost office and computer equipment\n \n | \n \n \n Leased buildings\n \n | \n \n \n Leased motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Cost or valuation\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n 99 \n \n | \n \n \n 117 \n \n | \n \n \n 91 \n \n | \n \n \n 49 \n \n | \n \n \n 2 \n \n | \n \n \n 358 \n \n | \n
| \n Additions \n | \n \n \n -\n \n | \n \n \n 11 \n \n | \n \n \n 18 \n \n | \n \n \n 13 \n \n | \n \n \n 1 \n \n | \n \n \n 43 \n \n | \n
| \n Revaluations \n | \n \n \n (7)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (7)\n \n | \n
| \n Depreciation write-back on revaluation \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n Disposals/lease exits or cancellations \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n \n At 31 December \n \n | \n \n \n 91 \n \n | \n \n \n 128 \n \n | \n \n \n 109 \n \n | \n \n \n 61 \n \n | \n \n \n 3 \n \n | \n \n \n 392 \n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Accumulated depreciation \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n -\n \n | \n \n \n (77)\n \n | \n \n \n (69)\n \n | \n \n \n (20)\n \n | \n \n \n (2)\n \n | \n \n \n (168)\n \n | \n
| \n Provided in the year \n | \n \n \n (1)\n \n | \n \n \n (7)\n \n | \n \n \n (8)\n \n | \n \n \n (5)\n \n | \n \n \n -\n \n | \n \n \n (21)\n \n | \n
| \n Eliminate on revaluation \n | \n \n \n 1 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1 \n \n | \n
| \n \n At 31 December \n \n | \n \n \n -\n \n | \n \n \n (84)\n \n | \n \n \n (77)\n \n | \n \n \n (25)\n \n | \n \n \n (2)\n \n | \n \n \n (188)\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n -\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Net book value at 31 December \n \n | \n \n \n 91 \n \n | \n \n \n 44 \n \n | \n \n \n 32 \n \n | \n \n \n 36 \n \n | \n \n \n 1 \n \n | \n \n \n 204 \n \n | \n
* For further details on right-of-use assets refer to note 34.
\nOf the \u20ac7m net revaluation loss, \u20ac8m is included in the revaluation reserve in the statement of comprehensive income and \u20ac1m impairment write-back is recognised on land and buildings in the income statement.
\n| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n Right-of-use assets*\n \n | \n \n \n | \n |
| \n \n 2021\n \n | \n \n \n Held at fair value land and buildings\n \n | \n \n \n Held at cost land and buildings\n \n | \n \n \n Held at cost office and computer equipment\n \n | \n \n \n Leased buildings\n \n | \n \n \n Leased motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cost or valuation \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n 98 \n | \n \n 107 \n | \n \n 85 \n | \n \n 46 \n | \n \n 2 \n | \n \n 338 \n | \n
| \n Additions \n | \n \n - \n | \n \n 10 \n | \n \n 6 \n | \n \n 3 \n | \n \n - \n | \n \n 19 \n | \n
| \n Revaluations \n | \n \n 2 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 2 \n | \n
| \n Depreciation write-back on revaluation \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (1) \n | \n
| \n At 31 December \n | \n \n 99 \n | \n \n 117 \n | \n \n 91 \n | \n \n 49 \n | \n \n 2 \n | \n \n 358 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Accumulated depreciation \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n - \n | \n \n (71) \n | \n \n (61) \n | \n \n (14) \n | \n \n (2) \n | \n \n (148) \n | \n
| \n Provided in the year \n | \n \n (1) \n | \n \n (6) \n | \n \n (8) \n | \n \n (6) \n | \n \n - \n | \n \n (21) \n | \n
| \n Eliminate on revaluation \n | \n \n 1 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n
| \n At 31 December \n | \n \n - \n | \n \n (77) \n | \n \n (69) \n | \n \n (20) \n | \n \n (2) \n | \n \n (168) \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Net book value at 31 December \n | \n \n 99 \n | \n \n 40 \n | \n \n 22 \n | \n \n 29 \n | \n \n - \n | \n \n 190 \n | \n
* For further details on right-of-use assets refer to note 34.
\nOf the \u20ac2m revaluation gain, \u20ac2m is included in the revaluation reserve in the statement of comprehensive income and no impairment write-back is recognised on land and buildings in the income statement.
\n \n \nThe net book value of land and buildings includes the following:
\n| \n \n | \n \n \n 31 December\n \n | \n \n \n 31 December\n \n | \n
| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Land \n | \n \n \n 30 \n \n | \n \n 32 \n | \n
| \n Buildings - freehold fair value \n | \n \n \n 61 \n \n | \n \n 67 \n | \n
| \n Buildings - freehold cost \n | \n \n \n 33 \n \n | \n \n 26 \n | \n
| \n Buildings - leasehold \n | \n \n \n 47\n \n | \n \n 43 \n | \n
| \n \n | \n \n \n 171\n \n | \n \n 168 \n | \n
Land and buildings at 31 December 2022 held at fair value was \u20ac91m (31 December 2021: \u20ac99m). The historic cost of land and buildings under the cost model is \u20ac92m (31 December 2021: \u20ac117m).
\n\n Fair value measurement of Group\u2019s land and buildings\n
\nThe Group\u2019s freehold land and buildings are stated at their revalued amounts, being the fair value at the date of revaluation less any accumulated depreciation recognised from the date of the latest revaluation. On the date of revaluation any accumulated depreciation is eliminated. The fair value measurements of the Group\u2019s freehold land and buildings as at 31 December 2022 and 31 December 2021 were performed by independent professional valuers having appropriate qualifications and recent experience in the fair value measurement of properties in the locations and categories being valued. The effective date of revaluation is 31 October 2022 and 31 October 2021.
\nThe fair value of the freehold land and buildings was determined based on a market comparable approach that reflects recent transaction prices for similar properties using capitalisation yields ranging from 5% to 10.75%. There has been no change to the valuation techniques during the year.
\nDetails of the freehold land and buildings and information about the fair value hierarchy as defined in the Group\u2019s accounting policy as at 31 December 2022 and 31 December 2021 are as follows:
\n| \n \n 31 December 2022\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair value\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Land \n | \n \n \n -\n \n | \n \n \n 30 \n \n | \n \n \n -\n \n | \n \n \n 30 \n \n | \n
| \n Buildings - freehold \n | \n \n \n -\n \n | \n \n \n 61 \n \n | \n \n \n -\n \n | \n \n \n 61 \n \n | \n
| \n \n | \n \n \n -\n \n | \n \n \n 91 \n \n | \n \n \n -\n \n | \n \n \n 91 \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair value\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Land \n | \n \n - \n | \n \n 32 \n | \n \n - \n | \n \n 32 \n | \n
| \n Buildings - freehold \n | \n \n - \n | \n \n 67 \n | \n \n - \n | \n \n 67 \n | \n
| \n \n | \n \n - \n | \n \n 99 \n | \n \n - \n | \n \n 99 \n | \n
\n 26. Intangible assets\n
\n| \n \n Software\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Cost\n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n 224 \n \n | \n \n 178 \n | \n
| \n Additions \n | \n \n \n 69 \n \n | \n \n 46 \n | \n
| \n \n At 31 December\n \n | \n \n \n 293 \n \n | \n \n 224 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Accumulated amortisation\n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n (102)\n \n | \n \n (76) \n | \n
| \n Provided in the year \n | \n \n \n (31)\n \n | \n \n (26) \n | \n
| \n \n At 31 December\n \n | \n \n \n (133)\n \n | \n \n (102) \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Net book value at 31 December\n \n | \n \n \n 160 \n \n | \n \n 122 \n | \n
\n 27. Deferred taxation\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Deferred tax liabilities \n | \n \n \n (25)\n \n | \n \n (26) \n | \n
| \n Deferred tax assets \n | \n \n \n 334\n \n | \n \n 376 \n | \n
| \n \n Net deferred tax assets \n \n | \n \n \n 309\n \n | \n \n 350 \n | \n
Net deferred tax assets are attributable to the following:
\n| \n \n 2022\n \n | \n \n \n At 1 January\n \n | \n \n \n Recognised in income statement\n \n | \n \n \n Recognised in equity\n \n | \n \n \n Recognised in other comprehensive income\n \n | \n \n \n At 31 December\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Property and equipment \n | \n \n \n (20)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n (18)\n \n | \n
| \n Unrealised gains/(losses) on assets/liabilities \n | \n \n \n (6)\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n (7)\n \n | \n
| \n Losses carried forward \n | \n \n \n 373\n \n | \n \n \n (39)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 334\n \n | \n
| \n Other temporary differences \n | \n \n \n 3\n \n | \n \n \n (3)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n 350\n \n | \n \n \n (42)\n \n | \n \n \n (1)\n \n | \n \n \n 2\n \n | \n \n \n 309\n \n | \n
| \n \n 2021\n \n | \n \n \n At 1 January\n \n | \n \n \n Recognised in income statement\n \n | \n \n \n Recognised in equity\n \n | \n \n \n Recognised in other comprehensive income\n \n | \n \n \n At 31 December\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Property and equipment \n | \n \n (21) \n | \n \n 1 \n | \n \n - \n | \n \n - \n | \n \n (20) \n | \n
| \n Unrealised gains/(losses) on assets/liabilities \n | \n \n (5) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n (6) \n | \n
| \n Losses carried forward \n | \n \n 370 \n | \n \n 3 \n | \n \n - \n | \n \n - \n | \n \n 373 \n | \n
| \n Other temporary differences \n | \n \n 5 \n | \n \n (2) \n | \n \n - \n | \n \n - \n | \n \n 3 \n | \n
| \n \n | \n \n 349 \n | \n \n 2 \n | \n \n (1) \n | \n \n - \n | \n \n 350 \n | \n
In line with the requirements of IAS 12 \u201cDeferred Tax Assets\u201d, Management and Directors formed the view that there should be sufficient future taxable profits within the PTSB legal entity against which PTSB tax losses carried forward can be used. Management and Directors have reviewed this position as at 31 December 2022 and remain of the view that it is appropriate to continue to recognise a deferred tax asset on the full quantum of tax losses carried forward in PTSB. This information is based on the following supporting evidence: (i) a review of the quantum of tax losses carried forward in PTSB in conjunction with forecasted profitability (the projections used having been approved by the Board of Directors). This review demonstrated that it is probable that there will be sufficient future taxable profits within PTSB against which the full quantum of tax losses carried forward can be utilised; (ii) The consideration of forecasting risks, including sensitivity analysis on the financial projections used (including an analysis of the effects of higher than expected impairment levels and lower than expected net interest margin). This analysis demonstrated, were certain adverse events to occur, it would remain probable that there would be sufficient future taxable profits within PTSB against which the full quantum of tax losses carried forward could be utilised, albeit that the period of time over which such utilisation would occur would be extended; and (iii) The consideration of a number of other factors which may impact the utilisation of the tax losses including the macroeconomic environment, progress made on the Group\u2019s NPL strategy and the Group\u2019s financial position. These factors are set out in further details in note 2, Critical accounting estimates and judgements.
\nIt should also be noted that under current Irish tax legislation there is no time restriction on the utilisation of trading losses. Therefore, the tax losses carried forward in PTSB are available for utilisation against profits of the same trade in any future period. Also, the Directors are satisfied that taxable future profits should be available to recover the remaining deferred tax assets.
\nThe total unrecognised deferred tax assets on carried forward tax losses at 31 December 2022 amounted to \u20ac20m (31 December 2021: \u20ac20m) which relates to the Group\u2019s subsidiaries.
\nIncluded in the overall deferred tax asset is a deferred tax asset of \u20acnil in relation to Permanent TSB Group Holdings plc (31 December 2021: \u20ac42k).
\nIn accordance with IFRS these balances are recognised on an undiscounted basis.
\n \n\n 28. Deposits by banks\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Placed by other banks and institutions on repurchase agreements \n | \n \n \n 611 \n \n | \n \n 347 \n | \n
| \n Other deposits \n | \n \n \n 3 \n \n | \n \n - \n | \n
| \n \n Deposits by banks\n \n | \n \n \n 614 \n \n | \n \n 347 \n | \n
Securities which are sold under agreements to repurchase are secured by Irish and other eligible Government bonds. These agreements are completed under market standard Global Master Repurchase Agreements. The fair value of the financial assets pledged under existing agreement to repurchase is \u20ac654m at 31 December 2022 (31 December 2021: \u20ac732m).Other deposits include \u20ac3m (31 December 2021: \u20acnil) of cash collateral placed in relation to derivative positions and repurchase agreements.
\n \n\n 29. Customer accounts\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Term deposits \n | \n \n \n 1,509\n \n | \n \n 2,226 \n | \n
| \n Demand deposits \n | \n \n \n 8,871\n \n | \n \n 7,657 \n | \n
| \n Current accounts \n | \n \n \n 8,983\n \n | \n \n 7,104 \n | \n
| \n Notice and other accounts \n | \n \n \n 2,367\n \n | \n \n 2,102 \n | \n
| \n \n Customer accounts\n \n | \n \n \n 21,730\n \n | \n \n 19,089 \n | \n
At 31 December 2022, the Group held corporate deposits of \u20ac1.2bn (31 December 2021: \u20ac1.4bn).
\nAn analysis of the contractual maturity profile of customer accounts is set out in the liquidity risk section of note 38 of the consolidated financial statements.
\n \n\n 30. Debt securities in issue\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n At amortised cost\n \n | \n \n \n | \n \n \n | \n
| \n Bonds and medium-term notes \n | \n \n \n 658 \n \n | \n \n 352 \n | \n
| \n Non-recourse funding \n | \n \n \n \u2013 \n \n | \n \n 172 \n | \n
| \n \n | \n \n \n 658 \n \n | \n \n 524 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Maturity analysis\n \n | \n \n \n | \n \n \n | \n
| \n Repayable in less than 1 year \n | \n \n \n 10 \n \n | \n \n 2 \n | \n
| \n Repayable in greater than 1 year but less than 5 years \n | \n \n \n 648 \n \n | \n \n 350 \n | \n
| \n Repayable in greater than 5 years \n | \n \n \n \u2013 \n \n | \n \n 172 \n | \n
| \n \n | \n \n \n 658 \n \n | \n \n 524 \n | \n
\n Bonds and medium-term notes\n
\nIn June 2022, PTSBGH issued \u20ac300m of Senior Unsecured Medium Term Notes priced at a fixed rate of 5.25% per annum, maturing on 30 June 2025. Interest is payable on the nominal amount annually in arrears on the coupon date.
\n\n Non-recourse funding \n
\nAs at 31 December 2022 the Group had no advances (31 December 2021: \u20ac172m) collateralised on residential property loans (31 December 2021: \u20ac153m) subject to non-recourse funding by way of residential mortgage securitisations. Residential mortgage securitisations involve transferring the interest in pools of mortgages to special purpose entities which issue mortgage-backed floating rate notes to fund the purchase of the interest in mortgage pools. These loans, which have not been de-recognised, are shown within loans and advances to customers while the non-recourse funding is shown as a separate liability.
\nNon-recourse funding reduced by \u20ac172m between 31 December 2021 and 31 December 2022 to nil, primarily due to the accelerated redemption of a securitisation during the year. The Group did not have any defaults of principal or interest or other breaches with respect to non-recourse funding during 2022.
\nUnder the terms of these securitisations, the rights of the providers of the related funds are limited to the mortgage loans in the securitised portfolios, together with any related income generated by the portfolios and the subordinated loans provided by the Group, without further recourse to the Group. During the term of the transactions, any amounts realised from the portfolios in excess of that due to the providers of the funding, less any related administrative costs, will be paid to the Group. The providers of this funding have agreed in writing (subject to the customary warranties and covenants) that they will seek repayment of the finance, as to both principal and interest, only to the extent that sufficient funds are generated by the mortgages and related security and any subordinated loans provided by the Group, and that they will not seek recourse in any other form.
\n\n 31. Other liabilities\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Amounts falling due within one year\n \n | \n \n \n | \n \n \n | \n
| \n PAYE and social insurance \n | \n \n \n 5\n \n | \n \n 4 \n | \n
| \n Creditor accruals \n | \n \n \n 84\n \n | \n \n 79 \n | \n
| \n Other* \n | \n \n \n 54\n \n | \n \n 56 \n | \n
| \n Lease liability (see note 34 for further information on lease liabilities) \n | \n \n \n 6\n \n | \n \n 5 \n | \n
| \n \n Total amounts falling due within one year\n \n | \n \n \n 149\n \n | \n \n 144 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Amounts falling due greater than one year\n \n | \n \n \n | \n \n \n | \n
| \n Lease liability (see note 34 for further information on lease liabilities) \n | \n \n \n 32 \n \n | \n \n 26 \n | \n
| \n \n Total amounts falling due greater than one year\n \n | \n \n \n 32 \n \n | \n \n 26 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Total other liabilities \n \n | \n \n \n 181 \n \n | \n \n 170 \n | \n
* Other includes \u20ac38m relating to additional cash consideration payable for the Ulster business acquired by the Group in 2022 and other miscellaneous liabilities. In 2021, other includes \u20ac48m relating to the deposit received by the Group on 11 November 2021 as part of the purchase price for the sale of the Glenbeigh III portfolio and miscellaneous liabilities.
\n \n \n\n 32. Provisions\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n ||||||
| \n \n | \n \n \n Restructuring costs\n \n | \n \n \n Provision for legacy, legal and compliance liabilities\n \n | \n \n \n Other\n \n | \n \n \n Total\n \n | \n \n \n Restructuring costs\n \n | \n \n \n Provision for legacy, legal and compliance liabilities\n \n | \n \n \n Other\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January\n \n | \n \n \n 6\n \n | \n \n \n 28\n \n | \n \n \n 21\n \n | \n \n \n 55\n \n | \n \n 28 \n | \n \n 29 \n | \n \n 20 \n | \n \n 77 \n | \n
| \n Provisions made during the year \n | \n \n \n 2\n \n | \n \n \n 8\n \n | \n \n \n 39\n \n | \n \n \n 49\n \n | \n \n 7 \n | \n \n 21 \n | \n \n 9 \n | \n \n 37 \n | \n
| \n Write-back of provisions during the year \n | \n \n \n -\n \n | \n \n \n (3)\n \n | \n \n \n (6)\n \n | \n \n \n (9)\n \n | \n \n - \n | \n \n (3) \n | \n \n (7) \n | \n \n (10) \n | \n
| \n Provisions used during the year \n | \n \n \n (4)\n \n | \n \n \n (10)\n \n | \n \n \n (1)\n \n | \n \n \n (15)\n \n | \n \n (29) \n | \n \n (19) \n | \n \n (1) \n | \n \n (49) \n | \n
| \n \n As at 31 December\n \n | \n \n \n 4\n \n | \n \n \n 23\n \n | \n \n \n 53\n \n | \n \n \n 80\n \n | \n \n 6 \n | \n \n 28 \n | \n \n 21 \n | \n \n 55 \n | \n
The provision at 31 December 2022 is \u20ac80m (31 December 2021: \u20ac55m) which is comprised of the following:
\n\n
\n Restructuring costs\n
\nDuring 2020, the Group announced an Enterprise Transformation programme. At 31 December 2020, a provision for restructuring of \u20ac27m was recognised based on the estimate of the costs of this programme. During 2021 an additional provision of \u20ac7m was made and an amount of \u20ac29m was utilised as part of this programme. During 2022 a further provision of \u20ac2m was made and an amount of \u20ac4m was utilised. The remaining provision of \u20ac3m is based on an estimate of the remaining costs to bring the programme to a conclusion. This programme is expected to conclude within the next 12 months.
\nThe Group remains a lessee on a number of non-cancellable leases over properties that it no longer occupies following a restructure in 2013. The remaining provision of \u20ac1m relates to dilapidation costs associated with the remaining properties.
\n\n Provision for legacy, legal and compliance liabilities\n
\nAs at 31 December 2022, the Group has provisions of \u20ac23m relating to legal, compliance and other costs of on-going disputes in relation to legacy business issues (31 December 2021: \u20ac28m).
\nA provision of \u20ac8m was made during 2022 relating to legal, compliance and other costs of on-going disputes in relation to legacy business issues.
\nManagement has exercised judgment in arriving at the estimated provision in respect of the potential liabilities.
\n\n
\n Other\n
\nAs at 31 December 2022, the provision of \u20ac53m (31 December 2021: \u20ac21m) primarily relates to Stamp Duty (\u20ac25m) arising as a result of the Ulster Bank transaction. Other amounts include indemnities and guarantees provided by the Group, together with further costs, relating to the deleveraging of various asset portfolios.
\n \n\n 33. Subordinated liabilities\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n At amortised cost: \n | \n \n \n | \n \n \n | \n
| \n \u20ac250m Tier 2 capital notes due August 2031, Callable 2026 \n | \n \n \n 252\n \n | \n \n 252 \n | \n
| \n \n | \n \n \n 252\n \n | \n \n 252 \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Maturity date \n | \n \n \n | \n \n \n | \n
| \n Repayable in less than 1 year \n | \n \n \n 3\n \n | \n \n 3 \n | \n
| \n Repayable in greater than 1 year but less than 5 years \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Repayable in greater than 5 years \n | \n \n \n 249\n \n | \n \n 249 \n | \n
| \n \n | \n \n \n 252\n \n | \n \n 252 \n | \n
\n Tier 2 capital notes \u2013 PTSBGH\n
\nIn May 2021, PTSBGH issued \u20ac250m of Tier 2 capital notes at a fixed rate of 3% per annum. The notes mature on 19 August 2031 with a call date of any date from and including 19 May 2026 to and including 19 August 2026. The call is subject to approval of the regulatory authorities, with approval conditional on meeting the requirements of the EU CRR.
\nThe interest rate will be reset, in the event that the securities are not called, on 19 August 2026 to Euro 5 year Mid Swap rate plus a margin of 3.221% per annum. The loan is subordinated and ranks as Tier 2 capital with interest paid annually in arrears on 19 August. The loan may be subject to the exercise of Irish Statutory loss absorption powers by the relevant resolution authority.
\nIn the event of winding up of PTSBGH, the Tier 2 capital notes will be:
\n\n 34. Leases\n
\n| \n \n Right-of-use assets*\n \n | \n \n \n Land and buildings\n \n | \n \n \n Motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January 2022\n \n | \n \n \n 29\n \n | \n \n \n -\n \n | \n \n \n 29\n \n | \n
| \n Additions \n | \n \n \n 13\n \n | \n \n \n 1\n \n | \n \n \n 14\n \n | \n
| \n Lease exits and cancellations \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n Depreciation of right-of-use assets \n | \n \n \n (5)\n \n | \n \n \n -\n \n | \n \n \n (5)\n \n | \n
| \n \n Balance as at 31 December 2022\n \n | \n \n \n 36\n \n | \n \n \n 1\n \n | \n \n \n 37\n \n | \n
| \n \n Right-of-use assets*\n \n | \n \n \n Land and buildings\n \n | \n \n \n Motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January 2021 \n | \n \n 32 \n | \n \n - \n | \n \n 32 \n | \n
| \n Additions \n | \n \n 3 \n | \n \n - \n | \n \n 3 \n | \n
| \n Lease exits and cancellations \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Depreciation of right-of-use assets \n | \n \n (6) \n | \n \n - \n | \n \n (6) \n | \n
| \n Balance as at 31 December 2021 \n | \n \n 29 \n | \n \n - \n | \n \n 29 \n | \n
| \n \n Lease liabilities*\n \n | \n \n \n Land and buildings\n \n | \n \n \n Motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January 2022\n \n | \n \n \n 31\n \n | \n \n \n -\n \n | \n \n \n 31\n \n | \n
| \n Additions \n | \n \n \n 13\n \n | \n \n \n 1\n \n | \n \n \n 14\n \n | \n
| \n Lease exits or cancellations \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n Repayment of lease liabilities \n | \n \n \n (6)\n \n | \n \n \n -\n \n | \n \n \n (6)\n \n | \n
| \n \n Balance as at 31 December 2022\n \n | \n \n \n 37\n \n | \n \n \n 1\n \n | \n \n \n 38\n \n | \n
| \n \n Lease liabilities*\n \n | \n \n \n Land and buildings\n \n | \n \n \n Motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January 2021 \n | \n \n 34 \n | \n \n - \n | \n \n 34 \n | \n
| \n Additions \n | \n \n 3 \n | \n \n - \n | \n \n 3 \n | \n
| \n Lease exits or cancellations \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Repayment of lease liabilities \n | \n \n (6) \n | \n \n - \n | \n \n (6) \n | \n
| \n Balance as at 31 December 2021 \n | \n \n 31 \n | \n \n - \n | \n \n 31 \n | \n
* Right-of-use assets are included in PPE and lease liabilities are included in Other liabilities.
\n| \n \n Lease liabilities\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Maturity analysis - contractual undiscounted cash flows*\n \n | \n \n \n | \n \n \n | \n
| \n Less than one year \n | \n \n \n 7\n \n | \n \n 6 \n | \n
| \n One to five years \n | \n \n \n 18\n \n | \n \n 16 \n | \n
| \n More than five years \n | \n \n \n 15\n \n | \n \n 10 \n | \n
| \n \n Total undiscounted lease liabilities\n \n | \n \n \n 40\n \n | \n \n 32 \n | \n
| \n \n Lease liabilities included in the statement of financial position\n \n | \n \n \n 38\n \n | \n \n 31 \n | \n
| \n Current lease liability \n | \n \n \n 6\n \n | \n \n 5 \n | \n
| \n Non-current lease liability \n | \n \n \n 32\n \n | \n \n 26 \n | \n
* The maturity analysis of undiscounted lease liabilities are disclosed in note 38.
\n\n Amounts recognised in income statement*\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Interest on lease liabilities \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Expenses relating to short-term leases \n | \n \n \n (1)\n \n | \n \n (1) \n | \n
| \n Depreciation of right-of-use assets \n | \n \n \n (5)\n \n | \n \n (6) \n | \n
| \n \n Total charge in income statement\n \n | \n \n \n (6)\n \n | \n \n (7) \n | \n
* Interest expense on the lease liabilities amounted to \u20ac0.4m (31 December 2021: \u20ac0.4m) whereas expenses relating to short-term leases amounted to \u20ac0.6m (31 December 2021: \u20ac0.6m) and is included in Administrative, staff and other expenses (excluding exceptional items).
\n\n Amounts recognised in statement of cash flow\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Cash outflow for leases \n | \n \n \n (6)\n \n | \n \n (6) \n | \n
| \n \n Total\n \n | \n \n \n (6)\n \n | \n \n (6) \n | \n
\n As a lessee\n
\n\n i. Real estate\n
\nThe Group leases retail properties for its branch operations. The lease term of retail properties typically run for a period of 10-35 years. The Group does not have variable lease payments and its leases do not contain extension options.
\n\n ii. Vehicles\n
\nThe Group leases vehicles with lease terms of three to five years. The Group has no option to purchase the assets at the end of the contract term and it does not guarantee the residual value of the leased assets at the end of the contract term.
\n\n iii. Sub-leases\n
\nThe Group has no sub leases as at 31 December 2022 (31 December 2021: two properties).
\n \n\n 35. Share capital, reserves and other equity instruments\n
\n\n Share capital\n
\nShare capital is the funds raised as a result of a share issue and comprises the ordinary shares of the holding company Permanent TSB Group Holdings plc.
\nThe holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Bank. All ordinary rank equally with regard to the Bank\u2019s residual assets.
\n\n Authorised share capital\n
\n| \n \n 31 December 2022\n \n | \n \n \n Number of shares\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Ordinary shares of \u20ac0.50 each \n | \n \n \n 1,550,000,000\n \n | \n \n \n 775\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Number of shares\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Ordinary shares of \u20ac0.50 each \n | \n \n 1,550,000,000 \n | \n \n 775 \n | \n
\n Issued share capital \n
\nThe movement in the number of paid up ordinary shares is as follows:
\n| \n \n Balances as at 31 December 2022\n \n | \n \n \n \u20ac 0.50 Ordinary shares\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January 2022\n \n | \n \n \n 454,695,492\n \n | \n \n \n | \n
| \n \n Movement\n \n | \n \n \n 90,893,627\n \n | \n \n \n | \n
| \n \n As at 31 December 2022\n \n | \n \n \n 545,589,119\n \n | \n \n \n | \n
| \n \n Issued share capital (\u20acm)\n \n | \n \n \n 273\n \n | \n \n \n 273\n \n | \n
| \n \n Shares held under employee benefit trust\n \n | \n \n \n 4,580\n \n | \n \n \n | \n
| \n \n % of authorised capital issued\n \n | \n \n \n | \n \n \n 35%\n \n | \n
On 7 November 2022, the Group issued 90,893,627 shares at \u20ac5.68 per share as part of the consideration transferred for the Ulster Bank transaction. The share price on the issue date of \u20ac1.70 was recognised in Share Capital at \u20ac0.50 per share and the excess in Share Premium. The remaining premium of \u20ac3.98 is recognised in Share Premium and represents the gain on bargain purchase that is transferred from Retained Earnings to Share Premium as per below. See notes 2 and 3 for further detail.
\n| \n \n Balances as at 31 December 2021\n \n | \n \n \n \u20ac 0.50 Ordinary shares\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January 2021 \n | \n \n 454,695,492 \n | \n \n \n | \n
| \n Movement \n | \n \n - \n | \n \n \n | \n
| \n As at 31 December 2021 \n | \n \n 454,695,492 \n | \n \n \n | \n
| \n Issued share capital (\u20acm) \n | \n \n 227 \n | \n \n 227 \n | \n
| \n Shares held under employee benefit trust \n | \n \n 4,580 \n | \n \n \n | \n
| \n % of authorised capital issued \n | \n \n \n | \n \n 29% \n | \n
\n Share Premium\n
\nThe share premium reserve represents the excess of amounts received for share issues less associated issue costs over the par value of those shares of the Company.
\nUnder section 71 of the Companies Act 2014 as the consideration for the Ulster Bank transaction includes the issuance of ordinary shares, Company law requires that the share premium be recognised as the difference between the nominal value of shares and the fair value of the consideration received. This results in the shares being issued at \u20ac5.68 per share as part of the consideration transferred. The share price on the issuance date was \u20ac1.70 per share with \u20ac0.50 being recognised in Share Capital and \u20ac1.20 being recognised in Share Premium. As the remaining fair value of the consideration received is in excess of the fair value of the shares this excess is required by law to be included in share premium and is, therefore, reclassified directly in equity between Retained Earnings and Share Premium. The excess amount is the gain on bargain purchase of \u20ac362m.
\n \n\n Other Reserves \n
\n\n Revaluation reserve (Non-distributable)\n
\nThe revaluation reserve is a non-distributable reserve comprising unrealised gains or losses, net of tax, on the revaluation of owner occupied properties.
\n\n Fair value reserve (Non-distributable) \n
\nThe fair value reserve comprises:
\n\n Other capital reserves (Non-distributable)\n
\nOther capital reserves includes \u20ac1,087m capital issued by the Company net of \u20ac7m capital redemption reserve from the repurchase and cancellation of shares and \u20ac224m incurred in the cancellation of the share capital and share premium of PTSB on the incorporation of the Company.
\n\n Retained earnings\n
\nRetained earnings include distributable and non-distributable earnings. This reserve represents the retained earnings of the holding company and subsidiaries after consolidation adjustments.
\n\u20ac10m (2021: \u20ac21m) coupon interest on the AT1 securities was paid from this reserve during 2022.
\n\n
\n Other equity instruments - Non-distributable\n
\n\n Additional Tier 1 Securities\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January \n \n | \n \n \n 123\n \n | \n \n 245 \n | \n
| \n Issued during the period \n | \n \n \n | \n \n \n | \n
| \n Additional Tier 1 Securities - net of the transaction costs \n | \n \n \n 245\n \n | \n \n - \n | \n
| \n \n Redemption during the period \n \n | \n \n \n | \n \n \n | \n
| \n Additional Tier 1 Securities (issued 2015) \n | \n \n \n -\n \n | \n \n (122) \n | \n
| \n \n Additional Tier 1 securities\n \n | \n \n \n 368\n \n | \n \n 123 \n | \n
On 26 October 2022, PTSBGH issued additional \u20ac250m AT1 Fixed Rate Reset Perpetual Temporary Write Down Securities. The transaction costs incurred were \u20ac5m. The first reset date for the fixed rate is 26 April 2028.
\nThe AT1 securities are perpetual and redeemable financial instruments with a semi-annual coupon of 13.25% paid in arrears on 26 April and 26 October of each year, commencing on 26 April 2023. On the first reset date on 26 April 2028, in the event the securities are not redeemed, interest will be reset to Euro 5 year Mid Swap rate plus a margin of 10.546% (converted from an annual to a semi-annual rate). The Company may elect at its full discretion at any time to cancel permanently (in whole or in part) the interest amount otherwise scheduled to be paid on an interest payment date.
\nOn 25 November 2020, PTSBGH issued \u20ac125m nominal value of AT1 Perpetual Temporary Write Down Securities as part of capital raise. The transaction costs incurred were \u20ac2m. The first reset date for the fixed rate is 25 May 2026.
\nThe AT1 securities are perpetual and redeemable financial instruments with a semi-annual coupon of 7.875% paid in arrears on 25 May and 25 November. On the first reset date on 25 May 2026, in the event the securities are not redeemed, interest will be reset to Euro 5 year Mid Swap rate plus a margin of 8.468% (converted from an annual to a semi-annual rate). The Company may elect at its full discretion at any time to cancel permanently (in whole or in part) the interest amount otherwise scheduled to be paid on an interest payment date.
\n \nThe Company may use such cancelled payments without restriction, including to make distributions or any other payments to the holders of its shares or any other securities issued by the Company. Any cancellation of interest payments will be permanent and on a non-cumulative basis and such cancellation will not give rise to or impose any restriction on the Company.
\nAlthough the AT1 securities are perpetual, the Company may, in its sole discretion, redeem the AT1 securities in full on any day falling in the period commencing 25 November 2025 and the first reset date above and on every interest payment date thereafter (subject to the approval of the Supervisory Authority) at the prevailing principal amount together with accrued but unpaid interest. In addition, the securities are redeemable at the option of the Company for certain regulatory or tax reasons, subject to regulatory approval.
\nThe securities, which do not carry voting rights, rank pari passu with holders of other tier 1 instruments (excluding the Company\u2019s ordinary shares). They rank ahead of the holders of ordinary share capital of the Company but junior to the claims of senior creditors and to Tier 2 capital of the Company.
\nUnder the EU (Bank Recovery and Resolution) Regulations 2015, these securities are loss absorbing at the point of non-viability.
\nOn the occurrence of a trigger event, at any time, any accrued and unpaid interest up to (but excluding) the write down date shall be automatically and irrevocably cancelled, and the then Prevailing Principal Amount of each Security shall be automatically and irrevocably reduced by the write down amount. This will occur if the CET1 Capital Ratio of PTSB or the Group at any time falls below 7%. Subsequent to any write-down event the Company may, at its sole discretion, write-up some or all of the written-down principal amount of the AT1 instrument provided regulatory capital requirements and certain conditions are met.
\n \n\n 36. Analysis of other comprehensive income\n
\nThe analysis of other comprehensive income below provides additional analysis to the information provided in the primary statements and should be read in conjunction with the consolidated statement of changes in equity.
\n| \n \n 31 December 2022\n \n | \n \n \n Revaluation reserve\n \n | \n \n \n Fair value reserve\n \n | \n \n \n Total \n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Other comprehensive income/(expense) (net of tax)\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Revaluation of property \n | \n \n \n (6)\n \n | \n \n \n -\n \n | \n \n \n (6)\n \n | \n
| \n Fair value reserve (equity instruments): \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Change in fair value of equity instruments \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 2\n \n | \n
| \n Fair value reserve (debt instruments): \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Change in fair value of debt instruments \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n Total other comprehensive income/(expense), net of tax\n \n | \n \n \n (6)\n \n | \n \n \n 2\n \n | \n \n \n (4)\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Revaluation reserve\n \n | \n \n \n Fair value reserve\n \n | \n \n \n Total \n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Other comprehensive income (net of tax) \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Revaluation of property \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n
| \n Fair value reserve (equity instruments): \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Change in fair value of equity instruments \n | \n \n - \n | \n \n 2 \n | \n \n 2 \n | \n
| \n Fair value reserve (debt instruments): \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Change in fair value of debt instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Total other comprehensive income, net of tax \n | \n \n 2 \n | \n \n 2 \n | \n \n 4 \n | \n
\n 37. Measurement basis and fair values of financial instruments\n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1. The table below sets out an overview of financial instruments held by the Group and their fair values.
\n\n (a) Measurement basis and fair value of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 19,593\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 21,730\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 143\n \n | \n \n \n -\n \n | \n \n \n 38\n \n | \n \n \n 181\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n - \n | \n \n 20 \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n - \n | \n \n 4,174 \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n \n 1 \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n - \n | \n \n - \n | \n \n 2,494 \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n - \n | \n \n 26 \n | \n \n - \n | \n \n 26 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,256 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n - \n | \n \n 19,089 \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n - \n | \n \n - \n | \n \n 524 \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n - \n | \n \n - \n | \n \n 252 \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n - \n | \n \n 170 \n | \n \n 170 \n | \n
* In addition the Group had an other asset of \u20ac310m and an other liability of \u20ac48m in respect of the sale of the sale of the Glenbeigh III, both of which were settled in early 2022.
\nThe following table sets out the fair value of financial instruments that the Group holds at 31 December 2022. It categorises these financial instruments into the relevant level on the fair value hierarchy.
\nThe fair values of financial instruments are measured according to the following fair value hierarchy:
\n\n Basis and fair values of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n 30\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 20,059\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n 13\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n 2,526 \n | \n \n - \n | \n \n - \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n 26 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,050 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n 19,092 \n | \n \n - \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n 357 \n | \n \n 173 \n | \n \n - \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n 256 \n | \n \n - \n | \n \n - \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n
\n (b) Fair value measurement principles \n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1 and note 2 and contains details on the critical accounting estimates and judgements made by management in relation to the fair value measurement of financial instruments. The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
\nWhere possible, the Group calculates fair value using observable market prices in an active market. Where market prices are not available, fair values are determined using valuation techniques. These techniques are subjective in nature and may involve assumptions which are based upon management\u2019s view of market conditions at year end, which may not necessarily be indicative of any subsequent fair value. Any minor changes in the assumptions used could have a significant impact on the resulting estimated fair values and, as a result, it may be difficult for the users to make a reasonable comparison of the fair value information disclosed in this note, against that disclosed by other financial institutions or to evaluate the Group\u2019s financial position and, therefore, are advised to exercise caution in interpreting these fair values. Also the fair values disclosed above do not represent, nor should it be interpreted to represent, the underlying value of the Group as a going concern at the reporting date.
\n\n
\n Financial assets and financial liabilities not subsequently measured at fair value \n
\nOther than the HTC&S debt securities, derivative financial instruments and equity securities, all other financial assets and liabilities are not measured at fair value at the reporting date. A description of the methods and assumptions used to calculate fair values of these assets and liabilities is set out below.
\n\n Cash at bank \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature in an active market.
\n\n Items in course of collection \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature.
\n\n
\n Loans and advances to banks \n
\nFor the purposes of fair value valuation, loans and advances to banks have been treated as cash and cash equivalents. These loans and advances are repayable on demand and short-term in nature; hence, the fair value of each financial instrument is equal to their carrying value.
\n\n Loans and advances to customers \n
\nLoans and advances to customers are carried net of impairments. The Group uses a discounted cash flow valuation model to estimate the fair value for the ROI residential and commercial mortgages. Cash flows are discounted using the current weighted average interest rate based on the specific portfolio. The fair value calculation also takes into account loan impairment provisions at the balance sheet date. The carrying value of the consumer finance portfolio is considered equal to its fair value due to its short duration.
\n\n Debt securities (HTC securities)\n
\nDebt securities at 31 December 2022 are \u20ac3,177m (31 December 2021 \u20ac2,494m) and consist of HTC securities. HTC securities are derived from observable inputs through independent pricing sources such as Bloomberg. A weighted average method is used to apply the prices to the Group\u2019s retained holding in the securitisation.
\n\n Deposits by banks/customer accounts\n
\nThe estimated fair value of deposit liabilities and current accounts with no stated maturity which are repayable on demand (including non-interest bearing deposits), approximates to their book value. The estimated fair value of fixed-interest bearing deposits and other borrowings is based on discounted cash flows using interest rates for new deposits with similar remaining maturities.
\n\n Debt securities in issue/subordinated liabilities\n
\nThe fair values of debt securities in issue/subordinated liabilities are estimated using market prices of instruments that are substantially the same as those issued by the Group. Where a readily available market price is unavailable in relation to the instrument, an estimated price is calculated using observable market data for similar instruments. If observable market data is not available, an appropriate credit spread linked to similar instruments, is used within the valuation technique.
\n \n \n \n \n \n\n Financial assets and financial liabilities subsequently measured at fair value\n
\nOn initial recognition, all financial instruments are measured at fair value. Following this, the Group measures HTC&S financial assets at fair value through other comprehensive income. Derivative financial instruments are held for trading and fair valued through the income statement.
\n\n Derivative financial instruments\n
\nThe fair values of derivatives are determined using valuation techniques such as discounted cash flow and pricing models which are commonly used by market participants. These valuations are provided by third party brokers and the models used incorporate observable market inputs such as current interest rate, time to maturity, forward foreign exchange rates, yield curves and volatility measures.
\n\n Equity securities \n
\nPTSB Group holds Series A and Series B preferred stock in Visa Inc. at 31 December 2022. The Series A preferred stock was acquired during 2020 upon the conversion of Series B preferred stock by Visa Inc. These were fair valued at \u20ac30m at 31 December 2022 (31 December 2021: \u20ac26m) and are recognised in the statement of financial position at FVOCI.
\nThe fair values of the Series A preferred stock in Visa Inc. is classified as Level 1 and the fair value of the Series B preferred stock is classified as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data.
\n\n Fair value measurements recognised in the Statement of financial position\n
\n| \n \n 31 December 2022\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Equity instruments \n | \n \n \n 20\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets measured at fair value \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Equity instruments \n | \n \n 20 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities measured at fair value \n | \n \n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n Reconciliation of level 3 fair value measurements of financial assets\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Equity Instruments\n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January \n | \n \n \n 9 \n \n | \n \n 8 \n | \n
| \n Revaluation movement in OCI \u2013 fair value reserve (equity instruments) \n | \n \n \n - \n \n | \n \n 1 \n | \n
| \n Conversion of Series B preferred stock to Series A preferred stock \n | \n \n \n (5) \n \n | \n \n - \n | \n
| \n \n As at 31 December \n \n | \n \n \n 4 \n \n | \n \n 9 \n | \n
There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial assets.
\n\n Level 3 fair value measurements of financial liabilities\n
\nThere were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial liabilities. The level 3 of \u20ac12m relates to business combination forwards. The fair value of the forward derivative at the acquisition date was a liability of \u20ac16m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired. See notes 2 and 3 for further detail.
\n\n Level 3 sensitivity analysis\n
\nThe table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.
\nFinancial instruments
\n| \n \n 31 December 2022\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Visa Inc. Series B Preferred Stock\n \n | \n \n \n Quoted market price (Discounted)*\n \n | \n \n \n Final share conversion rate\n \n | \n \n \n 0 - 90%\n \n | \n \n \n 4\n \n | \n \n \n 0 - 90%\n \n | \n
* Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n| \n \n 31 December 2021\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable \n \n\n inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Visa Inc. Series B Preferred Stock \n | \n \n Quoted market price (Discounted)* \n | \n \n Final share conversion rate \n | \n \n 0 - 90% \n | \n \n 9 \n | \n \n 0 - 90% \n | \n
*Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n\n Significant unobservable inputs\n
\n\n Visa Inc. Series A and Series B preferred stock \n
\nThe Visa Inc. Series A preferred stock held by PTSB was acquired during 2020 upon the partial conversion of Series B preferred stock by Visa Inc. These Series A and B preferred stock were fair valued at \u20ac26m and \u20ac4m respectively at 31 December 2022 (31 December 2021: \u20ac17m and \u20ac9m) and are recognised in the statement of financial position at FVOCI.
\nValuation Methodology: The Visa Inc. Class A Common stock price and conversion ratios were applied to the PTSB shareholding of Visa Inc. Series A and Series B preferred shares at 31 December 2022 and 31 December 2021. Future conversions are calculated using discounted cash follows. The stock was revalued at the year-end exchange rate.
\nUnobservable input: The unobservable inputs are the discount factor used to discount the future conversions of Series B preferred stock.
\nThe Visa Inc. Series A and Series B preferred stock is denominated in US dollars and is exposed to FX risk.
\n \n \n \n \n \n\n Business combination forwards\n
\nThere was a transfer in to Level 3 per the fair value hierarchy of \u20ac12m. As noted in note 3 the business combination became binding on 7 November 2022.
\nValuation Methodology: The fair value of the forward derivative at 31 December 2022 was a liability of \u20ac12m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired.
\nUnobservable input: The unobservable inputs are the prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio. Taking account of the various uncertainties, Management estimate the range of changes in fair value on the receive leg (loans acquired) to be 95% to 105%, with no material change expected on the pay leg (the consideration).
\n \n \n \n \n \n\n 38. Financial risk management\n
\n\n Maximum exposure to credit risk before collateral held or other credit enhancements\n
\nThe following table outlines the maximum exposure to credit risk before collateral held or other credit enhancements in respect of the Group\u2019s financial assets as at the statement of financial position date.
\n| \n \n | \n \n \n Notes\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n 20 \n | \n
| \n Loans and advances to banks (iii) \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments (ii) \n | \n \n 16 \n | \n \n \n -\n \n | \n \n 1 \n | \n
| \n Debt securities (i) \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
| \n Loans and advances to customers (iv) \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n 14,256 \n | \n
| \n \n | \n \n \n | \n \n \n 24,991\n \n | \n \n 21,002 \n | \n
| \n Commitments and contingencies \n | \n \n 43 \n | \n \n \n 1,342\n \n | \n \n 1,181 \n | \n
| \n \n | \n \n \n | \n \n \n 26,333\n \n | \n \n 22,183 \n | \n
\n The following tables outline the Group\u2019s exposure to credit risk by asset class\n
\n\n (i) Debt securities\n
\nThe Group is exposed to the credit risk on third parties where the Group holds debt securities (primarily sovereign debt). These exposures are subject to the limitations contained within Board approved policies, with sovereign debt restricted to those countries that have an External Credit Assessment Institution (ECAI) rating of investment grade.
\nThe following table gives an indication of the level of the credit worthiness of the Group\u2019s debt securities and is based on the Group\u2019s internal rating policy which was approved by the CBI. The inputs to the ratings used in the table below are those prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the EU.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating\n \n | \n \n \n | \n \n \n | \n
| \n Aaa \n | \n \n \n 49\n \n | \n \n 60 \n | \n
| \n AA+ \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n Aa2 \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n A1 \n | \n \n \n 1,734\n \n | \n \n - \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 1,463 \n | \n
| \n Baa1 \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n Baa2 \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Baa3 \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
The following table discloses, by country, the Group\u2019s exposure to sovereign debt and corporate debt as at:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Country\n \n | \n \n \n | \n \n \n | \n
| \n Ireland \n | \n \n \n 1,783\n \n | \n \n 1,523 \n | \n
| \n Portugal \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Spain \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n France \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n Italy \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n EU \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
\n (ii) Derivative financial instruments\n
\nThe Group has executed standard ISDA agreements with all of its counterparties. The Group has also executed CSAs with all of its counterparties in respect of the majority of derivative instruments to mitigate its credit risk. As part of these agreements, the Group exchanges collateral in line with movements in the market values of derivative positions daily. FX forward derivatives are settled gross. The cumulative positive market value of derivative assets at 31 December 2022 was \u20acnil (31 December 2021: \u20ac1m). The Group manages its collateral derivative positions with counterparties on a net basis. The uncollaterised derivative positions are all held with investment grade counterparties.
\n\n (iii) Loans and advances to banks\n
\nThe Group has a policy to ensure that, where possible, loans and advances to banks are held with investment grade counterparties with any exceptions subject to prior approval by the BRCC. The following table gives an indication of the level of creditworthiness of the Group\u2019s loans and advances to banks and is based on the ratings prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the CBI.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating \n \n | \n \n \n | \n \n \n | \n
| \n AAA \n | \n \n \n 1,620\n \n | \n \n 3,709 \n | \n
| \n Aa2 \n | \n \n \n 199\n \n | \n \n 199 \n | \n
| \n Aa3 \n | \n \n \n 286\n \n | \n \n 258 \n | \n
| \n A1 \n | \n \n \n 10\n \n | \n \n 2 \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 6 \n | \n
| \n Ba1 \n | \n \n \n 8\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
The following sections detail additional disclosures on asset quality.
\n\n (iv) Loans and advances to customers\n
\n\n Gross customer loans and advances\n
\nThe tables below outline total loans and advances to customers for the Group analysed by home loan, buy-to-let, commercial and consumer finance.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n Measured at amortised cost\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Residential mortgages: \n | \n \n \n | \n \n \n | \n
| \n Home loan \n | \n \n \n 18,340\n \n | \n \n 12,568 \n | \n
| \n Buy-to-let \n | \n \n \n 824\n \n | \n \n 1,623 \n | \n
| \n \n Total residential mortgages\n \n | \n \n \n 19,164\n \n | \n \n 14,191 \n | \n
| \n Commercial \n | \n \n \n 239\n \n | \n \n 196 \n | \n
| \n Consumer finance \n | \n \n \n 401\n \n | \n \n 358 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Analysed by ECL staging:\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 17,455 \n \n | \n \n 11,689 \n | \n
| \n Stage 2 \n | \n \n \n 1,699 \n \n | \n \n 2,239 \n | \n
| \n Stage 3 \n | \n \n \n 649\n \n | \n \n 815 \n | \n
| \n POCI \n | \n \n \n 1\n \n | \n \n 2 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Of which at the reporting date \n \n | \n \n \n | \n \n \n | \n
| \n Neither past due nor Stage 3 \n | \n \n \n 19,118\n \n | \n \n 13,885 \n | \n
| \n Past due but not Stage 3 \n | \n \n \n 36\n \n | \n \n 43 \n | \n
| \n Stage 3 \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n Of which are reported as non-performing loans\n \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Deferred fees, discounts and fair value adjustments\n \n | \n \n \n 310\n \n | \n \n 115 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n \n Asset quality*\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 1\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 12,826\n \n | \n \n \n 65\n \n | \n \n \n 12,891\n \n | \n \n \n 11\n \n | \n \n \n 143\n \n | \n \n \n 13,045\n \n | \n
| \n Satisfactory \n | \n \n \n 4,064\n \n | \n \n \n 141\n \n | \n \n \n 4,205\n \n | \n \n \n 17\n \n | \n \n \n 61\n \n | \n \n \n 4,283\n \n | \n
| \n Fair \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 21\n \n | \n \n \n 43\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 84\n \n | \n \n \n 84\n \n | \n
| \n \n | \n \n \n 16,912\n \n | \n \n \n 206\n \n | \n \n \n 17,118\n \n | \n \n \n 28\n \n | \n \n \n 309\n \n | \n \n \n 17,455\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 79\n \n | \n \n \n 44\n \n | \n \n \n 123\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n 128\n \n | \n
| \n Satisfactory \n | \n \n \n 296\n \n | \n \n \n 107\n \n | \n \n \n 403\n \n | \n \n \n 27\n \n | \n \n \n 21\n \n | \n \n \n 451\n \n | \n
| \n Fair \n | \n \n \n 711\n \n | \n \n \n 197\n \n | \n \n \n 908\n \n | \n \n \n 161\n \n | \n \n \n 26\n \n | \n \n \n 1,095\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 25\n \n | \n \n \n 25\n \n | \n
| \n \n | \n \n \n 1,086\n \n | \n \n \n 348\n \n | \n \n \n 1,434\n \n | \n \n \n 188\n \n | \n \n \n 77\n \n | \n \n \n 1,699\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n Total measured at amortised cost \n | \n \n \n 18,340\n \n | \n \n \n 824\n \n | \n \n \n 19,164\n \n | \n \n \n 239\n \n | \n \n \n 401\n \n | \n \n \n 19,804\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n Asset quality* \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 7,096 \n | \n \n 184 \n | \n \n 7,280 \n | \n \n 1 \n | \n \n 160 \n | \n \n 7,441 \n | \n
| \n Satisfactory \n | \n \n 3,807 \n | \n \n 289 \n | \n \n 4,096 \n | \n \n 10 \n | \n \n 65 \n | \n \n 4,171 \n | \n
| \n Fair \n | \n \n 20 \n | \n \n 1 \n | \n \n 21 \n | \n \n - \n | \n \n 6 \n | \n \n 27 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 50 \n | \n \n 50 \n | \n
| \n \n | \n \n 10,923 \n | \n \n 474 \n | \n \n 11,397 \n | \n \n 11 \n | \n \n 281 \n | \n \n 11,689 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 146 \n | \n \n 209 \n | \n \n 355 \n | \n \n 7 \n | \n \n 2 \n | \n \n 364 \n | \n
| \n Satisfactory \n | \n \n 344 \n | \n \n 334 \n | \n \n 678 \n | \n \n 58 \n | \n \n 17 \n | \n \n 753 \n | \n
| \n Fair \n | \n \n 735 \n | \n \n 267 \n | \n \n 1,002 \n | \n \n 76 \n | \n \n 29 \n | \n \n 1,107 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 15 \n | \n \n 15 \n | \n
| \n \n | \n \n 1,225 \n | \n \n 810 \n | \n \n 2,035 \n | \n \n 141 \n | \n \n 63 \n | \n \n 2,239 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Total measured at amortised cost \n | \n \n 12,568 \n | \n \n 1,623 \n | \n \n 14,191 \n | \n \n 196 \n | \n \n 358 \n | \n \n 14,745 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s independent auditor.
\n \n \n \n \nThe following table provides an aged analysis of customer loans and advances which are past due but not Stage 3.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n Fair value of collateral held \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
Collateral held against residential mortgages is principally comprised of residential properties; their fair value has been estimated based upon the last actual valuation, adjusted to take into account subsequent movement in house prices and is capped at the lower of the loan balance or the valuation amount.
\n\n Non-performing loans\n
\nNon-performing loans (NPLs) are loans which are credit impaired or loans which are classified as defaulted in accordance with the Group\u2019s definition of default. The Group\u2019s definition of default considers objective indicators of default including the 90 days past due criterion, evidence of exercise of concessions or modifications to terms and conditions is designed to be consistent with European Banking Authority (EBA) guidance on the definition of forbearance.
\nForeclosed assets are assets held on the balance sheet which are obtained by taking possession of collateral or by calling on similar credit enhancements.
\n \n \n \n \nNon-performing assets are defined as NPLs plus foreclosed assets.
\n| \n \n 31 December 2022\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n \n 175\n \n | \n \n \n 118\n \n | \n \n \n 17\n \n | \n \n \n 2\n \n | \n \n \n 312\n \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n \n 31\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n 3\n \n | \n \n \n 49\n \n | \n
| \n NPL is 1-2 years past due \n | \n \n \n 31\n \n | \n \n \n 80\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 113\n \n | \n
| \n NPL is 2-5 years past due \n | \n \n \n 51\n \n | \n \n \n 28\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 81\n \n | \n
| \n NPL is > 5 years past due \n | \n \n \n 54\n \n | \n \n \n 29\n \n | \n \n \n 6\n \n | \n \n \n 5\n \n | \n \n \n 94\n \n | \n
| \n POCI \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n
| \n \n Non-performing loans\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n \n Foreclosed assets\n \n | \n \n \n 3\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n \n Non-performing assets\n \n | \n \n \n 345\n \n | \n \n \n 285\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 668\n \n | \n
| \n \n NPLs as % of gross loans\n \n | \n \n \n 1.9%\n \n | \n \n \n 32.8%\n \n | \n \n \n 9.6%\n \n | \n \n \n 3.7%\n \n | \n \n \n 3.3%\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n 251 \n | \n \n 177 \n | \n \n 40 \n | \n \n 1 \n | \n \n 469 \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n 32 \n | \n \n 89 \n | \n \n 1 \n | \n \n 6 \n | \n \n 128 \n | \n
| \n NPL is 1-2 years past due \n | \n \n 39 \n | \n \n 25 \n | \n \n - \n | \n \n 2 \n | \n \n 66 \n | \n
| \n NPL is 2-5 years past due \n | \n \n 36 \n | \n \n 10 \n | \n \n - \n | \n \n 1 \n | \n \n 47 \n | \n
| \n NPL is > 5 years past due \n | \n \n 62 \n | \n \n 38 \n | \n \n 3 \n | \n \n 2 \n | \n \n 105 \n | \n
| \n POCI \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 2 \n | \n \n 2 \n | \n
| \n Non-performing loans \n | \n \n 420 \n | \n \n 339 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Foreclosed assets \n | \n \n 4 \n | \n \n 24 \n | \n \n - \n | \n \n - \n | \n \n 28 \n | \n
| \n Non-performing assets \n | \n \n 424 \n | \n \n 363 \n | \n \n 44 \n | \n \n 14 \n | \n \n 845 \n | \n
| \n NPLs as % of gross loans \n | \n \n 3.3% \n | \n \n 20.9% \n | \n \n 22.5% \n | \n \n 3.9% \n | \n \n 5.5% \n | \n
Non-performing loans as a percentage of total loans and advances was 3.3% at 31 December 2022, a reduction from 5.5% at 31 December 2021.
\n\n Total portfolio loss allowance: statement of financial position\n
\nThe tables below outline the ECL loss allowance total at 31 December 2022 in respect of total customer loans and advances.
\nThe impairment charge in respect of the total loans and advances for year ended 31 December 2022 is \u20ac7m, compared to a write-back of \u20ac1m for the year ended 31 December 2021.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Loss allowance - statement of financial position\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 136 \n \n | \n \n 61 \n | \n
| \n Stage 2 \n | \n \n \n 163 \n \n | \n \n 238 \n | \n
| \n Stage 3 \n | \n \n \n 222 \n \n | \n \n 305 \n | \n
| \n \n Total loss allowance\n \n | \n \n \n 521\n \n | \n \n 604 \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Provision coverage ratio*\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 0.8%\n \n | \n \n 0.5% \n | \n
| \n Stage 2 \n | \n \n \n 9.6%\n \n | \n \n 10.6% \n | \n
| \n Stage 3 \n | \n \n \n 34.1%\n \n | \n \n 37.3% \n | \n
| \n \n Total provisions/total loans\n \n | \n \n \n 2.6%\n \n | \n \n 4.1% \n | \n
*Provision coverage ratio is calculated as loss allowance/impairment provision as a percentage of gross loan balance.
\n\n Origination profile\n
\nLoan origination profile of the residential mortgage loan portfolio before provision for impairment:
\nThe table below illustrates that \u20ac2bn or 11% of the residential mortgage portfolio originated before 2006. Between 2006 and 2008 origination was \u20ac5bn or 24% of the residential mortgages. The residual of 65% of the residential mortgages were originated between 2009 and 2022.
\n| \n \n 31 December 2022\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1999 and before \n | \n \n 1,786 \n | \n \n 30 \n | \n \n 113 \n | \n \n 4 \n | \n
| \n 2000 \n | \n \n 1,483 \n | \n \n 40 \n | \n \n 57 \n | \n \n 3 \n | \n
| \n 2001 \n | \n \n 1,938 \n | \n \n 66 \n | \n \n 79 \n | \n \n 4 \n | \n
| \n 2002 \n | \n \n 2,801 \n | \n \n 127 \n | \n \n 99 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,360 \n | \n \n 255 \n | \n \n 166 \n | \n \n 14 \n | \n
| \n 2004 \n | \n \n 7,729 \n | \n \n 514 \n | \n \n 220 \n | \n \n 23 \n | \n
| \n 2005 \n | \n \n 11,134 \n | \n \n 1,006 \n | \n \n 397 \n | \n \n 57 \n | \n
| \n 2006 \n | \n \n 14,396 \n | \n \n 1,796 \n | \n \n 723 \n | \n \n 169 \n | \n
| \n 2007 \n | \n \n 12,439 \n | \n \n 1,730 \n | \n \n 740 \n | \n \n 203 \n | \n
| \n 2008 \n | \n \n 7,912 \n | \n \n 1,006 \n | \n \n 408 \n | \n \n 90 \n | \n
| \n 2009 \n | \n \n 2,301 \n | \n \n 213 \n | \n \n 65 \n | \n \n 7 \n | \n
| \n 2010 \n | \n \n 936 \n | \n \n 70 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2011 \n | \n \n 819 \n | \n \n 69 \n | \n \n 5 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 1,190 \n | \n \n 110 \n | \n \n 3 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 1,673 \n | \n \n 163 \n | \n \n 4 \n | \n \n - \n | \n
| \n 2014 \n | \n \n 2,960 \n | \n \n 316 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 4,058 \n | \n \n 471 \n | \n \n 29 \n | \n \n 1 \n | \n
| \n 2016 \n | \n \n 4,664 \n | \n \n 639 \n | \n \n 23 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 5,804 \n | \n \n 899 \n | \n \n 24 \n | \n \n 4 \n | \n
| \n 2018 \n | \n \n 7,607 \n | \n \n 1,345 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n 2019 \n | \n \n 9,633 \n | \n \n 1,863 \n | \n \n 37 \n | \n \n 7 \n | \n
| \n 2020 \n | \n \n 7,940 \n | \n \n 1,735 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 8,871 \n | \n \n 2,164 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2022 \n | \n \n 9,409 \n | \n \n 2,537 \n | \n \n 4 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 134,843\n \n | \n \n \n 19,164\n \n | \n \n \n 3,297\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1998 and before \n | \n \n 967 \n | \n \n 13 \n | \n \n 75 \n | \n \n 2 \n | \n
| \n 1999 \n | \n \n 754 \n | \n \n 18 \n | \n \n 53 \n | \n \n 2 \n | \n
| \n 2000 \n | \n \n 1,204 \n | \n \n 38 \n | \n \n 73 \n | \n \n 4 \n | \n
| \n 2001 \n | \n \n 1,561 \n | \n \n 61 \n | \n \n 103 \n | \n \n 6 \n | \n
| \n 2002 \n | \n \n 3,485 \n | \n \n 132 \n | \n \n 120 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,145 \n | \n \n 273 \n | \n \n 189 \n | \n \n 18 \n | \n
| \n 2004 \n | \n \n 7,697 \n | \n \n 574 \n | \n \n 259 \n | \n \n 32 \n | \n
| \n 2005 \n | \n \n 11,173 \n | \n \n 1,105 \n | \n \n 487 \n | \n \n 76 \n | \n
| \n 2006 \n | \n \n 15,474 \n | \n \n 2,125 \n | \n \n 881 \n | \n \n 215 \n | \n
| \n 2007 \n | \n \n 13,532 \n | \n \n 2,005 \n | \n \n 842 \n | \n \n 239 \n | \n
| \n 2008 \n | \n \n 8,712 \n | \n \n 1,207 \n | \n \n 513 \n | \n \n 111 \n | \n
| \n 2009 \n | \n \n 2,135 \n | \n \n 193 \n | \n \n 79 \n | \n \n 8 \n | \n
| \n 2010 \n | \n \n 889 \n | \n \n 67 \n | \n \n 23 \n | \n \n 3 \n | \n
| \n 2011 \n | \n \n 550 \n | \n \n 44 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 315 \n | \n \n 21 \n | \n \n 5 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 716 \n | \n \n 67 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2014 \n | \n \n 1,497 \n | \n \n 156 \n | \n \n 14 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 1,648 \n | \n \n 179 \n | \n \n 39 \n | \n \n 3 \n | \n
| \n 2016 \n | \n \n 1,811 \n | \n \n 227 \n | \n \n 25 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 3,202 \n | \n \n 487 \n | \n \n 31 \n | \n \n 5 \n | \n
| \n 2018 \n | \n \n 4,974 \n | \n \n 924 \n | \n \n 48 \n | \n \n 10 \n | \n
| \n 2019 \n | \n \n 6,282 \n | \n \n 1,306 \n | \n \n 40 \n | \n \n 8 \n | \n
| \n 2020 \n | \n \n 5,153 \n | \n \n 1,184 \n | \n \n 21 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 7,099 \n | \n \n 1,785 \n | \n \n 18 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 105,975\n \n | \n \n \n 14,191\n \n | \n \n \n 3,954\n \n | \n \n \n 759\n \n | \n
\n Loan-to-value profile\n
\n\n Loan-to-value (LTV) of mortgage lending (index linked):\n
\nThe LTV ratio is calculated at a property level and is the average of indexed property values in proportion to the outstanding loan balance. LTV is a key input to the impairment provisioning process. The tables below outline the composition of this ratio for the residential loan portfolio.
\n\n Actual and average LTVs across principal mortgage portfolios:\n
\nThe tables below outline the weighted average LTVs for the total residential mortgage portfolios analysed across home loan and buy-to-let facilities by value. The weighted average LTV on the existing residential mortgage portfolios is 54% at 31 December 2022 compared to 58% at 31 December 2021.
\nThe Group\u2019s residential mortgage lending LTVs at December 2022 reflect updated valuations obtained on high-exposure NPLs (largely impacting on high-exposure buy-to-let properties).
\n \n \n \n \n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 44%\n \n | \n \n \n 32%\n \n | \n \n \n 44%\n \n | \n
| \n 50% to 70% \n | \n \n \n 40%\n \n | \n \n \n 18%\n \n | \n \n \n 39%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 24%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n 1%\n \n | \n \n \n 8%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 99%\n \n | \n \n \n 82%\n \n | \n \n \n 98%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 1%\n \n | \n \n \n 5%\n \n | \n \n \n 1%\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 3%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 1%\n \n | \n \n \n 18%\n \n | \n \n \n 2%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of existing residential mortgages \n | \n \n \n 53%\n \n | \n \n \n 76%\n \n | \n \n \n 54%\n \n | \n
| \n New residential mortgages \n | \n \n \n 68%\n \n | \n \n \n 58%\n \n | \n \n \n 68%\n \n | \n
| \n Acquired residential mortgages \n | \n \n \n 47%\n \n | \n \n \n 39%\n \n | \n \n \n 47%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 74%\n \n | \n \n \n 100%\n \n | \n \n \n 85%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 38% \n | \n \n 32% \n | \n \n 37% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 16% \n | \n \n 32% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 21% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 11% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 98% \n | \n \n 80% \n | \n \n 96% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 6% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 4% \n | \n \n 1% \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 3% \n | \n \n 1% \n | \n
| \n 131% to 140% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 2% \n | \n \n 20% \n | \n \n 4% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 56% \n | \n \n 74% \n | \n \n 58% \n | \n
| \n New residential mortgages \n | \n \n 69% \n | \n \n 54% \n | \n \n 69% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 105% \n | \n \n 90% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is neither past due nor Stage 3:\n
\nThe tables below illustrates that 100% of residential home loan mortgages (31 December 2021: 99%) and 94% of residential buy-to-let mortgages (31 December 2021: 87%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 45%\n \n | \n \n \n 44%\n \n | \n \n \n 45%\n \n | \n
| \n 50% to 70% \n | \n \n \n 41%\n \n | \n \n \n 23%\n \n | \n \n \n 40%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 23%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 100%\n \n | \n \n \n 94%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n Subtotal \n | \n \n \n -\n \n | \n \n \n 6%\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 39% \n | \n \n 39% \n | \n \n 39% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 19% \n | \n \n 34% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 20% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 9% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 99% \n | \n \n 87% \n | \n \n 99% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 5% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 3% \n | \n \n - \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n 131% to 140% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 1% \n | \n \n 13% \n | \n \n 1% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is classified as Stage 3:\n
\nThe tables below illustrates that 79% of residential home loan mortgages (31 December 2021: 75%) and 55% of residential buy-to-let mortgages (31 December 2021: 53%) that are classified as Stage 3 are in positive equity as at 31 December 2022
\n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 33%\n \n | \n \n \n 7%\n \n | \n \n \n 22%\n \n | \n
| \n 50% to 70% \n | \n \n \n 22%\n \n | \n \n \n 8%\n \n | \n \n \n 16%\n \n | \n
| \n 71% to 90% \n | \n \n \n 19%\n \n | \n \n \n 27%\n \n | \n \n \n 22%\n \n | \n
| \n 91% to 100% \n | \n \n \n 5%\n \n | \n \n \n 13%\n \n | \n \n \n 8%\n \n | \n
| \n Subtotal \n | \n \n \n 79%\n \n | \n \n \n 55%\n \n | \n \n \n 68%\n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 12%\n \n | \n \n \n 7%\n \n | \n
| \n 111% to 120% \n | \n \n \n 5%\n \n | \n \n \n 10%\n \n | \n \n \n 7%\n \n | \n
| \n 121% to 130% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 6%\n \n | \n
| \n 131% to 140% \n | \n \n \n 2%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 2%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n Greater than 180% \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n
| \n Subtotal \n | \n \n \n 21%\n \n | \n \n \n 45%\n \n | \n \n \n 32%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Stage 3\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 29% \n | \n \n 7% \n | \n \n 19% \n | \n
| \n 50% to 70% \n | \n \n 19% \n | \n \n 8% \n | \n \n 14% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 21% \n | \n \n 20% \n | \n
| \n 91% to 100% \n | \n \n 7% \n | \n \n 17% \n | \n \n 11% \n | \n
| \n Subtotal \n | \n \n 75% \n | \n \n 53% \n | \n \n 64% \n | \n
| \n 101% to 110% \n | \n \n 6% \n | \n \n 12% \n | \n \n 9% \n | \n
| \n 111% to 120% \n | \n \n 4% \n | \n \n 6% \n | \n \n 5% \n | \n
| \n 121% to 130% \n | \n \n 4% \n | \n \n 8% \n | \n \n 6% \n | \n
| \n 131% to 140% \n | \n \n 3% \n | \n \n 6% \n | \n \n 4% \n | \n
| \n 141% to 150% \n | \n \n 2% \n | \n \n 4% \n | \n \n 3% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 3% \n | \n \n 2% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 4% \n | \n \n 5% \n | \n \n 5% \n | \n
| \n Subtotal \n | \n \n 25% \n | \n \n 47% \n | \n \n 36% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \u20acm \n | \n \n \u20acm \n | \n \n \u20acm \n | \n
| \n Stage 3 \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n
\n (v) Group portfolios: Collateral in possession\n
\nCollateral in possession occurs where the obligor either (i) voluntarily surrenders the property or (ii) the Group takes legal ownership due to the non-repayment of the loan facility. The following tables outline the main movements in this category during the year.
\n \n \n \n \n \n\n Stock of collateral in possession\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n
| \n \n Residential collateral in possession\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 14\n \n | \n \n \n 7\n \n | \n \n 27 \n | \n \n 10 \n | \n
| \n Buy-to-let \n | \n \n \n 105\n \n | \n \n \n 27\n \n | \n \n 165 \n | \n \n 42 \n | \n
| \n \n Total\n \n | \n \n \n 119\n \n | \n \n \n 34\n \n | \n \n 192 \n | \n \n 52 \n | \n
Collateral in possession assets are sold as soon as practicable. These assets which total \u20ac18m as at 31 December 2022 (31 December 2021: \u20ac28m) are included in assets held for sale (see note 18 for further details).
\nDuring the year the ownership of 16 properties were transferred to the Group.
\nThe details of the transfers are provided in the table below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n - \n | \n
| \n Buy-to-let \n | \n \n 16 \n | \n
| \n \n Total\n \n | \n \n 16 \n | \n
During the year 89 properties were disposed. The details of the disposals are provided in the tables below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 13 \n | \n
| \n Buy-to-let \n | \n \n 76 \n | \n
| \n Total \n | \n \n 89 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at \n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 13 \n \n | \n \n \n 3 \n \n | \n \n \n 2 \n \n | \n \n \n -\n \n | \n \n \n 1 \n \n | \n
| \n Buy-to-let \n | \n \n \n 76 \n \n | \n \n \n 18 \n \n | \n \n \n 13 \n \n | \n \n \n 1 \n \n | \n \n \n 6 \n \n | \n
| \n \n Year ended 31 December 2022\n \n | \n \n \n 89 \n \n | \n \n \n 21 \n \n | \n \n \n 15 \n \n | \n \n \n 1 \n \n | \n \n \n 7 \n \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n| \n \n 31 December 2021\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at\n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 23 \n | \n \n 7 \n | \n \n 5 \n | \n \n - \n | \n \n 2 \n | \n
| \n Buy-to-let \n | \n \n 114 \n | \n \n 25 \n | \n \n 16 \n | \n \n 1 \n | \n \n 10 \n | \n
| \n Year ended 31 December 2021 \n | \n \n 137 \n | \n \n 32 \n | \n \n 21 \n | \n \n 1 \n | \n \n 12 \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n \n \n \n \n \n\n (vi) Additional disclosures on forborne loans\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with the current Code of Conduct on Mortgages Arrears (CCMA).
\nThe tables below set out the asset quality and volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers for the years ended 31 December 2022 and 2021. The number and balances of loans in forbearance arrangements for residential home loan mortgages and buy-to-let residential mortgages are analysed below.
\n\n (a) Asset quality\n
\nThe method of splitting the forborne loans and advances to customers over the different asset quality categories:
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n *Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n Satisfactory \n | \n \n \n 33\n \n | \n \n \n 5\n \n | \n \n \n 38\n \n | \n \n \n 1\n \n | \n \n \n 39\n \n | \n
| \n Fair \n | \n \n \n 92\n \n | \n \n \n 26\n \n | \n \n \n 118\n \n | \n \n \n 1\n \n | \n \n \n 119\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n 130\n \n | \n \n \n 31\n \n | \n \n \n 161\n \n | \n \n \n 2\n \n | \n \n \n 163\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 228\n \n | \n \n \n 68\n \n | \n \n \n 296\n \n | \n \n \n 6\n \n | \n \n \n 302\n \n | \n
| \n \n Total measured at amortised costs \n \n | \n \n \n 358\n \n | \n \n \n 99\n \n | \n \n \n 457\n \n | \n \n \n 8\n \n | \n \n \n 465\n \n | \n
Where a borrower has been granted a forbearance treatment, the loan is considered to have experienced a significant increase in credit risk and is classified as Stage 2 for Expected Credit Loss assessment purposes under IFRS 9.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential Mortgages \n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n * Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 6 \n | \n \n 5 \n | \n \n 11 \n | \n \n 1 \n | \n \n 12 \n | \n
| \n Satisfactory \n | \n \n 76 \n | \n \n 37 \n | \n \n 113 \n | \n \n - \n | \n \n 113 \n | \n
| \n Fair \n | \n \n 96 \n | \n \n 30 \n | \n \n 126 \n | \n \n 3 \n | \n \n 129 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n \n | \n \n 178 \n | \n \n 72 \n | \n \n 250 \n | \n \n 4 \n | \n \n 254 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 289 \n | \n \n 94 \n | \n \n 383 \n | \n \n 33 \n | \n \n 416 \n | \n
| \n Total measured at amortised costs \n | \n \n 467 \n | \n \n 166 \n | \n \n 633 \n | \n \n 37 \n | \n \n 670 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s Independent Auditor.
\n \n \n \n \n\n (b) Weighted Average - LTV\n
\n\n LTV on total portfolio in forbearance\n
\nThe tables below illustrates that 85% of residential home loan mortgages (31 December 2021: 84%) and 69% of residential buy-to-let mortgages (31 December 2021: 67%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 37%\n \n | \n \n \n 7%\n \n | \n \n \n 31%\n \n | \n
| \n 50% to 70% \n | \n \n \n 27%\n \n | \n \n \n 11%\n \n | \n \n \n 24%\n \n | \n
| \n 71% to 90% \n | \n \n \n 17%\n \n | \n \n \n 42%\n \n | \n \n \n 23%\n \n | \n
| \n 91% to 100% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 5%\n \n | \n
| \n Subtotal \n | \n \n \n 85%\n \n | \n \n \n 69%\n \n | \n \n \n 83%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 11%\n \n | \n \n \n 4%\n \n | \n
| \n 111% to 120% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 121% to 130% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 131% to 140% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n \n - \n \n | \n \n \n 1%\n \n | \n \n \n - \n \n | \n
| \n Greater than 180% \n | \n \n \n 2%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n Subtotal \n | \n \n \n 15%\n \n | \n \n \n 31%\n \n | \n \n \n 17%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n \n 66%\n \n | \n \n \n 92%\n \n | \n \n \n 72%\n \n | \n
| \n New residential mortgages \n | \n \n \n 73%\n \n | \n \n \n - \n \n | \n \n \n 73%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 75%\n \n | \n \n \n 97%\n \n | \n \n \n 80%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 33% \n | \n \n 7% \n | \n \n 26% \n | \n
| \n 50% to 70% \n | \n \n 25% \n | \n \n 11% \n | \n \n 21% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 30% \n | \n \n 23% \n | \n
| \n 91% to 100% \n | \n \n 6% \n | \n \n 19% \n | \n \n 9% \n | \n
| \n Subtotal \n | \n \n 84% \n | \n \n 67% \n | \n \n 79% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 4% \n | \n \n 12% \n | \n \n 6% \n | \n
| \n 111% to 120% \n | \n \n 3% \n | \n \n 8% \n | \n \n 4% \n | \n
| \n 121% to 130% \n | \n \n 2% \n | \n \n 1% \n | \n \n 2% \n | \n
| \n 131% to 140% \n | \n \n 2% \n | \n \n 4% \n | \n \n 2% \n | \n
| \n 141% to 150% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 2% \n | \n \n 3% \n | \n \n 3% \n | \n
| \n Subtotal \n | \n \n 16% \n | \n \n 33% \n | \n \n 21% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 70% \n | \n \n 95% \n | \n \n 76% \n | \n
| \n New residential mortgages \n | \n \n 47% \n | \n \n - \n | \n \n 47% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 104% \n | \n \n 84% \n | \n
\n (c) Forbearance arrangements - residential mortgages\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with existing CCMA. These are set out in the table below.
\n\n Residential mortgages\n
\nThe tables below set out the volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers as at 31 December 2022 and 31 December 2021.
\n\n (i) Residential home loan mortgages:\n
\nThe incidence of the main type of forbearance arrangements for owner occupied residential mortgages are analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 21\n \n | \n \n \n 6\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Reduced payment (less than interest only) \n | \n \n \n 34\n \n | \n \n \n 3\n \n | \n \n \n 22\n \n | \n \n \n 2\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 1,369\n \n | \n \n \n 192\n \n | \n \n \n 782\n \n | \n \n \n 120\n \n | \n
| \n Payment moratorium \n | \n \n \n 32\n \n | \n \n \n 5\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 433\n \n | \n \n \n 53\n \n | \n \n \n 252\n \n | \n \n \n 31\n \n | \n
| \n Term extension \n | \n \n \n 428\n \n | \n \n \n 32\n \n | \n \n \n 209\n \n | \n \n \n 17\n \n | \n
| \n Hybrid* \n | \n \n \n 277\n \n | \n \n \n 41\n \n | \n \n \n 178\n \n | \n \n \n 26\n \n | \n
| \n Split mortgages \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n
| \n \n Total\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 61 \n | \n \n 12 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n Reduced payment (less than interest only) \n | \n \n 35 \n | \n \n 5 \n | \n \n 33 \n | \n \n 5 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 1,815 \n | \n \n 255 \n | \n \n 1,015 \n | \n \n 157 \n | \n
| \n Payment moratorium \n | \n \n 64 \n | \n \n 8 \n | \n \n 47 \n | \n \n 6 \n | \n
| \n Arrears capitalisation \n | \n \n 524 \n | \n \n 66 \n | \n \n 264 \n | \n \n 36 \n | \n
| \n Term extension \n | \n \n 483 \n | \n \n 38 \n | \n \n 245 \n | \n \n 20 \n | \n
| \n Hybrid* \n | \n \n 378 \n | \n \n 55 \n | \n \n 190 \n | \n \n 29 \n | \n
| \n Split mortgages \n | \n \n 164 \n | \n \n 28 \n | \n \n 164 \n | \n \n 28 \n | \n
| \n Total \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 2,010 \n | \n \n 289 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 777 cases in the year to 31 December 2022 for the Group in the number of residential home loan mortgages in forbearance arrangements, a decrease of \u20ac109m. The average balance of forborne loans is \u20ac0.130m at 31 December 2022 (31 December 2021: \u20ac0.133m).
\n \n \n \n \n\n (ii) Residential buy-to-let mortgages:\n
\nThe incidence of the main type of forbearance arrangements for residential buy-to-let mortgages only is analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 19\n \n | \n \n \n 8\n \n | \n \n \n 17\n \n | \n \n \n 7\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 99\n \n | \n \n \n 29\n \n | \n \n \n 76\n \n | \n \n \n 24\n \n | \n
| \n Payment moratorium \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 18\n \n | \n \n \n 8\n \n | \n \n \n 10\n \n | \n \n \n 4\n \n | \n
| \n Term extension \n | \n \n \n 27\n \n | \n \n \n 6\n \n | \n \n \n 12\n \n | \n \n \n 3\n \n | \n
| \n Hybrid* \n | \n \n \n 70\n \n | \n \n \n 41\n \n | \n \n \n 51\n \n | \n \n \n 23\n \n | \n
| \n Split mortgages \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n
| \n \n Total\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 188\n \n | \n \n \n 68\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 54 \n | \n \n 27 \n | \n \n 31 \n | \n \n 15 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 190 \n | \n \n 58 \n | \n \n 121 \n | \n \n 38 \n | \n
| \n Payment moratorium \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n 62 \n | \n \n 31 \n | \n \n 21 \n | \n \n 11 \n | \n
| \n Term extension \n | \n \n 32 \n | \n \n 6 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n Hybrid* \n | \n \n 86 \n | \n \n 37 \n | \n \n 56 \n | \n \n 20 \n | \n
| \n Split mortgages \n | \n \n 23 \n | \n \n 7 \n | \n \n 23 \n | \n \n 7 \n | \n
| \n Total \n | \n \n 449 \n | \n \n 166 \n | \n \n 267 \n | \n \n 94 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 193 cases in the year to 31 December 2022 for the Group in the number of residential buy-to-let in forbearance arrangements, a decrease of \u20ac67m in balances. The average balance of forborne loans is \u20ac0.39m at 31 December 2022 (31 December 2021: \u20ac0.37m).
\n\n Commercial mortgages\n
\nThe incidence of the main type of forbearance arrangements for commercial mortgages are analysed below:
\n| \n \n Commercial mortgages\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 11\n \n | \n \n \n 5\n \n | \n \n 13 \n | \n \n 23 \n | \n
| \n Payment moratorium \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n \n 5 \n | \n \n 7 \n | \n
| \n Term extension \n | \n \n \n 7\n \n | \n \n \n 1\n \n | \n \n 9 \n | \n \n 4 \n | \n
| \n Hybrid* \n | \n \n \n 6\n \n | \n \n \n 1\n \n | \n \n 10 \n | \n \n 3 \n | \n
| \n Split mortgages \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n 37 \n | \n \n 37 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe table above reflects a decrease of 12 cases in the year to 31 December 2022 for the Group in the number of commercial mortgages in forbearance arrangements, a decrease of \u20ac29m in balances.
\n \n \n \n \n\n (d) Reconciliation of movement in forborne loans for all classes\n
\nThe tables below provide an analysis of the movement of total forborne loans and Stage 3 forborne loans during the year. It outlines the number and balances of forbearance treatments offered, expired and loans paid down during the year.
\n\n (i) Reconciliation of movement of total forborne loans\n
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2022\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 3,524\n \n | \n \n \n 467\n \n | \n \n \n 449\n \n | \n \n \n 166\n \n | \n \n \n 37\n \n | \n \n \n 37\n \n | \n \n \n 4,010\n \n | \n \n \n 670\n \n | \n
| \n New forbearance extended during the year* \n | \n \n \n 307\n \n | \n \n \n 39\n \n | \n \n \n 30\n \n | \n \n \n 17\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 337\n \n | \n \n \n 56\n \n | \n
| \n Deleveraged loans \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (138)\n \n | \n \n \n (51)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (141)\n \n | \n \n \n (52)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n \n (18)\n \n | \n \n \n (3)\n \n | \n \n \n (7)\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (25)\n \n | \n \n \n (7)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (816)\n \n | \n \n \n (106)\n \n | \n \n \n (34)\n \n | \n \n \n (13)\n \n | \n \n \n (4)\n \n | \n \n \n (21)\n \n | \n \n \n (854)\n \n | \n \n \n (140)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (247)\n \n | \n \n \n (25)\n \n | \n \n \n (44)\n \n | \n \n \n (12)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (299)\n \n | \n \n \n (45)\n \n | \n
| \n Balance shift** \n | \n \n \n -\n \n | \n \n \n (13)\n \n | \n \n \n -\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (17)\n \n | \n
| \n \n Closing balance of loans in forbearance as at 31 December 2022\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n \n 3,028\n \n | \n \n \n 465\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2021\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 5,066 \n | \n \n 726 \n | \n \n 679 \n | \n \n 231 \n | \n \n 44 \n | \n \n 20 \n | \n \n 5,789 \n | \n \n 977 \n | \n
| \n New forbearance extended during the year* \n | \n \n 458 \n | \n \n 62 \n | \n \n 76 \n | \n \n 30 \n | \n \n 7 \n | \n \n 24 \n | \n \n 541 \n | \n \n 116 \n | \n
| \n Deleveraged loans \n | \n \n (845) \n | \n \n (115) \n | \n \n (214) \n | \n \n (48) \n | \n \n (4) \n | \n \n (3) \n | \n \n (1,063) \n | \n \n (166) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n (16) \n | \n \n (3) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (17) \n | \n \n (3) \n | \n
| \n - expired forbearance treatment \n | \n \n (753) \n | \n \n (139) \n | \n \n (58) \n | \n \n (29) \n | \n \n (3) \n | \n \n (1) \n | \n \n (814) \n | \n \n (169) \n | \n
| \n - expired loan paid down \n | \n \n (386) \n | \n \n (49) \n | \n \n (33) \n | \n \n (13) \n | \n \n (7) \n | \n \n (2) \n | \n \n (426) \n | \n \n (64) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (15) \n | \n \n - \n | \n \n (5) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n (21) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 449 \n | \n \n 166 \n | \n \n 37 \n | \n \n 37 \n | \n \n 4,010 \n | \n \n 670 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n \n \n \n \n\n (ii) Reconciliation of movement in forborne loans Stage 3\n
\n| \n \n 31 December 2022\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 2,010 \n \n | \n \n \n 289 \n \n | \n \n \n 267 \n \n | \n \n \n 94 \n \n | \n \n \n 32 \n \n | \n \n \n 33 \n \n | \n \n \n 2,309 \n \n | \n \n \n 416 \n \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n \n 354 \n \n | \n \n \n 43 \n \n | \n \n \n 29 \n \n | \n \n \n 15 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 383 \n \n | \n \n \n 58 \n \n | \n
| \n Deleveraged loans \n | \n \n \n (3) \n \n | \n \n \n (1) \n \n | \n \n \n (32) \n \n | \n \n \n (10) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (35) \n \n | \n \n \n (11) \n \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n \n (550)\n \n | \n \n \n (70)\n \n | \n \n \n (29)\n \n | \n \n \n (11)\n \n | \n \n \n (4)\n \n | \n \n \n (1)\n \n | \n \n \n (583)\n \n | \n \n \n (82)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n \n (10)\n \n | \n \n \n (2)\n \n | \n \n \n (4)\n \n | \n \n \n (4)\n \n | \n \n - \n | \n \n \n - \n \n | \n \n \n (14)\n \n | \n \n \n (6)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (19)\n \n | \n \n \n (9)\n \n | \n \n \n (4)\n \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (17)\n \n | \n \n \n (24)\n \n | \n \n \n (29)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (148)\n \n | \n \n \n (18)\n \n | \n \n \n (39)\n \n | \n \n \n (11)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (195)\n \n | \n \n \n (37)\n \n | \n
| \n Balance shift** \n | \n \n \n - \n \n | \n \n \n (4)\n \n | \n \n \n - \n \n | \n \n \n (2)\n \n | \n \n \n - \n \n | \n \n \n (1) \n \n | \n \n \n - \n \n | \n \n \n (7)\n \n | \n
| \n \n Closing balance loans in forbearance as at 31 December 2022\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n \n \n 188 \n \n | \n \n \n 68\n \n | \n \n \n 19\n \n | \n \n \n 6\n \n | \n \n \n 1,841\n \n | \n \n \n 302\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n 31 December 2021\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 2,850 \n | \n \n 438 \n | \n \n 478 \n | \n \n 151 \n | \n \n 36 \n | \n \n 14 \n | \n \n 3,364 \n | \n \n 603 \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n 538 \n | \n \n 74 \n | \n \n 77 \n | \n \n 31 \n | \n \n 6 \n | \n \n 25 \n | \n \n 621 \n | \n \n 130 \n | \n
| \n Deleveraged loans \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n (392) \n | \n \n (46) \n | \n \n (32) \n | \n \n (13) \n | \n \n (1) \n | \n \n (1) \n | \n \n (425) \n | \n \n (60) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n (12) \n | \n \n (2) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (13) \n | \n \n (2) \n | \n
| \n - expired forbearance treatment \n | \n \n (112) \n | \n \n (25) \n | \n \n (76) \n | \n \n (19) \n | \n \n (1) \n | \n \n (1) \n | \n \n (189) \n | \n \n (45) \n | \n
| \n - expired loan paid down \n | \n \n (862) \n | \n \n (146) \n | \n \n (179) \n | \n \n (55) \n | \n \n (8) \n | \n \n (4) \n | \n \n (1,049) \n | \n \n (205) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (4) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (5) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 2,010 \n | \n \n 289 \n | \n \n 267 \n | \n \n 94 \n | \n \n 32 \n | \n \n 33 \n | \n \n 2,309 \n | \n \n 416 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n\n (vii) Funding profile\n
\nThe ALCO monitors sources of funding and their respective maturities with a focus on establishing a stable and cost effective funding profile. Excluding equity, the Group\u2019s funding profile as at the 31 December 2022 can be broken down into the below component parts:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Customer accounts \n | \n \n \n 93\n \n | \n \n 94 \n | \n
| \n Long-term debt \n | \n \n \n 4\n \n | \n \n 4 \n | \n
| \n Short-term debt \n | \n \n \n 3\n \n | \n \n 2 \n | \n
| \n \u00a0 \n | \n \n \n 100 \n \n | \n \n 100 \n | \n
Long-term debt refers to debt with a maturity greater than 12 months from year-end and short-term debt is that which has a maturity of less than 12 months from year-end.
\n \n \n \n \nIn accordance with IFRS 7, Financial Instruments: Disclosures, the following tables present the maturity analysis of financial liabilities on an undiscounted basis, by remaining contractual maturity at the statement of financial position date. These will not agree directly with the balances on the consolidated statement of financial position due to the inclusion of future interest payments.
\n| \n \n 31 December 2022\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n \n 614 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614 \n \n | \n
| \n Customer accounts \n | \n \n \n 19,906 \n \n | \n \n \n 689 \n \n | \n \n \n 261 \n \n | \n \n \n 385 \n \n | \n \n \n 157 \n \n | \n \n \n 342 \n \n | \n \n \n 21,740 \n \n | \n
| \n Debt securities in issue \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 6 \n \n | \n \n \n 11 \n \n | \n \n \n 371 \n \n | \n \n \n 308 \n \n | \n \n \n 702 \n \n | \n
| \n Derivative financial instruments \n | \n \n \n 10 \n \n | \n \n \n 169\n \n | \n \n \n 1,343 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1,522 \n \n | \n
| \n Subordinated liabilities \n | \n \n \n 1 \n \n | \n \n \n 1 \n \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 7 \n \n | \n \n \n 300 \n \n | \n \n \n 315 \n \n | \n
| \n Other financial liabilities \n | \n \n \n 145\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 3\n \n | \n \n \n 6\n \n | \n \n \n 27\n \n | \n \n \n 183\n \n | \n
| \n \n Total liabilities\n \n | \n \n \n 20,678 \n \n | \n \n \n 863 \n \n | \n \n \n 1,614 \n \n | \n \n \n 403 \n \n | \n \n \n 541 \n \n | \n \n \n 977 \n \n | \n \n \n 25,076 \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 16,032 \n | \n \n 1,416 \n | \n \n 454 \n | \n \n 575 \n | \n \n 221 \n | \n \n 405 \n | \n \n 19,103 \n | \n
| \n Debt securities in issue \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 537 \n | \n \n 552 \n | \n
| \n Derivative financial instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Subordinated liabilities \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 304 \n | \n \n 319 \n | \n
| \n Other financial liabilities \n | \n \n 92 \n | \n \n 48 \n | \n \n 1 \n | \n \n 3 \n | \n \n 4 \n | \n \n 22 \n | \n \n 170 \n | \n
| \n Total liabilities \n | \n \n 16,473 \n | \n \n 1,466 \n | \n \n 459 \n | \n \n 586 \n | \n \n 239 \n | \n \n 1,268 \n | \n \n 20,491 \n | \n
When managing the Group\u2019s liquidity and funding profile, for products where the contractual maturity date may be different from actual behaviour, the Group uses statistical methodologies to manage liquidity on an expected or behaviourally adjusted basis.
\n\n
The following table details the Group\u2019s liquidity analysis for derivative instruments that do not qualify as hedging instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates from the yield curves at the end of the reporting year. These will not agree directly with the balances on the consolidated statement of financial position.
\n| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n 82 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 82 \n \n | \n
| \n - outflow \n | \n \n \n (83)\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (83)\n \n | \n
| \n Business combinations forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n -\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n -\n \n | \n
| \n - outflow \n | \n \n \n (9)\n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,521)\n \n | \n
| \n \n Balance at 31 December 2022\n \n | \n \n \n (10) \n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,522) \n \n | \n
| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n - outflow \n | \n \n (84) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (84) \n | \n
| \n Balance at 31 December 2021 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n (viii) Interest rate gap position\n
\nGap analysis is a technique for measuring the Group\u2019s interest rate risk exposure beginning with a maturity/re-pricing schedule that distributes interest sensitive assets, liabilities, and derivative positions into \u201ctime bands\u201d according to their maturity (if fixed rate), time remaining to their next re-pricing (if floating rate) or behavioural convention in order to identify any sources of significant mismatches. The below December 2022 IRRBB profile also includes interest cash flows based on the next re-price date i.e. one month\u2019s interest included for variable rate products and lifetime interest for fixed rate products.
\nA summary of the Group\u2019s interest rate gap position is as follows:
\n\n Interest rate re-pricing\n
\n| \n \n 31 December 2022\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Assets\n \n | \n \n \n 9,884\n \n | \n \n \n 697\n \n | \n \n \n 1,757\n \n | \n \n \n 11,516\n \n | \n \n \n 2,148\n \n | \n \n \n 26,002\n \n | \n
| \n \n Liabilities\n \n | \n \n \n (6,048)\n \n | \n \n \n (996)\n \n | \n \n \n (2,425)\n \n | \n \n \n (12,932)\n \n | \n \n \n (2,836)\n \n | \n \n \n (25,237)\n \n | \n
| \n \n Derivatives \n \n | \n \n \n 81\n \n | \n \n \n -\n \n | \n \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 81\n \n | \n
| \n \n Interest rate re-pricing gap \n \n | \n \n \n 3,917\n \n | \n \n \n (299)\n \n | \n \n \n (668)\n \n | \n \n \n (1,416)\n \n | \n \n \n (688)\n \n | \n \n \n 846\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Cumulative interest rate re-pricing gap\n \n | \n \n \n 3,917\n \n | \n \n \n 3,618\n \n | \n \n \n 2,950\n \n | \n \n \n 1,534\n \n | \n \n \n 846\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Assets \n | \n \n 12,608 \n | \n \n 587 \n | \n \n 1264 \n | \n \n 6505 \n | \n \n 1079 \n | \n \n 22043 \n | \n
| \n Liabilities \n | \n \n (11,769) \n | \n \n (973) \n | \n \n (1,395) \n | \n \n (6,137) \n | \n \n (1,546) \n | \n \n -21820 \n | \n
| \n Derivatives \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n Interest rate re-pricing gap \n | \n \n 923 \n | \n \n (386) \n | \n \n (131) \n | \n \n 368 \n | \n \n (467) \n | \n \n 307 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cumulative interest rate re-pricing gap \n | \n \n 923 \n | \n \n 537 \n | \n \n 406 \n | \n \n 774 \n | \n \n 307 \n | \n \n \n | \n
An increase in ECB interest rates of 100bps would increase net interest income by \u20ac58m and a decrease in ECB interest rates of 100bps would decrease net interest income by \u20ac58m.
\n \n \n \n \n\n 39. Capital management \n
\nThe core objective of the Group\u2019s capital management policy is to ensure that the Group complies with its regulatory capital requirements and maintains sufficient capital to cover its business risks and support its strategy. The Group has established an Internal Capital Adequacy Assessment Process (ICAAP) to ensure that it is adequately capitalised against the inherent risks to which its business operations are exposed and to maintain an appropriate level of capital to meet the minimum capital requirements. The ICAAP is subject to review and evaluation by the Regulator. The management of capital within the Group is monitored by the Board Risk and Compliance Committee (BRCC) and the Assets and Liabilities Committee (ALCo) in accordance with Board approved policy.
\nThe Group\u2019s regulatory capital comprises of three tiers:
\nThe Group\u2019s 2022 regulatory CET1 (transitional) minimum requirement is 8.94% (December 2021: 8.94%). The CET1 ratio requirement of 8.94% consists of a Pillar 1 CRR requirement of 4.50%, a Pillar 2 Requirement (P2R) of 1.94% (December 2021: 1.94%) and the Capital Conservation Buffer (CCB) of 2.50%.
\nThe Group\u2019s Total Capital minimum requirement of 13.95% at 31 December 2022 (31 December 2021: 13.95%) consists of a Pillar 1 CRR requirement of 8%, P2R of 3.45%, and CCB of 2.5%.
\n \nThese requirements exclude Pillar 2 Guidance (P2G) which is not publicly disclosed.
\nThe following table summarises the composition of regulatory capital and the ratios of PTSB, the primary regulated entity of the Group as at 31 December 2022 and 31 December 2021 which are calculated in accordance with CRD IV regulatory capital requirements.
\n\n The following information has not been subject to audit by the Group\u2019s independent auditor.\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Common Equity Tier 1 capital\n \n | \n \n \n | \n \n \n | \n
| \n Share capital and share premium \n | \n \n \n 1,077\n \n | \n \n 561 \n | \n
| \n Reserves \n | \n \n \n 940\n \n | \n \n 1,104 \n | \n
| \n Prudential filters \n | \n \n \n (299)\n \n | \n \n (208) \n | \n
| \n \n Total qualifying CET1 capital\n \n | \n \n \n 1,718\n \n | \n \n 1,457 \n | \n
| \n Additional Tier 1 capital \n | \n \n \n 369\n \n | \n \n 123 \n | \n
| \n \n Total qualifying Tier 1 capital\n \n | \n \n \n 2,087\n \n | \n \n 1,580 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Tier 2 capital\n \n | \n \n \n | \n \n \n | \n
| \n Subordinated liabilities \n | \n \n \n 250\n \n | \n \n 250 \n | \n
| \n Other \n | \n \n \n 32\n \n | \n \n 40 \n | \n
| \n \n Total qualifying Tier 2 capital\n \n | \n \n \n 282\n \n | \n \n 290 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Total own funds\n \n | \n \n \n 2,369\n \n | \n \n 1,870 \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \u20acm \n | \n
| \n \n Risk weighted assets\n \n | \n \n \n | \n \n \n | \n
| \n Total risk-weighted assets \n | \n \n \n 10,627\n \n | \n \n 8,600 \n | \n
| \n - Credit risk (including CVA) \n | \n \n \n 9,927\n \n | \n \n 7,961 \n | \n
| \n - Operational risk \n | \n \n \n 700\n \n | \n \n 639 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Capital Ratios\n \n | \n \n \n | \n \n \n | \n
| \n Common Equity Tier 1 Capital ratio (Transitional basis) \n | \n \n \n 16.2%\n \n | \n \n 16.9% \n | \n
| \n Total capital ratio (Transitional basis) \n | \n \n \n 22.3%\n \n | \n \n 21.8% \n | \n
\n The CET1 and Total Capital ratios are calculated and reported to the CBI on a quarterly basis.\n
\n\n The movement in the Group\u2019s regulatory capital is summarised below:\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Balance as at 1 January \n | \n \n \n 1,870\n \n | \n \n 1,779 \n | \n
| \n NatWest Equity Investment \n | \n \n \n 155\n \n | \n \n 0 \n | \n
| \n Operating profit/(loss) after tax \n | \n \n \n 223\n \n | \n \n (20) \n | \n
| \n Other intangible assets add-back/(deduction) \n | \n \n \n (33)\n \n | \n \n 19 \n | \n
| \n Deferred tax assets write-back/(deduction) \n | \n \n \n 2\n \n | \n \n (36) \n | \n
| \n IFRS 9 phase-in \n | \n \n \n (54)\n \n | \n \n (28) \n | \n
| \n AT1 securities \n | \n \n \n 245\n \n | \n \n (80) \n | \n
| \n Tier 2 Sub Debt \n | \n \n \n (8)\n \n | \n \n 250 \n | \n
| \n Other movements* \n | \n \n \n (31)\n \n | \n \n (14) \n | \n
| \n \n Balance as at 31 December \n \n | \n \n \n 2,369\n \n | \n \n 1,870 \n | \n
*Other movements include AT1 Coupons (-\u20ac17m), Calendar Provisioning (-\u20ac11m) and Revaluation Reserves (-\u20ac5m).
\n\n 40. Current/non-current assets and liabilities\n
\nThe following table provides an analysis of certain asset and liability line items as at 31 December 2022 and 31 December 2021. The analysis includes amounts expected to be recovered or settled no more than 12 months after the statement of financial position date (current) and more than 12 months after the statement of financial position date (non-current).
\n| \n \n | \n \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||
| \n \n | \n \n \n Note\n \n | \n \n \n Current\n \n | \n \n \n Non-current\n \n | \n \n \n Total\n \n | \n \n \n Current\n \n | \n \n \n Non-current\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n \n 57 \n | \n \n - \n | \n \n 57 \n | \n
| \n Items in the course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Other assets \n | \n \n 17 \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n 310 \n | \n \n - \n | \n \n 310 \n | \n
| \n Assets classified as held for sale \n | \n \n 18 \n | \n \n \n 18\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n \n 28 \n | \n \n - \n | \n \n 28 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 735\n \n | \n \n \n 2,442\n \n | \n \n \n 3,177\n \n | \n \n 214 \n | \n \n 2,280 \n | \n \n 2,494 \n | \n
| \n Equity Securities \n | \n \n 20 \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n 30\n \n | \n \n - \n | \n \n 26 \n | \n \n 26 \n | \n
| \n Prepayments and accrued income \n | \n \n 21 \n | \n \n \n 207\n \n | \n \n \n -\n \n | \n \n \n 207\n \n | \n \n 205 \n | \n \n - \n | \n \n 205 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 2,521\n \n | \n \n \n 17,072\n \n | \n \n \n 19,593\n \n | \n \n 2,071 \n | \n \n 12,185 \n | \n \n 14,256 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,240\n \n | \n \n \n 490\n \n | \n \n \n 21,730\n \n | \n \n 18,476 \n | \n \n 613 \n | \n \n 19,089 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n 13\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 10\n \n | \n \n \n 648\n \n | \n \n \n 658\n \n | \n \n 2 \n | \n \n 522 \n | \n \n 524 \n | \n
| \n Other liabilities \n | \n \n 31 \n | \n \n \n 149\n \n | \n \n \n 32\n \n | \n \n \n 181\n \n | \n \n 144 \n | \n \n 26 \n | \n \n 170 \n | \n
| \n Accruals \n | \n \n \n | \n \n \n 7\n \n | \n \n \n -\n \n | \n \n \n 7\n \n | \n \n 8 \n | \n \n - \n | \n \n 8 \n | \n
| \n Provisions \n | \n \n 32 \n | \n \n \n 52\n \n | \n \n \n 28\n \n | \n \n \n 80\n \n | \n \n 19 \n | \n \n 36 \n | \n \n 55 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 3\n \n | \n \n \n 249\n \n | \n \n \n 252\n \n | \n \n 3 \n | \n \n 249 \n | \n \n 252 \n | \n
\n 41. Transfer of financial assets\n
\nIn the ordinary course of business, the Group enters into transactions that result in the transfer of financial assets of loans and advances to customers. In accordance with note 1.5 (vii), the transferred financial assets continue to be either recognised in their entirety or to the extent of the Group\u2019s continuing involvement, or are derecognised in their entirety.
\nThe Group transfers financial assets primarily through the following transactions:
\n\n (a) Transferred financial assets that are not derecognised in their entirety\n
\n\n Sale and repurchase agreements \n
\nSale and repurchase agreements are transactions in which the Group sells a security and simultaneously agrees to repurchase it (or an asset that is substantially the same) at a fixed price on a future date. The Group continues to recognise the securities in their entirety in the statement of financial position as loans and advances to customers (note 22) and debt securities (note 19) because it retains substantially all the risks and rewards of ownership. The cash consideration received is recognised as a financial asset and a financial liability is recognised for the obligation to pay the repurchase price. As the Group sells the contractual rights to the cash flows of the securities it does not have the ability to use or pledge as collateral the transferred assets during the term of the arrangement. The carrying value of repurchase agreements at 31 December 2022 is \u20ac611m (31 December 2021: \u20ac347m).
\n\n Securitisations\n
\nThe Group sells loans and advances to customers to SEs that in turn issue notes to investors which are collateralised by the purchased assets. For the purpose of disclosure in this note, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the transfer of financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in the form of the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes.
\nAlthough the Group does not own more than half of the voting power of the Fastnet entities, it has the power to control the relevant activities of the SE and the ability to affect the variable returns of the investee and hence these SEs are consolidated. In these cases, the consideration received from the investors in the notes in the form of cash is recognised as a financial asset and a corresponding financial liability is recognised.
\nWhen the Group transfers assets as part of the securitisation transactions it does not have the ability to use or pledge as collateral the transferred assets during the term of the arrangement.
\nThe table below sets out an overview of carrying amounts and fair values related to transferred financial assets that are not derecognised in their entirety and associated liabilities.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Sale and repurchase agreements\n \n | \n \n \n Securitisations\n \n | \n \n \n Sale and repurchase agreements\n \n | \n \n \n Securitisations\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Carrying amount of assets\n \n | \n \n \n 678\n \n | \n \n \n -\n \n | \n \n 724 \n | \n \n 153 \n | \n
| \n \n Carrying amount of associated liabilities\n \n | \n \n \n 612\n \n | \n \n \n -\n \n | \n \n 745 \n | \n \n 172 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Liabilities that have recourse only to the transferred financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Fair value of assets \n | \n \n \n 654\n \n | \n \n \n -\n \n | \n \n 732 \n | \n \n 150 \n | \n
| \n Fair value of associated liabilities \n | \n \n \n 612\n \n | \n \n \n -\n \n | \n \n 745 \n | \n \n 172 \n | \n
| \n \n Net position\n \n | \n \n \n 42\n \n | \n \n \n -\n \n | \n \n (13) \n | \n \n (22) \n | \n
\n (b) Transferred financial assets that are derecognised in their entirety\n
\nThe Group has not transferred any financial assets that were derecognised in their entirety where the Group has continuing involvement in a transferred asset.
\n\n 42. Offsetting financial assets and financial liabilities\n
\nIn accordance with IAS 32, Financial Instruments: Presentation, the Group reports financial assets and financial liabilities on a net basis on the statement of financial position only if there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is disclosed in the table below in the \u201cEffect of offsetting on the statement of financial position\u201d section.
\nThe gross amounts of derivative assets and liabilities and their net amounts disclosed in the below tables have been measured in the statement of financial position at fair value.
\nThe tables below also disclose (in the \u201cRelated amounts not offset in the statement of financial position\u201d section) the impact of master netting agreements and other similar agreements on all derivative financial instruments and similar financial instruments that are subject to master netting agreements or similar agreements, but do not qualify for netting on the balance sheet. The similar financial agreements include securitisations and sale and repurchase agreements. The similar agreements include global master repurchase agreements. It highlights the amounts that could be potentially offset on the statement of financial position and those amounts covered by collateral placed with or by counterparties to these trades.
\nThe tables highlight the amounts that have been offset on the statement of financial position and those amounts covered by collateral placed with or by counterparties to these trades. It does not highlight where right of offset is available in the event of a default, as allowed under ISDA master agreements.
\nThe tables below also provide analysis of derivative financial assets and liabilities subject to offsetting, enforceable master netting agreements and similar agreements:
\n| \n \n | \n \n \n Effect of offsetting on the statement of financial position\n \n | \n \n \n Related amounts not offset in the statement of financial position\n \n | \n ||||
| \n \n 31 December 2022\n \n | \n \n \n Gross financial assets/\n \n\n (liabilities) recognised \n \n | \n \n \n Gross financial (liabilities)/\n \n\n assets offset\n \n | \n \n \n Net amounts reported on the statement of financial position\n \n | \n \n \n Financial instruments \n \n | \n \n \n Cash collateral\n \n | \n \n \n Net amount\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instruments \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Total \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instruments \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n
| \n \n Total\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n
| \n \n | \n \n \n Effect of offsetting on the statement of financial position\n \n | \n \n \n Related amounts not offset in the statement of financial position\n \n | \n ||||
| \n \n 31 December 2021\n \n | \n \n \n Gross financial assets/\n \n\n (liabilities) recognised \n \n | \n \n \n Gross financial (liabilities)/\n \n\n assets offset\n \n | \n \n \n Net amounts reported on the statement of financial position\n \n | \n \n \n Financial instruments \n \n | \n \n \n Cash collateral\n \n | \n \n \n Net amount\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Assets \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instruments \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n
| \n Total \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Total \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n 43. Commitments and Contingencies \n
\nThe table below gives the contractual amounts of irrevocable credit commitments. Even though these obligations are not recognised in statement of financial position they do involve credit risk. The maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.
\n \n| \n \n Credit commitments\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Guarantees and irrevocable letters of credit\n \n | \n \n \n 2 \n \n | \n \n 2 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Commitments to extend credit \n | \n \n \n | \n \n \n | \n
| \n - less than 1 year \n | \n \n \n 1,284 \n \n | \n \n 1,113 \n | \n
| \n - 1 year and over \n | \n \n \n 56 \n \n | \n \n 66 \n | \n
| \n \n Total commitments to extend credit\n \n | \n \n \n 1,340 \n \n | \n \n 1,179 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Total credit commitments\n \n | \n \n \n 1,342 \n \n | \n \n 1,181 \n | \n
\n Other contingencies\n
\nThe Group, like all other banks, is subject to litigation in the normal course of its business. Based on legal advice, other than matters referred to in note 32, the Group does not believe that any such litigation will have a material effect on its income statement or SOFP.
\nA number of different statutory and regulatory bodies, including the CBI, commenced investigations into a series of transactions involving deposits placed by Irish Life Assurance plc with Irish Bank Resolution Corporation (formerly Anglo Irish Bank) (on 31 March 2008, 26 September 2008, 29 September 2008 and 30 September 2008). While these investigations commenced a number of years ago, they were put on hold pending the determination of criminal proceedings against a number of individuals in respect of the same transactions. The Bank understands that those criminal proceedings have concluded and so the Bank is waiting to see if the investigations, which, from the Bank\u2019s perspective, have been dormant for some time will now be re-commenced.
\nAs part of the agreement in August 2011 to dispose of Irish Life International Limited, the Group provided certain indemnities and warranties to the purchaser under a number of identified scenarios.
\nLike other banks, in the normal course of business, customers bring complaints to the Financial Services and Pensions Ombudsman (FSPO) in relation to a variety of issues. The Bank considers the applicability of FSPO decisions and findings to other customers in similar circumstances.\u00a0 The Bank provides for these cases, where based on legal advice, the directors believe that it is more likely than not that an outflow of resources embodying economic benefits, will be required to settle a present obligation arising from a past event. The Bank has recently commenced appeals against two FSPO decisions in tracker mortgage related complaints to the High Court and, while the timing and outcome of these appeals is uncertain, based on legal advice received, no provision has been made for these cases. However, if the Bank is unsuccessful in these appeals the impact on the financial statements could be material.
\nECL held against commitments are reported under loans and advances to customers.
\nIn June 2021 PTSB committed to participate in the First Home Scheme along with the State and AIB and Bank of Ireland. PTSB has engaged with these parties over the last year to determine the structure of the Scheme as well as the mechanism for funding the operations of the scheme. The Group committed \u20ac54m in funding to the Joint venture. \u20ac10m was recognised in the Statement of Financial Position in respect of the scheme as at 31 December 2022.
\n \n \n \n\n 44. Related parties\n
\n \nRelated parties include individuals and entities that can exercise significant influence on operational and financial policies of the Group.
\n \nThe Group has a related party relationship with its Directors, Senior Executives, the Group\u2019s pension schemes, the Minister for Finance and with the Irish Government and Irish Government related entities on the basis that the Irish Government is deemed to have control over the Group.
\n \n\n (a) Directors\u2019 and Secretary\u2019s interest \n
\nThe interests of the Directors and the Company Secretary, including interests of their close family members in the share capital of the Company are as follows:
\n| \n \n Number of beneficial ordinary shares held \n \n | \n \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n Ordinary\n \n | \n \n \n Ordinary\n \n | \n
| \n \n | \n \n \n Position\n \n | \n \n \n shares\n \n | \n \n \n shares\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Robert Elliott \n | \n \n Chairman \n | \n \n \n 16,500 \n \n | \n \n 16,500 \n | \n
| \n Eamonn Crowley \n | \n \n Chief Executive Officer \n | \n \n \n 50,000 \n \n | \n \n 50,000 \n | \n
| \n Nicola O\u2019Brien (appointed 04 August 2022) \n | \n \n Chief Financial Officer \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Michael Frawley (retired 31 March 2022) \n | \n \n Chief Risk Officer \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Conor Ryan \n | \n \n Company Secretary \n | \n \n \n 10 \n \n | \n \n 10 \n | \n
| \n Donal Courtney \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Ronan O\u2019Neill \n | \n \n Non-Executive Director \n | \n \n \n 4 \n \n | \n \n 4 \n | \n
| \n Andrew Power \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Ken Slattery \n | \n \n Non-Executive Director \n | \n \n \n 10,000 \n \n | \n \n 10,000 \n | \n
| \n Ruth Wandh\u00f6fer \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Marian Corcoran \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Paul Doddrell \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Celine Fitzgerald \n | \n \n Non-Executive Director \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Anne Bradley \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
Conor Ryan, as trustee of the employee benefit trust set up under the terms of the long-term incentive plan, has non-beneficial interest in 4,580 shares held in the plan (31 December 2021: 4,580).
\nThere were no transactions in the above Directors\u2019 and Secretary\u2019s interests between 31 December 2022 and 28 February 2023.
\nDetails of the Directors\u2019 remuneration is included in the Directors\u2019 Remuneration Report on pages 142 to 146.
\n \n\n (b) Transactions with key management personnel \n
\nKey management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group. Key management personnel include Non-Executive Directors, Executive Directors and members of the Executive Committee (ExCo). The Executive Directors and members of the ExCo are listed below:
\n| \n \n Members of the ExCo at 31 December 2022\n \n | \n \n \n | \n
| \n Eamonn Crowley \n | \n \n Chief Executive \n | \n
| \n Nicola O\u2019Brien \n | \n \n Chief Financial Officer \n | \n
| \n Patrick Farrell \n | \n \n Retail Sales Director \n | \n
| \n Tom Hayes \n | \n \n Chief Technology Officer \n | \n
| \n Ger Mitchell \n | \n \n CHRO and Corporate Development Director \n | \n
| \n Andrew Walsh \n | \n \n Chief Legal Officer \n | \n
| \n Peter Vance \n | \n \n Chief Operations Officer \n | \n
| \n David Curtis \n | \n \n Interim Chief Risk Officer \n | \n
During the year ended 31 December 2022, the following key management personnel changes occurred;
\nNicola O\u2019Brien was appointed as Chief Financial Officer following the retirement of Declan Norgrove as Interim Chief Financial Officer. David Curtis was appointed Interim Chief Risk Officer following the retirement of Michael Frawley as Chief Risk Officer.
\nDeclan Norgrove, Breege Timoney and Shane O\u2019Sullivan retired as members of the ExCo during 2021. Their details are included in the comparative figures for 2021.
\nNon-Executive Directors are compensated by way of fees. In certain circumstances, expenses incurred by Non-Executive Directors during the normal course of business are paid by the Group and are included in taxable benefits. The compensation of Executive Directors and members of the ExCo comprises salary and other benefits together with pension benefits. Previously they also participated in the Group\u2019s profit sharing, share option schemes and long-term incentive plans. No awards have been issued under these schemes and plans since 2008.
\n \n\n Number of key management personnel as at year end is as follows:\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Non-Executive Directors \n | \n \n \n 10 \n \n | \n \n 10 \n | \n
| \n Executive Directors and Senior Management \n | \n \n \n 8 \n \n | \n \n 8 \n | \n
| \n \n | \n \n \n 18 \n \n | \n \n 18 \n | \n
\n (b) (i) Total compensation to Executive and Non-Executive Directors is as follows:\n
\n| \n \n | \n \n \n Year ended \n \n | \n \n \n Year ended\n \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Fees \n | \n \n \n 1,044 \n \n | \n \n 946 \n | \n
| \n Taxable benefits \n | \n \n \n 2 \n \n | \n \n 2 \n | \n
| \n Salary and other benefits \n | \n \n \n 742 \n \n | \n \n 856 \n | \n
| \n Pension benefits \n | \n \n \n | \n \n \n | \n
| \n - defined contribution \n | \n \n \n 106 \n \n | \n \n 122 \n | \n
| \n \n Total\n \n | \n \n \n 1,894 \n \n | \n \n 1,926 \n | \n
Total compensation to other key management personnel is as follows:
\n| \n \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Taxable benefits \n | \n \n \n 5 \n \n | \n \n 2 \n | \n
| \n Salary and other benefits \n | \n \n \n 2,395 \n \n | \n \n 2,221 \n | \n
| \n Pension benefits \n | \n \n \n | \n \n \n | \n
| \n - defined contribution \n | \n \n \n 332 \n \n | \n \n 282 \n | \n
| \n CFO Fees \n | \n \n - \n | \n \n 359 \n | \n
| \n \n Total\n \n | \n \n \n 2,732 \n \n | \n \n 2,864 \n | \n
There were no connected persons to key management personnel employed by the group during 2022 or 2021,
\n\n (b) (ii) Balances and transactions with key management personnel:\n
\nIn the normal course of its business, the Group had loan balances and transactions with key management personnel and their connected persons. The loans are granted on normal commercial terms and conditions with the exception of certain home loans where Executive Directors and Senior Managers may avail of subsidised loans on the same terms as other eligible management of the Group. All of the loans in the scope of the related party guidelines as outlined under the Companies Act 2014, the Central Bank Related Party lending code 2013 and IAS 24 Related party disclosures are secured, and all interest and principal due at the statement of financial position date has been repaid on schedule and therefore, no provision for loan impairment is required. Total outstanding balances of loans, credit cards, overdrafts and deposits are as follows:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Balances\n \n | \n \n \n | \n \n \n | \n
| \n Loans \n | \n \n \n 1,059 \n \n | \n \n 1,948 \n | \n
| \n Unsecured credit card balances and overdrafts \n | \n \n \n 1 \n \n | \n \n - \n | \n
| \n Deposits \n | \n \n \n 3,354 \n \n | \n \n 4,663 \n | \n
| \n \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Transactions during the year\n \n | \n \n \n | \n \n \n | \n
| \n Loan advances \n | \n \n \n - \n \n | \n \n 660 \n | \n
| \n Loan repayments \n | \n \n \n 892 \n \n | \n \n 327 \n | \n
| \n Interest received on loans \n | \n \n \n 41 \n \n | \n \n 43 \n | \n
| \n Interest paid on deposits \n | \n \n \n (1) \n \n | \n \n (1) \n | \n
\n Loans to Directors\n
\n| \n \n 31 December 2022\n \n | \n \n \n Balance as at 1 Jan\n \n | \n \n \n Advances during year\n \n | \n \n \n Principal repaid\n \n | \n \n \n Balance\n \n\n as at \n \n\n 31 Dec\n \n | \n \n \n Interest \n \n\n paid\n \n | \n \n \n Maximum balance\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Ronan O\u2019Neill*\n \n | \n \n \n 652\n \n | \n \n \n - \n \n | \n \n \n 12\n \n | \n \n \n 640\n \n | \n \n \n 16\n \n | \n \n \n 652\n \n | \n
| \n \n | \n \n \n 652 \n \n | \n \n \n - \n \n | \n \n \n 12\n \n | \n \n \n 640\n \n | \n \n \n 16\n \n | \n \n \n 652\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Balance as at 1 Jan\n \n | \n \n \n Advances \n \n\n during \n \n\n year\n \n | \n \n \n Principal repaid\n \n | \n \n \n Balance \n \n\n as at \n \n\n 31 Dec\n \n | \n \n \n Interest \n \n\n paid\n \n | \n \n \n Maximum balance\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Marian Corcoran \n | \n \n 248 \n | \n \n - \n | \n \n 248 \n | \n \n - \n | \n \n 2 \n | \n \n 248 \n | \n
| \n Ronan O\u2019Neill* \n | \n \n - \n | \n \n 660 \n | \n \n 8 \n | \n \n 652 \n | \n \n 11 \n | \n \n 660 \n | \n
| \n \n | \n \n 248 \n | \n \n 660 \n | \n \n 256 \n | \n \n 652 \n | \n \n 13 \n | \n \n 908 \n | \n
* Represents a loan for a person connected with this Director in accordance with section 307(3) of the Companies Act 2014.
\n \n\n (c) Irish Government and Irish Government related entities\n
\nThe Minister for Finance continues to be the majority shareholder of the Group (and the ultimate controlling party per IAS 24). The Irish Government is recognised as a related party as the Government is deemed to have control over the Group as defined by IAS 24. The Group has applied the amended IAS 24 which exempts an entity from the related party disclosure requirements in respect of the Government and Government related entities unless transactions are individually or collectively significant. In the normal course of business, the Group has entered into transactions with the Government and Government related entities involving deposits and senior debt.
\nThe following are transactions and balances between the Group and the Government and Government related entities that are collectively significant:
\nThe Government also has a controlling interest in Allied Irish Bank plc including EBS Limited. Due to the Group\u2019s related party relationship with the Irish Government as described above, balances between these financial institutions and the Group are considered related party transactions in accordance with IAS 24. There are no balances between these entities as at 31 December 2022 or 31 December 2021. As at 31 December 2022, the Irish Government no longer has significant influence over Bank of Ireland.
\n\n (d) Other related party transactions\n
\n\n 45. Sale of loans and advances to customers\n
\n\n Project Glenbeigh IV \n
\nOn 21 September 2022, the Group agreed the sale of a predominately performing buy-to-let loan portfolio (\u2019Glenbeigh IV\u2019). The portfolio gross balance on the Statement of Financial Position was \u20ac767m with a net book value of \u20ac703m.
\nIn line with IFRS 9, the assets have been derecognised from the Statement of Financial Position.
\nAs a result of the transaction, an impairment write-back on the sale of the portfolio of \u20ac8m was recorded through the impairment line of the Income Statement. On 17 November 2022, the deal completed with the receipt of the sales proceeds.
\n\n Project Glenbeigh III\n
\nOn 9 November 2021, the Group agreed the sale of a predominately NPL portfolio (\u2018Glenbeigh III\u2019). The portfolio gross balance on the Statement of Financial Position was \u20ac390m with a net book value of \u20ac305m.
\nIn line with IFRS 9, the assets were derecognised from the 2021 Statement of Financial Position and a receivable of \u20ac310m was recorded for the cash consideration. As a result of the transaction, an impairment write-back on the sale of the portfolio of \u20ac11m was recorded through the 2021 Income Statement. On 21 February 2022, the deal completed with the receipt of the sales proceeds.
\n\n 46. Principal subsidiary undertakings and interest in subsidiaries and structured entities\n
\nUnder IFRS 10 \u2018Consolidated financial statements\u2019, the Group has control over an entity when it has the power to direct relevant activities that significantly affect the investee return, it is exposed or has rights to variable returns from its involvement in the investee and has the ability to affect those returns through its powers over the entity.
\nA subsidiary is considered material if the value of the consolidated total assets at the end of the financial year of the subsidiary and the entities it controls (if any) is more than 1% of the total assets of the Group.
\nThe key subsidiary of the parent meeting the criteria outlined above is:
\n| \n \n | \n \n \n Nature of\n \n | \n \n \n Incorporated\n \n | \n \n \n % of ordinary\n \n | \n
| \n \n Name and registered office\n \n | \n \n \n business\n \n | \n \n \n in\n \n | \n \n \n shares held\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Held directly by the company:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Permanent TSB plc \n56-59 St. Stephen\u2019s Green, Dublin 2 \n | \n \n Retail banking \n | \n \n Ireland \n | \n \n 100 \n | \n
In presenting details of the principal subsidiary undertakings, the exemption permitted by section 315 (a) (i) of the Companies Act 2014 in relation to disclosing related undertaking net assets or profit or loss, has been availed of, and the Company will annex a full listing of Group undertakings to its annual return to the Companies Registration Office.
\nThe reporting date for each of the Group\u2019s principal subsidiary entities is 31 December.
\nThe principal country of operation of each company is the country in which it is incorporated.
\nThe registered office of Permanent TSB Group Holdings plc is 56-59 St. Stephen\u2019s Green, Dublin 2.
\n \n \n\n (A) Company\u2019s interest in subsidiary undertakings\n
\nThe Company is the ultimate holding company of the Group while PTSB is a 100% subsidiary of the Company. The investment in PTSB is carried at the recoverable amount in the holding company\u2019s statement of financial position.
\nAt 31 December 2022 the investment amounted to \u20ac2,346m (31 December 2021: \u20ac888m). The Group carried out an impairment assessment using a combination of internal group models and externally available data to inform their view of the recoverable amount of investment. As the value in use was higher than the carrying value, in line with IAS 36, no impairment charge was taken (31 December 2021: impairment charge \u20ac66m). A write back of \u20ac697m was taken as the value in use calculation indicated that there was sufficient evidence for management to reverse the impairment losses taken in prior years. See company SOFP on page 263 for further details.
\n\n (B) Structured entities (SEs)\n
\nA structured entity is an entity in which voting or similar rights are not the dominant factor in deciding control. SEs are generally created to achieve a narrow and well defined objective with restrictions around their on-going activities. Depending on the Group\u2019s power to direct the relevant activities of the investee and its exposure or rights to variable returns from its involvement in the investee and the ability to use its power over the investee to affect the amount of the investor\u2019s return, it may consolidate the entity.
\n\n Control and voting rights\n
\nThe Directors of the individual SEs are independent of the Group and neither the Group nor any of its subsidiaries have voting rights in the share capital of these entities. The Group initiated the setup of these SEs and, as architect dictated the terms relating to the operation of these SEs. The Group, as administrator, provides services to the individual SEs. The Group, as administrator, has power to:
\nThe key activities performed by the Group\u2019s subsidiaries as administrator is:
\nThese two items highlight the power the Group has to direct the relevant activities of these entities that significantly affect the investee returns and the ability to use its power to affect variable returns of investors.
\nThe Group provides funding to each of these vehicles by way of a subordinated loan and has an entitlement to deferred consideration.
\nThrough the subordinated loan and the deferred consideration the Group is exposed to the variable returns of the SEs.
\nThe Group currently has six SEs in issue in the ROI the details of which are outlined below. During 2022, Fastnet Securities 12 DAC which collapsed in 2021 went into liquidation, Fastnet Securities 13 DAC was collapsed and subsequently went into liquidation and Fastnet Securities 18 DAC was set up:
\n| \n \n | \n \n \n Sub loan provided\n \n | \n
| \n \n | \n \n \n | \n
| \n \n SEs setup with ROI Residential Mortgages\n \n | \n \n \n | \n
| \n - Fastnet Securities 11 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 14 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 15 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 16 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 17 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 18 DAC \n | \n \n \u221a \n | \n
Although the Group does not own more than half of the voting power, it has the power to control the relevant activities of the SE and the ability to affect the variable returns of the investee and hence these SEs are consolidated. In these cases, the consideration received from the investors in the notes in the form of cash is recognised as a financial asset and a corresponding financial liability is recognised.
\nAt 31 December 2022, restricted cash of \u20ac405m (31 December 2021: \u20ac329m) relates to cash held by the Group\u2019s securitisation.
\n \n \n\n 47. Reporting currency and exchange rates\n
\nThe consolidated financial statements are presented in millions of Euro.
\nThe following table shows the closing and average rates used by the Group for the current year-end and prior year-end
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \u20ac / \u00a3 exchange rate \n | \n \n \n | \n \n \n | \n
| \n Closing \n | \n \n \n 0.8869\n \n | \n \n 0.8403 \n | \n
| \n Average \n | \n \n \n 0.8549\n \n | \n \n 0.8583 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \u20ac / US$ exchange rate \n | \n \n \n | \n \n \n | \n
| \n Closing \n | \n \n \n 1.0666\n \n | \n \n 1.1326 \n | \n
| \n Average \n | \n \n \n 1.0500\n \n | \n \n 1.1814 \n | \n
\n 48. Events after the reporting period \n
\nSubsequent to the statement of financial position date the Group paid \u20ac41m in relation to the equity cash component amount and the Branch Properties were transferred from Ulster Bank for consideration of \u20ac9m in January 2023. The SME assets were acquired in February 2022 and cash of \u20ac162m was paid. See note 3 for further detail.
\nNo other items, transactions or events that would materially impact the consolidated financial statements and require adjustment or disclosure to these consolidated financial statements have occurred between the reporting date of 31 December 2022 and the date of the approval of these financial statements by the Board of Directors of 28 February 2023.
\n \n\n 1.1 Corporate information \n
\nPermanent TSB Group Holdings plc (the Company) is a holding company domiciled in Ireland (registration number 474438). Its registered office is situated at 56 - 59, St. Stephen\u2019s Green, Dublin 2, Ireland. The Company\u2019s shares are listed on the main market of the Irish and London Stock Exchanges.
\nThe consolidated financial statements include the financial statements of the Company and its subsidiaries (together referred to as the Group) and are prepared up to the end of the financial year, 31 December 2022.
\nPermanent TSB plc (PTSB), a 100% owned subsidiary of the Company, is the main trading entity of the Group which is involved in retail banking.
\n \nThese consolidated financial statements for the year ended 31 December 2022 were approved by the Board and authorised for issue by the Directors on 28 February 2023.
\n \nThe accounting policies applied in the preparation of the financial statements for the year ended 31 December 2022 are set out below.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182305": { "value": "Permanent TSB Group Holdings plc", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182306": { "value": "Permanent TSB Group Holdings plc", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182307": { "value": "plc", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182308": { "value": "Ireland", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182309": { "value": "Ireland", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182310": { "value": "Ireland", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182311": { "value": "56 - 59, St. Stephen\u2019s Green, Dublin 2, Ireland", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182314": { "value": "Permanent TSB plc (PTSB), a 100% owned subsidiary of the Company, is the main trading entity of the Group which is involved in retail banking.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182315": { "value": "\nThese consolidated financial statements for the year ended 31 December 2022 were approved by the Board and authorised for issue by the Directors on 28 February 2023.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182318": { "value": "\n\n 1.2 Basis of preparation\n
\n \n\n Statement of compliance\n
\nThese consolidated financial statements comprise of the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows, the Company SOFP, the Company statement of changes in equity, the Company statement of cash flows and the notes to the consolidated and the Company financial statements have been prepared in accordance with IFRS and interpretations issued by the IFR Interpretations Committee (IFRIC) as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and EU (Credit Institutions: Financial Statements) Regulations 2015.
\nThe accounting policies have been consistently applied by the Group entities and are consistent with the previous year.
\nThe financial statements include the information that is described as being an integral part of the audited financial statements contained in the Directors\u2019 Report on Remuneration and in Risk Management. Certain tables and related information in the notes to the financial statements, included in boxes and clearly identified as unaudited do not form part of the audited financial statements.
\nThe individual financial statements of the holding company have also been prepared in accordance with IFRS and interpretations issued by IFRIC as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS. In accordance with section 304(2) of the Companies Act 2014, the Company is availing of the exemption from presenting its individual income statement and related notes to the AGM and from filing it with the Registrar of Companies. See note 46 for further information.
\n \nThe Company\u2019s profit after tax for the year ended 31 December 2022 was \u20ac708m (31 December 2021: loss \u20ac56m). The Company issued \u20ac250,000,000 Additional Tier 1 securities on 26 October 2022. For further information, see the Company financial statements on pages 263 to 265.
\n\n Basis of measurement\n
\nThe consolidated and Company financial statements have been prepared on the historical cost basis as modified to include the fair valuation of certain financial instruments classified as HTC&S, equity securities classified as FVOCI, derivative financial instruments, assets classified as held for sale, financial assets and liabilities designated as hedged items in qualifying fair value hedge relationships, and land and buildings accounted for using the revaluation model.
\n \n\n Functional and presentation currency\n
\nThese financial statements are presented in Euro, which is the Company\u2019s functional currency. Except where otherwise indicated, financial information presented in Euro has been rounded to the nearest million (m).
\n \n\n Use of estimates and judgements\n
\nThe preparation of these consolidated financial statements, in conformity with IFRS, requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and related disclosures.
\nWhile the actual results may differ from the estimates made, the Directors believe that they are reasonable in the current circumstances based on the best available information at the date of the approval of these consolidated financial statements.
\n \nAdditional information about key assumptions and judgements are disclosed in the relevant notes for the following areas including significant estimation uncertainty:
\nThe estimates and assumptions are reviewed on an on-going basis and where necessary are revised to reflect current conditions. The principal estimates and assumptions made by Management relate to impairment of loans and advances to customers, deferred taxation, impairment of investment in subsidiary undertakings and financial instruments. Judgements made by Management that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 2.
\n \n\n 1.3 Going Concern\n
\nIn considering Management\u2019s assessment of the Group\u2019s and Company\u2019s ability to continue as a going concern, Management considered the principal risks and uncertainties as they might pertain to the going concern assumption, particularly the liquidity, profitability, and capital position. Management considered these items over the course of the year to date and into 2023, their current status, and future projections.
\nIn doing so, Management considered each risk in turn, and the likelihood of the risk precipitating in the going concern assumptions becoming invalid over the period of assessment, being twelve months from the date of the approval of the financial statements for the year ended 31 December 2022. Management considered realistic alternatives, including downside scenarios applied by the Group and Company to test assumptions and potential outcomes.
\n\n Assessment Basis\n
\nThe time that the Directors and Management have considered in evaluating the appropriateness of the going concern basis in preparing the Company consolidated financial statements for the twelve months ended 31 December 2022 is a period of twelve months from the date of approval of these financial statements (28 February 2024).
\nIn making this assessment, the Directors and Management have considered the Group\u2019s and Company\u2019s 2023-2027 MTP, profitability forecasts, funding and capital resource projections. These projections include both base and stress scenarios applied by the Group and Company. Together with a number of factors such as the Irish Economy, Government fiscal policies, the availability of collateral to access funding through third parties and the euro-system, and on-going changes in the regulatory environment.
\n\n Economic and political environment \n
\nThe Irish economy continues to perform strongly with a rapid recovery after the pandemic. Growth is continued to be forecast albeit at a lower rate. Consumer price inflation has risen due to increases in energy prices along with price pressures for other goods and services. To manage inflation, the ECB raised interest rates on a number of occasions during 2022 with further rate increases expected in 2023.
\nFurther to this, the Group and Company continues to be materially reliant on Government and EU policy, and materially impacted by geopolitical events; such as the on-going war in Ukraine, the continuing uncertainty around the Northern Irish Protocol and the introduction of the global minimum corporation tax rate to a sector of the Irish market.
\nThe Group and Company reassessed the financial impacts of the economic and political environment through the Group\u2019s and Company\u2019s integrated planning process and believes it is reasonably well positioned to withstand any volatility from economic events, particularly given the Group\u2019s and Company\u2019s acquisition of certain part of the Ulster Bank business in 2022 and continued management of its financial position through NPL reduction and capital management.
\n\n Funding & Liquidity \n
\nThe Group and Company continued to have sufficient liquidity throughout 2022, and continues to undertake initiatives to improve its liquidity position in the areas of deposits, collateral optimisation, and wholesale markets activity. The Directors and Management have also considered forecasts of the liquidity position over the going concern period, under a range of stress scenarios.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182321": { "value": "\n\n Statement of compliance\n
\nThese consolidated financial statements comprise of the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows, the Company SOFP, the Company statement of changes in equity, the Company statement of cash flows and the notes to the consolidated and the Company financial statements have been prepared in accordance with IFRS and interpretations issued by the IFR Interpretations Committee (IFRIC) as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and EU (Credit Institutions: Financial Statements) Regulations 2015.
\nThe accounting policies have been consistently applied by the Group entities and are consistent with the previous year.
\nThe financial statements include the information that is described as being an integral part of the audited financial statements contained in the Directors\u2019 Report on Remuneration and in Risk Management. Certain tables and related information in the notes to the financial statements, included in boxes and clearly identified as unaudited do not form part of the audited financial statements.
\nThe individual financial statements of the holding company have also been prepared in accordance with IFRS and interpretations issued by IFRIC as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS. In accordance with section 304(2) of the Companies Act 2014, the Company is availing of the exemption from presenting its individual income statement and related notes to the AGM and from filing it with the Registrar of Companies. See note 46 for further information.
\n ", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182332": { "value": "\n\n Functional and presentation currency\n
\nThese financial statements are presented in Euro, which is the Company\u2019s functional currency. Except where otherwise indicated, financial information presented in Euro has been rounded to the nearest million (m).
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182369": { "value": "\n\n 1.3 Going Concern\n
\nIn considering Management\u2019s assessment of the Group\u2019s and Company\u2019s ability to continue as a going concern, Management considered the principal risks and uncertainties as they might pertain to the going concern assumption, particularly the liquidity, profitability, and capital position. Management considered these items over the course of the year to date and into 2023, their current status, and future projections.
\nIn doing so, Management considered each risk in turn, and the likelihood of the risk precipitating in the going concern assumptions becoming invalid over the period of assessment, being twelve months from the date of the approval of the financial statements for the year ended 31 December 2022. Management considered realistic alternatives, including downside scenarios applied by the Group and Company to test assumptions and potential outcomes.
\n\n Assessment Basis\n
\nThe time that the Directors and Management have considered in evaluating the appropriateness of the going concern basis in preparing the Company consolidated financial statements for the twelve months ended 31 December 2022 is a period of twelve months from the date of approval of these financial statements (28 February 2024).
\nIn making this assessment, the Directors and Management have considered the Group\u2019s and Company\u2019s 2023-2027 MTP, profitability forecasts, funding and capital resource projections. These projections include both base and stress scenarios applied by the Group and Company. Together with a number of factors such as the Irish Economy, Government fiscal policies, the availability of collateral to access funding through third parties and the euro-system, and on-going changes in the regulatory environment.
\n\n Economic and political environment \n
\nThe Irish economy continues to perform strongly with a rapid recovery after the pandemic. Growth is continued to be forecast albeit at a lower rate. Consumer price inflation has risen due to increases in energy prices along with price pressures for other goods and services. To manage inflation, the ECB raised interest rates on a number of occasions during 2022 with further rate increases expected in 2023.
\nFurther to this, the Group and Company continues to be materially reliant on Government and EU policy, and materially impacted by geopolitical events; such as the on-going war in Ukraine, the continuing uncertainty around the Northern Irish Protocol and the introduction of the global minimum corporation tax rate to a sector of the Irish market.
\nThe Group and Company reassessed the financial impacts of the economic and political environment through the Group\u2019s and Company\u2019s integrated planning process and believes it is reasonably well positioned to withstand any volatility from economic events, particularly given the Group\u2019s and Company\u2019s acquisition of certain part of the Ulster Bank business in 2022 and continued management of its financial position through NPL reduction and capital management.
\n\n Funding & Liquidity \n
\nThe Group and Company continued to have sufficient liquidity throughout 2022, and continues to undertake initiatives to improve its liquidity position in the areas of deposits, collateral optimisation, and wholesale markets activity. The Directors and Management have also considered forecasts of the liquidity position over the going concern period, under a range of stress scenarios.
\n \nThe Group and Company continues to hold a significant liquidity buffer at 31 December 2022 that can be easily and readily monetised in a period of stress. The Directors and Management are aware that the Group\u2019s and Company\u2019s ability to effectively utilise its contingent counterbalancing capacity is dependent on the underlying collateral remaining eligible. However, the Directors and Management are satisfied, based on a review of funding plans, interaction with wholesale markets and deposit trends that the required liquidity and funding will be available to the Group and Company during the period of assessment.
\nThere are no material uncertainties, which would cast significant doubt on the ability of the Group and Company to continue as a going concern basis over the period of assessment.
\n\n Profitability and Capital Adequacy\n
\nThe Group and Company made a profit for the year ended 31 December 2022. Directors and Management have reviewed the MTP and based on this, the near-term macro-economic conditions of the country and the resolution of legacy issues, the Directors and Management are satisfied that the Group and Company are well positioned to continue to deliver profits in future years.
\nThe Directors and Management have also considered the Group\u2019s and Company\u2019s forecast capital position, including a deterioration in economic conditions due to high inflation and disruptions to the global supply chain. Based on the above considerations, the Directors and Management have assessed and concluded that this does not give rise to a material uncertainty, which would cast significant doubt on the ability of the Group and Company to continue on a going concern basis for the period of assessment.
\n\n Conclusion\n
\nAs required by IFRS as adopted by the EU, the Directors and Management have considered the principal risks and uncertainties facing the Group and Company as outlined above. Based on the latest and projected financial performance and position, and the options available to the Group and Company, the Directors have concluded that the Group and Company have no material uncertainties, which would cast significant doubt on the going concern assumption and have considered it appropriate to prepare the financial statements on a going concern basis.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182410": { "value": "\n\n 1.5 Summary of significant accounting policies\n
\n \n\n (i) Basis of consolidation\n
\n \n\n Subsidiaries\n
\nSubsidiaries are those entities (including special purpose entities) controlled by the Group. Control exists when the Group has:
\nThe financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Financial statements of subsidiaries are prepared up to the financial position date. Intercompany transaction balances and unrealised gains/losses on transactions between the Group\u2019s companies are eliminated on consolidation.
\nThe Company carries its investment in its subsidiary undertaking at cost in the Company financial statements and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment\u2019s fair value or its VIU. If impairment occurs, this loss is recognised in the income statement.
\nDetails of principal subsidiaries are included in note 46.
\n \n \n \n \n\n Interest in associated undertakings\n
\nInterest in associated undertakings encompass investments in entities whereby the Group has significant influence over the financial and operating policy decisions of the entity but does not have control. It is presumed that significant influence exists if the Group holds more than 20% of the voting rights in the entity unless it can be demonstrated otherwise. Conversely the Group may hold less than 20% of the voting rights but could be demonstrated to have significant influence.
\n \n \n \n \n \nInterest in associated undertakings are initially recognised at cost and subsequently accounted for using the equity method whereby the investment is increased or decreased each year by the Group\u2019s share of the post-acquisition profit or loss of the associate. The Group\u2019s share of the post-acquisition profit or loss of the associate is recognised in profit or loss and OCI.
\nThe Group continues to decrease the carrying amount of the investment for its\u2019 share of post-acquisition losses until the carrying amount is zero unless the Group has incurred a legal or constructive obligation or made payments on behalf of the associate. These additional losses are provided for and a liability is recognised in this instance.
\n \n \n \n\n (ii) Business combinations and goodwill\n
\n \n\n (a) Business combinations\n
\nThe Group accounts for business combinations, other than those under common control, using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group (see 1.5(i)).
\nIn determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.
\nThe consideration transferred in the acquisition is generally measured at the fair value of the assets transferred, the liabilities incurred to the former owners and equity interest issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities (see (vii)(a)). The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the income statement. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured and settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in the income statement.
\nThe results of subsidiaries acquired are included in the consolidated income statement from the date of acquisition. Profits or losses of subsidiary undertakings acquired or sold during the year are included in the consolidated results from the date of gaining control or up to the date of disposal.
\nFor each business combination, the Group elects on a transaction-by-transaction basis whether to measure a non-controlling interest at its fair value or at its proportionate share of the recognised amount of identifiable net assets. The assets and liabilities arising on a business combination are measured at their fair value at the acquisition date.
\n \nBusiness combinations under common control are accounted for prospectively from the date the Group obtains the ownership interest in the acquired entity. Assets and liabilities are initially recognised upon consolidation based on their carrying amount in the financial statements of the acquired entity (or holding entity, if applicable). Any difference between the fair value of the consideration paid and the amounts at which the assets and liabilities are initially recorded is recognised directly in equity in retained earnings.
\n \n \n \n\n (b) Goodwill \n
\nThe Group measures goodwill as the excess of the (i) consideration transferred; (ii) the amount of any non-controlling interest in the acquired entity; and (iii) acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
\nAcquisition costs are expensed to the income statement as incurred. Any contingent consideration to be transferred to the acquirer is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability are recognised in accordance with IFRS 9.
\nGoodwill arising on associates is shown as part of the investment in the associate.
\nGoodwill is subject to an impairment review at least annually, and, if events or changes in circumstances indicate that the carrying amount may not be recoverable, it is written down through the income statement by the amount of any impairment loss identified in the year.
\n \n \n \n \n\n (iii) Foreign currencies \n
\nForeign currency transactions are translated into the functional currency of the entity, being the currency of the primary environment in which the entity operates at the exchange rate prevailing at the date of the transaction or valuation where items are remeasured. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rates prevailing at the reporting date. Exchange movements are recognised in the income statement. However, exchange movements arising from the translation of the following items are recognised in OCI:
\nNon-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the spot exchange rate at the date on which the fair value is determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated using the spot exchange rate at the date of the transaction.
\nThe results and financial position of the Group\u2019s subsidiaries which have a functional currency different from Euro are translated into Euro as follows:
\nOn consolidation, exchange differences arising from the translation of borrowings and currency instruments designated as hedges of the net investment in overseas subsidiaries, are also recognised in OCI to the extent to which the hedge is deemed to be effective. The ineffective portion of any net investment hedge is recognised in the income statement immediately. On disposal, or partial disposal of an overseas subsidiary, the appropriate portion of the currency translation adjustment reserve is included in the gain or loss on disposal.
\n \n \n \n\n (iv) Recognition of income and expenses\n
\n \n\n (a) Interest and similar income and expenses\n
\nFor all interest bearing financial instruments, interest income or expense is recorded using the EIR method.
\nThe EIR is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
\nThe effective interest rate of a financial asset or financial liability is calculated on initial recognition of a financial asset or a financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. The effective interest rate is also revised for fair value hedge adjustments at the date on which amortisation of the hedge adjustment begins. The calculation of the EIR includes transaction costs, premiums or discounts, and fees paid or received that are an integral part of the EIR. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or financial liability.
\nInterest income is calculated by applying the EIR to the gross carrying amount of financial assets, except for:
\nInterest income and expense calculated using the effective interest method presented in the consolidated income statement includes:
\n\n (b) Fees and commission income and expense \n
\nAs outlined above, fees and commission income and expense that are integral to the EIR on a financial asset or liability are included in the measurement of the EIR.
\nOther fees and commission income are recognised as the related services are performed. Fees and commission expenses relate mainly to transaction and service fees, which are expensed as the services are received.
\n \n \n\n (c) Net trading income/(expense)\n
\nNet trading income/(expense) comprises gains and losses relating to trading assets and trading liabilities and includes all realised and unrealised fair value changes, dividends and FX differences.
\nDividend income is recognised when the right to receive income is established.
\n \n \n\n (d) Exceptional items\n
\nCertain items, by virtue of their nature and amount are disclosed separately in order for the user to obtain appropriate understanding of the financial information. These items would not ordinarily occur while carrying out normal business activities.
\nExceptional items include gains and losses on the disposal of businesses, gain on bargain purchase in respect of business combinations, material restructuring costs and material transaction, integration and restructuring costs associated with acquisitions (including potential acquisitions).
\n \n\n (e) Bank Levy and other regulatory charges\n
\nBank levy and other regulatory charges consist of DGS fees, Central Bank Industry Funding levy, Single Resolution Fund levy, ECB fees and a bank levy.
\nA bank levy payable to the Government, is provided for on the occurrence of the event identified by the legislation that triggers the obligation to pay the levy.
\n \n \n \n\n (v) Employee Benefits \n
\n\n (a) Defined contribution pension plan\n
\nThe Group operates a number of defined contribution pension schemes, under which the Group pays fixed contributions to a separate entity.
\nThe contribution payable to a defined contribution plan is recorded as an expense under administration, staff and other expenses. Unpaid contributions are recorded as a liability.
\n\n (b) Short term employee benefits \n
\nShort term employee benefits, such as salaries and other benefits, are accounted for on an accruals basis over the period in which the employee\u2019s service is rendered. Bonuses are recognised where the Group has a legal or constructive obligation to employees that can be reliably measured.
\n \n\n (c) Termination payments\n
\nTermination benefits may be payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees where the offer is irrevocable. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
\n \n \n \n \n \n\n (vi) Current and deferred taxation \n
\nTaxation comprises both current and deferred tax. Taxation is recognised as income or expenses and included in the income statement except to the extent it relates to a business combination, or items recognised in either OCI or equity. In the former case, taxation is recognised in OCI while in the latter case, taxation is recognised directly in equity. In a business combination the tax amounts are recognised as identifiable assets or liabilities at the acquisition date.
\nCurrent tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years (ROI: 12.5% from 1 April 2015).
\nDeferred tax is provided using the liability method on all temporary differences except those arising on goodwill not deductible for tax purposes, or on initial recognition of an asset or liability in a transaction that is not a business combination and which at the time of the transaction affects neither accounting, nor taxable, profit or loss.
\nDeferred tax is measured at the tax rates enacted or substantively enacted by the reporting date that are expected to be applied to the temporary differences when they reverse.
\nDeferred tax liabilities and assets are offset only when they arise in the same tax reporting group and where there is the intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.
\nDTAs and liabilities shall be offset if, and only if:
\nA DTA is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. DTAs are reviewed at each reporting date and are recognised only to the extent that it is probable that the related tax benefit will be realised. Deferred tax assets and liabilities are not discounted in accordance with IAS 12.
\nUnrecognised DTAs are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
\n \n \n \n \n\n (vii) Financial instruments \n
\n \n\n (a) Classification of financial assets \n
\nFinancial assets are recorded at fair value and are classified, on initial recognition, as amortised cost, fair value through OCI (FVOCI), fair value through profit or loss (FVTPL), elected at FVOCI or designated at FVTPL. Purchases and sales of financial assets are recognised on the trade date, being the date on which the Group commits to purchase or sell the asset.
\nWith the exception of assets classified as FVTPL, the initial fair value of a financial asset includes direct and incremental transaction costs. The fair value of assets traded on an active market will be the price that would be received if an asset were to be sold in an orderly transaction between market participants at the measurement date. In the absence of an active market, the Group establishes a fair value using various valuation techniques that use observable and unobservable inputs. These include recent transactions in similar items, discounted cash flow projections, option pricing models and other valuation techniques used by market participants.
\n \n \n \n \n \n \n \nThe classification requirements for debt and equity instruments are described below.
\n \n\n Debt instruments\n
\nDebt instruments, including loans and debt securities, are classified into one of the following measurement categories:
\nClassification and subsequent measurement of debt instruments depend on:
\n(i) The Group\u2019s business model for managing the asset; and
\n(ii) The cash flow characteristics of the asset.
\n\n (i) Business model assessment\n
\nThe business model reflects how the Group manages the assets in order to generate cash flows. That is, whether the Group\u2019s objective is solely to collect the contractual cash flows from the assets (HTC) or is to collect both the contractual cash flows and cash flows arising from the sale of assets (HTC&S). If neither of these is applicable, then the financial assets are classified as part of \u2018other\u2019 business model and measured at FVTPL.
\nThe Group assesses its business model at a portfolio level based on how it manages groups of financial assets to achieve its business objectives. The observable factors considered include:
\n\n (ii) Cash flow characteristics assessment\n
\nThe Group carries out the cash flow characteristics assessment using the contractual features of an instrument to determine if they give rise to cash flows that are consistent with a basic lending arrangement. Contractual cash flows are consistent with a basic lending arrangement if they represent cash flows that are solely payments of principal and interest (the \u2018SPPI\u2019 test). Principal, for the purpose of this test, is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset, for example, due to repayments or amortisation of the premium/discount. Interest is defined as the consideration for the time value of money and credit risk, which are the most significant elements of interest within a lending arrangement. If the Group identifies any contractual features that could significantly modify the cash flows of the instrument such that they introduce exposures to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at FVTPL.
\nThe Group carries out the SPPI test based on an assessment of the contractual features of each product on origination and subsequently at every reporting period. Derivative instruments and equity instruments are not covered by this assessment as they are held at FVTPL (except when equities are accounted for at FVOCI).
\nBased on the above assessments, the Group classifies its debt instruments into one of the following four measurement categories:
\n\n (i) Debt instruments measured at amortised cost\n
\nDebt instruments are measured at amortised cost if they are held within a business model whose objective is to hold the assets to collect contractual cash flows, where those cash flows represent solely payments of principal and interest. After initial measurement, debt instruments in this category are measured at amortised cost. Interest income on these instruments is recognised in interest income using the EIR method.
\n \n \n \n \n \nThe EIR is the rate that discounts estimated future cash payments or receipts through the expected life of a financial asset to the gross carrying amount of a financial asset. Amortised cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the EIR.
\nImpairment on debt instruments measured at amortised cost is calculated using the ECL approach. Loans and debt securities measured at amortised cost are presented net of allowance for ECL in the SOFP.
\n\n (ii) Debt instruments measured at FVOCI\n
\nDebt instruments are measured at FVOCI if they are held within a business model whose objective is to both hold the assets to collect contractual cash flows and to sell the financial assets, where the assets\u2019 cash flows represent payments that are solely payments of principal and interest. Subsequent to initial recognition, unrealised gains and losses on debt instruments measured at FVOCI are recorded in OCI, unless the instrument is designated in a fair value hedge relationship. When designated in a fair value hedge relationship, any changes in fair value due to changes in the hedged risk are recognised in interest income in the income statement. On derecognition, realised gains and losses are reclassified from OCI and recorded in other operating income in the statement of comprehensive income. FX gains and losses that relate to the amortised cost of the debt instrument are recognised in the income statement. Premiums, discounts and related transaction costs are amortised over the expected life of the instrument to interest income in the income statement using the EIR method.
\nImpairment on debt instruments measured at FVOCI is calculated using the ECL approach. The ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at its fair value. Instead, an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to provision for credit losses in the income statement. The accumulated allowance recognised in OCI is recycled to the income statement on derecognition of the debt instrument.
\n\n (iii) Debt instruments measured at FVTPL\n
\nDebt instruments measured at FVTPL include assets held for trading purposes, assets held as part of a portfolio managed on a fair value basis and assets whose cash flows do not represent payments that are solely payments of principal and interest. These instruments are measured at fair value in the SOFP, with transaction costs recognised immediately in the income statement as part of net trading income. Realised and unrealised gains and losses are recognised as part of other operating income in the income statement.
\n\n (iv) Debt instruments designated at FVTPL\n
\nDebt instruments are designated at FVTPL only if doing so eliminates, or significantly reduces, an accounting mismatch that would otherwise arise. The designation is only available on initial recognition and the designation is irrevocable. Debt instruments designated at FVTPL are recorded in the SOFP at fair value and changes in fair value are recorded in the income statement.
\n\n Equity instruments\n
\nEquity instruments are measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase. For equity instruments measured at FVTPL, changes in fair value are recognised as part of other operating income in the income statement. The Group can elect to classify non-trading equity instruments at FVOCI. The FVOCI election is made upon initial recognition, on an instrument-by-instrument basis and once made is irrevocable. Gains and losses on these instruments including when derecognised/sold are recorded in OCI and are not subsequently reclassified to the income statement. Dividend received is recorded in the income statement.
\n \n\n Reclassifications\n
\nFinancial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets.
\n \n \n\n (b) Impairment of financial assets \n
\nThe Group recognises loss allowances for ECL for the following financial instruments that are not measured at FVTPL:
\n\n Measurement\n
\nECL is measured by the Group in a way that reflects:
\nThe amount of ECL recognised as a loss allowance depends on the change in credit risk of the financial instrument since origination and whether the credit risk on those financial instruments has increased significantly since initial recognition. In order to determine the appropriate ECL, a financial instrument is allocated to a stage dependent on the credit risk relative to when the financial instrument was originated:
\nThe Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture life-time expected losses, the Group also models early redemptions as a separate component within the ECL calculation.
\nThe expected cash flows included in the ECL calculation are derived from a) the loan contract b) on the disposal of collateral or c) sale of loans arising from deleveraging of NPLs which are included in the ECL calculation from the point that they meet the following three conditions:
\nCredit loss is the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original EIR.
\n\n Purchased or originated credit-impaired assets (POCI)\n
\nPOCI are excluded from the general 3 stage impairment model in IFRS 9. POCI assets are financial assets that are credit-impaired on initial recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognised on a credit-adjusted EIR basis. ECL are only recognised or released to the extent that there is a subsequent change in ECL.
\n\n Expected life\n
\nWhen measuring ECL, the Group must consider the maximum contractual period over which the Group is exposed to credit risk. All contractual terms should be considered when determining the expected life, including prepayment options, extension and rollover options. For most instruments, the expected life is limited to the remaining contractual life, adjusted as applicable for expected prepayments.
\nFor certain revolving credit facilities that do not have a fixed maturity (e.g. credit cards and overdrafts), the expected life is estimated based on the period over which the Group is exposed to credit risk and where the credit losses would not be mitigated by Management actions.
\nFor instruments in Stage 2 or Stage 3, loss allowances will cover ECL over the expected remaining life of the instrument.
\n \n \n \n \n \n \n \n\n Expert Credit Judgement\n
\nThe Group\u2019s ECL accounting framework methodology, in line with the requirements of the standard, requires the Group to use its experienced credit judgement to incorporate the estimated impact of factors not captured in the modelled ECL results, in all reporting periods.
\n\n Effective Interest Rate\n
\nThe discount rate used by the Group in measuring ECL is the EIR (or \u2018credit-adjusted effective interest rate\u2019 for a POCI financial assets) or an approximation thereof.
\nFor undrawn commitments, the EIR, or an approximation thereof, is applied when recognising the financial assets resulting from the loan commitment.
\n\n Low credit risk exemption\n
\nThe Group applied the low credit risk exemption to sovereign debt securities, reverse repurchase agreements, loans and advances to banks and certain intercompany positions in scope for impairment under IFRS 9.
\nThe Group considers credit risk on a financial instrument low if it meets the following conditions:
\nThese exposures are in Stage 1 with a very low credit risk requiring 12-month ECL and contributing minimally to overall ECL.
\n\n Modification Policy for Financial Assets\n
\nThe Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Group assesses whether or not the new items are substantially different to the original terms. The Group does this by considering, among others, the following factors:
\nIf the terms are substantially different, the Group derecognises the original financial asset and recognises a new asset at fair value and recalculates a new EIR for the asset. The date of renegotiation of the new financial asset is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a SICR has occurred. However, the Group also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount are also recognised in profit or loss as a gain or loss on derecognition.
\nIf the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group calculates the gross carrying amount based on the revised cash flows of the financial asset and recognises a modification gain or loss in profit or loss. The new gross carrying amount is recalculated by discounting the modified cash flows at the original EIR (or credit-adjusted EIR for POCI financial assets).
\n \n \n \n \n \n \n \n\n Write-off policy\n
\nThe Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. Indicators that there is no prospect of recovery include the borrower being deemed unable to pay due to their financial circumstances or the cost to be incurred in seeking recovery is likely to exceed the amount of the write-off. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation. Write-off on those financial assets subject to enforcement activity will take place on conclusion of the enforcement process.
\nIn subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the income statement.
\n\n Presentation of ECL allowance in the statement of financial position\n
\nThe ECL on financial assets measured at amortised cost is presented as a deduction from the gross carrying amount.
\nThe ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at fair value. Instead an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to provision for credit losses in the income statement.
\nOff-balance sheet credit risks include certain undrawn lending commitments, letters of credit and letters of guarantee as a provision in the SOFP.
\n \n \n\n (c) Financial liabilities and equity \n
\nFinancial liabilities are classified at amortised cost unless mandatorily required to be classified at FVTPL, for example derivatives, or designated at FVTPL.
\n\n Financial liabilities measured at amortised cost\n
\nFinancial liabilities include deposits by banks (including Central Banks), customer accounts, debt securities and subordinated debt. Derivative liabilities are dealt with under separate accounting policies.
\nDebt securities and subordinated debt issued are initially recognised on the date that they originated, while all other financial liabilities are recognised initially on the trade date. Both the date of origination and the trade date is the date the Group becomes a party to the contractual provisions of the instrument.
\nAll financial liabilities are recognised initially at fair value, less any directly attributable transaction costs and are subsequently measured at amortised cost and the related interest expense is recognised in the income statement using the EIR method.
\n \n \n\n Financial liabilities designated at FVTPL\n
\nFinancial liabilities classified in this category are those that have been designated by the Group on initial recognition.
\nFinancial liabilities are designated at FVTPL when one of the following criteria is met:
\nFinancial liabilities designated at FVTPL are recorded in the SOFP. For liabilities designated at FVTPL, changes in fair value are recognised in non-interest income in the income statement, with the exception of movements in own credit.
\nFor financial liabilities designated at FVTPL, gains or losses attributable to changes in own credit are presented in OCI. The Group has not and does not expect to invoke the fair value option for financial liabilities.
\nThe classification of instruments as a financial liability or an equity instrument is dependent upon the substance of the contractual arrangement. Instruments which carry a contractual obligation to deliver cash or another financial asset to another entity are classified as financial liabilities. The coupons on these instruments are recognised in the income statement as interest expense using the effective interest method. Where the Group has absolute discretion in relation to the payment of coupons and repayment of principal, the instrument is classified as equity and any coupon payments are classified as distributions in the period in which they are made.
\nIf the Group purchases its own debt, it is removed from the balance sheet and the difference between the carrying amount of the liability and the consideration paid is included in other operating income, net of any costs or fees incurred.
\n \n \n \n \n \n \n\n Equity\n
\nFinancial instruments classified as equity are accounted for directly in equity less any transaction costs deducted directly from equity. Transaction costs are incremented costs directly attributable to the equity transaction that otherwise would have been avoided. Equity instruments are not subsequently re-measured. Any coupon payments on the instrument are treated as dividends and accounted for, when declared as a distribution out of retained earnings. Equity instruments are issued at arm\u2019s length.
\n \n\n (d) Derecognition of Financial instruments\n
\n\n Financial assets\n
\nThe Group derecognises a financial asset when the contractual right to the cash flow from the financial asset expires, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. Control over the assets is represented by the practical ability to sell the transferred asset.
\nOn derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
\nAny cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVOCI is not recognised in profit or loss on derecognition of such securities. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a separate asset or liability.
\nThe Group enters into transactions whereby it transfers assets recognised on its SOFP, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. In such cases, the transferred assets are not derecognised. Examples of such transactions are securities lending and sale-and-repurchase transactions.
\nWhen assets are sold to a third party with a concurrent total rate of return swap on the transferred assets, the transaction is accounted for as a secured financing transaction similar to sale-and-repurchase transactions, because the Group retains all or substantially all of the risks and rewards of ownership of such assets.
\nIn transactions in which the Group neither retains nor transfers substantially all of the risks and rewards of ownership of a financial asset and it retains control over the asset, the Group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset.
\nIn certain transactions, the Group retains the obligation to service the transferred financial asset for a fee. The transferred asset is derecognised if it meets the derecognition criteria. An asset or liability is recognised for the servicing contract if the servicing fee is more than adequate (asset) or is less than adequate (liability) for performing the servicing.
\nThe Group sells loans and advances to customers to SEs that in turn issue notes to investors which are collateralised by the purchased assets. For the purpose of disclosure, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the transfer of financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in the form of the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes. The securitisation is generally retained in the form of senior or subordinated tranches, or other residual interests (retained interests) however, these securitisations may also occur with entities external to the Group. Retained interests are recognised as debt securities. The Group sells loans and advances to customers to SEs that are not consolidated SEs and the Group retains no interest in these assets and they are derecognised in their entirety.
\n \n \n \n \n \n \n \n\n Financial liabilities\n
\nThe Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire. This may happen when payment is made to the lender; the borrower legally is released from primary responsibility for the financial liability; or if there is an exchange of debt instruments with substantially different terms or a substantial modification of the terms of an existing debt instrument. Derecognition conditions are also satisfied when an entity repurchases its own debt instruments issued previously. When a financial liability is extinguished, any difference between the carrying amount of the financial liability and the consideration paid is recognised in the income statement.
\n \n \n\n (e) Determination of fair value of financial instruments and other assets\n
\nThe Group measures financial instruments, such as, derivative financial instruments, trading financial instruments and other financial instruments at FVTPL. Certain risks in hedged financial instruments, financial assets classified as FVOCI, property and equipment, and collateral in possession are measured at fair value on initial recognition.
\nFair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset, or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability which is accessible to the Group.
\nThe Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
\nAll assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole and is described as follows:
\nFor assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.
\nAn analysis of the fair values of financial instruments, and further details as to how they are measured, are provided in note 37.
\n \n \n \n \n \n\n (viii) Derivative instruments and hedging \n
\nThe Group follows the IFRS 9 model for hedge accounting.
\nDerivative instruments used by the Group primarily comprise interest rate swaps and currency forward rate contracts. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
\nFor the purpose of hedge accounting, hedges are classified as:
\nAt the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
\nCertain derivative instruments do not fulfil the hedge accounting criteria under IFRS 9 and are consequently classified as held for trading. The fair value movement and any interest income/(expense) are included in Net trading income/(expense).
\nHedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below:
\n \n\n (a) Fair value hedges \n
\nThe change in the fair value of a hedging instrument is recognised in the consolidated income statement as NII. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the consolidated income statement as NII.
\nFor fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term of the hedge using the EIR method. The EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
\nIf the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss.
\n \n\n (b) Embedded derivatives\n
\nA derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if:
\nEmbedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the FVTPL category.
\nA derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host, together with the embedded derivative, is required to be classified in its entirety as a financial asset at FVTPL.
\n\n (c) Credit valuation adjustment\n
\nThe Group is engaged in over the counter (OTC) derivative transactions and considers whether a fair value adjustment for credit risk is required. CVA is considered to reflect the counterparty\u2019s default risk and debit valuation adjustment (DVA) to reflect own credit risk. There is no specific guidance on the methods used to calculate CVA or DVA which creates challenges in estimation.
\n \n \n \n \n \nAs a result, IFRS 13 requires entities to consider the effects of credit risk when determining a fair value measurement, e.g. by calculating a CVA on their derivatives. Estimation can be complex and requires the use of significant judgement which is often influenced by various qualitative factors, such as:
\nThe Group mitigates the majority of its derivative positions through the use of netting and Credit Support Annex collateral arrangements. The Group do not operationally net positions. The netting and collateral arrangements may be called upon in the event of a default. This allows a counterparty to net all assets and liabilities outstanding with the defaulting counterparty, subject to the agreement when the default event occurs. The collateral arrangements in place require the counterparty in a liability position to place collateral to cover that shortfall. The Group considers and discounts the necessity for any amendments to the valuations to reflect the CVA when calculating the fair value of the derivative positions.
\nThe Group monitors this position at every reporting period and assesses if material CVAs become appropriate to be recognised.
\n \n \n \n\n (ix) Cash and cash equivalents \n
\nCash comprises cash on hand and demand deposits and cash equivalents include liquid investments that are readily convertible to known amounts of cash which are subject to an insignificant risk of change in value and with an original maturity of less than three months.
\n \n \n\n (x) Leases\n
\n\n (a) Classification of Leases \n
\nAt inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
\nUnless the lease is of short-term and of low-value assets, where the Group has the right to obtain substantially all of the economic benefits from use of identified assets and has the right to direct the use of the identified asset, a right-of-use asset is recognised in property and equipment and a lease liability is recognised in other liabilities.
\nIf a lease is assumed as part of a business combination the Group, subject to not meeting the recognition exemptions as detailed below, will recognise a right-of-use asset and a lease liability as if the lease were a new lease at the acquisition date. The right-of-use assets and lease liability are then measured consistently with the Groups accounting policy as detailed above with the lease commencement date being the acquisition date.
\n \n \n \n\n As a lessee\n
\nThe Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
\nThe right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
\nThe lease liability is measured at amortised cost using the incremental borrowing rate. Incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right of use asset in a similar economic environment. For its incremental borrowing rate, the Group uses its FTP, which comprises its base cost of funds with add-ons related to regulatory requirements, and term liquidity premium based on the slope of swap curve as a proxy of time value of money. The Group FTP is fully reflective of its funding profile and therefore considers it an appropriate reflection of the Group\u2019s borrowing cost. For retail properties, property yield is added as a lease specific adjustment.
\nLease payments included in the measurement of the lease liability comprise the following:
\nThe lease liability is remeasured, if there is a change in future lease payments arising from a change in index-linked considerations, if there is a change in the Group\u2019s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.
\nWhen the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
\n\n Short-term leases and leases of low-value assets\n
\nThe Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of vehicles that have a lease term of twelve months or less and leases of low-value assets, including office equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
\n\n As a lessor\n
\nWhen the Group acts as a lessor, it determines at lease inception, whether each lease is a finance lease or an operating lease.
\nTo classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as, whether the lease is for the major part of the economic life of the asset.
\nWhen the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.
\nIf an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract.
\nThe Group recognises lease payments received under operating leases as income, on a straight-line basis, over the lease term, as part of other income.
\n \n \n \nThe accounting policies applicable to the Group as a lessor in the comparative period were not different from IFRS 16. However, when the Group was an intermediate lessor the sub-leases were classified with reference to the underlying asset.
\nThe Group presents right-of-use assets in property and equipment and lease liabilities in other liabilities in the SOFP.
\n \n \n \n\n (xi) Property and equipment \n
\nLeasehold premises with initial lease terms of less than 50 years and all other equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is calculated on a straight-line basis to write off the costs of such assets to their residual value over their estimated useful lives, which are assessed annually.
\nFreehold premises (including land) are revalued at least annually by external professional valuers. Any accumulated depreciation (on freehold premises excluding land) at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. Any resulting increase in value is credited to OCI and shown as revaluation reserves in shareholders\u2019 equity. Any decrease in value that offsets previous increases of the same asset are charged in OCI and debited against the revaluation reserves directly in equity while all other decreases are charged to the income statement. The revalued premises, excluding the land element, are depreciated to their residual values over their estimated useful lives, which are assessed annually.
\nSubsequent costs are included in the asset\u2019s carrying amount, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Property and equipment are assessed for impairment where there is an indication of impairment. Where impairment exists, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognised against the revaluation reserve to the extent it is available and any remainder is recognised in the income statement. The depreciation charge for the asset is then adjusted to reflect the asset\u2019s revised carrying amount.
\nIf an item of property, plant and equipment is disposed of, any gains or losses are recognised in the profit or loss before tax. If the asset being disposed of had previously been revalued then any amount in OCI relating to that asset is reclassified directly to retained earnings on disposal rather than the income statement.
\nThe estimated useful lives are as follows:
\n| \n Freehold Buildings \n | \n \n 50 years \n | \n
| \n Leasehold Buildings \n | \n \n 50 years or term of lease if less than 50 years \n | \n
| \n Office Equipment \n | \n \n 5 \u2013 15 years \n | \n
| \n Computer Hardware \n | \n \n 3 \u2013 10 years \n | \n
| \n Motor Vehicles \n | \n \n 5 years \n | \n
\n (xii) Intangible assets (other than goodwill)\n
\nAcquired computer software is stated at cost, less amortisation and provision for impairment, if any. The external costs and identifiable internal costs of bringing to use the computer software are capitalised where it is probable that future economic benefits that exceed its cost will flow from its use over more than one year.
\nCapitalised computer software has a finite life and is amortised on a straight-line basis over a period of between three to seven years.
\nExpenditure on internally developed software is recognised as an asset when the Group is able to demonstrate: that the product is technically and commercially feasible, its intention and ability to complete the development and use the software in a manner that will generate future economic benefits, and that it can reliably measure the costs to complete the development. The capitalised costs of internally developed software include all costs directly attributable to developing the software and capitalised borrowing costs, and are amortised over its useful life. Internally developed software is stated at capitalised cost less accumulated amortisation and any accumulated impairment losses
\nSoftware is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An asset\u2019s carrying value is written down immediately to its recoverable amount if the asset\u2019s carrying amount is greater than its estimated recoverable amount. The estimated recoverable amount is the higher of the asset\u2019s fair value less costs to sell or VIU.
\nCosts associated with research activities or maintaining computer software programmes are recognised as an expense as incurred.
\n \n \n \n\n Acquired intangible assets\n
\nCustomer related intangible assets and brands acquired in a business combination are recognised at fair value at acquisition date. Customer related intangible assets and brands have a finite useful life and are carried at cost less accumulated amortisation and provision for impairment, if any. Amortisation is calculated using the straight line basis to allocate the cost over their estimated useful life.
\n \n \n\n (xiii) Collateral in possession\n
\nIn certain circumstances, property is repossessed following foreclosure on loans that are in default. When a property is repossessed, the associated loan relating to that property is derecognised and any provision on that loan is reversed. On initial recognition the collateral in possession is valued at its fair value.
\nSubsequent to initial recognition, the property is carried at the lower of its cost or net realisable value.
\n \n \n\n (xiv) Assets and liabilities classified as held for sale\n
\nAn asset or a disposal group is classified as held for sale if the following criteria are met:
\nWhen assets (or disposal groups), other than financial assets as classified under IFRS 9, or rights under an insurance contract, are initially classified as held for sale, they are measured at the lower of the carrying amount or fair value less costs to sell at the date of reclassification.
\nImpairment losses subsequent to classification of such assets (or disposal groups) are recognised in the income statement. Increases in fair value less costs to sell of such assets (or disposal groups) that have been classified as held for sale are recognised in the income statement to the extent that the increase is not in excess of any cumulative loss previously recognised in respect of the asset (or disposal group).
\nWhere the above conditions cease to be met, the assets (or disposal group) are reclassified out of held for sale and included under the appropriate SOFP classifications.
\nFinancial assets within the scope of IFRS 9, DTAs and income taxes within the scope of IAS 12 continue to be measured in accordance with these standards.
\n \n \n \n\n (xv) Provisions\n
\nA provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
\nA restructuring provision is recognised when there is an approved detailed and formal Restructuring Plan, and the restructuring either has commenced or has been publicly announced. Future operating losses are not permitted to be recognised.
\nPresent obligations arising under onerous contracts are recognised and measured as provisions at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. An onerous contract is a contract in which the unavoidable cost of meeting the obligation under the contract exceeds the economic benefits expected to be received under it.
\nContingent liabilities are either possible obligations that arise from past events whose existence is dependent on whether some uncertain future events occur which are not wholly within the control of the entity or are a present obligation that arises from a past event but is not recognised because:
\nContingent liabilities are not recognised but are disclosed unless the probability of their occurrence is remote.
\n \nFinancial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss that it incurs because a specified debtor fails to make payment when it is due in accordance with the terms of a debt instrument.
\n \n \n \n \n \n \nLoan commitments are firm commitments to provide credit under pre-specified terms and conditions.
\nThe maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.
\nECL held against commitments are reported under loans and advances to customers.
\n \nFinancial guarantees issued or commitments to provide a loan at a below-market interest rate are initially measured at fair value. Subsequently, they are measured at the higher of the loss allowance determined in accordance with IFRS 9 and the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15.
\n \nOther loan commitments issued are measured at the sum of (i) the loss allowance determined in accordance with IFRS 9 and (ii) the amount of any fees received, less, if the commitment is unlikely to result in a specific lending arrangement, the cumulative amount of income recognised. Derecognition policies in 1(d) are applied to loan commitments issued and held.
\nThe Group has issued no loan commitments that are measured at FVTPL
\n \n \n \n\n (xvi) Dividends \n
\nFinal dividends on ordinary shares are recognised in equity in the period in which they are approved by the Company\u2019s shareholders. Interim dividends are recognised in equity in the period in which they are paid.
\n \n\n (xvii) Operating segments\n
\nAn operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group\u2019s other components, whose operating results are reviewed regularly by the Group Executive Committee (being the chief operating decision maker (CODM)) to make decisions about resources allocated to each segment and assess its performance, and for which discrete financial information is available. Transactions between the operating segments are on normal commercial terms and conditions unless stated otherwise. Internal charges and transfer pricing adjustments have been reflected in the performance of each segment. Revenue from external parties is measured in a manner consistent with the income recognition policy of the Group.
\n \n\n (xviii) Sales and repurchase agreements \n
\nFinancial assets may be lent for a fee or sold subject to a commitment to repurchase them (\u201crepos\u201d). Such assets are retained on the SOFP when substantially all the risks and rewards of ownership remain with the Group. The assets are reclassified as pledged assets when the transferee has the right by contract to sell or repledge the collateral. The liability to the counterparty is included separately on the SOFP as appropriate in either Deposits by banks or Customer accounts.
\nSimilarly, where financial assets are purchased with a commitment to resell (\u201creverse repos\u201d), or where the Group borrows financial assets but does not acquire the risks and rewards of ownership, the transactions are treated as collateralised loans, and the financial assets are not included in the SOFP. The collateralised loan asset is included separately on the SOFP as appropriate in either Loans and advances to banks or Loans and advances to customers.
\nThe difference between the sale and repurchase price is recognised in the income statement over the life of the agreements using the EIR. Fees earned on stock lending are recognised in the income statement over the term of the lending agreement. Securities lent to counterparties are also retained on the SOFP.
\n \nIn certain circumstances, the Group pledges collateral in respect of liabilities or borrowings. Collateral pledged in the form of securities or loans and advances continues to be recorded on the SOFP. Collateral placed in the form of cash is recorded in loans and advances to banks or customers. Any interest receivable arising is recorded as interest income.
\n \n\n (xix) Collateral\n
\nThe Group enters into master agreements with counterparties to ensure that in the event of a default, all amounts outstanding with those counterparties will be settled on a net basis. The Group obtains collateral in respect of customer liabilities where this is considered appropriate. The collateral normally takes the form of a lien over the customers\u2019 assets and gives the Group a claim on these assets for both existing and future liabilities. The collateral is not recorded on the Group\u2019s SOFP.
\nThe Group also receives collateral in the form of cash or securities in respect of other credit instruments, such as stock borrowing contracts and derivative contracts, in order to reduce credit risk. Collateral received in the form of securities is not recorded on the SOFP. Collateral received in the form of cash is recorded on the SOFP, with a corresponding liability recognised within deposits from banks or deposits from customers. Any interest payable arising is recorded as interest expense.
\n \n\n (xx) Offsetting\n
\nFinancial assets and liabilities are offset and the net amount reported in the balance sheet when there is currently a legally enforceable right of set off and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. No impairment loss allowance for ECL is recognised on a financial asset, or portion thereof, which has been offset.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182413": { "value": "\n\n (i) Basis of consolidation\n
\n \n\n Subsidiaries\n
\nSubsidiaries are those entities (including special purpose entities) controlled by the Group. Control exists when the Group has:
\nThe financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Financial statements of subsidiaries are prepared up to the financial position date. Intercompany transaction balances and unrealised gains/losses on transactions between the Group\u2019s companies are eliminated on consolidation.
\nThe Company carries its investment in its subsidiary undertaking at cost in the Company financial statements and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment\u2019s fair value or its VIU. If impairment occurs, this loss is recognised in the income statement.
\nDetails of principal subsidiaries are included in note 46.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182416": { "value": "\n\n Subsidiaries\n
\nSubsidiaries are those entities (including special purpose entities) controlled by the Group. Control exists when the Group has:
\nThe financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Financial statements of subsidiaries are prepared up to the financial position date. Intercompany transaction balances and unrealised gains/losses on transactions between the Group\u2019s companies are eliminated on consolidation.
\nThe Company carries its investment in its subsidiary undertaking at cost in the Company financial statements and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment\u2019s fair value or its VIU. If impairment occurs, this loss is recognised in the income statement.
\nDetails of principal subsidiaries are included in note 46.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182427": { "value": "\n \n\n Interest in associated undertakings\n
\nInterest in associated undertakings encompass investments in entities whereby the Group has significant influence over the financial and operating policy decisions of the entity but does not have control. It is presumed that significant influence exists if the Group holds more than 20% of the voting rights in the entity unless it can be demonstrated otherwise. Conversely the Group may hold less than 20% of the voting rights but could be demonstrated to have significant influence.
\n \n \n \nInterest in associated undertakings are initially recognised at cost and subsequently accounted for using the equity method whereby the investment is increased or decreased each year by the Group\u2019s share of the post-acquisition profit or loss of the associate. The Group\u2019s share of the post-acquisition profit or loss of the associate is recognised in profit or loss and OCI.
\nThe Group continues to decrease the carrying amount of the investment for its\u2019 share of post-acquisition losses until the carrying amount is zero unless the Group has incurred a legal or constructive obligation or made payments on behalf of the associate. These additional losses are provided for and a liability is recognised in this instance.
\n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182428": { "value": "\n\n Interest in associated undertakings\n
\nInterest in associated undertakings encompass investments in entities whereby the Group has significant influence over the financial and operating policy decisions of the entity but does not have control. It is presumed that significant influence exists if the Group holds more than 20% of the voting rights in the entity unless it can be demonstrated otherwise. Conversely the Group may hold less than 20% of the voting rights but could be demonstrated to have significant influence.
\n \nInterest in associated undertakings are initially recognised at cost and subsequently accounted for using the equity method whereby the investment is increased or decreased each year by the Group\u2019s share of the post-acquisition profit or loss of the associate. The Group\u2019s share of the post-acquisition profit or loss of the associate is recognised in profit or loss and OCI.
\nThe Group continues to decrease the carrying amount of the investment for its\u2019 share of post-acquisition losses until the carrying amount is zero unless the Group has incurred a legal or constructive obligation or made payments on behalf of the associate. These additional losses are provided for and a liability is recognised in this instance.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182456": { "value": "\n\n (ii) Business combinations and goodwill\n
\n \n\n (a) Business combinations\n
\nThe Group accounts for business combinations, other than those under common control, using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group (see 1.5(i)).
\nIn determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.
\nThe consideration transferred in the acquisition is generally measured at the fair value of the assets transferred, the liabilities incurred to the former owners and equity interest issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities (see (vii)(a)). The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the income statement. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured and settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in the income statement.
\nThe results of subsidiaries acquired are included in the consolidated income statement from the date of acquisition. Profits or losses of subsidiary undertakings acquired or sold during the year are included in the consolidated results from the date of gaining control or up to the date of disposal.
\nFor each business combination, the Group elects on a transaction-by-transaction basis whether to measure a non-controlling interest at its fair value or at its proportionate share of the recognised amount of identifiable net assets. The assets and liabilities arising on a business combination are measured at their fair value at the acquisition date.
\n \nBusiness combinations under common control are accounted for prospectively from the date the Group obtains the ownership interest in the acquired entity. Assets and liabilities are initially recognised upon consolidation based on their carrying amount in the financial statements of the acquired entity (or holding entity, if applicable). Any difference between the fair value of the consideration paid and the amounts at which the assets and liabilities are initially recorded is recognised directly in equity in retained earnings.
\n \n \n \n\n (b) Goodwill \n
\nThe Group measures goodwill as the excess of the (i) consideration transferred; (ii) the amount of any non-controlling interest in the acquired entity; and (iii) acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
\nAcquisition costs are expensed to the income statement as incurred. Any contingent consideration to be transferred to the acquirer is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability are recognised in accordance with IFRS 9.
\nGoodwill arising on associates is shown as part of the investment in the associate.
\nGoodwill is subject to an impairment review at least annually, and, if events or changes in circumstances indicate that the carrying amount may not be recoverable, it is written down through the income statement by the amount of any impairment loss identified in the year.
\n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182459": { "value": "\n\n (a) Business combinations\n
\nThe Group accounts for business combinations, other than those under common control, using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group (see 1.5(i)).
\nIn determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.
\nThe consideration transferred in the acquisition is generally measured at the fair value of the assets transferred, the liabilities incurred to the former owners and equity interest issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities (see (vii)(a)). The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the income statement. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured and settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in the income statement.
\nThe results of subsidiaries acquired are included in the consolidated income statement from the date of acquisition. Profits or losses of subsidiary undertakings acquired or sold during the year are included in the consolidated results from the date of gaining control or up to the date of disposal.
\nFor each business combination, the Group elects on a transaction-by-transaction basis whether to measure a non-controlling interest at its fair value or at its proportionate share of the recognised amount of identifiable net assets. The assets and liabilities arising on a business combination are measured at their fair value at the acquisition date.
\n \nBusiness combinations under common control are accounted for prospectively from the date the Group obtains the ownership interest in the acquired entity. Assets and liabilities are initially recognised upon consolidation based on their carrying amount in the financial statements of the acquired entity (or holding entity, if applicable). Any difference between the fair value of the consideration paid and the amounts at which the assets and liabilities are initially recorded is recognised directly in equity in retained earnings.
\n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182467": { "value": "\nBusiness combinations under common control are accounted for prospectively from the date the Group obtains the ownership interest in the acquired entity. Assets and liabilities are initially recognised upon consolidation based on their carrying amount in the financial statements of the acquired entity (or holding entity, if applicable). Any difference between the fair value of the consideration paid and the amounts at which the assets and liabilities are initially recorded is recognised directly in equity in retained earnings.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognisingDifferenceBetweenFairValueAtInitialRecognitionAndAmountDeterminedUsingValuationTechniqueExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182469": { "value": "\n\n (b) Goodwill \n
\nThe Group measures goodwill as the excess of the (i) consideration transferred; (ii) the amount of any non-controlling interest in the acquired entity; and (iii) acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
\nAcquisition costs are expensed to the income statement as incurred. Any contingent consideration to be transferred to the acquirer is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability are recognised in accordance with IFRS 9.
\nGoodwill arising on associates is shown as part of the investment in the associate.
\nGoodwill is subject to an impairment review at least annually, and, if events or changes in circumstances indicate that the carrying amount may not be recoverable, it is written down through the income statement by the amount of any impairment loss identified in the year.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182488": { "value": "\n\n (iii) Foreign currencies \n
\nForeign currency transactions are translated into the functional currency of the entity, being the currency of the primary environment in which the entity operates at the exchange rate prevailing at the date of the transaction or valuation where items are remeasured. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rates prevailing at the reporting date. Exchange movements are recognised in the income statement. However, exchange movements arising from the translation of the following items are recognised in OCI:
\nNon-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the spot exchange rate at the date on which the fair value is determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated using the spot exchange rate at the date of the transaction.
\nThe results and financial position of the Group\u2019s subsidiaries which have a functional currency different from Euro are translated into Euro as follows:
\nOn consolidation, exchange differences arising from the translation of borrowings and currency instruments designated as hedges of the net investment in overseas subsidiaries, are also recognised in OCI to the extent to which the hedge is deemed to be effective. The ineffective portion of any net investment hedge is recognised in the income statement immediately. On disposal, or partial disposal of an overseas subsidiary, the appropriate portion of the currency translation adjustment reserve is included in the gain or loss on disposal.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182503": { "value": "\n \n\n (iv) Recognition of income and expenses\n
\n \n\n (a) Interest and similar income and expenses\n
\nFor all interest bearing financial instruments, interest income or expense is recorded using the EIR method.
\nThe EIR is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
\nThe effective interest rate of a financial asset or financial liability is calculated on initial recognition of a financial asset or a financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. The effective interest rate is also revised for fair value hedge adjustments at the date on which amortisation of the hedge adjustment begins. The calculation of the EIR includes transaction costs, premiums or discounts, and fees paid or received that are an integral part of the EIR. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or financial liability.
\nInterest income is calculated by applying the EIR to the gross carrying amount of financial assets, except for:
\nInterest income and expense calculated using the effective interest method presented in the consolidated income statement includes:
\n\n (b) Fees and commission income and expense \n
\nAs outlined above, fees and commission income and expense that are integral to the EIR on a financial asset or liability are included in the measurement of the EIR.
\nOther fees and commission income are recognised as the related services are performed. Fees and commission expenses relate mainly to transaction and service fees, which are expensed as the services are received.
\n \n \n\n (c) Net trading income/(expense)\n
\nNet trading income/(expense) comprises gains and losses relating to trading assets and trading liabilities and includes all realised and unrealised fair value changes, dividends and FX differences.
\nDividend income is recognised when the right to receive income is established.
\n \n \n\n (d) Exceptional items\n
\nCertain items, by virtue of their nature and amount are disclosed separately in order for the user to obtain appropriate understanding of the financial information. These items would not ordinarily occur while carrying out normal business activities.
\nExceptional items include gains and losses on the disposal of businesses, gain on bargain purchase in respect of business combinations, material restructuring costs and material transaction, integration and restructuring costs associated with acquisitions (including potential acquisitions).
\n \n\n (e) Bank Levy and other regulatory charges\n
\nBank levy and other regulatory charges consist of DGS fees, Central Bank Industry Funding levy, Single Resolution Fund levy, ECB fees and a bank levy.
\nA bank levy payable to the Government, is provided for on the occurrence of the event identified by the legislation that triggers the obligation to pay the levy.
\n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182504": { "value": "\n\n (iv) Recognition of income and expenses\n
\n \n\n (a) Interest and similar income and expenses\n
\nFor all interest bearing financial instruments, interest income or expense is recorded using the EIR method.
\nThe EIR is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
\nThe effective interest rate of a financial asset or financial liability is calculated on initial recognition of a financial asset or a financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. The effective interest rate is also revised for fair value hedge adjustments at the date on which amortisation of the hedge adjustment begins. The calculation of the EIR includes transaction costs, premiums or discounts, and fees paid or received that are an integral part of the EIR. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or financial liability.
\nInterest income is calculated by applying the EIR to the gross carrying amount of financial assets, except for:
\nInterest income and expense calculated using the effective interest method presented in the consolidated income statement includes:
\n\n (b) Fees and commission income and expense \n
\nAs outlined above, fees and commission income and expense that are integral to the EIR on a financial asset or liability are included in the measurement of the EIR.
\nOther fees and commission income are recognised as the related services are performed. Fees and commission expenses relate mainly to transaction and service fees, which are expensed as the services are received.
\n \n \n\n (c) Net trading income/(expense)\n
\nNet trading income/(expense) comprises gains and losses relating to trading assets and trading liabilities and includes all realised and unrealised fair value changes, dividends and FX differences.
\nDividend income is recognised when the right to receive income is established.
\n \n \n\n (d) Exceptional items\n
\nCertain items, by virtue of their nature and amount are disclosed separately in order for the user to obtain appropriate understanding of the financial information. These items would not ordinarily occur while carrying out normal business activities.
\nExceptional items include gains and losses on the disposal of businesses, gain on bargain purchase in respect of business combinations, material restructuring costs and material transaction, integration and restructuring costs associated with acquisitions (including potential acquisitions).
\n \n\n (e) Bank Levy and other regulatory charges\n
\nBank levy and other regulatory charges consist of DGS fees, Central Bank Industry Funding levy, Single Resolution Fund levy, ECB fees and a bank levy.
\nA bank levy payable to the Government, is provided for on the occurrence of the event identified by the legislation that triggers the obligation to pay the levy.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182507": { "value": "\n\n (a) Interest and similar income and expenses\n
\nFor all interest bearing financial instruments, interest income or expense is recorded using the EIR method.
\nThe EIR is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
\nThe effective interest rate of a financial asset or financial liability is calculated on initial recognition of a financial asset or a financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. The effective interest rate is also revised for fair value hedge adjustments at the date on which amortisation of the hedge adjustment begins. The calculation of the EIR includes transaction costs, premiums or discounts, and fees paid or received that are an integral part of the EIR. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or financial liability.
\nInterest income is calculated by applying the EIR to the gross carrying amount of financial assets, except for:
\nInterest income and expense calculated using the effective interest method presented in the consolidated income statement includes:
\n\n (b) Fees and commission income and expense \n
\nAs outlined above, fees and commission income and expense that are integral to the EIR on a financial asset or liability are included in the measurement of the EIR.
\nOther fees and commission income are recognised as the related services are performed. Fees and commission expenses relate mainly to transaction and service fees, which are expensed as the services are received.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182557": { "value": "\n\n (c) Net trading income/(expense)\n
\nNet trading income/(expense) comprises gains and losses relating to trading assets and trading liabilities and includes all realised and unrealised fair value changes, dividends and FX differences.
\nDividend income is recognised when the right to receive income is established.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradingIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182562": { "value": "\n\n (d) Exceptional items\n
\nCertain items, by virtue of their nature and amount are disclosed separately in order for the user to obtain appropriate understanding of the financial information. These items would not ordinarily occur while carrying out normal business activities.
\nExceptional items include gains and losses on the disposal of businesses, gain on bargain purchase in respect of business combinations, material restructuring costs and material transaction, integration and restructuring costs associated with acquisitions (including potential acquisitions).
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExceptionalItemsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182571": { "value": "\n\n (v) Employee Benefits \n
\n\n (a) Defined contribution pension plan\n
\nThe Group operates a number of defined contribution pension schemes, under which the Group pays fixed contributions to a separate entity.
\nThe contribution payable to a defined contribution plan is recorded as an expense under administration, staff and other expenses. Unpaid contributions are recorded as a liability.
\n\n (b) Short term employee benefits \n
\nShort term employee benefits, such as salaries and other benefits, are accounted for on an accruals basis over the period in which the employee\u2019s service is rendered. Bonuses are recognised where the Group has a legal or constructive obligation to employees that can be reliably measured.
\n \n\n (c) Termination payments\n
\nTermination benefits may be payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees where the offer is irrevocable. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
\n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182581": { "value": "\n\n (c) Termination payments\n
\nTermination benefits may be payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees where the offer is irrevocable. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTerminationBenefits", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182597": { "value": "\n \n\n (vi) Current and deferred taxation \n
\nTaxation comprises both current and deferred tax. Taxation is recognised as income or expenses and included in the income statement except to the extent it relates to a business combination, or items recognised in either OCI or equity. In the former case, taxation is recognised in OCI while in the latter case, taxation is recognised directly in equity. In a business combination the tax amounts are recognised as identifiable assets or liabilities at the acquisition date.
\nCurrent tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years (ROI: 12.5% from 1 April 2015).
\nDeferred tax is provided using the liability method on all temporary differences except those arising on goodwill not deductible for tax purposes, or on initial recognition of an asset or liability in a transaction that is not a business combination and which at the time of the transaction affects neither accounting, nor taxable, profit or loss.
\nDeferred tax is measured at the tax rates enacted or substantively enacted by the reporting date that are expected to be applied to the temporary differences when they reverse.
\nDeferred tax liabilities and assets are offset only when they arise in the same tax reporting group and where there is the intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.
\nDTAs and liabilities shall be offset if, and only if:
\nA DTA is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. DTAs are reviewed at each reporting date and are recognised only to the extent that it is probable that the related tax benefit will be realised. Deferred tax assets and liabilities are not discounted in accordance with IAS 12.
\nUnrecognised DTAs are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
\n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182598": { "value": "\n\n (vi) Current and deferred taxation \n
\nTaxation comprises both current and deferred tax. Taxation is recognised as income or expenses and included in the income statement except to the extent it relates to a business combination, or items recognised in either OCI or equity. In the former case, taxation is recognised in OCI while in the latter case, taxation is recognised directly in equity. In a business combination the tax amounts are recognised as identifiable assets or liabilities at the acquisition date.
\nCurrent tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years (ROI: 12.5% from 1 April 2015).
\nDeferred tax is provided using the liability method on all temporary differences except those arising on goodwill not deductible for tax purposes, or on initial recognition of an asset or liability in a transaction that is not a business combination and which at the time of the transaction affects neither accounting, nor taxable, profit or loss.
\nDeferred tax is measured at the tax rates enacted or substantively enacted by the reporting date that are expected to be applied to the temporary differences when they reverse.
\nDeferred tax liabilities and assets are offset only when they arise in the same tax reporting group and where there is the intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.
\nDTAs and liabilities shall be offset if, and only if:
\nA DTA is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. DTAs are reviewed at each reporting date and are recognised only to the extent that it is probable that the related tax benefit will be realised. Deferred tax assets and liabilities are not discounted in accordance with IAS 12.
\nUnrecognised DTAs are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182615": { "value": "\n \n\n (vii) Financial instruments \n
\n \n\n (a) Classification of financial assets \n
\nFinancial assets are recorded at fair value and are classified, on initial recognition, as amortised cost, fair value through OCI (FVOCI), fair value through profit or loss (FVTPL), elected at FVOCI or designated at FVTPL. Purchases and sales of financial assets are recognised on the trade date, being the date on which the Group commits to purchase or sell the asset.
\nWith the exception of assets classified as FVTPL, the initial fair value of a financial asset includes direct and incremental transaction costs. The fair value of assets traded on an active market will be the price that would be received if an asset were to be sold in an orderly transaction between market participants at the measurement date. In the absence of an active market, the Group establishes a fair value using various valuation techniques that use observable and unobservable inputs. These include recent transactions in similar items, discounted cash flow projections, option pricing models and other valuation techniques used by market participants.
\n \n \n \n \n \nThe classification requirements for debt and equity instruments are described below.
\n \n\n Debt instruments\n
\nDebt instruments, including loans and debt securities, are classified into one of the following measurement categories:
\nClassification and subsequent measurement of debt instruments depend on:
\n(i) The Group\u2019s business model for managing the asset; and
\n(ii) The cash flow characteristics of the asset.
\n\n (i) Business model assessment\n
\nThe business model reflects how the Group manages the assets in order to generate cash flows. That is, whether the Group\u2019s objective is solely to collect the contractual cash flows from the assets (HTC) or is to collect both the contractual cash flows and cash flows arising from the sale of assets (HTC&S). If neither of these is applicable, then the financial assets are classified as part of \u2018other\u2019 business model and measured at FVTPL.
\nThe Group assesses its business model at a portfolio level based on how it manages groups of financial assets to achieve its business objectives. The observable factors considered include:
\n\n (ii) Cash flow characteristics assessment\n
\nThe Group carries out the cash flow characteristics assessment using the contractual features of an instrument to determine if they give rise to cash flows that are consistent with a basic lending arrangement. Contractual cash flows are consistent with a basic lending arrangement if they represent cash flows that are solely payments of principal and interest (the \u2018SPPI\u2019 test). Principal, for the purpose of this test, is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset, for example, due to repayments or amortisation of the premium/discount. Interest is defined as the consideration for the time value of money and credit risk, which are the most significant elements of interest within a lending arrangement. If the Group identifies any contractual features that could significantly modify the cash flows of the instrument such that they introduce exposures to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at FVTPL.
\nThe Group carries out the SPPI test based on an assessment of the contractual features of each product on origination and subsequently at every reporting period. Derivative instruments and equity instruments are not covered by this assessment as they are held at FVTPL (except when equities are accounted for at FVOCI).
\nBased on the above assessments, the Group classifies its debt instruments into one of the following four measurement categories:
\n\n (i) Debt instruments measured at amortised cost\n
\nDebt instruments are measured at amortised cost if they are held within a business model whose objective is to hold the assets to collect contractual cash flows, where those cash flows represent solely payments of principal and interest. After initial measurement, debt instruments in this category are measured at amortised cost. Interest income on these instruments is recognised in interest income using the EIR method.
\n \n \n \nThe EIR is the rate that discounts estimated future cash payments or receipts through the expected life of a financial asset to the gross carrying amount of a financial asset. Amortised cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the EIR.
\nImpairment on debt instruments measured at amortised cost is calculated using the ECL approach. Loans and debt securities measured at amortised cost are presented net of allowance for ECL in the SOFP.
\n\n (ii) Debt instruments measured at FVOCI\n
\nDebt instruments are measured at FVOCI if they are held within a business model whose objective is to both hold the assets to collect contractual cash flows and to sell the financial assets, where the assets\u2019 cash flows represent payments that are solely payments of principal and interest. Subsequent to initial recognition, unrealised gains and losses on debt instruments measured at FVOCI are recorded in OCI, unless the instrument is designated in a fair value hedge relationship. When designated in a fair value hedge relationship, any changes in fair value due to changes in the hedged risk are recognised in interest income in the income statement. On derecognition, realised gains and losses are reclassified from OCI and recorded in other operating income in the statement of comprehensive income. FX gains and losses that relate to the amortised cost of the debt instrument are recognised in the income statement. Premiums, discounts and related transaction costs are amortised over the expected life of the instrument to interest income in the income statement using the EIR method.
\nImpairment on debt instruments measured at FVOCI is calculated using the ECL approach. The ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at its fair value. Instead, an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to provision for credit losses in the income statement. The accumulated allowance recognised in OCI is recycled to the income statement on derecognition of the debt instrument.
\n\n (iii) Debt instruments measured at FVTPL\n
\nDebt instruments measured at FVTPL include assets held for trading purposes, assets held as part of a portfolio managed on a fair value basis and assets whose cash flows do not represent payments that are solely payments of principal and interest. These instruments are measured at fair value in the SOFP, with transaction costs recognised immediately in the income statement as part of net trading income. Realised and unrealised gains and losses are recognised as part of other operating income in the income statement.
\n\n (iv) Debt instruments designated at FVTPL\n
\nDebt instruments are designated at FVTPL only if doing so eliminates, or significantly reduces, an accounting mismatch that would otherwise arise. The designation is only available on initial recognition and the designation is irrevocable. Debt instruments designated at FVTPL are recorded in the SOFP at fair value and changes in fair value are recorded in the income statement.
\n\n Equity instruments\n
\nEquity instruments are measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase. For equity instruments measured at FVTPL, changes in fair value are recognised as part of other operating income in the income statement. The Group can elect to classify non-trading equity instruments at FVOCI. The FVOCI election is made upon initial recognition, on an instrument-by-instrument basis and once made is irrevocable. Gains and losses on these instruments including when derecognised/sold are recorded in OCI and are not subsequently reclassified to the income statement. Dividend received is recorded in the income statement.
\n \n\n Reclassifications\n
\nFinancial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets.
\n \n \n\n (b) Impairment of financial assets \n
\nThe Group recognises loss allowances for ECL for the following financial instruments that are not measured at FVTPL:
\n\n Measurement\n
\nECL is measured by the Group in a way that reflects:
\nThe amount of ECL recognised as a loss allowance depends on the change in credit risk of the financial instrument since origination and whether the credit risk on those financial instruments has increased significantly since initial recognition. In order to determine the appropriate ECL, a financial instrument is allocated to a stage dependent on the credit risk relative to when the financial instrument was originated:
\nThe Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture life-time expected losses, the Group also models early redemptions as a separate component within the ECL calculation.
\nThe expected cash flows included in the ECL calculation are derived from a) the loan contract b) on the disposal of collateral or c) sale of loans arising from deleveraging of NPLs which are included in the ECL calculation from the point that they meet the following three conditions:
\nCredit loss is the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original EIR.
\n\n Purchased or originated credit-impaired assets (POCI)\n
\nPOCI are excluded from the general 3 stage impairment model in IFRS 9. POCI assets are financial assets that are credit-impaired on initial recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognised on a credit-adjusted EIR basis. ECL are only recognised or released to the extent that there is a subsequent change in ECL.
\n\n Expected life\n
\nWhen measuring ECL, the Group must consider the maximum contractual period over which the Group is exposed to credit risk. All contractual terms should be considered when determining the expected life, including prepayment options, extension and rollover options. For most instruments, the expected life is limited to the remaining contractual life, adjusted as applicable for expected prepayments.
\nFor certain revolving credit facilities that do not have a fixed maturity (e.g. credit cards and overdrafts), the expected life is estimated based on the period over which the Group is exposed to credit risk and where the credit losses would not be mitigated by Management actions.
\nFor instruments in Stage 2 or Stage 3, loss allowances will cover ECL over the expected remaining life of the instrument.
\n \n \n \n \n \n\n Expert Credit Judgement\n
\nThe Group\u2019s ECL accounting framework methodology, in line with the requirements of the standard, requires the Group to use its experienced credit judgement to incorporate the estimated impact of factors not captured in the modelled ECL results, in all reporting periods.
\n\n Effective Interest Rate\n
\nThe discount rate used by the Group in measuring ECL is the EIR (or \u2018credit-adjusted effective interest rate\u2019 for a POCI financial assets) or an approximation thereof.
\nFor undrawn commitments, the EIR, or an approximation thereof, is applied when recognising the financial assets resulting from the loan commitment.
\n\n Low credit risk exemption\n
\nThe Group applied the low credit risk exemption to sovereign debt securities, reverse repurchase agreements, loans and advances to banks and certain intercompany positions in scope for impairment under IFRS 9.
\nThe Group considers credit risk on a financial instrument low if it meets the following conditions:
\nThese exposures are in Stage 1 with a very low credit risk requiring 12-month ECL and contributing minimally to overall ECL.
\n\n Modification Policy for Financial Assets\n
\nThe Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Group assesses whether or not the new items are substantially different to the original terms. The Group does this by considering, among others, the following factors:
\nIf the terms are substantially different, the Group derecognises the original financial asset and recognises a new asset at fair value and recalculates a new EIR for the asset. The date of renegotiation of the new financial asset is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a SICR has occurred. However, the Group also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount are also recognised in profit or loss as a gain or loss on derecognition.
\nIf the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group calculates the gross carrying amount based on the revised cash flows of the financial asset and recognises a modification gain or loss in profit or loss. The new gross carrying amount is recalculated by discounting the modified cash flows at the original EIR (or credit-adjusted EIR for POCI financial assets).
\n \n \n \n \n \n\n Write-off policy\n
\nThe Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. Indicators that there is no prospect of recovery include the borrower being deemed unable to pay due to their financial circumstances or the cost to be incurred in seeking recovery is likely to exceed the amount of the write-off. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation. Write-off on those financial assets subject to enforcement activity will take place on conclusion of the enforcement process.
\nIn subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the income statement.
\n\n Presentation of ECL allowance in the statement of financial position\n
\nThe ECL on financial assets measured at amortised cost is presented as a deduction from the gross carrying amount.
\nThe ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at fair value. Instead an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to provision for credit losses in the income statement.
\nOff-balance sheet credit risks include certain undrawn lending commitments, letters of credit and letters of guarantee as a provision in the SOFP.
\n \n \n\n (c) Financial liabilities and equity \n
\nFinancial liabilities are classified at amortised cost unless mandatorily required to be classified at FVTPL, for example derivatives, or designated at FVTPL.
\n\n Financial liabilities measured at amortised cost\n
\nFinancial liabilities include deposits by banks (including Central Banks), customer accounts, debt securities and subordinated debt. Derivative liabilities are dealt with under separate accounting policies.
\nDebt securities and subordinated debt issued are initially recognised on the date that they originated, while all other financial liabilities are recognised initially on the trade date. Both the date of origination and the trade date is the date the Group becomes a party to the contractual provisions of the instrument.
\nAll financial liabilities are recognised initially at fair value, less any directly attributable transaction costs and are subsequently measured at amortised cost and the related interest expense is recognised in the income statement using the EIR method.
\n \n \n\n Financial liabilities designated at FVTPL\n
\nFinancial liabilities classified in this category are those that have been designated by the Group on initial recognition.
\nFinancial liabilities are designated at FVTPL when one of the following criteria is met:
\nFinancial liabilities designated at FVTPL are recorded in the SOFP. For liabilities designated at FVTPL, changes in fair value are recognised in non-interest income in the income statement, with the exception of movements in own credit.
\nFor financial liabilities designated at FVTPL, gains or losses attributable to changes in own credit are presented in OCI. The Group has not and does not expect to invoke the fair value option for financial liabilities.
\nThe classification of instruments as a financial liability or an equity instrument is dependent upon the substance of the contractual arrangement. Instruments which carry a contractual obligation to deliver cash or another financial asset to another entity are classified as financial liabilities. The coupons on these instruments are recognised in the income statement as interest expense using the effective interest method. Where the Group has absolute discretion in relation to the payment of coupons and repayment of principal, the instrument is classified as equity and any coupon payments are classified as distributions in the period in which they are made.
\nIf the Group purchases its own debt, it is removed from the balance sheet and the difference between the carrying amount of the liability and the consideration paid is included in other operating income, net of any costs or fees incurred.
\n \n \n \n \n\n Equity\n
\nFinancial instruments classified as equity are accounted for directly in equity less any transaction costs deducted directly from equity. Transaction costs are incremented costs directly attributable to the equity transaction that otherwise would have been avoided. Equity instruments are not subsequently re-measured. Any coupon payments on the instrument are treated as dividends and accounted for, when declared as a distribution out of retained earnings. Equity instruments are issued at arm\u2019s length.
\n \n\n (d) Derecognition of Financial instruments\n
\n\n Financial assets\n
\nThe Group derecognises a financial asset when the contractual right to the cash flow from the financial asset expires, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. Control over the assets is represented by the practical ability to sell the transferred asset.
\nOn derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
\nAny cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVOCI is not recognised in profit or loss on derecognition of such securities. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a separate asset or liability.
\nThe Group enters into transactions whereby it transfers assets recognised on its SOFP, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. In such cases, the transferred assets are not derecognised. Examples of such transactions are securities lending and sale-and-repurchase transactions.
\nWhen assets are sold to a third party with a concurrent total rate of return swap on the transferred assets, the transaction is accounted for as a secured financing transaction similar to sale-and-repurchase transactions, because the Group retains all or substantially all of the risks and rewards of ownership of such assets.
\nIn transactions in which the Group neither retains nor transfers substantially all of the risks and rewards of ownership of a financial asset and it retains control over the asset, the Group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset.
\nIn certain transactions, the Group retains the obligation to service the transferred financial asset for a fee. The transferred asset is derecognised if it meets the derecognition criteria. An asset or liability is recognised for the servicing contract if the servicing fee is more than adequate (asset) or is less than adequate (liability) for performing the servicing.
\nThe Group sells loans and advances to customers to SEs that in turn issue notes to investors which are collateralised by the purchased assets. For the purpose of disclosure, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the transfer of financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in the form of the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes. The securitisation is generally retained in the form of senior or subordinated tranches, or other residual interests (retained interests) however, these securitisations may also occur with entities external to the Group. Retained interests are recognised as debt securities. The Group sells loans and advances to customers to SEs that are not consolidated SEs and the Group retains no interest in these assets and they are derecognised in their entirety.
\n \n \n \n \n \n\n Financial liabilities\n
\nThe Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire. This may happen when payment is made to the lender; the borrower legally is released from primary responsibility for the financial liability; or if there is an exchange of debt instruments with substantially different terms or a substantial modification of the terms of an existing debt instrument. Derecognition conditions are also satisfied when an entity repurchases its own debt instruments issued previously. When a financial liability is extinguished, any difference between the carrying amount of the financial liability and the consideration paid is recognised in the income statement.
\n \n \n\n (e) Determination of fair value of financial instruments and other assets\n
\nThe Group measures financial instruments, such as, derivative financial instruments, trading financial instruments and other financial instruments at FVTPL. Certain risks in hedged financial instruments, financial assets classified as FVOCI, property and equipment, and collateral in possession are measured at fair value on initial recognition.
\nFair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset, or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability which is accessible to the Group.
\nThe Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
\nAll assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole and is described as follows:
\nFor assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.
\nAn analysis of the fair values of financial instruments, and further details as to how they are measured, are provided in note 37.
\n \n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182616": { "value": "\n\n (vii) Financial instruments \n
\n \n\n (a) Classification of financial assets \n
\nFinancial assets are recorded at fair value and are classified, on initial recognition, as amortised cost, fair value through OCI (FVOCI), fair value through profit or loss (FVTPL), elected at FVOCI or designated at FVTPL. Purchases and sales of financial assets are recognised on the trade date, being the date on which the Group commits to purchase or sell the asset.
\nWith the exception of assets classified as FVTPL, the initial fair value of a financial asset includes direct and incremental transaction costs. The fair value of assets traded on an active market will be the price that would be received if an asset were to be sold in an orderly transaction between market participants at the measurement date. In the absence of an active market, the Group establishes a fair value using various valuation techniques that use observable and unobservable inputs. These include recent transactions in similar items, discounted cash flow projections, option pricing models and other valuation techniques used by market participants.
\n \n \n \nThe classification requirements for debt and equity instruments are described below.
\n \n\n Debt instruments\n
\nDebt instruments, including loans and debt securities, are classified into one of the following measurement categories:
\nClassification and subsequent measurement of debt instruments depend on:
\n(i) The Group\u2019s business model for managing the asset; and
\n(ii) The cash flow characteristics of the asset.
\n\n (i) Business model assessment\n
\nThe business model reflects how the Group manages the assets in order to generate cash flows. That is, whether the Group\u2019s objective is solely to collect the contractual cash flows from the assets (HTC) or is to collect both the contractual cash flows and cash flows arising from the sale of assets (HTC&S). If neither of these is applicable, then the financial assets are classified as part of \u2018other\u2019 business model and measured at FVTPL.
\nThe Group assesses its business model at a portfolio level based on how it manages groups of financial assets to achieve its business objectives. The observable factors considered include:
\n\n (ii) Cash flow characteristics assessment\n
\nThe Group carries out the cash flow characteristics assessment using the contractual features of an instrument to determine if they give rise to cash flows that are consistent with a basic lending arrangement. Contractual cash flows are consistent with a basic lending arrangement if they represent cash flows that are solely payments of principal and interest (the \u2018SPPI\u2019 test). Principal, for the purpose of this test, is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset, for example, due to repayments or amortisation of the premium/discount. Interest is defined as the consideration for the time value of money and credit risk, which are the most significant elements of interest within a lending arrangement. If the Group identifies any contractual features that could significantly modify the cash flows of the instrument such that they introduce exposures to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at FVTPL.
\nThe Group carries out the SPPI test based on an assessment of the contractual features of each product on origination and subsequently at every reporting period. Derivative instruments and equity instruments are not covered by this assessment as they are held at FVTPL (except when equities are accounted for at FVOCI).
\nBased on the above assessments, the Group classifies its debt instruments into one of the following four measurement categories:
\n\n (i) Debt instruments measured at amortised cost\n
\nDebt instruments are measured at amortised cost if they are held within a business model whose objective is to hold the assets to collect contractual cash flows, where those cash flows represent solely payments of principal and interest. After initial measurement, debt instruments in this category are measured at amortised cost. Interest income on these instruments is recognised in interest income using the EIR method.
\n \nThe EIR is the rate that discounts estimated future cash payments or receipts through the expected life of a financial asset to the gross carrying amount of a financial asset. Amortised cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the EIR.
\nImpairment on debt instruments measured at amortised cost is calculated using the ECL approach. Loans and debt securities measured at amortised cost are presented net of allowance for ECL in the SOFP.
\n\n (ii) Debt instruments measured at FVOCI\n
\nDebt instruments are measured at FVOCI if they are held within a business model whose objective is to both hold the assets to collect contractual cash flows and to sell the financial assets, where the assets\u2019 cash flows represent payments that are solely payments of principal and interest. Subsequent to initial recognition, unrealised gains and losses on debt instruments measured at FVOCI are recorded in OCI, unless the instrument is designated in a fair value hedge relationship. When designated in a fair value hedge relationship, any changes in fair value due to changes in the hedged risk are recognised in interest income in the income statement. On derecognition, realised gains and losses are reclassified from OCI and recorded in other operating income in the statement of comprehensive income. FX gains and losses that relate to the amortised cost of the debt instrument are recognised in the income statement. Premiums, discounts and related transaction costs are amortised over the expected life of the instrument to interest income in the income statement using the EIR method.
\nImpairment on debt instruments measured at FVOCI is calculated using the ECL approach. The ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at its fair value. Instead, an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to provision for credit losses in the income statement. The accumulated allowance recognised in OCI is recycled to the income statement on derecognition of the debt instrument.
\n\n (iii) Debt instruments measured at FVTPL\n
\nDebt instruments measured at FVTPL include assets held for trading purposes, assets held as part of a portfolio managed on a fair value basis and assets whose cash flows do not represent payments that are solely payments of principal and interest. These instruments are measured at fair value in the SOFP, with transaction costs recognised immediately in the income statement as part of net trading income. Realised and unrealised gains and losses are recognised as part of other operating income in the income statement.
\n\n (iv) Debt instruments designated at FVTPL\n
\nDebt instruments are designated at FVTPL only if doing so eliminates, or significantly reduces, an accounting mismatch that would otherwise arise. The designation is only available on initial recognition and the designation is irrevocable. Debt instruments designated at FVTPL are recorded in the SOFP at fair value and changes in fair value are recorded in the income statement.
\n\n Equity instruments\n
\nEquity instruments are measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase. For equity instruments measured at FVTPL, changes in fair value are recognised as part of other operating income in the income statement. The Group can elect to classify non-trading equity instruments at FVOCI. The FVOCI election is made upon initial recognition, on an instrument-by-instrument basis and once made is irrevocable. Gains and losses on these instruments including when derecognised/sold are recorded in OCI and are not subsequently reclassified to the income statement. Dividend received is recorded in the income statement.
\n \n\n Reclassifications\n
\nFinancial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets.
\n \n \n\n (b) Impairment of financial assets \n
\nThe Group recognises loss allowances for ECL for the following financial instruments that are not measured at FVTPL:
\n\n Measurement\n
\nECL is measured by the Group in a way that reflects:
\nThe amount of ECL recognised as a loss allowance depends on the change in credit risk of the financial instrument since origination and whether the credit risk on those financial instruments has increased significantly since initial recognition. In order to determine the appropriate ECL, a financial instrument is allocated to a stage dependent on the credit risk relative to when the financial instrument was originated:
\nThe Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture life-time expected losses, the Group also models early redemptions as a separate component within the ECL calculation.
\nThe expected cash flows included in the ECL calculation are derived from a) the loan contract b) on the disposal of collateral or c) sale of loans arising from deleveraging of NPLs which are included in the ECL calculation from the point that they meet the following three conditions:
\nCredit loss is the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original EIR.
\n\n Purchased or originated credit-impaired assets (POCI)\n
\nPOCI are excluded from the general 3 stage impairment model in IFRS 9. POCI assets are financial assets that are credit-impaired on initial recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognised on a credit-adjusted EIR basis. ECL are only recognised or released to the extent that there is a subsequent change in ECL.
\n\n Expected life\n
\nWhen measuring ECL, the Group must consider the maximum contractual period over which the Group is exposed to credit risk. All contractual terms should be considered when determining the expected life, including prepayment options, extension and rollover options. For most instruments, the expected life is limited to the remaining contractual life, adjusted as applicable for expected prepayments.
\nFor certain revolving credit facilities that do not have a fixed maturity (e.g. credit cards and overdrafts), the expected life is estimated based on the period over which the Group is exposed to credit risk and where the credit losses would not be mitigated by Management actions.
\nFor instruments in Stage 2 or Stage 3, loss allowances will cover ECL over the expected remaining life of the instrument.
\n \n \n \n\n Expert Credit Judgement\n
\nThe Group\u2019s ECL accounting framework methodology, in line with the requirements of the standard, requires the Group to use its experienced credit judgement to incorporate the estimated impact of factors not captured in the modelled ECL results, in all reporting periods.
\n\n Effective Interest Rate\n
\nThe discount rate used by the Group in measuring ECL is the EIR (or \u2018credit-adjusted effective interest rate\u2019 for a POCI financial assets) or an approximation thereof.
\nFor undrawn commitments, the EIR, or an approximation thereof, is applied when recognising the financial assets resulting from the loan commitment.
\n\n Low credit risk exemption\n
\nThe Group applied the low credit risk exemption to sovereign debt securities, reverse repurchase agreements, loans and advances to banks and certain intercompany positions in scope for impairment under IFRS 9.
\nThe Group considers credit risk on a financial instrument low if it meets the following conditions:
\nThese exposures are in Stage 1 with a very low credit risk requiring 12-month ECL and contributing minimally to overall ECL.
\n\n Modification Policy for Financial Assets\n
\nThe Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Group assesses whether or not the new items are substantially different to the original terms. The Group does this by considering, among others, the following factors:
\nIf the terms are substantially different, the Group derecognises the original financial asset and recognises a new asset at fair value and recalculates a new EIR for the asset. The date of renegotiation of the new financial asset is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a SICR has occurred. However, the Group also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount are also recognised in profit or loss as a gain or loss on derecognition.
\nIf the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group calculates the gross carrying amount based on the revised cash flows of the financial asset and recognises a modification gain or loss in profit or loss. The new gross carrying amount is recalculated by discounting the modified cash flows at the original EIR (or credit-adjusted EIR for POCI financial assets).
\n \n \n \n\n Write-off policy\n
\nThe Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. Indicators that there is no prospect of recovery include the borrower being deemed unable to pay due to their financial circumstances or the cost to be incurred in seeking recovery is likely to exceed the amount of the write-off. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation. Write-off on those financial assets subject to enforcement activity will take place on conclusion of the enforcement process.
\nIn subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the income statement.
\n\n Presentation of ECL allowance in the statement of financial position\n
\nThe ECL on financial assets measured at amortised cost is presented as a deduction from the gross carrying amount.
\nThe ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at fair value. Instead an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to provision for credit losses in the income statement.
\nOff-balance sheet credit risks include certain undrawn lending commitments, letters of credit and letters of guarantee as a provision in the SOFP.
\n \n \n\n (c) Financial liabilities and equity \n
\nFinancial liabilities are classified at amortised cost unless mandatorily required to be classified at FVTPL, for example derivatives, or designated at FVTPL.
\n\n Financial liabilities measured at amortised cost\n
\nFinancial liabilities include deposits by banks (including Central Banks), customer accounts, debt securities and subordinated debt. Derivative liabilities are dealt with under separate accounting policies.
\nDebt securities and subordinated debt issued are initially recognised on the date that they originated, while all other financial liabilities are recognised initially on the trade date. Both the date of origination and the trade date is the date the Group becomes a party to the contractual provisions of the instrument.
\nAll financial liabilities are recognised initially at fair value, less any directly attributable transaction costs and are subsequently measured at amortised cost and the related interest expense is recognised in the income statement using the EIR method.
\n \n \n\n Financial liabilities designated at FVTPL\n
\nFinancial liabilities classified in this category are those that have been designated by the Group on initial recognition.
\nFinancial liabilities are designated at FVTPL when one of the following criteria is met:
\nFinancial liabilities designated at FVTPL are recorded in the SOFP. For liabilities designated at FVTPL, changes in fair value are recognised in non-interest income in the income statement, with the exception of movements in own credit.
\nFor financial liabilities designated at FVTPL, gains or losses attributable to changes in own credit are presented in OCI. The Group has not and does not expect to invoke the fair value option for financial liabilities.
\nThe classification of instruments as a financial liability or an equity instrument is dependent upon the substance of the contractual arrangement. Instruments which carry a contractual obligation to deliver cash or another financial asset to another entity are classified as financial liabilities. The coupons on these instruments are recognised in the income statement as interest expense using the effective interest method. Where the Group has absolute discretion in relation to the payment of coupons and repayment of principal, the instrument is classified as equity and any coupon payments are classified as distributions in the period in which they are made.
\nIf the Group purchases its own debt, it is removed from the balance sheet and the difference between the carrying amount of the liability and the consideration paid is included in other operating income, net of any costs or fees incurred.
\n \n \n\n Equity\n
\nFinancial instruments classified as equity are accounted for directly in equity less any transaction costs deducted directly from equity. Transaction costs are incremented costs directly attributable to the equity transaction that otherwise would have been avoided. Equity instruments are not subsequently re-measured. Any coupon payments on the instrument are treated as dividends and accounted for, when declared as a distribution out of retained earnings. Equity instruments are issued at arm\u2019s length.
\n \n\n (d) Derecognition of Financial instruments\n
\n\n Financial assets\n
\nThe Group derecognises a financial asset when the contractual right to the cash flow from the financial asset expires, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. Control over the assets is represented by the practical ability to sell the transferred asset.
\nOn derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
\nAny cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVOCI is not recognised in profit or loss on derecognition of such securities. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a separate asset or liability.
\nThe Group enters into transactions whereby it transfers assets recognised on its SOFP, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. In such cases, the transferred assets are not derecognised. Examples of such transactions are securities lending and sale-and-repurchase transactions.
\nWhen assets are sold to a third party with a concurrent total rate of return swap on the transferred assets, the transaction is accounted for as a secured financing transaction similar to sale-and-repurchase transactions, because the Group retains all or substantially all of the risks and rewards of ownership of such assets.
\nIn transactions in which the Group neither retains nor transfers substantially all of the risks and rewards of ownership of a financial asset and it retains control over the asset, the Group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset.
\nIn certain transactions, the Group retains the obligation to service the transferred financial asset for a fee. The transferred asset is derecognised if it meets the derecognition criteria. An asset or liability is recognised for the servicing contract if the servicing fee is more than adequate (asset) or is less than adequate (liability) for performing the servicing.
\nThe Group sells loans and advances to customers to SEs that in turn issue notes to investors which are collateralised by the purchased assets. For the purpose of disclosure, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the transfer of financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in the form of the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes. The securitisation is generally retained in the form of senior or subordinated tranches, or other residual interests (retained interests) however, these securitisations may also occur with entities external to the Group. Retained interests are recognised as debt securities. The Group sells loans and advances to customers to SEs that are not consolidated SEs and the Group retains no interest in these assets and they are derecognised in their entirety.
\n \n \n \n\n Financial liabilities\n
\nThe Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire. This may happen when payment is made to the lender; the borrower legally is released from primary responsibility for the financial liability; or if there is an exchange of debt instruments with substantially different terms or a substantial modification of the terms of an existing debt instrument. Derecognition conditions are also satisfied when an entity repurchases its own debt instruments issued previously. When a financial liability is extinguished, any difference between the carrying amount of the financial liability and the consideration paid is recognised in the income statement.
\n \n \n\n (e) Determination of fair value of financial instruments and other assets\n
\nThe Group measures financial instruments, such as, derivative financial instruments, trading financial instruments and other financial instruments at FVTPL. Certain risks in hedged financial instruments, financial assets classified as FVOCI, property and equipment, and collateral in possession are measured at fair value on initial recognition.
\nFair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset, or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability which is accessible to the Group.
\nThe Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
\nAll assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole and is described as follows:
\nFor assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.
\nAn analysis of the fair values of financial instruments, and further details as to how they are measured, are provided in note 37.
\n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182619": { "value": "\n\n (a) Classification of financial assets \n
\nFinancial assets are recorded at fair value and are classified, on initial recognition, as amortised cost, fair value through OCI (FVOCI), fair value through profit or loss (FVTPL), elected at FVOCI or designated at FVTPL. Purchases and sales of financial assets are recognised on the trade date, being the date on which the Group commits to purchase or sell the asset.
\nWith the exception of assets classified as FVTPL, the initial fair value of a financial asset includes direct and incremental transaction costs. The fair value of assets traded on an active market will be the price that would be received if an asset were to be sold in an orderly transaction between market participants at the measurement date. In the absence of an active market, the Group establishes a fair value using various valuation techniques that use observable and unobservable inputs. These include recent transactions in similar items, discounted cash flow projections, option pricing models and other valuation techniques used by market participants.
\n \nThe classification requirements for debt and equity instruments are described below.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182705": { "value": "\n\n Reclassifications\n
\nFinancial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReclassificationOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182709": { "value": "\n\n (b) Impairment of financial assets \n
\nThe Group recognises loss allowances for ECL for the following financial instruments that are not measured at FVTPL:
\n\n Measurement\n
\nECL is measured by the Group in a way that reflects:
\nThe amount of ECL recognised as a loss allowance depends on the change in credit risk of the financial instrument since origination and whether the credit risk on those financial instruments has increased significantly since initial recognition. In order to determine the appropriate ECL, a financial instrument is allocated to a stage dependent on the credit risk relative to when the financial instrument was originated:
\nThe Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture life-time expected losses, the Group also models early redemptions as a separate component within the ECL calculation.
\nThe expected cash flows included in the ECL calculation are derived from a) the loan contract b) on the disposal of collateral or c) sale of loans arising from deleveraging of NPLs which are included in the ECL calculation from the point that they meet the following three conditions:
\nCredit loss is the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original EIR.
\n\n Purchased or originated credit-impaired assets (POCI)\n
\nPOCI are excluded from the general 3 stage impairment model in IFRS 9. POCI assets are financial assets that are credit-impaired on initial recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognised on a credit-adjusted EIR basis. ECL are only recognised or released to the extent that there is a subsequent change in ECL.
\n\n Expected life\n
\nWhen measuring ECL, the Group must consider the maximum contractual period over which the Group is exposed to credit risk. All contractual terms should be considered when determining the expected life, including prepayment options, extension and rollover options. For most instruments, the expected life is limited to the remaining contractual life, adjusted as applicable for expected prepayments.
\nFor certain revolving credit facilities that do not have a fixed maturity (e.g. credit cards and overdrafts), the expected life is estimated based on the period over which the Group is exposed to credit risk and where the credit losses would not be mitigated by Management actions.
\nFor instruments in Stage 2 or Stage 3, loss allowances will cover ECL over the expected remaining life of the instrument.
\n \n\n Expert Credit Judgement\n
\nThe Group\u2019s ECL accounting framework methodology, in line with the requirements of the standard, requires the Group to use its experienced credit judgement to incorporate the estimated impact of factors not captured in the modelled ECL results, in all reporting periods.
\n\n Effective Interest Rate\n
\nThe discount rate used by the Group in measuring ECL is the EIR (or \u2018credit-adjusted effective interest rate\u2019 for a POCI financial assets) or an approximation thereof.
\nFor undrawn commitments, the EIR, or an approximation thereof, is applied when recognising the financial assets resulting from the loan commitment.
\n\n Low credit risk exemption\n
\nThe Group applied the low credit risk exemption to sovereign debt securities, reverse repurchase agreements, loans and advances to banks and certain intercompany positions in scope for impairment under IFRS 9.
\nThe Group considers credit risk on a financial instrument low if it meets the following conditions:
\nThese exposures are in Stage 1 with a very low credit risk requiring 12-month ECL and contributing minimally to overall ECL.
\n\n Modification Policy for Financial Assets\n
\nThe Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Group assesses whether or not the new items are substantially different to the original terms. The Group does this by considering, among others, the following factors:
\nIf the terms are substantially different, the Group derecognises the original financial asset and recognises a new asset at fair value and recalculates a new EIR for the asset. The date of renegotiation of the new financial asset is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a SICR has occurred. However, the Group also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount are also recognised in profit or loss as a gain or loss on derecognition.
\nIf the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group calculates the gross carrying amount based on the revised cash flows of the financial asset and recognises a modification gain or loss in profit or loss. The new gross carrying amount is recalculated by discounting the modified cash flows at the original EIR (or credit-adjusted EIR for POCI financial assets).
\n \n\n Write-off policy\n
\nThe Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. Indicators that there is no prospect of recovery include the borrower being deemed unable to pay due to their financial circumstances or the cost to be incurred in seeking recovery is likely to exceed the amount of the write-off. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation. Write-off on those financial assets subject to enforcement activity will take place on conclusion of the enforcement process.
\nIn subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the income statement.
\n\n Presentation of ECL allowance in the statement of financial position\n
\nThe ECL on financial assets measured at amortised cost is presented as a deduction from the gross carrying amount.
\nThe ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at fair value. Instead an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to provision for credit losses in the income statement.
\nOff-balance sheet credit risks include certain undrawn lending commitments, letters of credit and letters of guarantee as a provision in the SOFP.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182843": { "value": "\n\n (c) Financial liabilities and equity \n
\nFinancial liabilities are classified at amortised cost unless mandatorily required to be classified at FVTPL, for example derivatives, or designated at FVTPL.
\n\n Financial liabilities measured at amortised cost\n
\nFinancial liabilities include deposits by banks (including Central Banks), customer accounts, debt securities and subordinated debt. Derivative liabilities are dealt with under separate accounting policies.
\nDebt securities and subordinated debt issued are initially recognised on the date that they originated, while all other financial liabilities are recognised initially on the trade date. Both the date of origination and the trade date is the date the Group becomes a party to the contractual provisions of the instrument.
\nAll financial liabilities are recognised initially at fair value, less any directly attributable transaction costs and are subsequently measured at amortised cost and the related interest expense is recognised in the income statement using the EIR method.
\n \n\n Financial liabilities designated at FVTPL\n
\nFinancial liabilities classified in this category are those that have been designated by the Group on initial recognition.
\nFinancial liabilities are designated at FVTPL when one of the following criteria is met:
\nFinancial liabilities designated at FVTPL are recorded in the SOFP. For liabilities designated at FVTPL, changes in fair value are recognised in non-interest income in the income statement, with the exception of movements in own credit.
\nFor financial liabilities designated at FVTPL, gains or losses attributable to changes in own credit are presented in OCI. The Group has not and does not expect to invoke the fair value option for financial liabilities.
\nThe classification of instruments as a financial liability or an equity instrument is dependent upon the substance of the contractual arrangement. Instruments which carry a contractual obligation to deliver cash or another financial asset to another entity are classified as financial liabilities. The coupons on these instruments are recognised in the income statement as interest expense using the effective interest method. Where the Group has absolute discretion in relation to the payment of coupons and repayment of principal, the instrument is classified as equity and any coupon payments are classified as distributions in the period in which they are made.
\nIf the Group purchases its own debt, it is removed from the balance sheet and the difference between the carrying amount of the liability and the consideration paid is included in other operating income, net of any costs or fees incurred.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182882": { "value": "\n\n (d) Derecognition of Financial instruments\n
\n\n Financial assets\n
\nThe Group derecognises a financial asset when the contractual right to the cash flow from the financial asset expires, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. Control over the assets is represented by the practical ability to sell the transferred asset.
\nOn derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
\nAny cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVOCI is not recognised in profit or loss on derecognition of such securities. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a separate asset or liability.
\nThe Group enters into transactions whereby it transfers assets recognised on its SOFP, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. In such cases, the transferred assets are not derecognised. Examples of such transactions are securities lending and sale-and-repurchase transactions.
\nWhen assets are sold to a third party with a concurrent total rate of return swap on the transferred assets, the transaction is accounted for as a secured financing transaction similar to sale-and-repurchase transactions, because the Group retains all or substantially all of the risks and rewards of ownership of such assets.
\nIn transactions in which the Group neither retains nor transfers substantially all of the risks and rewards of ownership of a financial asset and it retains control over the asset, the Group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset.
\nIn certain transactions, the Group retains the obligation to service the transferred financial asset for a fee. The transferred asset is derecognised if it meets the derecognition criteria. An asset or liability is recognised for the servicing contract if the servicing fee is more than adequate (asset) or is less than adequate (liability) for performing the servicing.
\nThe Group sells loans and advances to customers to SEs that in turn issue notes to investors which are collateralised by the purchased assets. For the purpose of disclosure, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the transfer of financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in the form of the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes. The securitisation is generally retained in the form of senior or subordinated tranches, or other residual interests (retained interests) however, these securitisations may also occur with entities external to the Group. Retained interests are recognised as debt securities. The Group sells loans and advances to customers to SEs that are not consolidated SEs and the Group retains no interest in these assets and they are derecognised in their entirety.
\n \n\n Financial liabilities\n
\nThe Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire. This may happen when payment is made to the lender; the borrower legally is released from primary responsibility for the financial liability; or if there is an exchange of debt instruments with substantially different terms or a substantial modification of the terms of an existing debt instrument. Derecognition conditions are also satisfied when an entity repurchases its own debt instruments issued previously. When a financial liability is extinguished, any difference between the carrying amount of the financial liability and the consideration paid is recognised in the income statement.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182921": { "value": "\n\n (e) Determination of fair value of financial instruments and other assets\n
\nThe Group measures financial instruments, such as, derivative financial instruments, trading financial instruments and other financial instruments at FVTPL. Certain risks in hedged financial instruments, financial assets classified as FVOCI, property and equipment, and collateral in possession are measured at fair value on initial recognition.
\nFair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset, or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability which is accessible to the Group.
\nThe Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
\nAll assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole and is described as follows:
\nFor assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.
\nAn analysis of the fair values of financial instruments, and further details as to how they are measured, are provided in note 37.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182934": { "value": "\n \n\n (viii) Derivative instruments and hedging \n
\nThe Group follows the IFRS 9 model for hedge accounting.
\nDerivative instruments used by the Group primarily comprise interest rate swaps and currency forward rate contracts. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
\nFor the purpose of hedge accounting, hedges are classified as:
\nAt the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
\nCertain derivative instruments do not fulfil the hedge accounting criteria under IFRS 9 and are consequently classified as held for trading. The fair value movement and any interest income/(expense) are included in Net trading income/(expense).
\nHedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below:
\n \n\n (a) Fair value hedges \n
\nThe change in the fair value of a hedging instrument is recognised in the consolidated income statement as NII. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the consolidated income statement as NII.
\nFor fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term of the hedge using the EIR method. The EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
\nIf the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss.
\n \n\n (b) Embedded derivatives\n
\nA derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if:
\nEmbedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the FVTPL category.
\nA derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host, together with the embedded derivative, is required to be classified in its entirety as a financial asset at FVTPL.
\n\n (c) Credit valuation adjustment\n
\nThe Group is engaged in over the counter (OTC) derivative transactions and considers whether a fair value adjustment for credit risk is required. CVA is considered to reflect the counterparty\u2019s default risk and debit valuation adjustment (DVA) to reflect own credit risk. There is no specific guidance on the methods used to calculate CVA or DVA which creates challenges in estimation.
\n \n \n \nAs a result, IFRS 13 requires entities to consider the effects of credit risk when determining a fair value measurement, e.g. by calculating a CVA on their derivatives. Estimation can be complex and requires the use of significant judgement which is often influenced by various qualitative factors, such as:
\nThe Group mitigates the majority of its derivative positions through the use of netting and Credit Support Annex collateral arrangements. The Group do not operationally net positions. The netting and collateral arrangements may be called upon in the event of a default. This allows a counterparty to net all assets and liabilities outstanding with the defaulting counterparty, subject to the agreement when the default event occurs. The collateral arrangements in place require the counterparty in a liability position to place collateral to cover that shortfall. The Group considers and discounts the necessity for any amendments to the valuations to reflect the CVA when calculating the fair value of the derivative positions.
\nThe Group monitors this position at every reporting period and assesses if material CVAs become appropriate to be recognised.
\n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182935": { "value": "\n\n (viii) Derivative instruments and hedging \n
\nThe Group follows the IFRS 9 model for hedge accounting.
\nDerivative instruments used by the Group primarily comprise interest rate swaps and currency forward rate contracts. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
\nFor the purpose of hedge accounting, hedges are classified as:
\nAt the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
\nCertain derivative instruments do not fulfil the hedge accounting criteria under IFRS 9 and are consequently classified as held for trading. The fair value movement and any interest income/(expense) are included in Net trading income/(expense).
\nHedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below:
\n \n\n (a) Fair value hedges \n
\nThe change in the fair value of a hedging instrument is recognised in the consolidated income statement as NII. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the consolidated income statement as NII.
\nFor fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term of the hedge using the EIR method. The EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
\nIf the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss.
\n \n\n (b) Embedded derivatives\n
\nA derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if:
\nEmbedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the FVTPL category.
\nA derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host, together with the embedded derivative, is required to be classified in its entirety as a financial asset at FVTPL.
\n\n (c) Credit valuation adjustment\n
\nThe Group is engaged in over the counter (OTC) derivative transactions and considers whether a fair value adjustment for credit risk is required. CVA is considered to reflect the counterparty\u2019s default risk and debit valuation adjustment (DVA) to reflect own credit risk. There is no specific guidance on the methods used to calculate CVA or DVA which creates challenges in estimation.
\n \nAs a result, IFRS 13 requires entities to consider the effects of credit risk when determining a fair value measurement, e.g. by calculating a CVA on their derivatives. Estimation can be complex and requires the use of significant judgement which is often influenced by various qualitative factors, such as:
\nThe Group mitigates the majority of its derivative positions through the use of netting and Credit Support Annex collateral arrangements. The Group do not operationally net positions. The netting and collateral arrangements may be called upon in the event of a default. This allows a counterparty to net all assets and liabilities outstanding with the defaulting counterparty, subject to the agreement when the default event occurs. The collateral arrangements in place require the counterparty in a liability position to place collateral to cover that shortfall. The Group considers and discounts the necessity for any amendments to the valuations to reflect the CVA when calculating the fair value of the derivative positions.
\nThe Group monitors this position at every reporting period and assesses if material CVAs become appropriate to be recognised.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f182966": { "value": "\n\n (a) Fair value hedges \n
\nThe change in the fair value of a hedging instrument is recognised in the consolidated income statement as NII. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the consolidated income statement as NII.
\nFor fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term of the hedge using the EIR method. The EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
\nIf the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183017": { "value": "\n\n (ix) Cash and cash equivalents \n
\nCash comprises cash on hand and demand deposits and cash equivalents include liquid investments that are readily convertible to known amounts of cash which are subject to an insignificant risk of change in value and with an original maturity of less than three months.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183021": { "value": "\n\n (x) Leases\n
\n\n (a) Classification of Leases \n
\nAt inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
\nUnless the lease is of short-term and of low-value assets, where the Group has the right to obtain substantially all of the economic benefits from use of identified assets and has the right to direct the use of the identified asset, a right-of-use asset is recognised in property and equipment and a lease liability is recognised in other liabilities.
\nIf a lease is assumed as part of a business combination the Group, subject to not meeting the recognition exemptions as detailed below, will recognise a right-of-use asset and a lease liability as if the lease were a new lease at the acquisition date. The right-of-use assets and lease liability are then measured consistently with the Groups accounting policy as detailed above with the lease commencement date being the acquisition date.
\n \n\n As a lessee\n
\nThe Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
\nThe right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
\nThe lease liability is measured at amortised cost using the incremental borrowing rate. Incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right of use asset in a similar economic environment. For its incremental borrowing rate, the Group uses its FTP, which comprises its base cost of funds with add-ons related to regulatory requirements, and term liquidity premium based on the slope of swap curve as a proxy of time value of money. The Group FTP is fully reflective of its funding profile and therefore considers it an appropriate reflection of the Group\u2019s borrowing cost. For retail properties, property yield is added as a lease specific adjustment.
\nLease payments included in the measurement of the lease liability comprise the following:
\nThe lease liability is remeasured, if there is a change in future lease payments arising from a change in index-linked considerations, if there is a change in the Group\u2019s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.
\nWhen the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
\n\n Short-term leases and leases of low-value assets\n
\nThe Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of vehicles that have a lease term of twelve months or less and leases of low-value assets, including office equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
\n\n As a lessor\n
\nWhen the Group acts as a lessor, it determines at lease inception, whether each lease is a finance lease or an operating lease.
\nTo classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as, whether the lease is for the major part of the economic life of the asset.
\nWhen the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.
\nIf an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract.
\nThe Group recognises lease payments received under operating leases as income, on a straight-line basis, over the lease term, as part of other income.
\n \nThe accounting policies applicable to the Group as a lessor in the comparative period were not different from IFRS 16. However, when the Group was an intermediate lessor the sub-leases were classified with reference to the underlying asset.
\nThe Group presents right-of-use assets in property and equipment and lease liabilities in other liabilities in the SOFP.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183096": { "value": "\n \n\n (xi) Property and equipment \n
\nLeasehold premises with initial lease terms of less than 50 years and all other equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is calculated on a straight-line basis to write off the costs of such assets to their residual value over their estimated useful lives, which are assessed annually.
\nFreehold premises (including land) are revalued at least annually by external professional valuers. Any accumulated depreciation (on freehold premises excluding land) at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. Any resulting increase in value is credited to OCI and shown as revaluation reserves in shareholders\u2019 equity. Any decrease in value that offsets previous increases of the same asset are charged in OCI and debited against the revaluation reserves directly in equity while all other decreases are charged to the income statement. The revalued premises, excluding the land element, are depreciated to their residual values over their estimated useful lives, which are assessed annually.
\nSubsequent costs are included in the asset\u2019s carrying amount, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Property and equipment are assessed for impairment where there is an indication of impairment. Where impairment exists, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognised against the revaluation reserve to the extent it is available and any remainder is recognised in the income statement. The depreciation charge for the asset is then adjusted to reflect the asset\u2019s revised carrying amount.
\nIf an item of property, plant and equipment is disposed of, any gains or losses are recognised in the profit or loss before tax. If the asset being disposed of had previously been revalued then any amount in OCI relating to that asset is reclassified directly to retained earnings on disposal rather than the income statement.
\nThe estimated useful lives are as follows:
\n| \n Freehold Buildings \n | \n \n 50 years \n | \n
| \n Leasehold Buildings \n | \n \n 50 years or term of lease if less than 50 years \n | \n
| \n Office Equipment \n | \n \n 5 \u2013 15 years \n | \n
| \n Computer Hardware \n | \n \n 3 \u2013 10 years \n | \n
| \n Motor Vehicles \n | \n \n 5 years \n | \n
\n (xi) Property and equipment \n
\nLeasehold premises with initial lease terms of less than 50 years and all other equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is calculated on a straight-line basis to write off the costs of such assets to their residual value over their estimated useful lives, which are assessed annually.
\nFreehold premises (including land) are revalued at least annually by external professional valuers. Any accumulated depreciation (on freehold premises excluding land) at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. Any resulting increase in value is credited to OCI and shown as revaluation reserves in shareholders\u2019 equity. Any decrease in value that offsets previous increases of the same asset are charged in OCI and debited against the revaluation reserves directly in equity while all other decreases are charged to the income statement. The revalued premises, excluding the land element, are depreciated to their residual values over their estimated useful lives, which are assessed annually.
\nSubsequent costs are included in the asset\u2019s carrying amount, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Property and equipment are assessed for impairment where there is an indication of impairment. Where impairment exists, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognised against the revaluation reserve to the extent it is available and any remainder is recognised in the income statement. The depreciation charge for the asset is then adjusted to reflect the asset\u2019s revised carrying amount.
\nIf an item of property, plant and equipment is disposed of, any gains or losses are recognised in the profit or loss before tax. If the asset being disposed of had previously been revalued then any amount in OCI relating to that asset is reclassified directly to retained earnings on disposal rather than the income statement.
\nThe estimated useful lives are as follows:
\n| \n Freehold Buildings \n | \n \n 50 years \n | \n
| \n Leasehold Buildings \n | \n \n 50 years or term of lease if less than 50 years \n | \n
| \n Office Equipment \n | \n \n 5 \u2013 15 years \n | \n
| \n Computer Hardware \n | \n \n 3 \u2013 10 years \n | \n
| \n Motor Vehicles \n | \n \n 5 years \n | \n
\n (xii) Intangible assets (other than goodwill)\n
\nAcquired computer software is stated at cost, less amortisation and provision for impairment, if any. The external costs and identifiable internal costs of bringing to use the computer software are capitalised where it is probable that future economic benefits that exceed its cost will flow from its use over more than one year.
\nCapitalised computer software has a finite life and is amortised on a straight-line basis over a period of between three to seven years.
\nExpenditure on internally developed software is recognised as an asset when the Group is able to demonstrate: that the product is technically and commercially feasible, its intention and ability to complete the development and use the software in a manner that will generate future economic benefits, and that it can reliably measure the costs to complete the development. The capitalised costs of internally developed software include all costs directly attributable to developing the software and capitalised borrowing costs, and are amortised over its useful life. Internally developed software is stated at capitalised cost less accumulated amortisation and any accumulated impairment losses
\nSoftware is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An asset\u2019s carrying value is written down immediately to its recoverable amount if the asset\u2019s carrying amount is greater than its estimated recoverable amount. The estimated recoverable amount is the higher of the asset\u2019s fair value less costs to sell or VIU.
\nCosts associated with research activities or maintaining computer software programmes are recognised as an expense as incurred.
\n \n\n Acquired intangible assets\n
\nCustomer related intangible assets and brands acquired in a business combination are recognised at fair value at acquisition date. Customer related intangible assets and brands have a finite useful life and are carried at cost less accumulated amortisation and provision for impairment, if any. Amortisation is calculated using the straight line basis to allocate the cost over their estimated useful life.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183156": { "value": "\n\n (xiii) Collateral in possession\n
\nIn certain circumstances, property is repossessed following foreclosure on loans that are in default. When a property is repossessed, the associated loan relating to that property is derecognised and any provision on that loan is reversed. On initial recognition the collateral in possession is valued at its fair value.
\nSubsequent to initial recognition, the property is carried at the lower of its cost or net realisable value.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCollateralExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183161": { "value": "\n\n (xiv) Assets and liabilities classified as held for sale\n
\nAn asset or a disposal group is classified as held for sale if the following criteria are met:
\nWhen assets (or disposal groups), other than financial assets as classified under IFRS 9, or rights under an insurance contract, are initially classified as held for sale, they are measured at the lower of the carrying amount or fair value less costs to sell at the date of reclassification.
\nImpairment losses subsequent to classification of such assets (or disposal groups) are recognised in the income statement. Increases in fair value less costs to sell of such assets (or disposal groups) that have been classified as held for sale are recognised in the income statement to the extent that the increase is not in excess of any cumulative loss previously recognised in respect of the asset (or disposal group).
\nWhere the above conditions cease to be met, the assets (or disposal group) are reclassified out of held for sale and included under the appropriate SOFP classifications.
\nFinancial assets within the scope of IFRS 9, DTAs and income taxes within the scope of IAS 12 continue to be measured in accordance with these standards.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183173": { "value": "\n \n\n (xv) Provisions\n
\nA provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
\nA restructuring provision is recognised when there is an approved detailed and formal Restructuring Plan, and the restructuring either has commenced or has been publicly announced. Future operating losses are not permitted to be recognised.
\nPresent obligations arising under onerous contracts are recognised and measured as provisions at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. An onerous contract is a contract in which the unavoidable cost of meeting the obligation under the contract exceeds the economic benefits expected to be received under it.
\nContingent liabilities are either possible obligations that arise from past events whose existence is dependent on whether some uncertain future events occur which are not wholly within the control of the entity or are a present obligation that arises from a past event but is not recognised because:
\nContingent liabilities are not recognised but are disclosed unless the probability of their occurrence is remote.
\n \nFinancial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss that it incurs because a specified debtor fails to make payment when it is due in accordance with the terms of a debt instrument.
\n \n \n \n \nLoan commitments are firm commitments to provide credit under pre-specified terms and conditions.
\nThe maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.
\nECL held against commitments are reported under loans and advances to customers.
\n \nFinancial guarantees issued or commitments to provide a loan at a below-market interest rate are initially measured at fair value. Subsequently, they are measured at the higher of the loss allowance determined in accordance with IFRS 9 and the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15.
\n \nOther loan commitments issued are measured at the sum of (i) the loss allowance determined in accordance with IFRS 9 and (ii) the amount of any fees received, less, if the commitment is unlikely to result in a specific lending arrangement, the cumulative amount of income recognised. Derecognition policies in 1(d) are applied to loan commitments issued and held.
\nThe Group has issued no loan commitments that are measured at FVTPL
\n \n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183174": { "value": "\n\n (xv) Provisions\n
\nA provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
\nA restructuring provision is recognised when there is an approved detailed and formal Restructuring Plan, and the restructuring either has commenced or has been publicly announced. Future operating losses are not permitted to be recognised.
\nPresent obligations arising under onerous contracts are recognised and measured as provisions at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. An onerous contract is a contract in which the unavoidable cost of meeting the obligation under the contract exceeds the economic benefits expected to be received under it.
\nContingent liabilities are either possible obligations that arise from past events whose existence is dependent on whether some uncertain future events occur which are not wholly within the control of the entity or are a present obligation that arises from a past event but is not recognised because:
\nContingent liabilities are not recognised but are disclosed unless the probability of their occurrence is remote.
\n \nFinancial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss that it incurs because a specified debtor fails to make payment when it is due in accordance with the terms of a debt instrument.
\n \n \nLoan commitments are firm commitments to provide credit under pre-specified terms and conditions.
\nThe maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.
\nECL held against commitments are reported under loans and advances to customers.
\n \nFinancial guarantees issued or commitments to provide a loan at a below-market interest rate are initially measured at fair value. Subsequently, they are measured at the higher of the loss allowance determined in accordance with IFRS 9 and the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15.
\n \nOther loan commitments issued are measured at the sum of (i) the loss allowance determined in accordance with IFRS 9 and (ii) the amount of any fees received, less, if the commitment is unlikely to result in a specific lending arrangement, the cumulative amount of income recognised. Derecognition policies in 1(d) are applied to loan commitments issued and held.
\nThe Group has issued no loan commitments that are measured at FVTPL
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183185": { "value": "\nFinancial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss that it incurs because a specified debtor fails to make payment when it is due in accordance with the terms of a debt instrument.
\n \nFinancial guarantees issued or commitments to provide a loan at a below-market interest rate are initially measured at fair value. Subsequently, they are measured at the higher of the loss allowance determined in accordance with IFRS 9 and the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialGuaranteesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183216": { "value": "\n\n (xvi) Dividends \n
\nFinal dividends on ordinary shares are recognised in equity in the period in which they are approved by the Company\u2019s shareholders. Interim dividends are recognised in equity in the period in which they are paid.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183223": { "value": "\n\n (xviii) Sales and repurchase agreements \n
\nFinancial assets may be lent for a fee or sold subject to a commitment to repurchase them (\u201crepos\u201d). Such assets are retained on the SOFP when substantially all the risks and rewards of ownership remain with the Group. The assets are reclassified as pledged assets when the transferee has the right by contract to sell or repledge the collateral. The liability to the counterparty is included separately on the SOFP as appropriate in either Deposits by banks or Customer accounts.
\nSimilarly, where financial assets are purchased with a commitment to resell (\u201creverse repos\u201d), or where the Group borrows financial assets but does not acquire the risks and rewards of ownership, the transactions are treated as collateralised loans, and the financial assets are not included in the SOFP. The collateralised loan asset is included separately on the SOFP as appropriate in either Loans and advances to banks or Loans and advances to customers.
\nThe difference between the sale and repurchase price is recognised in the income statement over the life of the agreements using the EIR. Fees earned on stock lending are recognised in the income statement over the term of the lending agreement. Securities lent to counterparties are also retained on the SOFP.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183246": { "value": "\n\n (xx) Offsetting\n
\nFinancial assets and liabilities are offset and the net amount reported in the balance sheet when there is currently a legally enforceable right of set off and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. No impairment loss allowance for ECL is recognised on a financial asset, or portion thereof, which has been offset.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183452": { "value": "\n \n \n\n 2. Critical accounting estimates and judgements\n
\nThe preparation of these consolidated financial statements, in conformity with IFRS, requires Management to make assumptions, estimates and judgements that affect the reported amounts of income, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that may require a material adjustment to the carrying amount of the assets or liabilities affected in future periods.
\nThe current economic climate, with interest rate increases and high inflation, elevates the uncertainty associated with judgements, estimates and assumptions made by Management. The Irish economy demonstrated recovery post Covid and resilience in the current economic climate in 2022. The results of the actions taken by the Government, EBA and CBI point toward a positive trajectory of recovery. The Directors and Management, however, remain cautious and risk remains in the medium to long-term that the Irish Banking sector will continue to face challenges, particularly due to higher capital requirements and new and emerging risks.
\nWhile the actual results may differ from the estimates made, the Directors believe that they are reasonable in the current circumstances based on the best available information at the date of the approval of these consolidated financial statements.
\nAssumptions, estimates and judgements are revised on an ongoing basis and where necessary are revised to reflect current conditions and updated information.
\nCritical accounting estimates and judgements made by Management in applying accounting policies are set out below.
\n\n (a) Allowance for credit losses under IFRS 9 \n
\nIFRS 9 requires an impairment allowance to be recorded for ECL on financial assets regardless of whether there has been an actual loss event. There is a requirement to track and assess changes in credit risk on financial instruments since origination and determine whether the credit risk on those financial instruments has increased significantly since initial recognition.
\nGovernment-led customer support initiatives in response to the pandemic have weakened established relationships between model inputs and outputs, reducing the ability to forecast using models alone. In addition, models are constructed based on a single economic cycle. As a result a greater level of management judgement is required to reflect the current nature and uncertainty of the economic outlook.
\nThe following concepts introduce significant judgement within impairment and have a tangible impact on the level of ECL allowances.
\n\n Determination of significant increase in credit risk (SICR)\n
\nThe determination of whether a loan has experienced a significant increase in credit risk may have a material impact on the level of ECL impairment allowance as a 12-month ECL is recognised for Stage 1 loans whereas a lifetime ECL is recognised for Stage 2 loans.
\nMigration of loans between Stage 1 and Stage 2 can cause some volatility in the amount of the recognised ECL allowances and the provision for expected credit losses in any accounting period.
\nThe Group has relied on a number of measures including delinquency, forborne status, risk grade, change in remaining lifetime Probability of Default (PD) and PD at maturity to determine SICR.
\nAt December 2022, management judgement has been applied to specified non-standard mortgages classified as Stage 1 by Impairment models and these loans were transferred to Stage 2 with a lifetime impairment loss allowance applied. The impact of this staging adjustment is a c.\u20ac138m increase in Stage 2 volumes.
\n\n Forward Looking Information (FLI)\n
\nThe Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture lifetime ECL, the Group also modelled early redemptions as a separate component within the ECL calculation.
\nJudgement is combined with statistical evidence in determining which forward-looking variables are relevant for the Group\u2019s loan portfolios and in determining the extent by which through-the-cycle parameters should be adjusted for FLI to determine point-in-time parameters.
\nChanges in FLI variables applied to convert through-the-cycle PD and LGD into point-in-time parameters can either increase or decrease ECL impairment allowances in a particular accounting period. On update, increases in the level of optimism in the FLI variables will cause a decrease in ECL while increases in the level of pessimism in the FLI variables will cause an increase in ECL. These movements could be significant in the accounting period of update.
\n \n \n \n \n \nThe estimation and application of FLI requires significant judgement. In its calculation of ECL, the Group considers multiple scenarios and possible outcomes together with their probability of occurrence. Scenarios are designed to capture a range of possible outcomes. Each macroeconomic scenario in the Group\u2019s ECL calculation includes a projection of all relevant macroeconomic variables applied in the models for a five year period (where the relevant period extends to five years), subsequently reverting to long-run averages.
\nThe Group\u2019s approach applies extreme-but-plausible economic scenarios (i.e. underpinned by historical evidence) to estimate the distribution of ECL to which the Group is exposed. Using statistical techniques combined with expert credit judgement the Group then formulates an unbiased probability weighted estimate of ECL at the reporting date.
\nThree scenarios are currently considered in the Group\u2019s calculation of ECL. The base scenario is used for financial planning purposes. The Group considers one scenario that represents a macroeconomic environment that is more favourable to the central scenario and one scenario that represents a macroeconomic environment that is less favourable to the central scenario. Three scenarios are currently considered in the Group\u2019s calculation of ECL at the reporting date.
\nThe following table details the key macroeconomic variables applied to model credit losses together with the associated percentiles and probability weightings for Stages 1 and 2 at 31 December 2022. Macroeconomic scenarios were most recently updated in December 2022. The update in the Base Case Scenario reflects a deterioration in the outlook for the Irish economy in future years as a result of higher inflation, with lower forecast HPI and GDP growth.
\nIFRS 9 Upside and Downside scenarios have been updated to present extreme \u20181-in-20\u2019 scenarios relative to the updated Base scenario. Given the severity of these scenarios (5th Percentile upside and 95% Percentile downside), their combination captures the macroeconomic uncertainty arising from the current economic environment.
\n\u00a0
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||||
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n Base Case\n \n | \n \n \n Upside Scenario\n \n | \n \n \n Down side Scenario\n \n | \n \n \u00a0 \n | \n \n \n Base Case\n \n | \n \n \n Upside Scenario\n \n | \n \n \n Down side Scenario\n \n | \n
| \n \u00a0 \n | \n \n \n Average value over Year 1\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value for the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over Year 1\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Percentile \n | \n \n \u00a0 \n | \n \n \n 50th\n \n | \n \n \n 5th\n \n | \n \n \n 95th\n \n | \n \n \u00a0 \n | \n \n 50th \n | \n \n 5th \n | \n \n 95th \n | \n
| \n Scenario Probability Weighting \n | \n \n \u00a0 \n | \n \n \n 54%\n \n | \n \n \n 23%\n \n | \n \n \n 23%\n \n | \n \n \u00a0 \n | \n \n 54% \n | \n \n 23% \n | \n \n 23% \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Irish Residential House Prices \n | \n \n \n 0%\n \n | \n \n \n 2%\n \n | \n \n \n 12%\n \n | \n \n \n -10%\n \n | \n \n 4% \n | \n \n 3% \n | \n \n 13% \n | \n \n -8% \n | \n
| \n Irish Unemployment \n | \n \n \n 7%\n \n | \n \n \n 5%\n \n | \n \n \n 4%\n \n | \n \n \n 11%\n \n | \n \n 7% \n | \n \n 6% \n | \n \n 4% \n | \n \n 12% \n | \n
| \n Irish GDP \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n \n \n 6%\n \n | \n \n \n -2%\n \n | \n \n 6% \n | \n \n 4% \n | \n \n 6% \n | \n \n -1% \n | \n
| \n Consumer Price Index \n | \n \n \n 6%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n \n \n 4%\n \n | \n \n 3% \n | \n \n 2% \n | \n \n 2% \n | \n \n 3% \n | \n
| \n ECB Base Rate \n | \n \n \n 3%\n \n | \n \n \n 3%\n \n | \n \n \n 1%\n \n | \n \n \n 3%\n \n | \n \n 0% \n | \n \n 0% \n | \n \n 0% \n | \n \n 2% \n | \n
The Base, Upside and Downside scenarios are described as follows:
\n\n Base scenario\n
\nIn the base scenario, the outlook for the global economy is one of slower growth and more uncertainty in 2023, as the economic rebound from the impact of Covid lockdowns in 2020 and 2021 dissipates, and the remaining inflationary shock drives the most aggressive response from global central banks for the past 30 years.
\nA forceful series of interest rate increases to stem burgeoning inflation, marks the end of the zero-rate environment and highly accommodative global monetary policy of the past decade. With fallout from the Russian invasion of Ukraine continuing to drive price instability in key energy and agri-food markets and combined with the Covid driven global supply chain issues, the inflation outlook continues to be highly uncertain, leading to a period of much greater economic uncertainty.
\n \n \n \n \n \nProperty prices have now reached the peak last seen in April 2007, although wages are significantly ahead of that period in 2022, and the number of households in the economy has grown by c.400,000 with new housing supply meeting a fraction of demand. Underlying driving forces, such as a) decade of under supply of housing (with 2022 falling short of output forecasts), b) strong population growth through inward migration, c) record rental values, d) an influx of Ukrainian war refugees and e) exceptionally strong construction price increases, are expected to hold property prices at current levels in 2023.
\nOn unemployment, the Baseline model reflects both the expectation of better than expected unemployment numbers in the end of 2022, and a rise in forecast unemployment level for 2023 to 6.5% (up 1%).
\n\n Upside scenario\n
\nThis is an extreme positive scenario developed to reflect a much stronger outcome for the Irish economy than in the base scenario. There is both historical context and statistical backing to the key forecasts, but at a positive extremity.
\nAverage GDP growth over the forecast period is 6%, which is higher than the average of 3.9% for the Irish economy since 1950. The outlook reflects an extreme positive of effective full employment.
\nConsistent with the longer term nominal house price average gain of 9.3% since 1970 ( Irish property prices are 50X higher than in 1970 in nominal terms) and 6.4% globally during that period, the HPI forecast for the extreme positive scenario, puts average HPI increases during the scenario under review, at 12% per annum.
\nSubstantially below trend CPI growth returns in the Irish economy over the forecast horizon, with inflation trends remaining highly supportive of economic growth.
\n\n Downside scenario\n
\nThe Downside scenario is an extreme scenario backed by Irish historical context and international comparatives. The scenario captures a statistical extreme in unemployment, GDP and HPI, while maintaining credibility as a single scenario. A prolonged period of mid teen unemployment, extends quickly, reaching a peak of 15% in 2024.
\nFive years of sub normal growth across the forecast horizon in 2022 to 2027, shows a sharp reversal from current expected growth levels and is significantly below the 3.9% average GDP growth seen in the Irish economy since 1950. GDP falls a low point of minus 11.5% over the forecast period.
\nThe threat of CPI moving ahead at a much faster pace than expected, is a key feature of this 1 in 20 scenario for this period, acknowledging the weakness in the global supply chain, and the impact of the Ukraine /Russian conflict which has pushed inflationary forces to 40 year highs.
\nThe Group applies statistical techniques combined with expert credit judgement to formulate an unbiased probability weighted estimate of ECL at the reporting date. A review of the methodology to calculate the final weighted estimate of ECL based on three scenario inputs (Base, Upside and Downside scenarios) by reference to challenger methods and supplementary benchmarks was conducted in H2 2022. The review concluded that the methodology remains in compliance with IFRS 9.
\nGiven the relative sizes of the portfolios, the key judgemental area for the Group is in relation to the level of ECL calculated for the residential mortgage portfolio.
\nDetermining probability weightings of the scenarios and forecasting FLI in respect of those scenarios requires a significant degree of Management judgement. The reported ECL allowance is impacted by the probability weighting attributed to each macroeconomic scenario.
\nIf the Group were to only use its Base Case Scenario for the measurement of ECL for the secured mortgage portfolio, excluding Management\u2019s adjustment to modelled outcomes, the ECL impairment allowance would be \u20ac98m less than reported at 31 December 2022.
\n \n \n \n \n \nSimilarly, excluding Management\u2019s adjustment to modelled outcomes, if the Group were to only apply its Upside Scenario for the measurement of ECL for the secured mortgage portfolio, the ECL impairment allowance would be \u20ac126m less than reported at 31 December 2022. Whereas, if the Group were to only use its Downside Scenario, the ECL impairment allowance would be \u20ac336m greater than reported at December 2022.
\nThe adequacy of ECL allowance is reviewed by the BAC on a half-yearly basis. At 31 December 2022, the total impairment provision included \u20ac137m of management\u2019s adjustments to modelled outcomes (31 December 2021: \u20ac118m) which primarily comprises the following:
\nAt December 2022, management judgement has been applied to specified non-standard mortgages classified as Stage 1 by Impairment models and these loans were transferred to Stage 2 with a lifetime impairment loss allowance applied. The impact of this staging adjustment is a c. \u20ac138m increase in Stage 2 volumes.
\n\n (b) Deferred taxation\n
\nAt 31 December 2022, the Group had a net deferred tax asset of \u20ac309m (31 December 2021: \u20ac350m). See note 27 for further details.
\nDeferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. The recognition of a deferred tax asset relies on Management\u2019s judgements surrounding the probability and adequacy of future taxable profits and the reversals of existing taxable temporary differences.
\nThe most important judgement relates to Management\u2019s assessment of the recoverability of the deferred tax asset relating to carried forward tax losses, being \u20ac334m at 31 December 2022. It should be noted that the full deferred tax asset on tax losses relates to tax losses generated in the PTSB legal entity (i.e. no deferred tax asset is being recognised on tax losses carried forward in any other Group company).
\nThe assessment of recoverability of this asset requires significant judgements to be made about the projection of long-term profitability because of the period over which recovery extends. In addition, given PTSB\u2019s history of recent losses, in accordance with IAS 12, there must be convincing other evidence to underpin this assessment.
\n \n \n \n \n \nIn making the assessment, the Board considered the following factors:
\nTaking the above factors into account, and in the absence of any expiry date for the utilisation of carried forward tax losses in Ireland, the Board have concluded that it is more likely than not that there will be sufficient taxable profits against which the losses can be utilised and on the basis of the assessment above, continue to recognise \u20ac334m of a deferred tax asset on tax losses on the statement of financial position as at 31 December 2022.
\nIn this regard, the Group has carried out an exercise to determine the likely number of years required to utilise the deferred tax asset arising on tax losses carried forward. Based on the Group\u2019s latest forecast plans to 2027 and assuming a level of profitability growth consistent with GDP growth of approximately 2.5%, it will take c. 10 years for the deferred tax asset on tax losses of \u20ac334m to be utilised. A level of profitability consistent with GDP growth continues to be considered by Management to be appropriate given the Group\u2019s primarily domestic retail focus and the expectation arising therefrom that, over the long-term, the Group\u2019s performance would be expected to broadly track the performance of the Irish economy. While the geopolitical uncertainty has significantly impacted GDP in the short-term it is expected that, over the medium-term, GDP will recover and Management are of the view that a long-term assumed growth rate of 2.5% is not unreasonable in this context.
\nIFRS does not allow for the deferred tax asset recognised to be discounted notwithstanding that it is likely to take a number of years for it to be recovered.
\nThe expected period of time to full utilisation of the deferred tax asset has decreased since 31 December 2021 from 22 to 10 years. This is mainly due to forecast interest rate rises and the impact of the Ulster Bank transaction. These revised profitability figures also impact the assumed long-term projections for the Group with the result that the expected utilisation period has decreased.
\n \n \n \n \n \nIt should be noted that Management make certain judgements in the process of applying the Group\u2019s accounting policies which may impact on amounts recognised in the financial statements and consequently on taxable profits and the utilisation of tax losses. As set out in note 27, analysis carried out demonstrates that were certain adverse events to arise (see below for further detail of the adverse events considered) it continues to be Management\u2019s view that there would be sufficient future taxable profits against which the full quantum of tax losses carried forward could be utilised, albeit that the period of time over which such utilisation would occur would be extended.
\nIt should be further noted that the analysis of the estimated utilisation of the deferred tax asset arising on tax losses carried forward in PTSB is based on the current business model of the Group.
\nThe recognition of this asset is dependent on the Group earning sufficient profits to utilise the tax losses. The quantum of and timing of these profits is a source of significant estimation uncertainty. However, as a principle, the Group is expecting to be profitable in the medium term. Consequently the key uncertainty relates principally to the time period over which these profits will be earned. Whilst the Group may be more or less profitable in certain periods owing to various factors such as the interest rate environment, loan loss provisions, operating costs and the regulatory environment, Management expect that, notwithstanding these, the Group will be profitable over the long term. Consequently, any change to these factors which would ultimately impact on profitability, are highly subjective, but will only impact on the time period over which this asset is recovered.
\nAs set out above, in assessing the appropriateness of recognising a deferred tax asset on tax losses carried forward, Management has considered the impact of various stress case scenarios on the period of recoverability. The three scenarios identified as having potentially significant implications for the deferred tax asset recoverability are (i) adverse changes in the interest rate environment, (ii) increased impairment charges and (iii) increases in operating costs. These sensitivity case scenarios are intended to simulate a situation where there is an economic downturn. If any one of the stress case scenarios were to occur, within a reasonably possible range, it is our expectation that the time period over which these assets might be recovered could extend by 1 year. If all adverse assumptions were to arise the period of recoverability would be extended by 1 year (i.e. full utilisation by 2033). However, Management consider this scenario unlikely. Changes in these assumptions are most impacted by changes to house prices and unemployment, which represent the majority of any expected stress loss which could occur. This position will continue to be reviewed for each reporting period; however, much of this estimation uncertainty may not be resolved for a number of years. However, as noted, based on the Group\u2019s latest forecast plan, it is Management estimate that the expected time period for recovery of the deferred tax asset on tax losses to be 10 years, i.e. full utilisation is expected by 2032.
\n\n (c) Fair Value of Financial instruments\n
\nThe Group\u2019s accounting policy for the determination of fair value of financial instruments is set out in note 1(vii)(e). The best evidence of fair value is quoted prices in an active market. The absence of quoted prices increases reliance on valuation techniques and requires the use of judgement in the estimation of fair value. This judgement includes evaluating available market data, determining the expected cash flows for the instruments, as well as identifying and applying an appropriate discount rate and credit spread.
\nValuation techniques that rely on non-observable data require a higher level of Management judgement in estimating the fair value compared to those based on observable data.
\nThe quality of market data, valuation techniques and other inputs into the valuation models used are subject to internal review and approval.
\nThe Group carries certain financial assets at fair value. In estimating the fair value of these assets and derivatives, the Group seeks to use quoted market prices (level 1). Where quoted market prices are not available, the Group uses internally developed valuation models and valuations from external experts. Inputs to these models are taken from observable market data where possible (level 2) but where this is not possible, a degree of judgement is used (level 3). Such judgement considerations typically include items such as interest rate yield curves, equity prices, option volatilities and currency rates.
\nFurther details of the fair value of financial assets and liabilities are set out in note 37.
\n \n \n \n \n \n\n (d) Impairment review of its subsidiary undertaking\n
\nThe Company carries its investment in its subsidiary undertaking at cost and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment\u2019s fair value or its value-in-use (VIU).
\nAn impairment charge arises if the carrying value exceeds the recoverable amount and where the carrying value is not supported by the estimated discounted future cash flows of the underlying business. Management note that the market capitalisation of the Group is lower than its net assets. The depressed share price is a result of the overall subdued banking environment currently in which the entity operates along with various entity specific factors that affect the liquidity of the shares. The recoverable amount of the investment is the higher of its fair value less costs to sell or it\u2019s VIU. The carrying value of the investment in PTSB plc was \u20ac888m as at 31 December 2021. During 2022, an AT1 issuance of \u20ac245m (net of transaction costs) and a share issuance related to Project Sun of \u20ac516m occurred which brought the carrying value to \u20ac1,649m. The recoverable amount based on the VIU is in excess of the carrying amount after the reversal of previous impairment charges. On the basis that the VIU in in excess of the carrying value no impairment charge is required (31 December 2021: impairment charge of \u20ac66m). Management have considered whether a reversal of impairment charge from previous years is appropriate. Having reviewed external and internal information management noted that there had been a significant change in the value of the asset, primarily due to the increased forecast profitability as a result of the Ulster Bank transaction and increased interest rates. On this basis, management were satisfied there was sufficient headroom to take a full write back of the previous impairment charges of \u20ac697m.
\nThe VIU is the present value of the future free cash flows expected to be derived from the investment, based upon a VIU calculation discounted at an appropriate rate for the investment.
\nThe recoverable amount reflecting Management\u2019s best estimate is sensitive to changes in the following key assumptions:
\n\n Cash flow forecasts\n
\nCash flow forecasts are based on internal management information used for strategic planning for a period of up to five years, after which a long-term growth rate appropriate for the business is applied. The key cash flows in these forecasts are as follows:
\nThe projected cash flows are stress tested with actual performance and verifiable economic data annually to reflect current market conditions and Management\u2019s best estimates of future projections.
\n\n Growth rate\n
\nGrowth rate is determined by reference to long-term economic growth and does not exceed the relevant long-term average growth rate of the industry in which it operates. A growth rate of 2.5% was used.
\n\n Discount rate\n
\nThe discount rate used is a post-tax weighted average cost of capital of the Group of 10% (2020: 10%) as the cash flows used in impairment assessment are post tax cash flows. The discount rate includes an additional risk premium to account for various specific risks. These specific risks are not reflected in the cash flows projected for impairment analysis.
\nThe discount rate is used for various internal pricing models and is benchmarked with the industry averages to cater for the any changes in risk profile of the Group.
\nThe Group uses post-tax discount rate as the cash flows generated by the subsidiary are post tax cash flows.
\n \n \n \n \n \n\n Sensitivity analysis\n
\nThe impact of changes in the growth rate, the discount rate and cash flows has been assessed by the Directors:
\n\n (e) IFRS 3 Business Combination Accounting (BCA) including fair value of acquired net assets \n
\nOn 17 December 2021, PTSB entered into a conditional agreement to acquire a business from Ulster Bank consisting of certain elements of its non-tracker residential mortgage portfolio, SME portfolio and asset finance portfolio. The acquisition also included 25 branches and the workforce associated with the various businesses and branches. The agreement was effected through a series of linked contracts and became unconditional on 7 November 2022. For operational reasons, the above businesses/ assets will not transfer to the group on a single date. The group took possession of the majority of the mortgage book and its associated workforce on 7 November 2022 (the Principal Completion Date). The branches and associated workforce transferred in January 2023 and the SME assets (including associated employees) transferred in February 2023. The remainder of the mortgage book, and the asset finance assets (including associated employees) are expected to transfer to the group in the first half of 2023.
\nThis agreement was accounted for as a business combination on the Principal Completion Date with the purchase price allocation (PPA) and fair value of the net assets acquired being determined on that date. This gave rise to gain on bargain purchase of \u20ac362m. The forward purchase of the loans yet to be transferred under the contract is accounted for as a derivative from that date. See note 3 for further details.
\nThe accounting for this transaction required Management to make certain critical accounting judgements and estimates.
\n\n Critical Accounting Judgement\n
\nManagement had to make the following accounting judgements:
\nManagement considered these judgements in detail and concluded as follows:
\n| \n \n Judgement\n \n | \n \n \n Conclusion\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n How many transactions are there?\n \n | \n \n Management considered the requirements of IFRS 3 and IFRS 9 and believe that the group should account for this agreement as one overall transaction due to following reasons: \n
| \n
| \n \n Judgement\n \n | \n \n \n Conclusion\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n What is PTSB acquiring \u2013 a business or assets?\n \n | \n \n Management considered the requirements of IFRS 3 and concluded that this transaction collectively constitutes the acquisition of a business on the basis it includes acquired inputs (the loan books) and substantive processes which are embodied in the key individuals transferring (credit risk, underwriting and customer relationship management) along with sufficient support staff. The assessment of whether an acquired set of activities and assets constitutes a business must include, at a minimum, an input and substantive process and whether when these are applied to an input or inputs it is critical to the ability to continue producing outputs. This assessment must be performed from the perspective of a market participant. The mere existence of an output (e.g. interest income) doesn\u2019t indicate that both an input and a substantive process have been acquired. Management considerd substantive processes to include strategic, operational and resource management processes in order to be considered a business. These processes are usually documented but the intellectual capacity of an organised workforce with the necessary skills and experience also provide the necessary processes to determine the acquired set of assets and activities as a business. Management determined that the acquisition of the organised workforce from Ulster Bank that included key individuals with the necessary skills and experience to direct the substantive processes within credit risk, underwriting and customer relationship management met the requirements of IFRS 3. As a result, the entire transaction was accounted for as a business combination. \n | \n
| \n \n When is the acquisition accounted for?\n \n | \n \n Management considered the requirements of IFRS 3 and concluded that there is one business combination date and that this takes place at the Principal Completion Date i.e., when the mortgage business (being the majority of the mortgage book and workforce (including key mortgage employees)) transfers. The fact that certain parts of the business do not transfer for operational reasons at this date does not change this judgement. As noted above this is one unconditional, interrelated transaction. The mortgage business, which amounts to the vast majority of the overall business, is irreversibly transferred on this date with the rest of the assets and workforce being contractually obliged to follow. As a result, the business combination is accounted for as at this date. \n | \n
| \n \n What is measured?\n \n | \n \n The Directors considered the requirements of IFRS 3 and IFRS 9 and concluded that what is measured is the fair value of the net assets transferred at the Principal Completion Date and that the contractual obligation for assets to be transferred after the Principal Completion Date creates derivatives (forward purchase) which are fair valued at the date. These derivatives are accounted for a fair value until the actual transfer of the underlying assets \n | \n
This transaction has been accounted for as a business combination under IFRS 3 (as described above). If this transaction was not accounted for as a business combination no gain on bargain purchase would be recognised and the timing of asset recognition and associated measurement including subsequent EIR would be significantly different.
\n\n Critical Accounting Estimates\n
\nBusiness combination accounting required Management to make certain critical accounting estimates being the fair value of the assets acquired including derivatives. Management engaged the services of independent third-party valuers to provide valuations of the assets being transferred in the transaction. The fair value of the branch properties was determined using the open market prices. As there was no observable market price for the loans (Level 3), their fair value was calculated using discounted cashflow model and included calculating the expected contractual cash flows of the assets and applying the following to the portfolio of assets; prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio.
\nSee notes 3 and 37 for sensitivities relating to the fair values.
\n \n \n ", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183453": { "value": "\n \n\n 2. Critical accounting estimates and judgements\n
\nThe preparation of these consolidated financial statements, in conformity with IFRS, requires Management to make assumptions, estimates and judgements that affect the reported amounts of income, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that may require a material adjustment to the carrying amount of the assets or liabilities affected in future periods.
\nThe current economic climate, with interest rate increases and high inflation, elevates the uncertainty associated with judgements, estimates and assumptions made by Management. The Irish economy demonstrated recovery post Covid and resilience in the current economic climate in 2022. The results of the actions taken by the Government, EBA and CBI point toward a positive trajectory of recovery. The Directors and Management, however, remain cautious and risk remains in the medium to long-term that the Irish Banking sector will continue to face challenges, particularly due to higher capital requirements and new and emerging risks.
\nWhile the actual results may differ from the estimates made, the Directors believe that they are reasonable in the current circumstances based on the best available information at the date of the approval of these consolidated financial statements.
\nAssumptions, estimates and judgements are revised on an ongoing basis and where necessary are revised to reflect current conditions and updated information.
\nCritical accounting estimates and judgements made by Management in applying accounting policies are set out below.
\n\n (a) Allowance for credit losses under IFRS 9 \n
\nIFRS 9 requires an impairment allowance to be recorded for ECL on financial assets regardless of whether there has been an actual loss event. There is a requirement to track and assess changes in credit risk on financial instruments since origination and determine whether the credit risk on those financial instruments has increased significantly since initial recognition.
\nGovernment-led customer support initiatives in response to the pandemic have weakened established relationships between model inputs and outputs, reducing the ability to forecast using models alone. In addition, models are constructed based on a single economic cycle. As a result a greater level of management judgement is required to reflect the current nature and uncertainty of the economic outlook.
\nThe following concepts introduce significant judgement within impairment and have a tangible impact on the level of ECL allowances.
\n\n Determination of significant increase in credit risk (SICR)\n
\nThe determination of whether a loan has experienced a significant increase in credit risk may have a material impact on the level of ECL impairment allowance as a 12-month ECL is recognised for Stage 1 loans whereas a lifetime ECL is recognised for Stage 2 loans.
\nMigration of loans between Stage 1 and Stage 2 can cause some volatility in the amount of the recognised ECL allowances and the provision for expected credit losses in any accounting period.
\nThe Group has relied on a number of measures including delinquency, forborne status, risk grade, change in remaining lifetime Probability of Default (PD) and PD at maturity to determine SICR.
\nAt December 2022, management judgement has been applied to specified non-standard mortgages classified as Stage 1 by Impairment models and these loans were transferred to Stage 2 with a lifetime impairment loss allowance applied. The impact of this staging adjustment is a c.\u20ac138m increase in Stage 2 volumes.
\n\n Forward Looking Information (FLI)\n
\nThe Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture lifetime ECL, the Group also modelled early redemptions as a separate component within the ECL calculation.
\nJudgement is combined with statistical evidence in determining which forward-looking variables are relevant for the Group\u2019s loan portfolios and in determining the extent by which through-the-cycle parameters should be adjusted for FLI to determine point-in-time parameters.
\nChanges in FLI variables applied to convert through-the-cycle PD and LGD into point-in-time parameters can either increase or decrease ECL impairment allowances in a particular accounting period. On update, increases in the level of optimism in the FLI variables will cause a decrease in ECL while increases in the level of pessimism in the FLI variables will cause an increase in ECL. These movements could be significant in the accounting period of update.
\n \n \n \nThe estimation and application of FLI requires significant judgement. In its calculation of ECL, the Group considers multiple scenarios and possible outcomes together with their probability of occurrence. Scenarios are designed to capture a range of possible outcomes. Each macroeconomic scenario in the Group\u2019s ECL calculation includes a projection of all relevant macroeconomic variables applied in the models for a five year period (where the relevant period extends to five years), subsequently reverting to long-run averages.
\nThe Group\u2019s approach applies extreme-but-plausible economic scenarios (i.e. underpinned by historical evidence) to estimate the distribution of ECL to which the Group is exposed. Using statistical techniques combined with expert credit judgement the Group then formulates an unbiased probability weighted estimate of ECL at the reporting date.
\nThree scenarios are currently considered in the Group\u2019s calculation of ECL. The base scenario is used for financial planning purposes. The Group considers one scenario that represents a macroeconomic environment that is more favourable to the central scenario and one scenario that represents a macroeconomic environment that is less favourable to the central scenario. Three scenarios are currently considered in the Group\u2019s calculation of ECL at the reporting date.
\nThe following table details the key macroeconomic variables applied to model credit losses together with the associated percentiles and probability weightings for Stages 1 and 2 at 31 December 2022. Macroeconomic scenarios were most recently updated in December 2022. The update in the Base Case Scenario reflects a deterioration in the outlook for the Irish economy in future years as a result of higher inflation, with lower forecast HPI and GDP growth.
\nIFRS 9 Upside and Downside scenarios have been updated to present extreme \u20181-in-20\u2019 scenarios relative to the updated Base scenario. Given the severity of these scenarios (5th Percentile upside and 95% Percentile downside), their combination captures the macroeconomic uncertainty arising from the current economic environment.
\n\u00a0
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||||
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n Base Case\n \n | \n \n \n Upside Scenario\n \n | \n \n \n Down side Scenario\n \n | \n \n \u00a0 \n | \n \n \n Base Case\n \n | \n \n \n Upside Scenario\n \n | \n \n \n Down side Scenario\n \n | \n
| \n \u00a0 \n | \n \n \n Average value over Year 1\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value for the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over Year 1\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Percentile \n | \n \n \u00a0 \n | \n \n \n 50th\n \n | \n \n \n 5th\n \n | \n \n \n 95th\n \n | \n \n \u00a0 \n | \n \n 50th \n | \n \n 5th \n | \n \n 95th \n | \n
| \n Scenario Probability Weighting \n | \n \n \u00a0 \n | \n \n \n 54%\n \n | \n \n \n 23%\n \n | \n \n \n 23%\n \n | \n \n \u00a0 \n | \n \n 54% \n | \n \n 23% \n | \n \n 23% \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Irish Residential House Prices \n | \n \n \n 0%\n \n | \n \n \n 2%\n \n | \n \n \n 12%\n \n | \n \n \n -10%\n \n | \n \n 4% \n | \n \n 3% \n | \n \n 13% \n | \n \n -8% \n | \n
| \n Irish Unemployment \n | \n \n \n 7%\n \n | \n \n \n 5%\n \n | \n \n \n 4%\n \n | \n \n \n 11%\n \n | \n \n 7% \n | \n \n 6% \n | \n \n 4% \n | \n \n 12% \n | \n
| \n Irish GDP \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n \n \n 6%\n \n | \n \n \n -2%\n \n | \n \n 6% \n | \n \n 4% \n | \n \n 6% \n | \n \n -1% \n | \n
| \n Consumer Price Index \n | \n \n \n 6%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n \n \n 4%\n \n | \n \n 3% \n | \n \n 2% \n | \n \n 2% \n | \n \n 3% \n | \n
| \n ECB Base Rate \n | \n \n \n 3%\n \n | \n \n \n 3%\n \n | \n \n \n 1%\n \n | \n \n \n 3%\n \n | \n \n 0% \n | \n \n 0% \n | \n \n 0% \n | \n \n 2% \n | \n
The Base, Upside and Downside scenarios are described as follows:
\n\n Base scenario\n
\nIn the base scenario, the outlook for the global economy is one of slower growth and more uncertainty in 2023, as the economic rebound from the impact of Covid lockdowns in 2020 and 2021 dissipates, and the remaining inflationary shock drives the most aggressive response from global central banks for the past 30 years.
\nA forceful series of interest rate increases to stem burgeoning inflation, marks the end of the zero-rate environment and highly accommodative global monetary policy of the past decade. With fallout from the Russian invasion of Ukraine continuing to drive price instability in key energy and agri-food markets and combined with the Covid driven global supply chain issues, the inflation outlook continues to be highly uncertain, leading to a period of much greater economic uncertainty.
\n \n \n \nProperty prices have now reached the peak last seen in April 2007, although wages are significantly ahead of that period in 2022, and the number of households in the economy has grown by c.400,000 with new housing supply meeting a fraction of demand. Underlying driving forces, such as a) decade of under supply of housing (with 2022 falling short of output forecasts), b) strong population growth through inward migration, c) record rental values, d) an influx of Ukrainian war refugees and e) exceptionally strong construction price increases, are expected to hold property prices at current levels in 2023.
\nOn unemployment, the Baseline model reflects both the expectation of better than expected unemployment numbers in the end of 2022, and a rise in forecast unemployment level for 2023 to 6.5% (up 1%).
\n\n Upside scenario\n
\nThis is an extreme positive scenario developed to reflect a much stronger outcome for the Irish economy than in the base scenario. There is both historical context and statistical backing to the key forecasts, but at a positive extremity.
\nAverage GDP growth over the forecast period is 6%, which is higher than the average of 3.9% for the Irish economy since 1950. The outlook reflects an extreme positive of effective full employment.
\nConsistent with the longer term nominal house price average gain of 9.3% since 1970 ( Irish property prices are 50X higher than in 1970 in nominal terms) and 6.4% globally during that period, the HPI forecast for the extreme positive scenario, puts average HPI increases during the scenario under review, at 12% per annum.
\nSubstantially below trend CPI growth returns in the Irish economy over the forecast horizon, with inflation trends remaining highly supportive of economic growth.
\n\n Downside scenario\n
\nThe Downside scenario is an extreme scenario backed by Irish historical context and international comparatives. The scenario captures a statistical extreme in unemployment, GDP and HPI, while maintaining credibility as a single scenario. A prolonged period of mid teen unemployment, extends quickly, reaching a peak of 15% in 2024.
\nFive years of sub normal growth across the forecast horizon in 2022 to 2027, shows a sharp reversal from current expected growth levels and is significantly below the 3.9% average GDP growth seen in the Irish economy since 1950. GDP falls a low point of minus 11.5% over the forecast period.
\nThe threat of CPI moving ahead at a much faster pace than expected, is a key feature of this 1 in 20 scenario for this period, acknowledging the weakness in the global supply chain, and the impact of the Ukraine /Russian conflict which has pushed inflationary forces to 40 year highs.
\nThe Group applies statistical techniques combined with expert credit judgement to formulate an unbiased probability weighted estimate of ECL at the reporting date. A review of the methodology to calculate the final weighted estimate of ECL based on three scenario inputs (Base, Upside and Downside scenarios) by reference to challenger methods and supplementary benchmarks was conducted in H2 2022. The review concluded that the methodology remains in compliance with IFRS 9.
\nGiven the relative sizes of the portfolios, the key judgemental area for the Group is in relation to the level of ECL calculated for the residential mortgage portfolio.
\nDetermining probability weightings of the scenarios and forecasting FLI in respect of those scenarios requires a significant degree of Management judgement. The reported ECL allowance is impacted by the probability weighting attributed to each macroeconomic scenario.
\nIf the Group were to only use its Base Case Scenario for the measurement of ECL for the secured mortgage portfolio, excluding Management\u2019s adjustment to modelled outcomes, the ECL impairment allowance would be \u20ac98m less than reported at 31 December 2022.
\n \n \n \nSimilarly, excluding Management\u2019s adjustment to modelled outcomes, if the Group were to only apply its Upside Scenario for the measurement of ECL for the secured mortgage portfolio, the ECL impairment allowance would be \u20ac126m less than reported at 31 December 2022. Whereas, if the Group were to only use its Downside Scenario, the ECL impairment allowance would be \u20ac336m greater than reported at December 2022.
\nThe adequacy of ECL allowance is reviewed by the BAC on a half-yearly basis. At 31 December 2022, the total impairment provision included \u20ac137m of management\u2019s adjustments to modelled outcomes (31 December 2021: \u20ac118m) which primarily comprises the following:
\nAt December 2022, management judgement has been applied to specified non-standard mortgages classified as Stage 1 by Impairment models and these loans were transferred to Stage 2 with a lifetime impairment loss allowance applied. The impact of this staging adjustment is a c. \u20ac138m increase in Stage 2 volumes.
\n\n (b) Deferred taxation\n
\nAt 31 December 2022, the Group had a net deferred tax asset of \u20ac309m (31 December 2021: \u20ac350m). See note 27 for further details.
\nDeferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. The recognition of a deferred tax asset relies on Management\u2019s judgements surrounding the probability and adequacy of future taxable profits and the reversals of existing taxable temporary differences.
\nThe most important judgement relates to Management\u2019s assessment of the recoverability of the deferred tax asset relating to carried forward tax losses, being \u20ac334m at 31 December 2022. It should be noted that the full deferred tax asset on tax losses relates to tax losses generated in the PTSB legal entity (i.e. no deferred tax asset is being recognised on tax losses carried forward in any other Group company).
\nThe assessment of recoverability of this asset requires significant judgements to be made about the projection of long-term profitability because of the period over which recovery extends. In addition, given PTSB\u2019s history of recent losses, in accordance with IAS 12, there must be convincing other evidence to underpin this assessment.
\n \n \n \nIn making the assessment, the Board considered the following factors:
\nTaking the above factors into account, and in the absence of any expiry date for the utilisation of carried forward tax losses in Ireland, the Board have concluded that it is more likely than not that there will be sufficient taxable profits against which the losses can be utilised and on the basis of the assessment above, continue to recognise \u20ac334m of a deferred tax asset on tax losses on the statement of financial position as at 31 December 2022.
\nIn this regard, the Group has carried out an exercise to determine the likely number of years required to utilise the deferred tax asset arising on tax losses carried forward. Based on the Group\u2019s latest forecast plans to 2027 and assuming a level of profitability growth consistent with GDP growth of approximately 2.5%, it will take c. 10 years for the deferred tax asset on tax losses of \u20ac334m to be utilised. A level of profitability consistent with GDP growth continues to be considered by Management to be appropriate given the Group\u2019s primarily domestic retail focus and the expectation arising therefrom that, over the long-term, the Group\u2019s performance would be expected to broadly track the performance of the Irish economy. While the geopolitical uncertainty has significantly impacted GDP in the short-term it is expected that, over the medium-term, GDP will recover and Management are of the view that a long-term assumed growth rate of 2.5% is not unreasonable in this context.
\nIFRS does not allow for the deferred tax asset recognised to be discounted notwithstanding that it is likely to take a number of years for it to be recovered.
\nThe expected period of time to full utilisation of the deferred tax asset has decreased since 31 December 2021 from 22 to 10 years. This is mainly due to forecast interest rate rises and the impact of the Ulster Bank transaction. These revised profitability figures also impact the assumed long-term projections for the Group with the result that the expected utilisation period has decreased.
\n \n \n \nIt should be noted that Management make certain judgements in the process of applying the Group\u2019s accounting policies which may impact on amounts recognised in the financial statements and consequently on taxable profits and the utilisation of tax losses. As set out in note 27, analysis carried out demonstrates that were certain adverse events to arise (see below for further detail of the adverse events considered) it continues to be Management\u2019s view that there would be sufficient future taxable profits against which the full quantum of tax losses carried forward could be utilised, albeit that the period of time over which such utilisation would occur would be extended.
\nIt should be further noted that the analysis of the estimated utilisation of the deferred tax asset arising on tax losses carried forward in PTSB is based on the current business model of the Group.
\nThe recognition of this asset is dependent on the Group earning sufficient profits to utilise the tax losses. The quantum of and timing of these profits is a source of significant estimation uncertainty. However, as a principle, the Group is expecting to be profitable in the medium term. Consequently the key uncertainty relates principally to the time period over which these profits will be earned. Whilst the Group may be more or less profitable in certain periods owing to various factors such as the interest rate environment, loan loss provisions, operating costs and the regulatory environment, Management expect that, notwithstanding these, the Group will be profitable over the long term. Consequently, any change to these factors which would ultimately impact on profitability, are highly subjective, but will only impact on the time period over which this asset is recovered.
\nAs set out above, in assessing the appropriateness of recognising a deferred tax asset on tax losses carried forward, Management has considered the impact of various stress case scenarios on the period of recoverability. The three scenarios identified as having potentially significant implications for the deferred tax asset recoverability are (i) adverse changes in the interest rate environment, (ii) increased impairment charges and (iii) increases in operating costs. These sensitivity case scenarios are intended to simulate a situation where there is an economic downturn. If any one of the stress case scenarios were to occur, within a reasonably possible range, it is our expectation that the time period over which these assets might be recovered could extend by 1 year. If all adverse assumptions were to arise the period of recoverability would be extended by 1 year (i.e. full utilisation by 2033). However, Management consider this scenario unlikely. Changes in these assumptions are most impacted by changes to house prices and unemployment, which represent the majority of any expected stress loss which could occur. This position will continue to be reviewed for each reporting period; however, much of this estimation uncertainty may not be resolved for a number of years. However, as noted, based on the Group\u2019s latest forecast plan, it is Management estimate that the expected time period for recovery of the deferred tax asset on tax losses to be 10 years, i.e. full utilisation is expected by 2032.
\n\n (c) Fair Value of Financial instruments\n
\nThe Group\u2019s accounting policy for the determination of fair value of financial instruments is set out in note 1(vii)(e). The best evidence of fair value is quoted prices in an active market. The absence of quoted prices increases reliance on valuation techniques and requires the use of judgement in the estimation of fair value. This judgement includes evaluating available market data, determining the expected cash flows for the instruments, as well as identifying and applying an appropriate discount rate and credit spread.
\nValuation techniques that rely on non-observable data require a higher level of Management judgement in estimating the fair value compared to those based on observable data.
\nThe quality of market data, valuation techniques and other inputs into the valuation models used are subject to internal review and approval.
\nThe Group carries certain financial assets at fair value. In estimating the fair value of these assets and derivatives, the Group seeks to use quoted market prices (level 1). Where quoted market prices are not available, the Group uses internally developed valuation models and valuations from external experts. Inputs to these models are taken from observable market data where possible (level 2) but where this is not possible, a degree of judgement is used (level 3). Such judgement considerations typically include items such as interest rate yield curves, equity prices, option volatilities and currency rates.
\nFurther details of the fair value of financial assets and liabilities are set out in note 37.
\n \n \n \n\n (d) Impairment review of its subsidiary undertaking\n
\nThe Company carries its investment in its subsidiary undertaking at cost and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment\u2019s fair value or its value-in-use (VIU).
\nAn impairment charge arises if the carrying value exceeds the recoverable amount and where the carrying value is not supported by the estimated discounted future cash flows of the underlying business. Management note that the market capitalisation of the Group is lower than its net assets. The depressed share price is a result of the overall subdued banking environment currently in which the entity operates along with various entity specific factors that affect the liquidity of the shares. The recoverable amount of the investment is the higher of its fair value less costs to sell or it\u2019s VIU. The carrying value of the investment in PTSB plc was \u20ac888m as at 31 December 2021. During 2022, an AT1 issuance of \u20ac245m (net of transaction costs) and a share issuance related to Project Sun of \u20ac516m occurred which brought the carrying value to \u20ac1,649m. The recoverable amount based on the VIU is in excess of the carrying amount after the reversal of previous impairment charges. On the basis that the VIU in in excess of the carrying value no impairment charge is required (31 December 2021: impairment charge of \u20ac66m). Management have considered whether a reversal of impairment charge from previous years is appropriate. Having reviewed external and internal information management noted that there had been a significant change in the value of the asset, primarily due to the increased forecast profitability as a result of the Ulster Bank transaction and increased interest rates. On this basis, management were satisfied there was sufficient headroom to take a full write back of the previous impairment charges of \u20ac697m.
\nThe VIU is the present value of the future free cash flows expected to be derived from the investment, based upon a VIU calculation discounted at an appropriate rate for the investment.
\nThe recoverable amount reflecting Management\u2019s best estimate is sensitive to changes in the following key assumptions:
\n\n Cash flow forecasts\n
\nCash flow forecasts are based on internal management information used for strategic planning for a period of up to five years, after which a long-term growth rate appropriate for the business is applied. The key cash flows in these forecasts are as follows:
\nThe projected cash flows are stress tested with actual performance and verifiable economic data annually to reflect current market conditions and Management\u2019s best estimates of future projections.
\n\n Growth rate\n
\nGrowth rate is determined by reference to long-term economic growth and does not exceed the relevant long-term average growth rate of the industry in which it operates. A growth rate of 2.5% was used.
\n\n Discount rate\n
\nThe discount rate used is a post-tax weighted average cost of capital of the Group of 10% (2020: 10%) as the cash flows used in impairment assessment are post tax cash flows. The discount rate includes an additional risk premium to account for various specific risks. These specific risks are not reflected in the cash flows projected for impairment analysis.
\nThe discount rate is used for various internal pricing models and is benchmarked with the industry averages to cater for the any changes in risk profile of the Group.
\nThe Group uses post-tax discount rate as the cash flows generated by the subsidiary are post tax cash flows.
\n \n \n \n\n Sensitivity analysis\n
\nThe impact of changes in the growth rate, the discount rate and cash flows has been assessed by the Directors:
\n\n (e) IFRS 3 Business Combination Accounting (BCA) including fair value of acquired net assets \n
\nOn 17 December 2021, PTSB entered into a conditional agreement to acquire a business from Ulster Bank consisting of certain elements of its non-tracker residential mortgage portfolio, SME portfolio and asset finance portfolio. The acquisition also included 25 branches and the workforce associated with the various businesses and branches. The agreement was effected through a series of linked contracts and became unconditional on 7 November 2022. For operational reasons, the above businesses/ assets will not transfer to the group on a single date. The group took possession of the majority of the mortgage book and its associated workforce on 7 November 2022 (the Principal Completion Date). The branches and associated workforce transferred in January 2023 and the SME assets (including associated employees) transferred in February 2023. The remainder of the mortgage book, and the asset finance assets (including associated employees) are expected to transfer to the group in the first half of 2023.
\nThis agreement was accounted for as a business combination on the Principal Completion Date with the purchase price allocation (PPA) and fair value of the net assets acquired being determined on that date. This gave rise to gain on bargain purchase of \u20ac362m. The forward purchase of the loans yet to be transferred under the contract is accounted for as a derivative from that date. See note 3 for further details.
\nThe accounting for this transaction required Management to make certain critical accounting judgements and estimates.
\n\n Critical Accounting Judgement\n
\nManagement had to make the following accounting judgements:
\nManagement considered these judgements in detail and concluded as follows:
\n| \n \n Judgement\n \n | \n \n \n Conclusion\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n How many transactions are there?\n \n | \n \n Management considered the requirements of IFRS 3 and IFRS 9 and believe that the group should account for this agreement as one overall transaction due to following reasons: \n
| \n
| \n \n Judgement\n \n | \n \n \n Conclusion\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n What is PTSB acquiring \u2013 a business or assets?\n \n | \n \n Management considered the requirements of IFRS 3 and concluded that this transaction collectively constitutes the acquisition of a business on the basis it includes acquired inputs (the loan books) and substantive processes which are embodied in the key individuals transferring (credit risk, underwriting and customer relationship management) along with sufficient support staff. The assessment of whether an acquired set of activities and assets constitutes a business must include, at a minimum, an input and substantive process and whether when these are applied to an input or inputs it is critical to the ability to continue producing outputs. This assessment must be performed from the perspective of a market participant. The mere existence of an output (e.g. interest income) doesn\u2019t indicate that both an input and a substantive process have been acquired. Management considerd substantive processes to include strategic, operational and resource management processes in order to be considered a business. These processes are usually documented but the intellectual capacity of an organised workforce with the necessary skills and experience also provide the necessary processes to determine the acquired set of assets and activities as a business. Management determined that the acquisition of the organised workforce from Ulster Bank that included key individuals with the necessary skills and experience to direct the substantive processes within credit risk, underwriting and customer relationship management met the requirements of IFRS 3. As a result, the entire transaction was accounted for as a business combination. \n | \n
| \n \n When is the acquisition accounted for?\n \n | \n \n Management considered the requirements of IFRS 3 and concluded that there is one business combination date and that this takes place at the Principal Completion Date i.e., when the mortgage business (being the majority of the mortgage book and workforce (including key mortgage employees)) transfers. The fact that certain parts of the business do not transfer for operational reasons at this date does not change this judgement. As noted above this is one unconditional, interrelated transaction. The mortgage business, which amounts to the vast majority of the overall business, is irreversibly transferred on this date with the rest of the assets and workforce being contractually obliged to follow. As a result, the business combination is accounted for as at this date. \n | \n
| \n \n What is measured?\n \n | \n \n The Directors considered the requirements of IFRS 3 and IFRS 9 and concluded that what is measured is the fair value of the net assets transferred at the Principal Completion Date and that the contractual obligation for assets to be transferred after the Principal Completion Date creates derivatives (forward purchase) which are fair valued at the date. These derivatives are accounted for a fair value until the actual transfer of the underlying assets \n | \n
This transaction has been accounted for as a business combination under IFRS 3 (as described above). If this transaction was not accounted for as a business combination no gain on bargain purchase would be recognised and the timing of asset recognition and associated measurement including subsequent EIR would be significantly different.
\n\n Critical Accounting Estimates\n
\nBusiness combination accounting required Management to make certain critical accounting estimates being the fair value of the assets acquired including derivatives. Management engaged the services of independent third-party valuers to provide valuations of the assets being transferred in the transaction. The fair value of the branch properties was determined using the open market prices. As there was no observable market price for the loans (Level 3), their fair value was calculated using discounted cashflow model and included calculating the expected contractual cash flows of the assets and applying the following to the portfolio of assets; prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio.
\nSee notes 3 and 37 for sensitivities relating to the fair values.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f183454": { "value": "\n\n 2. Critical accounting estimates and judgements\n
\nThe preparation of these consolidated financial statements, in conformity with IFRS, requires Management to make assumptions, estimates and judgements that affect the reported amounts of income, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that may require a material adjustment to the carrying amount of the assets or liabilities affected in future periods.
\nThe current economic climate, with interest rate increases and high inflation, elevates the uncertainty associated with judgements, estimates and assumptions made by Management. The Irish economy demonstrated recovery post Covid and resilience in the current economic climate in 2022. The results of the actions taken by the Government, EBA and CBI point toward a positive trajectory of recovery. The Directors and Management, however, remain cautious and risk remains in the medium to long-term that the Irish Banking sector will continue to face challenges, particularly due to higher capital requirements and new and emerging risks.
\nWhile the actual results may differ from the estimates made, the Directors believe that they are reasonable in the current circumstances based on the best available information at the date of the approval of these consolidated financial statements.
\nAssumptions, estimates and judgements are revised on an ongoing basis and where necessary are revised to reflect current conditions and updated information.
\nCritical accounting estimates and judgements made by Management in applying accounting policies are set out below.
\n\n (a) Allowance for credit losses under IFRS 9 \n
\nIFRS 9 requires an impairment allowance to be recorded for ECL on financial assets regardless of whether there has been an actual loss event. There is a requirement to track and assess changes in credit risk on financial instruments since origination and determine whether the credit risk on those financial instruments has increased significantly since initial recognition.
\nGovernment-led customer support initiatives in response to the pandemic have weakened established relationships between model inputs and outputs, reducing the ability to forecast using models alone. In addition, models are constructed based on a single economic cycle. As a result a greater level of management judgement is required to reflect the current nature and uncertainty of the economic outlook.
\nThe following concepts introduce significant judgement within impairment and have a tangible impact on the level of ECL allowances.
\n\n Determination of significant increase in credit risk (SICR)\n
\nThe determination of whether a loan has experienced a significant increase in credit risk may have a material impact on the level of ECL impairment allowance as a 12-month ECL is recognised for Stage 1 loans whereas a lifetime ECL is recognised for Stage 2 loans.
\nMigration of loans between Stage 1 and Stage 2 can cause some volatility in the amount of the recognised ECL allowances and the provision for expected credit losses in any accounting period.
\nThe Group has relied on a number of measures including delinquency, forborne status, risk grade, change in remaining lifetime Probability of Default (PD) and PD at maturity to determine SICR.
\nAt December 2022, management judgement has been applied to specified non-standard mortgages classified as Stage 1 by Impairment models and these loans were transferred to Stage 2 with a lifetime impairment loss allowance applied. The impact of this staging adjustment is a c.\u20ac138m increase in Stage 2 volumes.
\n\n Forward Looking Information (FLI)\n
\nThe Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture lifetime ECL, the Group also modelled early redemptions as a separate component within the ECL calculation.
\nJudgement is combined with statistical evidence in determining which forward-looking variables are relevant for the Group\u2019s loan portfolios and in determining the extent by which through-the-cycle parameters should be adjusted for FLI to determine point-in-time parameters.
\nChanges in FLI variables applied to convert through-the-cycle PD and LGD into point-in-time parameters can either increase or decrease ECL impairment allowances in a particular accounting period. On update, increases in the level of optimism in the FLI variables will cause a decrease in ECL while increases in the level of pessimism in the FLI variables will cause an increase in ECL. These movements could be significant in the accounting period of update.
\n \nThe estimation and application of FLI requires significant judgement. In its calculation of ECL, the Group considers multiple scenarios and possible outcomes together with their probability of occurrence. Scenarios are designed to capture a range of possible outcomes. Each macroeconomic scenario in the Group\u2019s ECL calculation includes a projection of all relevant macroeconomic variables applied in the models for a five year period (where the relevant period extends to five years), subsequently reverting to long-run averages.
\nThe Group\u2019s approach applies extreme-but-plausible economic scenarios (i.e. underpinned by historical evidence) to estimate the distribution of ECL to which the Group is exposed. Using statistical techniques combined with expert credit judgement the Group then formulates an unbiased probability weighted estimate of ECL at the reporting date.
\nThree scenarios are currently considered in the Group\u2019s calculation of ECL. The base scenario is used for financial planning purposes. The Group considers one scenario that represents a macroeconomic environment that is more favourable to the central scenario and one scenario that represents a macroeconomic environment that is less favourable to the central scenario. Three scenarios are currently considered in the Group\u2019s calculation of ECL at the reporting date.
\nThe following table details the key macroeconomic variables applied to model credit losses together with the associated percentiles and probability weightings for Stages 1 and 2 at 31 December 2022. Macroeconomic scenarios were most recently updated in December 2022. The update in the Base Case Scenario reflects a deterioration in the outlook for the Irish economy in future years as a result of higher inflation, with lower forecast HPI and GDP growth.
\nIFRS 9 Upside and Downside scenarios have been updated to present extreme \u20181-in-20\u2019 scenarios relative to the updated Base scenario. Given the severity of these scenarios (5th Percentile upside and 95% Percentile downside), their combination captures the macroeconomic uncertainty arising from the current economic environment.
\n\u00a0
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||||
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n Base Case\n \n | \n \n \n Upside Scenario\n \n | \n \n \n Down side Scenario\n \n | \n \n \u00a0 \n | \n \n \n Base Case\n \n | \n \n \n Upside Scenario\n \n | \n \n \n Down side Scenario\n \n | \n
| \n \u00a0 \n | \n \n \n Average value over Year 1\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value for the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over Year 1\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n \n \n Average value over the forecast period\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Percentile \n | \n \n \u00a0 \n | \n \n \n 50th\n \n | \n \n \n 5th\n \n | \n \n \n 95th\n \n | \n \n \u00a0 \n | \n \n 50th \n | \n \n 5th \n | \n \n 95th \n | \n
| \n Scenario Probability Weighting \n | \n \n \u00a0 \n | \n \n \n 54%\n \n | \n \n \n 23%\n \n | \n \n \n 23%\n \n | \n \n \u00a0 \n | \n \n 54% \n | \n \n 23% \n | \n \n 23% \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Irish Residential House Prices \n | \n \n \n 0%\n \n | \n \n \n 2%\n \n | \n \n \n 12%\n \n | \n \n \n -10%\n \n | \n \n 4% \n | \n \n 3% \n | \n \n 13% \n | \n \n -8% \n | \n
| \n Irish Unemployment \n | \n \n \n 7%\n \n | \n \n \n 5%\n \n | \n \n \n 4%\n \n | \n \n \n 11%\n \n | \n \n 7% \n | \n \n 6% \n | \n \n 4% \n | \n \n 12% \n | \n
| \n Irish GDP \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n \n \n 6%\n \n | \n \n \n -2%\n \n | \n \n 6% \n | \n \n 4% \n | \n \n 6% \n | \n \n -1% \n | \n
| \n Consumer Price Index \n | \n \n \n 6%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n \n \n 4%\n \n | \n \n 3% \n | \n \n 2% \n | \n \n 2% \n | \n \n 3% \n | \n
| \n ECB Base Rate \n | \n \n \n 3%\n \n | \n \n \n 3%\n \n | \n \n \n 1%\n \n | \n \n \n 3%\n \n | \n \n 0% \n | \n \n 0% \n | \n \n 0% \n | \n \n 2% \n | \n
The Base, Upside and Downside scenarios are described as follows:
\n\n Base scenario\n
\nIn the base scenario, the outlook for the global economy is one of slower growth and more uncertainty in 2023, as the economic rebound from the impact of Covid lockdowns in 2020 and 2021 dissipates, and the remaining inflationary shock drives the most aggressive response from global central banks for the past 30 years.
\nA forceful series of interest rate increases to stem burgeoning inflation, marks the end of the zero-rate environment and highly accommodative global monetary policy of the past decade. With fallout from the Russian invasion of Ukraine continuing to drive price instability in key energy and agri-food markets and combined with the Covid driven global supply chain issues, the inflation outlook continues to be highly uncertain, leading to a period of much greater economic uncertainty.
\n \nProperty prices have now reached the peak last seen in April 2007, although wages are significantly ahead of that period in 2022, and the number of households in the economy has grown by c.400,000 with new housing supply meeting a fraction of demand. Underlying driving forces, such as a) decade of under supply of housing (with 2022 falling short of output forecasts), b) strong population growth through inward migration, c) record rental values, d) an influx of Ukrainian war refugees and e) exceptionally strong construction price increases, are expected to hold property prices at current levels in 2023.
\nOn unemployment, the Baseline model reflects both the expectation of better than expected unemployment numbers in the end of 2022, and a rise in forecast unemployment level for 2023 to 6.5% (up 1%).
\n\n Upside scenario\n
\nThis is an extreme positive scenario developed to reflect a much stronger outcome for the Irish economy than in the base scenario. There is both historical context and statistical backing to the key forecasts, but at a positive extremity.
\nAverage GDP growth over the forecast period is 6%, which is higher than the average of 3.9% for the Irish economy since 1950. The outlook reflects an extreme positive of effective full employment.
\nConsistent with the longer term nominal house price average gain of 9.3% since 1970 ( Irish property prices are 50X higher than in 1970 in nominal terms) and 6.4% globally during that period, the HPI forecast for the extreme positive scenario, puts average HPI increases during the scenario under review, at 12% per annum.
\nSubstantially below trend CPI growth returns in the Irish economy over the forecast horizon, with inflation trends remaining highly supportive of economic growth.
\n\n Downside scenario\n
\nThe Downside scenario is an extreme scenario backed by Irish historical context and international comparatives. The scenario captures a statistical extreme in unemployment, GDP and HPI, while maintaining credibility as a single scenario. A prolonged period of mid teen unemployment, extends quickly, reaching a peak of 15% in 2024.
\nFive years of sub normal growth across the forecast horizon in 2022 to 2027, shows a sharp reversal from current expected growth levels and is significantly below the 3.9% average GDP growth seen in the Irish economy since 1950. GDP falls a low point of minus 11.5% over the forecast period.
\nThe threat of CPI moving ahead at a much faster pace than expected, is a key feature of this 1 in 20 scenario for this period, acknowledging the weakness in the global supply chain, and the impact of the Ukraine /Russian conflict which has pushed inflationary forces to 40 year highs.
\nThe Group applies statistical techniques combined with expert credit judgement to formulate an unbiased probability weighted estimate of ECL at the reporting date. A review of the methodology to calculate the final weighted estimate of ECL based on three scenario inputs (Base, Upside and Downside scenarios) by reference to challenger methods and supplementary benchmarks was conducted in H2 2022. The review concluded that the methodology remains in compliance with IFRS 9.
\nGiven the relative sizes of the portfolios, the key judgemental area for the Group is in relation to the level of ECL calculated for the residential mortgage portfolio.
\nDetermining probability weightings of the scenarios and forecasting FLI in respect of those scenarios requires a significant degree of Management judgement. The reported ECL allowance is impacted by the probability weighting attributed to each macroeconomic scenario.
\nIf the Group were to only use its Base Case Scenario for the measurement of ECL for the secured mortgage portfolio, excluding Management\u2019s adjustment to modelled outcomes, the ECL impairment allowance would be \u20ac98m less than reported at 31 December 2022.
\n \nSimilarly, excluding Management\u2019s adjustment to modelled outcomes, if the Group were to only apply its Upside Scenario for the measurement of ECL for the secured mortgage portfolio, the ECL impairment allowance would be \u20ac126m less than reported at 31 December 2022. Whereas, if the Group were to only use its Downside Scenario, the ECL impairment allowance would be \u20ac336m greater than reported at December 2022.
\nThe adequacy of ECL allowance is reviewed by the BAC on a half-yearly basis. At 31 December 2022, the total impairment provision included \u20ac137m of management\u2019s adjustments to modelled outcomes (31 December 2021: \u20ac118m) which primarily comprises the following:
\nAt December 2022, management judgement has been applied to specified non-standard mortgages classified as Stage 1 by Impairment models and these loans were transferred to Stage 2 with a lifetime impairment loss allowance applied. The impact of this staging adjustment is a c. \u20ac138m increase in Stage 2 volumes.
\n\n (b) Deferred taxation\n
\nAt 31 December 2022, the Group had a net deferred tax asset of \u20ac309m (31 December 2021: \u20ac350m). See note 27 for further details.
\nDeferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. The recognition of a deferred tax asset relies on Management\u2019s judgements surrounding the probability and adequacy of future taxable profits and the reversals of existing taxable temporary differences.
\nThe most important judgement relates to Management\u2019s assessment of the recoverability of the deferred tax asset relating to carried forward tax losses, being \u20ac334m at 31 December 2022. It should be noted that the full deferred tax asset on tax losses relates to tax losses generated in the PTSB legal entity (i.e. no deferred tax asset is being recognised on tax losses carried forward in any other Group company).
\nThe assessment of recoverability of this asset requires significant judgements to be made about the projection of long-term profitability because of the period over which recovery extends. In addition, given PTSB\u2019s history of recent losses, in accordance with IAS 12, there must be convincing other evidence to underpin this assessment.
\n \nIn making the assessment, the Board considered the following factors:
\nTaking the above factors into account, and in the absence of any expiry date for the utilisation of carried forward tax losses in Ireland, the Board have concluded that it is more likely than not that there will be sufficient taxable profits against which the losses can be utilised and on the basis of the assessment above, continue to recognise \u20ac334m of a deferred tax asset on tax losses on the statement of financial position as at 31 December 2022.
\nIn this regard, the Group has carried out an exercise to determine the likely number of years required to utilise the deferred tax asset arising on tax losses carried forward. Based on the Group\u2019s latest forecast plans to 2027 and assuming a level of profitability growth consistent with GDP growth of approximately 2.5%, it will take c. 10 years for the deferred tax asset on tax losses of \u20ac334m to be utilised. A level of profitability consistent with GDP growth continues to be considered by Management to be appropriate given the Group\u2019s primarily domestic retail focus and the expectation arising therefrom that, over the long-term, the Group\u2019s performance would be expected to broadly track the performance of the Irish economy. While the geopolitical uncertainty has significantly impacted GDP in the short-term it is expected that, over the medium-term, GDP will recover and Management are of the view that a long-term assumed growth rate of 2.5% is not unreasonable in this context.
\nIFRS does not allow for the deferred tax asset recognised to be discounted notwithstanding that it is likely to take a number of years for it to be recovered.
\nThe expected period of time to full utilisation of the deferred tax asset has decreased since 31 December 2021 from 22 to 10 years. This is mainly due to forecast interest rate rises and the impact of the Ulster Bank transaction. These revised profitability figures also impact the assumed long-term projections for the Group with the result that the expected utilisation period has decreased.
\n \nIt should be noted that Management make certain judgements in the process of applying the Group\u2019s accounting policies which may impact on amounts recognised in the financial statements and consequently on taxable profits and the utilisation of tax losses. As set out in note 27, analysis carried out demonstrates that were certain adverse events to arise (see below for further detail of the adverse events considered) it continues to be Management\u2019s view that there would be sufficient future taxable profits against which the full quantum of tax losses carried forward could be utilised, albeit that the period of time over which such utilisation would occur would be extended.
\nIt should be further noted that the analysis of the estimated utilisation of the deferred tax asset arising on tax losses carried forward in PTSB is based on the current business model of the Group.
\nThe recognition of this asset is dependent on the Group earning sufficient profits to utilise the tax losses. The quantum of and timing of these profits is a source of significant estimation uncertainty. However, as a principle, the Group is expecting to be profitable in the medium term. Consequently the key uncertainty relates principally to the time period over which these profits will be earned. Whilst the Group may be more or less profitable in certain periods owing to various factors such as the interest rate environment, loan loss provisions, operating costs and the regulatory environment, Management expect that, notwithstanding these, the Group will be profitable over the long term. Consequently, any change to these factors which would ultimately impact on profitability, are highly subjective, but will only impact on the time period over which this asset is recovered.
\nAs set out above, in assessing the appropriateness of recognising a deferred tax asset on tax losses carried forward, Management has considered the impact of various stress case scenarios on the period of recoverability. The three scenarios identified as having potentially significant implications for the deferred tax asset recoverability are (i) adverse changes in the interest rate environment, (ii) increased impairment charges and (iii) increases in operating costs. These sensitivity case scenarios are intended to simulate a situation where there is an economic downturn. If any one of the stress case scenarios were to occur, within a reasonably possible range, it is our expectation that the time period over which these assets might be recovered could extend by 1 year. If all adverse assumptions were to arise the period of recoverability would be extended by 1 year (i.e. full utilisation by 2033). However, Management consider this scenario unlikely. Changes in these assumptions are most impacted by changes to house prices and unemployment, which represent the majority of any expected stress loss which could occur. This position will continue to be reviewed for each reporting period; however, much of this estimation uncertainty may not be resolved for a number of years. However, as noted, based on the Group\u2019s latest forecast plan, it is Management estimate that the expected time period for recovery of the deferred tax asset on tax losses to be 10 years, i.e. full utilisation is expected by 2032.
\n\n (c) Fair Value of Financial instruments\n
\nThe Group\u2019s accounting policy for the determination of fair value of financial instruments is set out in note 1(vii)(e). The best evidence of fair value is quoted prices in an active market. The absence of quoted prices increases reliance on valuation techniques and requires the use of judgement in the estimation of fair value. This judgement includes evaluating available market data, determining the expected cash flows for the instruments, as well as identifying and applying an appropriate discount rate and credit spread.
\nValuation techniques that rely on non-observable data require a higher level of Management judgement in estimating the fair value compared to those based on observable data.
\nThe quality of market data, valuation techniques and other inputs into the valuation models used are subject to internal review and approval.
\nThe Group carries certain financial assets at fair value. In estimating the fair value of these assets and derivatives, the Group seeks to use quoted market prices (level 1). Where quoted market prices are not available, the Group uses internally developed valuation models and valuations from external experts. Inputs to these models are taken from observable market data where possible (level 2) but where this is not possible, a degree of judgement is used (level 3). Such judgement considerations typically include items such as interest rate yield curves, equity prices, option volatilities and currency rates.
\nFurther details of the fair value of financial assets and liabilities are set out in note 37.
\n \n\n (d) Impairment review of its subsidiary undertaking\n
\nThe Company carries its investment in its subsidiary undertaking at cost and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment\u2019s fair value or its value-in-use (VIU).
\nAn impairment charge arises if the carrying value exceeds the recoverable amount and where the carrying value is not supported by the estimated discounted future cash flows of the underlying business. Management note that the market capitalisation of the Group is lower than its net assets. The depressed share price is a result of the overall subdued banking environment currently in which the entity operates along with various entity specific factors that affect the liquidity of the shares. The recoverable amount of the investment is the higher of its fair value less costs to sell or it\u2019s VIU. The carrying value of the investment in PTSB plc was \u20ac888m as at 31 December 2021. During 2022, an AT1 issuance of \u20ac245m (net of transaction costs) and a share issuance related to Project Sun of \u20ac516m occurred which brought the carrying value to \u20ac1,649m. The recoverable amount based on the VIU is in excess of the carrying amount after the reversal of previous impairment charges. On the basis that the VIU in in excess of the carrying value no impairment charge is required (31 December 2021: impairment charge of \u20ac66m). Management have considered whether a reversal of impairment charge from previous years is appropriate. Having reviewed external and internal information management noted that there had been a significant change in the value of the asset, primarily due to the increased forecast profitability as a result of the Ulster Bank transaction and increased interest rates. On this basis, management were satisfied there was sufficient headroom to take a full write back of the previous impairment charges of \u20ac697m.
\nThe VIU is the present value of the future free cash flows expected to be derived from the investment, based upon a VIU calculation discounted at an appropriate rate for the investment.
\nThe recoverable amount reflecting Management\u2019s best estimate is sensitive to changes in the following key assumptions:
\n\n Cash flow forecasts\n
\nCash flow forecasts are based on internal management information used for strategic planning for a period of up to five years, after which a long-term growth rate appropriate for the business is applied. The key cash flows in these forecasts are as follows:
\nThe projected cash flows are stress tested with actual performance and verifiable economic data annually to reflect current market conditions and Management\u2019s best estimates of future projections.
\n\n Growth rate\n
\nGrowth rate is determined by reference to long-term economic growth and does not exceed the relevant long-term average growth rate of the industry in which it operates. A growth rate of 2.5% was used.
\n\n Discount rate\n
\nThe discount rate used is a post-tax weighted average cost of capital of the Group of 10% (2020: 10%) as the cash flows used in impairment assessment are post tax cash flows. The discount rate includes an additional risk premium to account for various specific risks. These specific risks are not reflected in the cash flows projected for impairment analysis.
\nThe discount rate is used for various internal pricing models and is benchmarked with the industry averages to cater for the any changes in risk profile of the Group.
\nThe Group uses post-tax discount rate as the cash flows generated by the subsidiary are post tax cash flows.
\n \n\n Sensitivity analysis\n
\nThe impact of changes in the growth rate, the discount rate and cash flows has been assessed by the Directors:
\n\n (e) IFRS 3 Business Combination Accounting (BCA) including fair value of acquired net assets \n
\nOn 17 December 2021, PTSB entered into a conditional agreement to acquire a business from Ulster Bank consisting of certain elements of its non-tracker residential mortgage portfolio, SME portfolio and asset finance portfolio. The acquisition also included 25 branches and the workforce associated with the various businesses and branches. The agreement was effected through a series of linked contracts and became unconditional on 7 November 2022. For operational reasons, the above businesses/ assets will not transfer to the group on a single date. The group took possession of the majority of the mortgage book and its associated workforce on 7 November 2022 (the Principal Completion Date). The branches and associated workforce transferred in January 2023 and the SME assets (including associated employees) transferred in February 2023. The remainder of the mortgage book, and the asset finance assets (including associated employees) are expected to transfer to the group in the first half of 2023.
\nThis agreement was accounted for as a business combination on the Principal Completion Date with the purchase price allocation (PPA) and fair value of the net assets acquired being determined on that date. This gave rise to gain on bargain purchase of \u20ac362m. The forward purchase of the loans yet to be transferred under the contract is accounted for as a derivative from that date. See note 3 for further details.
\nThe accounting for this transaction required Management to make certain critical accounting judgements and estimates.
\n\n Critical Accounting Judgement\n
\nManagement had to make the following accounting judgements:
\nManagement considered these judgements in detail and concluded as follows:
\n| \n \n Judgement\n \n | \n \n \n Conclusion\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n How many transactions are there?\n \n | \n \n Management considered the requirements of IFRS 3 and IFRS 9 and believe that the group should account for this agreement as one overall transaction due to following reasons: \n
| \n
| \n \n Judgement\n \n | \n \n \n Conclusion\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n What is PTSB acquiring \u2013 a business or assets?\n \n | \n \n Management considered the requirements of IFRS 3 and concluded that this transaction collectively constitutes the acquisition of a business on the basis it includes acquired inputs (the loan books) and substantive processes which are embodied in the key individuals transferring (credit risk, underwriting and customer relationship management) along with sufficient support staff. The assessment of whether an acquired set of activities and assets constitutes a business must include, at a minimum, an input and substantive process and whether when these are applied to an input or inputs it is critical to the ability to continue producing outputs. This assessment must be performed from the perspective of a market participant. The mere existence of an output (e.g. interest income) doesn\u2019t indicate that both an input and a substantive process have been acquired. Management considerd substantive processes to include strategic, operational and resource management processes in order to be considered a business. These processes are usually documented but the intellectual capacity of an organised workforce with the necessary skills and experience also provide the necessary processes to determine the acquired set of assets and activities as a business. Management determined that the acquisition of the organised workforce from Ulster Bank that included key individuals with the necessary skills and experience to direct the substantive processes within credit risk, underwriting and customer relationship management met the requirements of IFRS 3. As a result, the entire transaction was accounted for as a business combination. \n | \n
| \n \n When is the acquisition accounted for?\n \n | \n \n Management considered the requirements of IFRS 3 and concluded that there is one business combination date and that this takes place at the Principal Completion Date i.e., when the mortgage business (being the majority of the mortgage book and workforce (including key mortgage employees)) transfers. The fact that certain parts of the business do not transfer for operational reasons at this date does not change this judgement. As noted above this is one unconditional, interrelated transaction. The mortgage business, which amounts to the vast majority of the overall business, is irreversibly transferred on this date with the rest of the assets and workforce being contractually obliged to follow. As a result, the business combination is accounted for as at this date. \n | \n
| \n \n What is measured?\n \n | \n \n The Directors considered the requirements of IFRS 3 and IFRS 9 and concluded that what is measured is the fair value of the net assets transferred at the Principal Completion Date and that the contractual obligation for assets to be transferred after the Principal Completion Date creates derivatives (forward purchase) which are fair valued at the date. These derivatives are accounted for a fair value until the actual transfer of the underlying assets \n | \n
This transaction has been accounted for as a business combination under IFRS 3 (as described above). If this transaction was not accounted for as a business combination no gain on bargain purchase would be recognised and the timing of asset recognition and associated measurement including subsequent EIR would be significantly different.
\n\n Critical Accounting Estimates\n
\nBusiness combination accounting required Management to make certain critical accounting estimates being the fair value of the assets acquired including derivatives. Management engaged the services of independent third-party valuers to provide valuations of the assets being transferred in the transaction. The fair value of the branch properties was determined using the open market prices. As there was no observable market price for the loans (Level 3), their fair value was calculated using discounted cashflow model and included calculating the expected contractual cash flows of the assets and applying the following to the portfolio of assets; prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio.
\nSee notes 3 and 37 for sensitivities relating to the fair values.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f184088": { "value": "\n\n 3. Business combination\n
\nOn 17 December 2021, PTSB entered into a legally binding agreement with NatWest Group Plc (\u2018NatWest\u2019) to acquire certain elements of the Retail mortgage lending, Asset Financing and SME businesses, including 25 branch properties and staff of Ulster Bank Ireland DAC (\u2018Ulster\u2019) in the Republic of Ireland. On 7 November 2022 the transaction was completed when \u20ac5.2bn of the Retail business assets and significant processes were acquired by the Bank thereby legally binding the Bank to acquire the remaining Retail, Asset Financing and SME assets. No voting interest in Ulster was acquired as part of the acquisition. The remaining Retail, Asset Financing and SME assets are envisioned to be acquired by the Bank on subsequent dates in the first half of 2023.See note 2(e) for further details on this transaction.
\nThe acquisition of the Ulster business was accounted for under IFRS 3: Business Combinations and therefore, any resulting negative goodwill/gain on bargain purchase is calculated as the excess of the fair value of the identifiable assets acquired and the liabilities assumed over the fair value of the consideration transferred. In this transaction a gain on bargain purchase arose because the fair value of the assets and liabilities acquired exceeded the fair value of the consideration paid. This is as a result of a number of external factor\u2019s including NatWest\u2019s decision to leave the Irish market therefore the Bank acquired the assets at a discount to their fair value. The accounting for the business acquisition was completed on 7 November 2022 when business combination accounting was achieved.
\nThe details of the business combination are as follows:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Fair value of consideration transferred\n \n | \n \n \u00a0 \n | \n
| \n Amount settled in cash \n | \n \n \n 4,816 \n \n | \n
| \n Equity consideration \n | \n \n \n 155 \n \n | \n
| \n Contingent consideration \n | \n \n \n 37 \n \n | \n
| \n \n Total\n \n | \n \n \n 5,008\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Recognised amounts of identifiable net assets \u2013 at fair value\n \n | \n \n \u00a0 \n | \n
| \n Retail mortgage lending \n | \n \n \n 5,386 \n \n | \n
| \n Forward Contract Derivatives \n | \n \n \n (16) \n \n | \n
| \n \n Total\n \n | \n \n \n 5,370\n \n | \n
| \n \n Gain on bargain purchase\n \n | \n \n \n (362)\n \n | \n
The total fair value of the consideration transferred on the acquisition date was \u20ac5,008m and consists of;
\nThe liability for contingent consideration consists of a liability to pay an equity cash consideration amount based on 4.04% of the Banks ordinary shares (after the issuance of shares on the acquisition date described below) using a volume weighted average price (VWAP) of the Banks ordinary shares for a period of 60 days post the acquisition date. On the acquisition date the liability is measured using the closing share price on 4 November 2022 of \u20ac1.70. The undiscounted range of outcomes based on the highest and lowest VWAP in the 60 day period are \u20ac37m and \u20ac41m. The contingent consideration is accounted for at fair value until settlement. This liability was settled in January 2023 when cash of \u20ac41m was paid to NatWest.
\nThe total fair value of the net assets acquired on the acquisition date was \u20ac5,370m and consists of;
\nThe fair value measurements were performed by independent professional valuers having appropriate qualifications and recent experience in the fair value measurement of loans and properties in the locations and categories being valued.
\n \nA discounted cash flow model was used to estimate the fair value of the acquired retail mortgage assets. This included calculating the expected contractual cash flows of the assets and applying the following to the portfolio of assets; prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio.
\nThe forward contract derivatives represent the remaining Retail lending assets and the entirety of the Asset Financing and SME assets and Branch Properties that will not be transferred until a later date and therefore the Bank have not acquired control of these assets. As the business combination was accounted for on 7 November 2022, the Group is required to account for derivatives for the forward purchase of the remaining Retail lending assets and the entirety of the Asset Financing and SME assets and Branch Properties on that date. The forward contract derivatives are measured as the net of the fair value of the assets based on the above discounted cash flow model and the fair value of the consideration to be transferred i.e. the gross outstanding balance. The same discounted cash flow model was used to estimate the fair value of the remaining assets to be acquired. The Branch Properties were measured at their open market prices.
\nThe gross fair value of the assets to be acquired as at the acquisition date included as part of the forward contract derivatives are as follows. These are based on an estimate of the outstanding balance of these loans on their expected transfer date.
\nThe gross fair value of the consideration to be transferred as at the acquisition date included as part of the forward contract derivatives are as follows. These are based on an estimate of the outstanding balance of these loans on their expected transfer date.
\nSee note 37 for further detail on fair value of the forward contract derivatives as at 31 December 2022 and the related sensitives.
\nThe Branch Properties (including associated employees) transferred in January 2023 and \u20ac9m cash was paid to NatWest. The SME assets (including associated employees) transferred in February 2023 and \u20ac162m cash was paid to NatWest.
\nIn accordance with IFRS 3 as the fair value of the assets acquired and the liabilities assumed (\u20ac5,008m) is in excess of the fair value of the consideration transferred (\u20ac5,370m) a gain on bargain purchase of \u20ac362m was recognised on the acquisition date in the Income Statement. Management recognised this gain in Exceptional Items.
\nAn assessment of sensitivity to changes in the discount rates used in the discounted cash flow model was performed. A 25 basis point increase in the discount rate results in a reduction of the gross fair value of the business combination of \u20ac87m, a 25 basis point decrease in the discount rate results in an increase of the gross fair value of the business combination of \u20ac90m.
\nUnder section 71 of the Companies Act 2014 as the consideration for the acquisition of the Ulster business includes the issuance of ordinary shares, Company law requires that the share premium be recognised as the difference between the nominal value of shares and the fair value of the consideration received. This results in the shares being issued at \u20ac5.68 per share as part of the consideration transferred. The share price on the issuance date was \u20ac1.70 per share with \u20ac0.50 being recognised in Share Capital and \u20ac1.20 being recognised in Share Premium. As the remaining fair value of the consideration received is in excess of the fair value of the shares this excess is required by law to be included in share premium and is, therefore, reclassified directly in equity between Retained Earnings and Share Premium. The excess amount is the gain on bargain purchase of \u20ac362m.
\nThe acquired retail assets incurred a pre-tax loss of \u20ac21m from the acquisition date to the reporting date primarily due to initial recognition of ECL on the acquired loans. Revenue from the acquisition date to 31 December 2022 was \u20ac16m. The day 1 ECL recognised of this transaction was \u20ac30m. This is not included in the gain on bargain purchase.
\n \nIf the business assets (including retail, SME and asset finance) had been acquired on 1 January 2022, revenue of the Group for 2022 would have increased by \u20ac167m, and pre-tax profit for the year would have increased by \u20ac57m. The basis for this is estimate is data received on the loan assets since the acquisition date.
\nAcquisition-related costs amounting to \u20ac92m are not included as part of consideration transferred and have been recognised as an expense in the consolidated income statement, as part of exceptional items within total operating expenses. \u20ac1m of transaction costs were incurred as part of the share issuance to NatWest. These are recognised in Share Premium.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f184248": { "value": "\n\n 4. Operating segments\n
\n \nThe Group reports one operating segment which is in accordance with IFRS 8 \u2018Operating segments\u2019.
\nIn line with IFRS 8, the Group also reports revenue from external customers for each major group of products and services. The amount of revenue reported is based on the financial information used to produce the Group\u2019s financial statements. The Group also reports revenue and non-current assets on a geographical basis; Ireland and Isle of Man (IOM)
\n \nThe ExCo as the Chief Operating Decision Maker (CCDM) is responsible for implementing the strategic management of the Group as guided by the Board. The ExCo reviews key performance indicators and internal management reports on a monthly basis.
\n \n \n\n 4.1 Revenue from external customers split by products and services\n
\nThe sources from which the Group earns external revenue are: interest income, fee and commission income, net trading income, and other operating income. Total revenue from external customers was \u20ac501m (2021: \u20ac431m). The main products from which the Group earns external revenue include: mortgages; consumer finance; and treasury assets. The interest income from these products is set out in the table below. Net interest income from external customers split by product:
\n\u00a0
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Mortgages \n | \n \n \n 354\n \n | \n \n 315 \n | \n
| \n Consumer finance* \n | \n \n \n 33\n \n | \n \n 31 \n | \n
| \n Treasury assets \n | \n \n \n 11\n \n | \n \n 7 \n | \n
| \n Wholesale funding \n | \n \n \n 19\n \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 417\n \n | \n \n 354 \n | \n
*Consumer finance comprises income from term loans, credit cards and overdrafts.
\n \n \n\n 4.2 Profit for the year based on geographical location\n
\nDuring the years ended 31 December 2022 and 31 December 2021, the majority of the Group's profit/(loss) was incurred in Ireland. Immaterial losses (less than \u20ac1m) were incurred outside of Ireland in the Group's IOM subsidiary PBI Ltd during the years ended 31 December 2022 and 31 December 2021.
\n\n 4.3 Assets and liabilities based on geographical location\n
\n| \n \u00a0 \n | \n \n \n Ireland\n \n | \n \n \n IOM*\n \n | \n \n \n Of which inter-group balances\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Assets\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Held for sale \n | \n \n \n 18\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n Other assets \n | \n \n \n 25,914\n \n | \n \n \n 1\n \n | \n \n \n (56)\n \n | \n \n \n 25,915\n \n | \n
| \n \n Total segment assets\n \n | \n \n \n 25,932\n \n | \n \n \n 1\n \n | \n \n \n (56)\n \n | \n \n \n 25,933\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Total segment liabilities\n \n | \n \n \n 23,534\n \n | \n \n \n 1\n \n | \n \n \n (56)\n \n | \n \n \n 23,535\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \u00a0 \n | \n
| \n \n Capital expenditure\n \n | \n \n \n 112\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 112\n \n | \n
*This is based on geographical locations and reflects Group intercompany activity with PBI Ltd.
\n \n| \n \u00a0 \n | \n \n \n Ireland\n \n | \n \n \n IOM*\n \n | \n \n \n Of which inter-group balances\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Assets \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Held for sale \n | \n \n 28 \n | \n \n - \n | \n \n - \n | \n \n 28 \n | \n
| \n Other assets \n | \n \n 22,205 \n | \n \n 2 \n | \n \n (59) \n | \n \n 22,207 \n | \n
| \n Total segment assets \n | \n \n 22,233 \n | \n \n 2 \n | \n \n (59) \n | \n \n 22,235 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Total segment liabilities \n | \n \n 20,444 \n | \n \n 2 \n | \n \n (59) \n | \n \n 20,446 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Capital expenditure \n | \n \n 65 \n | \n \n - \n | \n \n - \n | \n \n 65 \n | \n
*This is based on geographical locations and reflects Group intercompany activity with PBI Ltd.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f184251": { "value": "\nThe Group reports one operating segment which is in accordance with IFRS 8 \u2018Operating segments\u2019.
\nIn line with IFRS 8, the Group also reports revenue from external customers for each major group of products and services. The amount of revenue reported is based on the financial information used to produce the Group\u2019s financial statements. The Group also reports revenue and non-current assets on a geographical basis; Ireland and Isle of Man (IOM)
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f184255": { "value": "\n \n\n 4.1 Revenue from external customers split by products and services\n
\nThe sources from which the Group earns external revenue are: interest income, fee and commission income, net trading income, and other operating income. Total revenue from external customers was \u20ac501m (2021: \u20ac431m). The main products from which the Group earns external revenue include: mortgages; consumer finance; and treasury assets. The interest income from these products is set out in the table below. Net interest income from external customers split by product:
\n\u00a0
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Mortgages \n | \n \n \n 354\n \n | \n \n 315 \n | \n
| \n Consumer finance* \n | \n \n \n 33\n \n | \n \n 31 \n | \n
| \n Treasury assets \n | \n \n \n 11\n \n | \n \n 7 \n | \n
| \n Wholesale funding \n | \n \n \n 19\n \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 417\n \n | \n \n 354 \n | \n
*Consumer finance comprises income from term loans, credit cards and overdrafts.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f184256": { "value": "\n\n 4.1 Revenue from external customers split by products and services\n
\nThe sources from which the Group earns external revenue are: interest income, fee and commission income, net trading income, and other operating income. Total revenue from external customers was \u20ac501m (2021: \u20ac431m). The main products from which the Group earns external revenue include: mortgages; consumer finance; and treasury assets. The interest income from these products is set out in the table below. Net interest income from external customers split by product:
\n\u00a0
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Mortgages \n | \n \n \n 354\n \n | \n \n 315 \n | \n
| \n Consumer finance* \n | \n \n \n 33\n \n | \n \n 31 \n | \n
| \n Treasury assets \n | \n \n \n 11\n \n | \n \n 7 \n | \n
| \n Wholesale funding \n | \n \n \n 19\n \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 417\n \n | \n \n 354 \n | \n
*Consumer finance comprises income from term loans, credit cards and overdrafts.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f184640": { "value": "\n \n \n\n 5. Net interest income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Interest income\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Loans and advances to customers \n | \n \n \n 387 \n \n | \n \n 346 \n | \n
| \n Loans and advances to banks \n | \n \n \n 15 \n \n | \n \n - \n | \n
| \n Debt securities and other fixed-income securities \n | \n \n \n 11\n \n | \n \n 7 \n | \n
| \n Deposits from banks \n | \n \n \n 4\n \n | \n \n 1 \n | \n
| \n \u00a0 \n | \n \n \n 417 \n \n | \n \n 354 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Interest expense\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deposits from banks \n | \n \n \n (10)\n \n | \n \n - \n | \n
| \n Due to customers \n | \n \n \n (10)\n \n | \n \n (14) \n | \n
| \n Debt securities in issue \n | \n \n \n (16)\n \n | \n \n (8) \n | \n
| \n Loans and advances to banks \n | \n \n \n (10)\n \n | \n \n (14) \n | \n
| \n Subordinated liabilities \n | \n \n \n (9)\n \n | \n \n (5) \n | \n
| \n \u00a0 \n | \n \n \n (55)\n \n | \n \n (41) \n | \n
| \n \n Net interest income\n \n | \n \n \n 362 \n \n | \n \n 313 \n | \n
\n 5. Net interest income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Interest income\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Loans and advances to customers \n | \n \n \n 387 \n \n | \n \n 346 \n | \n
| \n Loans and advances to banks \n | \n \n \n 15 \n \n | \n \n - \n | \n
| \n Debt securities and other fixed-income securities \n | \n \n \n 11\n \n | \n \n 7 \n | \n
| \n Deposits from banks \n | \n \n \n 4\n \n | \n \n 1 \n | \n
| \n \u00a0 \n | \n \n \n 417 \n \n | \n \n 354 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Interest expense\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deposits from banks \n | \n \n \n (10)\n \n | \n \n - \n | \n
| \n Due to customers \n | \n \n \n (10)\n \n | \n \n (14) \n | \n
| \n Debt securities in issue \n | \n \n \n (16)\n \n | \n \n (8) \n | \n
| \n Loans and advances to banks \n | \n \n \n (10)\n \n | \n \n (14) \n | \n
| \n Subordinated liabilities \n | \n \n \n (9)\n \n | \n \n (5) \n | \n
| \n \u00a0 \n | \n \n \n (55)\n \n | \n \n (41) \n | \n
| \n \n Net interest income\n \n | \n \n \n 362 \n \n | \n \n 313 \n | \n
\n 5. Net interest income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Interest income\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Loans and advances to customers \n | \n \n \n 387 \n \n | \n \n 346 \n | \n
| \n Loans and advances to banks \n | \n \n \n 15 \n \n | \n \n - \n | \n
| \n Debt securities and other fixed-income securities \n | \n \n \n 11\n \n | \n \n 7 \n | \n
| \n Deposits from banks \n | \n \n \n 4\n \n | \n \n 1 \n | \n
| \n \u00a0 \n | \n \n \n 417 \n \n | \n \n 354 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Interest expense\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deposits from banks \n | \n \n \n (10)\n \n | \n \n - \n | \n
| \n Due to customers \n | \n \n \n (10)\n \n | \n \n (14) \n | \n
| \n Debt securities in issue \n | \n \n \n (16)\n \n | \n \n (8) \n | \n
| \n Loans and advances to banks \n | \n \n \n (10)\n \n | \n \n (14) \n | \n
| \n Subordinated liabilities \n | \n \n \n (9)\n \n | \n \n (5) \n | \n
| \n \u00a0 \n | \n \n \n (55)\n \n | \n \n (41) \n | \n
| \n \n Net interest income\n \n | \n \n \n 362 \n \n | \n \n 313 \n | \n
\n 6. Fees and commission income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Fees and commission income\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Retail banking and credit card fees \n | \n \n \n 65 \n \n | \n \n 52 \n | \n
| \n Brokerage and insurance commission \n | \n \n \n 9 \n \n | \n \n 11 \n | \n
| \n Other fees and commission income \n | \n \n \n 1 \n \n | \n \n 1 \n | \n
| \n \n Fees and commission income\n \n | \n \n \n 75 \n \n | \n \n 64 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Fees and commission expense *\n \n | \n \n \n (33)\n \n | \n \n (29) \n | \n
| \n \n Net fees and commission income\n \n | \n \n \n 42 \n \n | \n \n 35 \n | \n
* Fees and commission expenses primarily comprises retail banking and credit cards fees.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f184926": { "value": "\n\n 7. Net trading Income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Held-for-trading\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Foreign exchange gains \n | \n \n \n 3 \n \n | \n \n 2 \n | \n
| \n \n Net trading income\n \n | \n \n \n 3 \n \n | \n \n 2 \n | \n
\n 8. Net other operating income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Other income \n | \n \n \n 6\n \n | \n \n 11 \n | \n
| \n \n Net other operating income\n \n | \n \n \n 6\n \n | \n \n 11 \n | \n
\n 8. Net other operating income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Other income \n | \n \n \n 6\n \n | \n \n 11 \n | \n
| \n \n Net other operating income\n \n | \n \n \n 6\n \n | \n \n 11 \n | \n
\n 8. Net other operating income\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Other income \n | \n \n \n 6\n \n | \n \n 11 \n | \n
| \n \n Net other operating income\n \n | \n \n \n 6\n \n | \n \n 11 \n | \n
\n 9. Administrative, staff and other expenses (excluding exceptional items)\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Staff costs (as detailed below) \n | \n \n \n 152\n \n | \n \n 142 \n | \n
| \n Other general and administrative expenses \n | \n \n \n 150\n \n | \n \n 121 \n | \n
| \n \n Administrative, staff and other expenses (excluding exceptional items)\n \n | \n \n \n 302\n \n | \n \n 263 \n | \n
Administrative, staff and other expenses (excluding exceptional items) includes costs of \u20ac4m in relation to legacy legal cases in 2022 (31 December 2021: \u20ac15m).
\n \n\n Fees paid to the Group\u2019s auditors for services outlined below\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Statutory auditor\u2019s remuneration (including expenses and excluding VAT) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Audit of the individual and the Group financial statements \n | \n \n \n 1.4\n \n | \n \n 1.1 \n | \n
| \n - Other assurance services \n | \n \n \n 0.1\n \n | \n \n 0.1 \n | \n
| \n - Other non-audit services* \n | \n \n \n 0.8\n \n | \n \n 0.3 \n | \n
* Other non-audit services for 2022 primarily relate to the Project Sun Class 1 Circular to shareholders and comfort letters and other services in relation to the Group\u2019s Euro Notes Programme and subsequent debt issuance, the AT1 issuance and the Fastnet securitisations. Other non-audit services in 2021 include comfort letters and other services in relation to the Fastnet securitisations, the Group\u2019s Euro Note Programme and subsequent debt and capital issuances.
\n \n \n \n \n \n \n \n\n Staff costs\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Wages and salaries (including commission payable to sales staff) \n | \n \n \n 124\n \n | \n \n 115 \n | \n
| \n Social insurance \n | \n \n \n 15\n \n | \n \n 14 \n | \n
| \n Pension costs \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
\n
| \n \n \n 13\n \n | \n \n 13 \n | \n
| \n \n Total staff costs\n \n | \n \n \n 152\n \n | \n \n 142 \n | \n
Staff redundancy costs associated with exceptional items for the year ended 31 December 2022 and 31 December 2021 are included as part of note 11 exceptional Items.
\nStaff costs of \u20ac13m (31 December 2021: \u20ac13m), have been capitalised to Intangible assets (see note 26), as the cost incurred was directly related to developing software and it is probable that future economic benefits that exceed its cost will flow from its use over more than one year. Therefore these costs are not included in this note.
\n \n\n Staff numbers\n
\nClosing and average number of staff (including Executive Directors) employed during the year are as follows:
\n| \n \u00a0 \n | \n \n \n Closing staff numbers*\n \n | \n \n \n Average staff numbers\n \n | \n ||
| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Ireland \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
| \n \n Total number of staff\n \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
*Closing staff numbers are calculated on a full time equivalent (FTE) basis. Includes 126 closing and 70.6 average staff numbers working on the Ulster Bank transaction.
\n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f185051": { "value": "\n \n\n 9. Administrative, staff and other expenses (excluding exceptional items)\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Staff costs (as detailed below) \n | \n \n \n 152\n \n | \n \n 142 \n | \n
| \n Other general and administrative expenses \n | \n \n \n 150\n \n | \n \n 121 \n | \n
| \n \n Administrative, staff and other expenses (excluding exceptional items)\n \n | \n \n \n 302\n \n | \n \n 263 \n | \n
Administrative, staff and other expenses (excluding exceptional items) includes costs of \u20ac4m in relation to legacy legal cases in 2022 (31 December 2021: \u20ac15m).
\n \n\n Fees paid to the Group\u2019s auditors for services outlined below\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Statutory auditor\u2019s remuneration (including expenses and excluding VAT) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Audit of the individual and the Group financial statements \n | \n \n \n 1.4\n \n | \n \n 1.1 \n | \n
| \n - Other assurance services \n | \n \n \n 0.1\n \n | \n \n 0.1 \n | \n
| \n - Other non-audit services* \n | \n \n \n 0.8\n \n | \n \n 0.3 \n | \n
* Other non-audit services for 2022 primarily relate to the Project Sun Class 1 Circular to shareholders and comfort letters and other services in relation to the Group\u2019s Euro Notes Programme and subsequent debt issuance, the AT1 issuance and the Fastnet securitisations. Other non-audit services in 2021 include comfort letters and other services in relation to the Fastnet securitisations, the Group\u2019s Euro Note Programme and subsequent debt and capital issuances.
\n \n \n \n \n \n\n Staff costs\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Wages and salaries (including commission payable to sales staff) \n | \n \n \n 124\n \n | \n \n 115 \n | \n
| \n Social insurance \n | \n \n \n 15\n \n | \n \n 14 \n | \n
| \n Pension costs \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
\n
| \n \n \n 13\n \n | \n \n 13 \n | \n
| \n \n Total staff costs\n \n | \n \n \n 152\n \n | \n \n 142 \n | \n
Staff redundancy costs associated with exceptional items for the year ended 31 December 2022 and 31 December 2021 are included as part of note 11 exceptional Items.
\nStaff costs of \u20ac13m (31 December 2021: \u20ac13m), have been capitalised to Intangible assets (see note 26), as the cost incurred was directly related to developing software and it is probable that future economic benefits that exceed its cost will flow from its use over more than one year. Therefore these costs are not included in this note.
\n \n\n Staff numbers\n
\nClosing and average number of staff (including Executive Directors) employed during the year are as follows:
\n| \n \u00a0 \n | \n \n \n Closing staff numbers*\n \n | \n \n \n Average staff numbers\n \n | \n ||
| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Ireland \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
| \n \n Total number of staff\n \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
*Closing staff numbers are calculated on a full time equivalent (FTE) basis. Includes 126 closing and 70.6 average staff numbers working on the Ulster Bank transaction.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f185052": { "value": "\n\n 9. Administrative, staff and other expenses (excluding exceptional items)\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Staff costs (as detailed below) \n | \n \n \n 152\n \n | \n \n 142 \n | \n
| \n Other general and administrative expenses \n | \n \n \n 150\n \n | \n \n 121 \n | \n
| \n \n Administrative, staff and other expenses (excluding exceptional items)\n \n | \n \n \n 302\n \n | \n \n 263 \n | \n
Administrative, staff and other expenses (excluding exceptional items) includes costs of \u20ac4m in relation to legacy legal cases in 2022 (31 December 2021: \u20ac15m).
\n \n\n Fees paid to the Group\u2019s auditors for services outlined below\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Statutory auditor\u2019s remuneration (including expenses and excluding VAT) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Audit of the individual and the Group financial statements \n | \n \n \n 1.4\n \n | \n \n 1.1 \n | \n
| \n - Other assurance services \n | \n \n \n 0.1\n \n | \n \n 0.1 \n | \n
| \n - Other non-audit services* \n | \n \n \n 0.8\n \n | \n \n 0.3 \n | \n
* Other non-audit services for 2022 primarily relate to the Project Sun Class 1 Circular to shareholders and comfort letters and other services in relation to the Group\u2019s Euro Notes Programme and subsequent debt issuance, the AT1 issuance and the Fastnet securitisations. Other non-audit services in 2021 include comfort letters and other services in relation to the Fastnet securitisations, the Group\u2019s Euro Note Programme and subsequent debt and capital issuances.
\n \n \n \n\n Staff costs\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Wages and salaries (including commission payable to sales staff) \n | \n \n \n 124\n \n | \n \n 115 \n | \n
| \n Social insurance \n | \n \n \n 15\n \n | \n \n 14 \n | \n
| \n Pension costs \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
\n
| \n \n \n 13\n \n | \n \n 13 \n | \n
| \n \n Total staff costs\n \n | \n \n \n 152\n \n | \n \n 142 \n | \n
Staff redundancy costs associated with exceptional items for the year ended 31 December 2022 and 31 December 2021 are included as part of note 11 exceptional Items.
\nStaff costs of \u20ac13m (31 December 2021: \u20ac13m), have been capitalised to Intangible assets (see note 26), as the cost incurred was directly related to developing software and it is probable that future economic benefits that exceed its cost will flow from its use over more than one year. Therefore these costs are not included in this note.
\n \n\n Staff numbers\n
\nClosing and average number of staff (including Executive Directors) employed during the year are as follows:
\n| \n \u00a0 \n | \n \n \n Closing staff numbers*\n \n | \n \n \n Average staff numbers\n \n | \n ||
| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Ireland \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
| \n \n Total number of staff\n \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
*Closing staff numbers are calculated on a full time equivalent (FTE) basis. Includes 126 closing and 70.6 average staff numbers working on the Ulster Bank transaction.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f185117": { "value": "\n\n Fees paid to the Group\u2019s auditors for services outlined below\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Statutory auditor\u2019s remuneration (including expenses and excluding VAT) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Audit of the individual and the Group financial statements \n | \n \n \n 1.4\n \n | \n \n 1.1 \n | \n
| \n - Other assurance services \n | \n \n \n 0.1\n \n | \n \n 0.1 \n | \n
| \n - Other non-audit services* \n | \n \n \n 0.8\n \n | \n \n 0.3 \n | \n
* Other non-audit services for 2022 primarily relate to the Project Sun Class 1 Circular to shareholders and comfort letters and other services in relation to the Group\u2019s Euro Notes Programme and subsequent debt issuance, the AT1 issuance and the Fastnet securitisations. Other non-audit services in 2021 include comfort letters and other services in relation to the Fastnet securitisations, the Group\u2019s Euro Note Programme and subsequent debt and capital issuances.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f185199": { "value": "\n \n \n \n \n\n Staff costs\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Wages and salaries (including commission payable to sales staff) \n | \n \n \n 124\n \n | \n \n 115 \n | \n
| \n Social insurance \n | \n \n \n 15\n \n | \n \n 14 \n | \n
| \n Pension costs \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
\n
| \n \n \n 13\n \n | \n \n 13 \n | \n
| \n \n Total staff costs\n \n | \n \n \n 152\n \n | \n \n 142 \n | \n
Staff redundancy costs associated with exceptional items for the year ended 31 December 2022 and 31 December 2021 are included as part of note 11 exceptional Items.
\nStaff costs of \u20ac13m (31 December 2021: \u20ac13m), have been capitalised to Intangible assets (see note 26), as the cost incurred was directly related to developing software and it is probable that future economic benefits that exceed its cost will flow from its use over more than one year. Therefore these costs are not included in this note.
\n \n\n Staff numbers\n
\nClosing and average number of staff (including Executive Directors) employed during the year are as follows:
\n| \n \u00a0 \n | \n \n \n Closing staff numbers*\n \n | \n \n \n Average staff numbers\n \n | \n ||
| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Ireland \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
| \n \n Total number of staff\n \n | \n \n \n 2,614 \n \n | \n \n 2,236 \n | \n \n \n 2,422 \n \n | \n \n 2,286 \n | \n
*Closing staff numbers are calculated on a full time equivalent (FTE) basis. Includes 126 closing and 70.6 average staff numbers working on the Ulster Bank transaction.
\n \n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f185203": { "value": "\n\n Staff costs\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Wages and salaries (including commission payable to sales staff) \n | \n \n \n 124\n \n | \n \n 115 \n | \n
| \n Social insurance \n | \n \n \n 15\n \n | \n \n 14 \n | \n
| \n Pension costs \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
\n
| \n \n \n 13\n \n | \n \n 13 \n | \n
| \n \n Total staff costs\n \n | \n \n \n 152\n \n | \n \n 142 \n | \n
Staff redundancy costs associated with exceptional items for the year ended 31 December 2022 and 31 December 2021 are included as part of note 11 exceptional Items.
\nStaff costs of \u20ac13m (31 December 2021: \u20ac13m), have been capitalised to Intangible assets (see note 26), as the cost incurred was directly related to developing software and it is probable that future economic benefits that exceed its cost will flow from its use over more than one year. Therefore these costs are not included in this note.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f185532": { "value": "\n \n\n 12. Taxation\n
\n\n (a) Analysis of taxation charge\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Current taxation\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Charge for current year \n | \n \n \n 2\n \n | \n \n 1 \n | \n
| \n \u00a0 \n | \n \n \n 2\n \n | \n \n 1 \n | \n
| \n \n Deferred taxation\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Origination and reversal of temporary differences \n | \n \n \n 42\n \n | \n \n (2) \n | \n
| \n \n Deferred taxation recognised in the income statement (note 27)\n \n | \n \n \n 42\n \n | \n \n (2) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Taxation charged/(credited) to income statement\n \n | \n \n \n 44\n \n | \n \n (1) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Effective tax rate\n \n | \n \n \n 16%\n \n | \n \n 5% \n | \n
The Group taxation charge for the year ended 31 December 2022 was \u20ac44m (31 December 2021: \u20ac1m credit) of which \u20ac39m was in respect of a corporation tax charge on exceptional items. The main drivers of this charge/credit include (i) a current tax charge of \u20ac2m arising on trading and non-trading income, (ii) a current year deferred tax charge of \u20ac39m arising from the utilisation of tax losses carried forward to shelter tax adjusted profits arising in the year, and (iii) the partial release of a DTA of \u20ac3m created on the introduction of IFRS 9.
\n\n (b) Reconciliation of standard to effective tax rate\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Profit/(loss) on the Group activities before tax\n \n | \n \n \n 267\n \n | \n \n (21) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Tax calculated at standard ROI corporation tax rate of 12.5% (2021: 12.5%) \n | \n \n \n 33\n \n | \n \n (3) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Tax effect of non-deductible expenses and non-trading income \n | \n \n \n 10\n \n | \n \n 2 \n | \n
| \n Other \n | \n \n \n 1\n \n | \n \n - \n | \n
| \n Adjustment to tax losses carried forward \n | \n \n \n -\n \n | \n \n - \n | \n
| \n \n Taxation charged/(credited) to income statement\n \n | \n \n \n 44\n \n | \n \n (1) \n | \n
\n (c) Tax effects of each component of other comprehensive income\n
\n| \n \u00a0 \n | \n \n \n Year ended 31 December 2022\n \n | \n ||
| \n \u00a0 \n | \n \n \n Gross\n \n | \n \n \n Tax\n \n | \n \n \n Net\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Revaluation of property \n | \n \n \n (8)\n \n | \n \n \n 2\n \n | \n \n \n (6)\n \n | \n
| \n Fair value reserve: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Change in fair value of equity instruments \n | \n \n \n 3\n \n | \n \n \n (1)\n \n | \n \n \n 2\n \n | \n
| \n - Change in fair value of debt instruments \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n - Transfer to income statement on asset disposal \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n (5)\n \n | \n \n \n 1\n \n | \n \n \n (4)\n \n | \n
| \n \u00a0 \n | \n \n \n Year ended 31 December 2021\n \n | \n ||
| \n \u00a0 \n | \n \n \n Gross\n \n | \n \n \n Tax\n \n | \n \n \n Net\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Revaluation of property \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n
| \n Fair value reserve: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Change in fair value of equity instruments \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n
| \n -Change in fair value of debt instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n - Transfer to income statement on asset disposal \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 31 December 2021 \n | \n \n 4 \n | \n \n - \n | \n \n 4 \n | \n
\n 27. Deferred taxation\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Deferred tax liabilities \n | \n \n \n (25)\n \n | \n \n (26) \n | \n
| \n Deferred tax assets \n | \n \n \n 334\n \n | \n \n 376 \n | \n
| \n \n Net deferred tax assets \n \n | \n \n \n 309\n \n | \n \n 350 \n | \n
Net deferred tax assets are attributable to the following:
\n| \n \n 2022\n \n | \n \n \n At 1 January\n \n | \n \n \n Recognised in income statement\n \n | \n \n \n Recognised in equity\n \n | \n \n \n Recognised in other comprehensive income\n \n | \n \n \n At 31 December\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Property and equipment \n | \n \n \n (20)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n (18)\n \n | \n
| \n Unrealised gains/(losses) on assets/liabilities \n | \n \n \n (6)\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n (7)\n \n | \n
| \n Losses carried forward \n | \n \n \n 373\n \n | \n \n \n (39)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 334\n \n | \n
| \n Other temporary differences \n | \n \n \n 3\n \n | \n \n \n (3)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n 350\n \n | \n \n \n (42)\n \n | \n \n \n (1)\n \n | \n \n \n 2\n \n | \n \n \n 309\n \n | \n
| \n \n 2021\n \n | \n \n \n At 1 January\n \n | \n \n \n Recognised in income statement\n \n | \n \n \n Recognised in equity\n \n | \n \n \n Recognised in other comprehensive income\n \n | \n \n \n At 31 December\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Property and equipment \n | \n \n (21) \n | \n \n 1 \n | \n \n - \n | \n \n - \n | \n \n (20) \n | \n
| \n Unrealised gains/(losses) on assets/liabilities \n | \n \n (5) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n (6) \n | \n
| \n Losses carried forward \n | \n \n 370 \n | \n \n 3 \n | \n \n - \n | \n \n - \n | \n \n 373 \n | \n
| \n Other temporary differences \n | \n \n 5 \n | \n \n (2) \n | \n \n - \n | \n \n - \n | \n \n 3 \n | \n
| \n \n | \n \n 349 \n | \n \n 2 \n | \n \n (1) \n | \n \n - \n | \n \n 350 \n | \n
In line with the requirements of IAS 12 \u201cDeferred Tax Assets\u201d, Management and Directors formed the view that there should be sufficient future taxable profits within the PTSB legal entity against which PTSB tax losses carried forward can be used. Management and Directors have reviewed this position as at 31 December 2022 and remain of the view that it is appropriate to continue to recognise a deferred tax asset on the full quantum of tax losses carried forward in PTSB. This information is based on the following supporting evidence: (i) a review of the quantum of tax losses carried forward in PTSB in conjunction with forecasted profitability (the projections used having been approved by the Board of Directors). This review demonstrated that it is probable that there will be sufficient future taxable profits within PTSB against which the full quantum of tax losses carried forward can be utilised; (ii) The consideration of forecasting risks, including sensitivity analysis on the financial projections used (including an analysis of the effects of higher than expected impairment levels and lower than expected net interest margin). This analysis demonstrated, were certain adverse events to occur, it would remain probable that there would be sufficient future taxable profits within PTSB against which the full quantum of tax losses carried forward could be utilised, albeit that the period of time over which such utilisation would occur would be extended; and (iii) The consideration of a number of other factors which may impact the utilisation of the tax losses including the macroeconomic environment, progress made on the Group\u2019s NPL strategy and the Group\u2019s financial position. These factors are set out in further details in note 2, Critical accounting estimates and judgements.
\nIt should also be noted that under current Irish tax legislation there is no time restriction on the utilisation of trading losses. Therefore, the tax losses carried forward in PTSB are available for utilisation against profits of the same trade in any future period. Also, the Directors are satisfied that taxable future profits should be available to recover the remaining deferred tax assets.
\nThe total unrecognised deferred tax assets on carried forward tax losses at 31 December 2022 amounted to \u20ac20m (31 December 2021: \u20ac20m) which relates to the Group\u2019s subsidiaries.
\nIncluded in the overall deferred tax asset is a deferred tax asset of \u20acnil in relation to Permanent TSB Group Holdings plc (31 December 2021: \u20ac42k).
\nIn accordance with IFRS these balances are recognised on an undiscounted basis.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f185533": { "value": "\n\n 12. Taxation\n
\n\n (a) Analysis of taxation charge\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Current taxation\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Charge for current year \n | \n \n \n 2\n \n | \n \n 1 \n | \n
| \n \u00a0 \n | \n \n \n 2\n \n | \n \n 1 \n | \n
| \n \n Deferred taxation\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Origination and reversal of temporary differences \n | \n \n \n 42\n \n | \n \n (2) \n | \n
| \n \n Deferred taxation recognised in the income statement (note 27)\n \n | \n \n \n 42\n \n | \n \n (2) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Taxation charged/(credited) to income statement\n \n | \n \n \n 44\n \n | \n \n (1) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Effective tax rate\n \n | \n \n \n 16%\n \n | \n \n 5% \n | \n
The Group taxation charge for the year ended 31 December 2022 was \u20ac44m (31 December 2021: \u20ac1m credit) of which \u20ac39m was in respect of a corporation tax charge on exceptional items. The main drivers of this charge/credit include (i) a current tax charge of \u20ac2m arising on trading and non-trading income, (ii) a current year deferred tax charge of \u20ac39m arising from the utilisation of tax losses carried forward to shelter tax adjusted profits arising in the year, and (iii) the partial release of a DTA of \u20ac3m created on the introduction of IFRS 9.
\n\n (b) Reconciliation of standard to effective tax rate\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Profit/(loss) on the Group activities before tax\n \n | \n \n \n 267\n \n | \n \n (21) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Tax calculated at standard ROI corporation tax rate of 12.5% (2021: 12.5%) \n | \n \n \n 33\n \n | \n \n (3) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Tax effect of non-deductible expenses and non-trading income \n | \n \n \n 10\n \n | \n \n 2 \n | \n
| \n Other \n | \n \n \n 1\n \n | \n \n - \n | \n
| \n Adjustment to tax losses carried forward \n | \n \n \n -\n \n | \n \n - \n | \n
| \n \n Taxation charged/(credited) to income statement\n \n | \n \n \n 44\n \n | \n \n (1) \n | \n
\n (c) Tax effects of each component of other comprehensive income\n
\n| \n \u00a0 \n | \n \n \n Year ended 31 December 2022\n \n | \n ||
| \n \u00a0 \n | \n \n \n Gross\n \n | \n \n \n Tax\n \n | \n \n \n Net\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Revaluation of property \n | \n \n \n (8)\n \n | \n \n \n 2\n \n | \n \n \n (6)\n \n | \n
| \n Fair value reserve: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Change in fair value of equity instruments \n | \n \n \n 3\n \n | \n \n \n (1)\n \n | \n \n \n 2\n \n | \n
| \n - Change in fair value of debt instruments \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n - Transfer to income statement on asset disposal \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n (5)\n \n | \n \n \n 1\n \n | \n \n \n (4)\n \n | \n
| \n \u00a0 \n | \n \n \n Year ended 31 December 2021\n \n | \n ||
| \n \u00a0 \n | \n \n \n Gross\n \n | \n \n \n Tax\n \n | \n \n \n Net\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Revaluation of property \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n
| \n Fair value reserve: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Change in fair value of equity instruments \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n
| \n -Change in fair value of debt instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n - Transfer to income statement on asset disposal \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 31 December 2021 \n | \n \n 4 \n | \n \n - \n | \n \n 4 \n | \n
\n 13. Earnings/(loss) per ordinary share\n
\n\n (a) Basic earnings/(loss) per ordinary share\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Weighted average number of ordinary shares in issue and ranking for dividend excluding treasury shares \n | \n \n \n 468,387,212\n \n | \n \n 454,690,912 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Profit/(loss) for the year attributable to equity holders \n | \n \n \n \u20ac223m\n \n | \n \n (\u20ac20m) \n | \n
| \n Less AT1 coupon paid (see note 35) \n | \n \n \n (\u20ac10m)\n \n | \n \n (\u20ac21m) \n | \n
| \n Profit/(loss) for the year attributable to equity holders less AT1 coupon paid \n | \n \n \n \u20ac213m\n \n | \n \n (\u20ac41m) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Basic earnings/(loss) per ordinary share (\u20ac cent) \n \n | \n \n \n 45.4\n \n | \n \n (9.0) \n | \n
\n (b) Diluted earnings/(loss) per ordinary share\n
\n| \n \u00a0 \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Weighted average number of ordinary shares excluding treasury shares held under employee benefit trust used in the calculation of diluted earnings per share \n | \n \n \n 468,387,212\n \n | \n \n 454,690,912 \n | \n
| \n \n Diluted earnings/(loss) per ordinary share (\u20ac cent)\n \n | \n \n \n 45.4 \n \n | \n \n (9.0) \n | \n
Diluted earnings/(loss) per ordinary share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
\nNo adjustment to the weighted average number of ordinary shares for the effects of dilutive potential ordinary shares was required for the year ended 31 December 2022 or 31 December 2021 as the AT1 securities issued in 2020 and 2022 have no conversion features. The AT1 securities issued in 2015 was assessed due to the conversion feature within the security, and was found to have an anti-dilutive effect. It was redeemed on the first call of 1 April 2021.
\n\n Weighted average number of ordinary shares*\n
\n| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Number of ordinary shares in issue at 1 January (note 35) \n | \n \n \n 454,695,492\n \n | \n \n 454,695,492 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Treasury shares held (note 35) \n | \n \n \n (4,580)\n \n | \n \n (4,580) \n | \n
| \n \n Net movements during the year\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Weighted average shares redesignated \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Weighted average shares issued \n | \n \n \n 13,696,300 \n \n | \n \n - \n | \n
| \n \n Weighted average number of ordinary shares\n \n | \n \n \n 468,387,212\n \n | \n \n 454,690,912 \n | \n
* When calculating the earnings/(loss) per share the weighted average number of ordinary shares outstanding during the year and all years presented shall be adjusted for events other than the conversion of potential ordinary shares that have changed the number of ordinary shares without a corresponding change in reserves.
\n \nOn 7 November 2022, the Group issued 90,893,627 shares as part of the consideration transferred for the retail mortgage activities and significant processes of Ulster Bank. See notes 2 and 3 for further details.
\nThere are no instruments with a potential to be converted to ordinary shares at 31 December 2021 as the AT1 security issued in 2015 was redeemed on the first call date of 1 April 2021 (see note 35 for further detail). The AT1 securities issued in 2022 and 2020 have no conversion features within the securities.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f186215": { "value": "\n \n \n\n 14. Cash and cash equivalents\n
\nFor the purpose of the statement of cash flows, cash and cash equivalents comprise of following:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Cash at bank \n | \n \n \n 58 \n \n | \n \n 57 \n | \n
| \n Items in the course of collection \n | \n \n \n 40 \n \n | \n \n 20 \n | \n
| \n Loans and advances to banks repayable on demand (maturity of less than 3 months) (note 15) \n | \n \n \n 2,123 \n \n | \n \n 4,174 \n | \n
| \n \n Cash and cash equivalents as per statement of cash flows\n \n | \n \n \n 2,221 \n \n | \n \n 4,251 \n | \n
At 31 December 2022, restricted cash of \u20ac408m (31 December 2021: \u20ac330m) consists of cash of \u20ac405m (31 December 2021: \u20ac329m) held by the Group\u2019s securitisation entities and \u20ac3m (31 December 2021: \u20ac1m) which relates to cash collateral placed with counterparties in relation to derivative positions and repurchase agreements.
\nThe following contractual restrictions apply to our securitisation vehicles cash balances;
\n\u2022 Each vehicle must hold an amount equal to a percentage of the outstanding notes in a reserve account on demand as part of the credit enhancement and liquidity support rules. These funds can only be used to fund any revenue shortfall for contractual payments and must be replenished as soon as additional funds are available. When the notes are fully repaid these reserve funds can be used to pay outstanding principal on the subordinated loan.
\nAs a result of these restrictions, the group excluded these balances from cash and cash equivalents in prior period cash flow statements.
\nHowever, the group reviewed this treatment on foot of a decision taken by IFRIC in 2022. This IFRIC decision clarified that such balances should be included in cash and cash equivalents and removed inconsistencies in accounting treatment in the market place. As a result, the group are including these balances in cash and cash equivalents in the cash flow statement for both 2022 and 2021.
\n \n \n \n\n 15. Loans and advances to banks\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Held at amortised cost\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Placed with central banks \n | \n \n \n 1,619 \n \n | \n \n 3,709 \n | \n
| \n Placed with other banks \n | \n \n \n 504 \n \n | \n \n 465 \n | \n
| \n \n Loans and advances to banks\n \n | \n \n \n 2,123 \n \n | \n \n 4,174 \n | \n
Placements with other banks includes restricted cash of \u20ac408m (31 December 2021: \u20ac330m) of which \u20ac405m (31 December 2021: \u20ac329m) is held by the Group\u2019s securitisation entities and \u20ac3m (31 December 2021: \u20ac1m) which relates to cash collateral placed with counterparties in relation to derivative positions and repurchase agreements. The fair value of collateral pledged by counterparties in relation to reverse repurchase agreements at 31 December 2022 is \u20ac8m (31 December 2021: \u20ac433m).
\nLoans and advances to banks amounting to \u20ac2,123m (31 December 2021: \u20ac4,174m) have a maturity of less than three months and therefore have been treated as cash and cash equivalents, with the exception of restricted cash as noted above.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndBankBalancesAtCentralBanksExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f186216": { "value": "\n \n\n 14. Cash and cash equivalents\n
\nFor the purpose of the statement of cash flows, cash and cash equivalents comprise of following:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Cash at bank \n | \n \n \n 58 \n \n | \n \n 57 \n | \n
| \n Items in the course of collection \n | \n \n \n 40 \n \n | \n \n 20 \n | \n
| \n Loans and advances to banks repayable on demand (maturity of less than 3 months) (note 15) \n | \n \n \n 2,123 \n \n | \n \n 4,174 \n | \n
| \n \n Cash and cash equivalents as per statement of cash flows\n \n | \n \n \n 2,221 \n \n | \n \n 4,251 \n | \n
At 31 December 2022, restricted cash of \u20ac408m (31 December 2021: \u20ac330m) consists of cash of \u20ac405m (31 December 2021: \u20ac329m) held by the Group\u2019s securitisation entities and \u20ac3m (31 December 2021: \u20ac1m) which relates to cash collateral placed with counterparties in relation to derivative positions and repurchase agreements.
\nThe following contractual restrictions apply to our securitisation vehicles cash balances;
\n\u2022 Each vehicle must hold an amount equal to a percentage of the outstanding notes in a reserve account on demand as part of the credit enhancement and liquidity support rules. These funds can only be used to fund any revenue shortfall for contractual payments and must be replenished as soon as additional funds are available. When the notes are fully repaid these reserve funds can be used to pay outstanding principal on the subordinated loan.
\nAs a result of these restrictions, the group excluded these balances from cash and cash equivalents in prior period cash flow statements.
\nHowever, the group reviewed this treatment on foot of a decision taken by IFRIC in 2022. This IFRIC decision clarified that such balances should be included in cash and cash equivalents and removed inconsistencies in accounting treatment in the market place. As a result, the group are including these balances in cash and cash equivalents in the cash flow statement for both 2022 and 2021.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f186217": { "value": "\n\n 14. Cash and cash equivalents\n
\nFor the purpose of the statement of cash flows, cash and cash equivalents comprise of following:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Cash at bank \n | \n \n \n 58 \n \n | \n \n 57 \n | \n
| \n Items in the course of collection \n | \n \n \n 40 \n \n | \n \n 20 \n | \n
| \n Loans and advances to banks repayable on demand (maturity of less than 3 months) (note 15) \n | \n \n \n 2,123 \n \n | \n \n 4,174 \n | \n
| \n \n Cash and cash equivalents as per statement of cash flows\n \n | \n \n \n 2,221 \n \n | \n \n 4,251 \n | \n
At 31 December 2022, restricted cash of \u20ac408m (31 December 2021: \u20ac330m) consists of cash of \u20ac405m (31 December 2021: \u20ac329m) held by the Group\u2019s securitisation entities and \u20ac3m (31 December 2021: \u20ac1m) which relates to cash collateral placed with counterparties in relation to derivative positions and repurchase agreements.
\nThe following contractual restrictions apply to our securitisation vehicles cash balances;
\n\u2022 Each vehicle must hold an amount equal to a percentage of the outstanding notes in a reserve account on demand as part of the credit enhancement and liquidity support rules. These funds can only be used to fund any revenue shortfall for contractual payments and must be replenished as soon as additional funds are available. When the notes are fully repaid these reserve funds can be used to pay outstanding principal on the subordinated loan.
\nAs a result of these restrictions, the group excluded these balances from cash and cash equivalents in prior period cash flow statements.
\nHowever, the group reviewed this treatment on foot of a decision taken by IFRIC in 2022. This IFRIC decision clarified that such balances should be included in cash and cash equivalents and removed inconsistencies in accounting treatment in the market place. As a result, the group are including these balances in cash and cash equivalents in the cash flow statement for both 2022 and 2021.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f186287": { "value": "\n \n\n 15. Loans and advances to banks\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Held at amortised cost\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Placed with central banks \n | \n \n \n 1,619 \n \n | \n \n 3,709 \n | \n
| \n Placed with other banks \n | \n \n \n 504 \n \n | \n \n 465 \n | \n
| \n \n Loans and advances to banks\n \n | \n \n \n 2,123 \n \n | \n \n 4,174 \n | \n
Placements with other banks includes restricted cash of \u20ac408m (31 December 2021: \u20ac330m) of which \u20ac405m (31 December 2021: \u20ac329m) is held by the Group\u2019s securitisation entities and \u20ac3m (31 December 2021: \u20ac1m) which relates to cash collateral placed with counterparties in relation to derivative positions and repurchase agreements. The fair value of collateral pledged by counterparties in relation to reverse repurchase agreements at 31 December 2022 is \u20ac8m (31 December 2021: \u20ac433m).
\nLoans and advances to banks amounting to \u20ac2,123m (31 December 2021: \u20ac4,174m) have a maturity of less than three months and therefore have been treated as cash and cash equivalents, with the exception of restricted cash as noted above.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToBanksExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f186370": { "value": "\n\n 16. Derivative financial instruments\n
\nDerivative instruments are primarily used by the Group to hedge against foreign currency risk.
\nCertain derivative instruments do not fulfil the hedge accounting criteria under IFRS 9 and are consequently classified as held for trading (HFT). All derivatives are carried at fair value.
\nThe derivative instruments used by the Group include currency forward rate contracts, which are commitments to purchase and sell currencies, including undelivered spot transactions.
\nAs disclosed in note 3 the forward contract derivatives represent the remaining Retail lending assets and the entirety of the Asset Financing and SME assets and branch properties that will not be transferred until a later date. The forward contract derivatives are measured as the net of the fair value of the assets and the fair value of the consideration to be transferred i.e. the gross outstanding balance. The forward contract derivative was valued as a liability of \u20ac12m as at 31 December 2022. See notes 2 and 3 for further detail.
\nFurther details on the Group\u2019s risk management policies are set out in the Risk Management Report.
\nDerivatives held by the Group are analysed as follows:
\n \n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||
| \n \u00a0 \n | \n \n \n Contract/\n \n\n notional amount\n \n | \n \n \n Fair \n \n\n value \n \n\n asset\n \n | \n \n \n Fair \n \n\n value \n \n\n liability\n \n | \n \n \n Contract/ notional amount\n \n | \n \n \n Fair \n \n\n value \n \n\n asset\n \n | \n \n \n Fair \n \n\n value \n \n\n liability\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Held for trading\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Forwards \n | \n \n \n 82\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n 84 \n | \n \n 1 \n | \n \n - \n | \n
| \n Business combination forwards \n | \n \n \n 1,520\n \n | \n \n \n -\n \n | \n \n \n 12\n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 1,602\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n 84 \n | \n \n 1 \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Derivative financial instruments as per the statement of financial position\n \n | \n \n \n 1,602\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n 84 \n | \n \n 1 \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||
| \n \u00a0 \n | \n \n \n Contract/\n \n\n notional amount\n \n | \n \n \n Fair \n \n\n value \n \n\n asset\n \n | \n \n \n Fair \n \n\n value \n \n\n liability\n \n | \n \n \n Contract/ notional amount\n \n | \n \n \n Fair \n \n\n value \n \n\n asset\n \n | \n \n \n Fair \n \n\n value \n \n\n liability\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Held for trading\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Forwards \n | \n \n \n 82\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n 84 \n | \n \n 1 \n | \n \n - \n | \n
| \n Business combination forwards \n | \n \n \n 1,520\n \n | \n \n \n -\n \n | \n \n \n 12\n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 1,602\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n 84 \n | \n \n 1 \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Derivative financial instruments as per the statement of financial position\n \n | \n \n \n 1,602\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n 84 \n | \n \n 1 \n | \n \n - \n | \n
\n 17. Other assets\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Loan sale receivable \n | \n \n \n -\n \n | \n \n 310 \n | \n
| \n Other \n | \n \n \n 1 \n \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 1 \n \n | \n \n 310 \n | \n
Loan sale receivable at 31 December 2021 relates to the amount due from the purchaser of the Glenbeigh III portfolio, which was received in the first quarter of 2022.
\nOther assets include accruals for miscellaneous debtors of \u20ac1m at 31 December 2022 (31 December 2021:\u20acnil).
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f186628": { "value": "\n \n\n 18. Assets classified as held for sale\n
\nAt 31 December 2022, assets classified as held for sale amounted to \u20ac18m (31 December 2021: \u20ac28m). This relates to collateral in possession. These properties are expected to be sold within the next 12 months.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f186629": { "value": "\n\n 18. Assets classified as held for sale\n
\nAt 31 December 2022, assets classified as held for sale amounted to \u20ac18m (31 December 2021: \u20ac28m). This relates to collateral in possession. These properties are expected to be sold within the next 12 months.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f186642": { "value": "\n\n 19. Debt securities\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n Total HTC\n \n | \n \n \n Total HTC\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Government bonds \n | \n \n \n 3,128\n \n | \n \n 2,434 \n | \n
| \n Corporate bonds \n | \n \n \n 49\n \n | \n \n 60 \n | \n
| \n \n Gross debt securities\n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
As at 31 December 2022, all unpledged debt securities are available to be used and are eligible as collateral (though eligibility will depend on the criteria of the counterparty) in sale and repurchase agreements.
\nDebt securities that are managed on a HTC business model basis are accounted for at amortised cost. Debt securities that are managed on a HTC&S basis are accounted for at FVOCI.
\nGovernment bonds of \u20ac3.1bn (31 December 2021: \u20ac2.4bn) comprise Irish, Spanish, Portuguese, French, Italian and EU government bonds which are designated as HTC. Corporate bonds of \u20ac49m (31 December 2021: \u20ac60m) comprise Residential Mortgage Backed Securities (RMBS) and are designated as HTC. The HTC securities represent a portfolio of securities purchased for the purpose of collecting contractual cashflows to maturity. The Group has no HTC&S securities as at 31 December 2022 (31 December 2021: \u20acnil).
\nAt 31 December 2022, debt securities at amortised cost with a fair value of \u20ac654m (31 December 2021: \u20ac732m) had been pledged to third parties in sale and repurchase agreements. The Group has not derecognised any securities delivered in such sale and repurchase agreements on the statement of financial position.
\nAll debt securities at 31 December 2022 are stage 1 for ECL purposes.
\n\n (a) HTC\n
\nThe movement in HTC securities is classified as follows:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n HTC\n \n | \n \n \n HTC\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n As at 1 January\n \n | \n \n \n 2,494 \n \n | \n \n 2,583 \n | \n
| \n Additions \n | \n \n \n 972 \n \n | \n \n - \n | \n
| \n Maturities \n | \n \n \n (251)\n \n | \n \n (46) \n | \n
| \n Interest net of cash receipts \n | \n \n \n 3 \n \n | \n \n - \n | \n
| \n Amortisation of premium/(discount) \n | \n \n \n (41)\n \n | \n \n (43) \n | \n
| \n \n Total\n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
\n (b) Amounts arising from impairment provisioning on debt securities:\n
\n\n Held at amortised cost\n
\nAs at 31 December 2022, the amount arising from ECL on debt securities measured at amortised cost is \u20ac0.6m (31 December 2021: \u20ac0.7m). The ECL on debt instruments measured at amortised cost is offset against the carrying amount of the assets in the statement of financial position.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f186924": { "value": "\n\n 21. Prepayments and accrued income\n
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Visa prepayments \n | \n \n \n 175 \n \n | \n \n 182 \n | \n
| \n Other prepayments \n | \n \n \n 32 \n \n | \n \n 23 \n | \n
| \n \u00a0 \n | \n \n \n 207 \n \n | \n \n 205 \n | \n
\n 22. Loans and advances to customers\n
\nLoans and advances by category are set out below:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Residential mortgages\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - Held through special purpose entities \n | \n \n \n 7,915 \n \n | \n \n 7,337 \n | \n
| \n - Held directly \n | \n \n \n 11,249 \n \n | \n \n 6,854 \n | \n
| \n \u00a0 \n | \n \n \n 19,164 \n \n | \n \n 14,191 \n | \n
| \n \n Commercial mortgage loans\n \n | \n \n \n 239 \n \n | \n \n 196 \n | \n
| \n \n Consumer finance (term loans/other)\n \n | \n \n \n 401 \n \n | \n \n 358 \n | \n
| \n \n Gross loans and advances to customers\n \n | \n \n \n 19,804 \n \n | \n \n 14,745 \n | \n
| \n Less: provision for impairment (note 23) \n | \n \n \n (521)\n \n | \n \n (604) \n | \n
| \n \n Deferred fees, discounts and fair value adjustments\n \n | \n \n \n 310 \n \n | \n \n 115 \n | \n
| \n \n Net loans and advances to customers\n \n | \n \n \n 19,593 \n \n | \n \n 14,256 \n | \n
Loans and advances can be analysed into tracker, fixed and variable rate loans as follows:
\n| \n \u00a0 \n | \n \n \n Gross loans and advances to customers\n \n | \n \n \n Net loans and advances to customers\n \n | \n ||
| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Tracker rate \n | \n \n \n 4,378 \n \n | \n \n 6,027 \n | \n \n \n 4,099 \n \n | \n \n 5,605 \n | \n
| \n Variable rate \n | \n \n \n 2,788 \n \n | \n \n 2,820 \n | \n \n \n 2,665 \n \n | \n \n 2,688 \n | \n
| \n Fixed rate \n | \n \n \n 12,638 \n \n | \n \n 5,898 \n | \n \n \n 12,519 \n \n | \n \n 5,848 \n | \n
| \n \u00a0 \n | \n \n \n 19,804 \n \n | \n \n 14,745 \n | \n \n \n 19,283 \n \n | \n \n 14,141 \n | \n
| \n Deferred fees, discounts and fair value adjustments \n | \n \n \n 310 \n \n | \n \n 115 \n | \n \n \n 310 \n \n | \n \n 115 \n | \n
| \n \n Total\n \n | \n \n \n 20,114 \n \n | \n \n 14,860 \n | \n \n \n 19,593 \n \n | \n \n 14,256 \n | \n
The Group has established a number of securitisation entities. This involved transferring the Group\u2019s interest in pools of residential mortgages to a number of special purpose entities which issued mortgage-backed floating-rate notes to fund the purchase of the interest in the mortgage pools. The notes are secured by a first fixed charge over the residential mortgages in each pool and may be sold to investors or held by the Group and used as collateral for borrowings.
\nDetails of the residential mortgage pools sold to special purpose entities and the notes issued by the special purpose entities are included below:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acbn\n \n | \n \n \n \u20acbn\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Residential mortgages held through special purpose entities \n | \n \n \n 7.9\n \n | \n \n 7.3 \n | \n
| \n Notes issued by special purpose entities \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n - rated \n | \n \n \n 6.7\n \n | \n \n 6.1 \n | \n
| \n - unrated \n | \n \n \n 1.2\n \n | \n \n 1.2 \n | \n
The notes issued by these special purpose entities comprise the following:
\n| \n \u00a0 \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acbn\n \n | \n \n \n \u20acbn\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Sold to third parties and included within debt securities in issue (non-recourse) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n on the Statement of financial position (note 30) \n | \n \n \n -\n \n | \n \n 0.2 \n | \n
| \n Held by other banks and institutions as part of collateralised lending or sale and \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n repurchase agreements (note 28) \n | \n \n \n 0.3\n \n | \n \n - \n | \n
| \n Available collateral* \n | \n \n \n 5.6\n \n | \n \n 5.3 \n | \n
| \n Rated notes, unavailable for collateral \n | \n \n \n 0.8\n \n | \n \n 0.6 \n | \n
| \n Unrated notes \n | \n \n \n 1.2\n \n | \n \n 1.2 \n | \n
| \n \n Total\n \n | \n \n \n 7.9\n \n | \n \n 7.3 \n | \n
*The eligibility of available collateral will depend on the criteria of the counterparty.
\n \nLoans and advances balance movement for the year ended 31 December 2022 and the year ended 31 December 2021 is set out in the following tables:
\n| \n \u00a0 \n | \n \n \n Non-credit impaired\n \n | \n \n \n Credit impaired\n \n | \n \n \n Total\n \n | \n ||
| \n \u00a0 \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n POCI\n \n | \n \n \u00a0 \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Balance as at 1 January 2022\n \n | \n \n \n 11,689\n \n | \n \n \n 2,239\n \n | \n \n \n 815\n \n | \n \n \n 2\n \n | \n \n \n 14,745\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n New assets originated* \n | \n \n \n 2,586\n \n | \n \n \n 111\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,697\n \n | \n
| \n Loans acquired \n | \n \n \n 5,063\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5,063\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Stage Transfers:\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfers from Stage 1 to Stage 2 \n | \n \n \n (296)\n \n | \n \n \n 296\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Transfers to Stage 3 \n | \n \n \n (16)\n \n | \n \n \n (119)\n \n | \n \n \n 135\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Transfers from Stage 2 to Stage 1 \n | \n \n \n 344\n \n | \n \n \n (344)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Transfers from Stage 3 \n | \n \n \n 2\n \n | \n \n \n 155\n \n | \n \n \n (157)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n Net movement arising from transfer of Stage\n \n | \n \n \n 34\n \n | \n \n \n (12)\n \n | \n \n \n (22)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n \n (1,575)\n \n | \n \n \n (242)\n \n | \n \n \n (62)\n \n | \n \n \n -\n \n | \n \n \n (1,879)\n \n | \n
| \n Decrease due to write offs \n | \n \n \n (1)\n \n | \n \n \n (2)\n \n | \n \n \n (40)\n \n | \n \n \n -\n \n | \n \n \n (43)\n \n | \n
| \n Disposals \n | \n \n \n (341)\n \n | \n \n \n (395)\n \n | \n \n \n (42)\n \n | \n \n \n -\n \n | \n \n \n (778)\n \n | \n
| \n Other movements \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n (1)\n \n | \n
| \n \n Balance as at 31 December 2022\n \n | \n \n \n 17,455\n \n | \n \n \n 1,699\n \n | \n \n \n 649\n \n | \n \n \n 1\n \n | \n \n \n 19,804\n \n | \n
* Loan originations are net of repayments in the year
\n| \n \u00a0 \n | \n \n \n Non-credit impaired\n \n | \n \n \n Credit impaired\n \n | \n \n \n Total\n \n | \n ||
| \n \u00a0 \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n POCI\n \n | \n \n \u00a0 \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Balance as at 1 January 2021 \n | \n \n 10,575 \n | \n \n 3,152 \n | \n \n 1,127 \n | \n \n 1 \n | \n \n 14,855 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n New assets originated* \n | \n \n 1,843 \n | \n \n 111 \n | \n \n 2 \n | \n \n - \n | \n \n 1,956 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Stage Transfers: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfers from Stage 1 to Stage 2 \n | \n \n (311) \n | \n \n 311 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Transfers to Stage 3 \n | \n \n (23) \n | \n \n (257) \n | \n \n 280 \n | \n \n - \n | \n \n - \n | \n
| \n Transfers from Stage 2 to Stage 1 \n | \n \n 875 \n | \n \n (875) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Transfers from Stage 3 \n | \n \n 5 \n | \n \n 185 \n | \n \n (190) \n | \n \n - \n | \n \n - \n | \n
| \n Net movement arising from transfer of Stage \n | \n \n 546 \n | \n \n (636) \n | \n \n 90 \n | \n \n - \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n (1,270) \n | \n \n (259) \n | \n \n (78) \n | \n \n - \n | \n \n (1,607) \n | \n
| \n Decrease due to write offs \n | \n \n - \n | \n \n (5) \n | \n \n (60) \n | \n \n - \n | \n \n (65) \n | \n
| \n Disposals \n | \n \n (5) \n | \n \n (124) \n | \n \n (266) \n | \n \n - \n | \n \n (395) \n | \n
| \n Other movements \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n \n 1 \n | \n
| \n Balance as at 31 December 2021 \n | \n \n 11,689 \n | \n \n 2,239 \n | \n \n 815 \n | \n \n 2 \n | \n \n 14,745 \n | \n
* Loan originations are net of repayments in the year
\nDuring 2021 Stage 2 balances declined by \u20ac636 million. The decline is primarily attributable to:
\n\u2022 PD refinements incorporating greater segmentation of default information for mortgage customers distinguishing between nonstandard mortgage defaults and standard mortgage defaults (\u20ac404m move to stage 1); and
\n\u2022 Improvements in risk grade and reduction in forborne accounts (\u20ac163m move to stage 1).
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToCustomersExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f188048": { "value": "\n \n\n 23. Impairment provisions\n
\n\n Loans and advances to customers\n
\nThe following table reflects non-performing loans for which ECL provisions are held and an analysis of Stage 1, Stage 2 and Stage 3 ECL provisions across the loans and advances to customers portfolio.
\nThe non-performing loan balance as at 31 December 2022 was \u20ac650m (31 December 2021: \u20ac817m). Refer to note 38 for further details.
\n| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n ECL provisions\n \n | \n \n \n Total ECL provisions as % of total loans\n \n | \n |||
| \n \n 31 December 2022\n \n | \n \n \n Loans and advances to customers\n \n | \n \n \n NPLs \n \n | \n \n \n NPL % of total loans\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n |
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n %\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n % \n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Residential: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Home loans \n | \n \n \n 18,340\n \n | \n \n \n 342\n \n | \n \n \n 1.9%\n \n | \n \n \n 127\n \n | \n \n \n 50\n \n | \n \n \n 103\n \n | \n \n \n 280\n \n | \n \n \n 1.5%\n \n | \n
| \n -Buy-to-let \n | \n \n \n 824\n \n | \n \n \n 270\n \n | \n \n \n 32.8%\n \n | \n \n \n 3\n \n | \n \n \n 68\n \n | \n \n \n 96\n \n | \n \n \n 167\n \n | \n \n \n 20.3%\n \n | \n
| \n Commercial \n | \n \n \n 239\n \n | \n \n \n 23\n \n | \n \n \n 9.6%\n \n | \n \n \n 1\n \n | \n \n \n 30\n \n | \n \n \n 9\n \n | \n \n \n 40\n \n | \n \n \n 16.7%\n \n | \n
| \n Consumer Finance: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Term loans/other \n | \n \n \n 401\n \n | \n \n \n 15\n \n | \n \n \n 3.7%\n \n | \n \n \n 5\n \n | \n \n \n 15\n \n | \n \n \n 14\n \n | \n \n \n 34\n \n | \n \n \n 8.5%\n \n | \n
| \n Total gross loans \n | \n \n \n 19,804\n \n | \n \n \n 650\n \n | \n \n \n 3.3%\n \n | \n \n \n 136\n \n | \n \n \n 163\n \n | \n \n \n 222\n \n | \n \n \n 521\n \n | \n \n \n 2.6%\n \n | \n
| \n Impairment provision \n | \n \n \n (521)\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deferred fees, discounts and fair value adjustments \n | \n \n \n 310\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Balance as at 31 December 2022\n \n | \n \n \n 19,593\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n ECL provisions\n \n | \n \n \u00a0 \n | \n |||
| \n \n 31 December 2021\n \n | \n \n \n Loans and advances to customers\n \n | \n \n \n NPLs \n \n | \n \n \n NPL % of total loans\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n \n \n Total ECL provisions as % of total loans\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n %\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n % \n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Residential: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Home loans \n | \n \n 12,568 \n | \n \n 420 \n | \n \n 3.3% \n | \n \n 55 \n | \n \n 45 \n | \n \n 127 \n | \n \n 227 \n | \n \n 1.8% \n | \n
| \n -Buy-to-let \n | \n \n 1,623 \n | \n \n 339 \n | \n \n 20.9% \n | \n \n 1 \n | \n \n 152 \n | \n \n 145 \n | \n \n 298 \n | \n \n 18.4% \n | \n
| \n Commercial \n | \n \n 196 \n | \n \n 44 \n | \n \n 22.5% \n | \n \n - \n | \n \n 30 \n | \n \n 23 \n | \n \n 53 \n | \n \n 27.0% \n | \n
| \n Consumer Finance: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Term loans/other \n | \n \n 358 \n | \n \n 14 \n | \n \n 3.9% \n | \n \n 5 \n | \n \n 11 \n | \n \n 10 \n | \n \n 26 \n | \n \n 7.3% \n | \n
| \n Total gross loans \n | \n \n 14,745 \n | \n \n 817 \n | \n \n 5.5% \n | \n \n 61 \n | \n \n 238 \n | \n \n 305 \n | \n \n 604 \n | \n \n 4.1% \n | \n
| \n Impairment provision \n | \n \n (604) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deferred fees, discounts and fair value adjustments \n | \n \n 115 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Balance as at 31 December 2021 \n | \n \n 14,256 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
A reconciliation of the provision for impairment losses for loans and advances is as follows:
\n| \n \n 2022\n \n | \n \n \n Residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Total by portfolio\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 1 January 2022\n \n | \n \n \n 525\n \n | \n \n \n 53\n \n | \n \n \n 26\n \n | \n \n \n 604\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n \n (18)\n \n | \n \n \n (9)\n \n | \n \n \n (1)\n \n | \n \n \n (28)\n \n | \n
| \n Net remeasurement of loss allowance \n | \n \n \n (41)\n \n | \n \n \n (16)\n \n | \n \n \n 5\n \n | \n \n \n (52)\n \n | \n
| \n Loan originations \n | \n \n \n 34\n \n | \n \n \n 13\n \n | \n \n \n 7\n \n | \n \n \n 54\n \n | \n
| \n Loans acquired \n | \n \n \n 37\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 37\n \n | \n
| \n \n Net movement excluding derecognition\n \n | \n \n \n 12\n \n | \n \n \n (12)\n \n | \n \n \n 11\n \n | \n \n \n 11\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n \n (64)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (64)\n \n | \n
| \n Derecognition-repossessions \n | \n \n \n (3)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (3)\n \n | \n
| \n Derecognition-write offs* \n | \n \n \n (23)\n \n | \n \n \n (1)\n \n | \n \n \n (3)\n \n | \n \n \n (27)\n \n | \n
| \n \n Derecognition\n \n | \n \n \n (90)\n \n | \n \n \n (1)\n \n | \n \n \n (3)\n \n | \n \n \n (94)\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 31 December 2022\n \n | \n \n \n 447\n \n | \n \n \n 40\n \n | \n \n \n 34\n \n | \n \n \n 521\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Net movement excluding derecognition (from above)\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 11\n \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n (8)\n \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 4\n \n | \n
| \n \n Impairment charge on loans and advances to customers for the year ended 31 December 2022\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 7\n \n | \n
* The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation.
\n| \n \n 2021\n \n | \n \n \n Residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Total by portfolio \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 1 January 2021 \n | \n \n 639 \n | \n \n 53 \n | \n \n 36 \n | \n \n 728 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n (45) \n | \n \n (4) \n | \n \n (3) \n | \n \n (52) \n | \n
| \n Net remeasurement of loss allowance \n | \n \n 35 \n | \n \n (4) \n | \n \n (8) \n | \n \n 23 \n | \n
| \n Loan originations \n | \n \n 16 \n | \n \n 13 \n | \n \n 5 \n | \n \n 34 \n | \n
| \n Net movement excluding derecognition \n | \n \n 6 \n | \n \n 5 \n | \n \n (6) \n | \n \n 5 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n (84) \n | \n \n (2) \n | \n \n - \n | \n \n (86) \n | \n
| \n Derecognition-repossessions \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n (1) \n | \n
| \n Derecognition-write offs* \n | \n \n (35) \n | \n \n (3) \n | \n \n (4) \n | \n \n (42) \n | \n
| \n Derecognition \n | \n \n (120) \n | \n \n (5) \n | \n \n (4) \n | \n \n (129) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 31 December 2021 \n | \n \n 525 \n | \n \n 53 \n | \n \n 26 \n | \n \n 604 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Net movement excluding derecognition (from above) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 5 \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (8) \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 2 \n | \n
| \n Impairment write-back on loans and advances to customers for the year ended 31 December 2021 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (1) \n | \n
* The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation.
\n \n \n \n| \n \n Total by stage\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 1 January 2022\n \n | \n \n \n 61\n \n | \n \n \n 238\n \n | \n \n \n 305\n \n | \n \n \n 604\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfer to Stage 1 \n | \n \n \n 13\n \n | \n \n \n (13)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Transfer to Stage 2 \n | \n \n \n (3)\n \n | \n \n \n 39\n \n | \n \n \n (36)\n \n | \n \n \n -\n \n | \n
| \n Transfer to Stage 3 \n | \n \n \n -\n \n | \n \n \n (19)\n \n | \n \n \n 19\n \n | \n \n \n -\n \n | \n
| \n \n Stage transfers\n \n | \n \n \n 10\n \n | \n \n \n 7\n \n | \n \n \n (17)\n \n | \n \n \n -\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n \n (5)\n \n | \n \n \n (11)\n \n | \n \n \n (12)\n \n | \n \n \n (28)\n \n | \n
| \n Net remeasurement of loss allowance \n | \n \n \n -\n \n | \n \n \n (34)\n \n | \n \n \n (18)\n \n | \n \n \n (52)\n \n | \n
| \n Loan originations \n | \n \n \n 34\n \n | \n \n \n 20\n \n | \n \n \n -\n \n | \n \n \n 54\n \n | \n
| \n Loans Acquired \n | \n \n \n 37\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 37\n \n | \n
| \n \n Net movement excluding derecognition\n \n | \n \n \n 66\n \n | \n \n \n (25)\n \n | \n \n \n (30)\n \n | \n \n \n 11\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n \n (1)\n \n | \n \n \n (56)\n \n | \n \n \n (7)\n \n | \n \n \n (64)\n \n | \n
| \n Derecognition-repossessions \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (3)\n \n | \n \n \n (3)\n \n | \n
| \n Derecognition-write offs* \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n (26)\n \n | \n \n \n (27)\n \n | \n
| \n \n Derecognition\n \n | \n \n \n (1)\n \n | \n \n \n (57)\n \n | \n \n \n (36)\n \n | \n \n \n (94)\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 31 December 2022\n \n | \n \n \n 136\n \n | \n \n \n 163\n \n | \n \n \n 222\n \n | \n \n \n 521\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Net movement excluding derecognition (from above)\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 11\n \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n (8)\n \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 4\n \n | \n
| \n \n Impairment charge on loans and advances to customers for the year ended 31 December 2022\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 7\n \n | \n
* The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write off may be earlier than collateral realisation.
\n \n \n \n| \n \n Total by stage\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 1 January 2021 \n | \n \n 55 \n | \n \n 286 \n | \n \n 387 \n | \n \n 728 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfer to Stage 1 \n | \n \n 23 \n | \n \n (23) \n | \n \n - \n | \n \n - \n | \n
| \n Transfer to Stage 2 \n | \n \n (4) \n | \n \n 42 \n | \n \n (38) \n | \n \n - \n | \n
| \n Transfer to Stage 3 \n | \n \n - \n | \n \n (44) \n | \n \n 44 \n | \n \n - \n | \n
| \n Stage transfers \n | \n \n 19 \n | \n \n (25) \n | \n \n 6 \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n (4) \n | \n \n (27) \n | \n \n (21) \n | \n \n (52) \n | \n
| \n Net remeasurement of loss allowance \n | \n \n (26) \n | \n \n (9) \n | \n \n 58 \n | \n \n 23 \n | \n
| \n Loan originations \n | \n \n 17 \n | \n \n 17 \n | \n \n - \n | \n \n 34 \n | \n
| \n Net movement excluding derecognition \n | \n \n (13) \n | \n \n (19) \n | \n \n 37 \n | \n \n 5 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n - \n | \n \n (2) \n | \n \n (84) \n | \n \n (86) \n | \n
| \n Derecognition-repossessions \n | \n \n - \n | \n \n - \n | \n \n (1) \n | \n \n (1) \n | \n
| \n Derecognition-write offs* \n | \n \n - \n | \n \n (2) \n | \n \n (40) \n | \n \n (42) \n | \n
| \n Derecognition \n | \n \n - \n | \n \n (4) \n | \n \n (125) \n | \n \n (129) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 31 December 2021 \n | \n \n 61 \n | \n \n 238 \n | \n \n 305 \n | \n \n 604 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Net movement excluding derecognition (from above) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 5 \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (8) \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 2 \n | \n
| \n Impairment write-back on loans and advances to customers for the year ended 31 December 2021 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (1) \n | \n
*The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write off may be earlier than collateral realisation.
\n\n Modified Financial Assets\n
\nAt 31 December 2022 there have been no significant modified financial assets for which the loss allowance has changed from lifetime to
\n12-month ECL.
\nFrom time to time, the original terms of a customer\u2019s loan is modified either as part of the ongoing relationship or arising from changes in the customer\u2019s circumstances such as when that customer is unable to make the agreed original contractual repayments. The risk of default of such assets after modification is assessed at the reporting date and compared with the risk under the original terms at initial recognition, when the modification is not substantial and so does not result in de-recognition of the original asset.
\nThe gross carrying amount of modified financial assets for which impairment loss allowance has changed from lifetime to 12-month expected credit losses during the year is \u20ac52m.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f188049": { "value": "\n\n 23. Impairment provisions\n
\n\n Loans and advances to customers\n
\nThe following table reflects non-performing loans for which ECL provisions are held and an analysis of Stage 1, Stage 2 and Stage 3 ECL provisions across the loans and advances to customers portfolio.
\nThe non-performing loan balance as at 31 December 2022 was \u20ac650m (31 December 2021: \u20ac817m). Refer to note 38 for further details.
\n| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n ECL provisions\n \n | \n \n \n Total ECL provisions as % of total loans\n \n | \n |||
| \n \n 31 December 2022\n \n | \n \n \n Loans and advances to customers\n \n | \n \n \n NPLs \n \n | \n \n \n NPL % of total loans\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n |
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n %\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n % \n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Residential: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Home loans \n | \n \n \n 18,340\n \n | \n \n \n 342\n \n | \n \n \n 1.9%\n \n | \n \n \n 127\n \n | \n \n \n 50\n \n | \n \n \n 103\n \n | \n \n \n 280\n \n | \n \n \n 1.5%\n \n | \n
| \n -Buy-to-let \n | \n \n \n 824\n \n | \n \n \n 270\n \n | \n \n \n 32.8%\n \n | \n \n \n 3\n \n | \n \n \n 68\n \n | \n \n \n 96\n \n | \n \n \n 167\n \n | \n \n \n 20.3%\n \n | \n
| \n Commercial \n | \n \n \n 239\n \n | \n \n \n 23\n \n | \n \n \n 9.6%\n \n | \n \n \n 1\n \n | \n \n \n 30\n \n | \n \n \n 9\n \n | \n \n \n 40\n \n | \n \n \n 16.7%\n \n | \n
| \n Consumer Finance: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Term loans/other \n | \n \n \n 401\n \n | \n \n \n 15\n \n | \n \n \n 3.7%\n \n | \n \n \n 5\n \n | \n \n \n 15\n \n | \n \n \n 14\n \n | \n \n \n 34\n \n | \n \n \n 8.5%\n \n | \n
| \n Total gross loans \n | \n \n \n 19,804\n \n | \n \n \n 650\n \n | \n \n \n 3.3%\n \n | \n \n \n 136\n \n | \n \n \n 163\n \n | \n \n \n 222\n \n | \n \n \n 521\n \n | \n \n \n 2.6%\n \n | \n
| \n Impairment provision \n | \n \n \n (521)\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deferred fees, discounts and fair value adjustments \n | \n \n \n 310\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Balance as at 31 December 2022\n \n | \n \n \n 19,593\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n ECL provisions\n \n | \n \n \u00a0 \n | \n |||
| \n \n 31 December 2021\n \n | \n \n \n Loans and advances to customers\n \n | \n \n \n NPLs \n \n | \n \n \n NPL % of total loans\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n \n \n Total ECL provisions as % of total loans\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n %\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n % \n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Residential: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Home loans \n | \n \n 12,568 \n | \n \n 420 \n | \n \n 3.3% \n | \n \n 55 \n | \n \n 45 \n | \n \n 127 \n | \n \n 227 \n | \n \n 1.8% \n | \n
| \n -Buy-to-let \n | \n \n 1,623 \n | \n \n 339 \n | \n \n 20.9% \n | \n \n 1 \n | \n \n 152 \n | \n \n 145 \n | \n \n 298 \n | \n \n 18.4% \n | \n
| \n Commercial \n | \n \n 196 \n | \n \n 44 \n | \n \n 22.5% \n | \n \n - \n | \n \n 30 \n | \n \n 23 \n | \n \n 53 \n | \n \n 27.0% \n | \n
| \n Consumer Finance: \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n -Term loans/other \n | \n \n 358 \n | \n \n 14 \n | \n \n 3.9% \n | \n \n 5 \n | \n \n 11 \n | \n \n 10 \n | \n \n 26 \n | \n \n 7.3% \n | \n
| \n Total gross loans \n | \n \n 14,745 \n | \n \n 817 \n | \n \n 5.5% \n | \n \n 61 \n | \n \n 238 \n | \n \n 305 \n | \n \n 604 \n | \n \n 4.1% \n | \n
| \n Impairment provision \n | \n \n (604) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Deferred fees, discounts and fair value adjustments \n | \n \n 115 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Balance as at 31 December 2021 \n | \n \n 14,256 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
A reconciliation of the provision for impairment losses for loans and advances is as follows:
\n| \n \n 2022\n \n | \n \n \n Residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Total by portfolio\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 1 January 2022\n \n | \n \n \n 525\n \n | \n \n \n 53\n \n | \n \n \n 26\n \n | \n \n \n 604\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n \n (18)\n \n | \n \n \n (9)\n \n | \n \n \n (1)\n \n | \n \n \n (28)\n \n | \n
| \n Net remeasurement of loss allowance \n | \n \n \n (41)\n \n | \n \n \n (16)\n \n | \n \n \n 5\n \n | \n \n \n (52)\n \n | \n
| \n Loan originations \n | \n \n \n 34\n \n | \n \n \n 13\n \n | \n \n \n 7\n \n | \n \n \n 54\n \n | \n
| \n Loans acquired \n | \n \n \n 37\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 37\n \n | \n
| \n \n Net movement excluding derecognition\n \n | \n \n \n 12\n \n | \n \n \n (12)\n \n | \n \n \n 11\n \n | \n \n \n 11\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n \n (64)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (64)\n \n | \n
| \n Derecognition-repossessions \n | \n \n \n (3)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (3)\n \n | \n
| \n Derecognition-write offs* \n | \n \n \n (23)\n \n | \n \n \n (1)\n \n | \n \n \n (3)\n \n | \n \n \n (27)\n \n | \n
| \n \n Derecognition\n \n | \n \n \n (90)\n \n | \n \n \n (1)\n \n | \n \n \n (3)\n \n | \n \n \n (94)\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 31 December 2022\n \n | \n \n \n 447\n \n | \n \n \n 40\n \n | \n \n \n 34\n \n | \n \n \n 521\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Net movement excluding derecognition (from above)\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 11\n \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n (8)\n \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 4\n \n | \n
| \n \n Impairment charge on loans and advances to customers for the year ended 31 December 2022\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 7\n \n | \n
* The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation.
\n| \n \n 2021\n \n | \n \n \n Residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Total by portfolio \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 1 January 2021 \n | \n \n 639 \n | \n \n 53 \n | \n \n 36 \n | \n \n 728 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n (45) \n | \n \n (4) \n | \n \n (3) \n | \n \n (52) \n | \n
| \n Net remeasurement of loss allowance \n | \n \n 35 \n | \n \n (4) \n | \n \n (8) \n | \n \n 23 \n | \n
| \n Loan originations \n | \n \n 16 \n | \n \n 13 \n | \n \n 5 \n | \n \n 34 \n | \n
| \n Net movement excluding derecognition \n | \n \n 6 \n | \n \n 5 \n | \n \n (6) \n | \n \n 5 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n (84) \n | \n \n (2) \n | \n \n - \n | \n \n (86) \n | \n
| \n Derecognition-repossessions \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n (1) \n | \n
| \n Derecognition-write offs* \n | \n \n (35) \n | \n \n (3) \n | \n \n (4) \n | \n \n (42) \n | \n
| \n Derecognition \n | \n \n (120) \n | \n \n (5) \n | \n \n (4) \n | \n \n (129) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 31 December 2021 \n | \n \n 525 \n | \n \n 53 \n | \n \n 26 \n | \n \n 604 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Net movement excluding derecognition (from above) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 5 \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (8) \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 2 \n | \n
| \n Impairment write-back on loans and advances to customers for the year ended 31 December 2021 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (1) \n | \n
* The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation.
\n \n| \n \n Total by stage\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 1 January 2022\n \n | \n \n \n 61\n \n | \n \n \n 238\n \n | \n \n \n 305\n \n | \n \n \n 604\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfer to Stage 1 \n | \n \n \n 13\n \n | \n \n \n (13)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Transfer to Stage 2 \n | \n \n \n (3)\n \n | \n \n \n 39\n \n | \n \n \n (36)\n \n | \n \n \n -\n \n | \n
| \n Transfer to Stage 3 \n | \n \n \n -\n \n | \n \n \n (19)\n \n | \n \n \n 19\n \n | \n \n \n -\n \n | \n
| \n \n Stage transfers\n \n | \n \n \n 10\n \n | \n \n \n 7\n \n | \n \n \n (17)\n \n | \n \n \n -\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n \n (5)\n \n | \n \n \n (11)\n \n | \n \n \n (12)\n \n | \n \n \n (28)\n \n | \n
| \n Net remeasurement of loss allowance \n | \n \n \n -\n \n | \n \n \n (34)\n \n | \n \n \n (18)\n \n | \n \n \n (52)\n \n | \n
| \n Loan originations \n | \n \n \n 34\n \n | \n \n \n 20\n \n | \n \n \n -\n \n | \n \n \n 54\n \n | \n
| \n Loans Acquired \n | \n \n \n 37\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 37\n \n | \n
| \n \n Net movement excluding derecognition\n \n | \n \n \n 66\n \n | \n \n \n (25)\n \n | \n \n \n (30)\n \n | \n \n \n 11\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n \n (1)\n \n | \n \n \n (56)\n \n | \n \n \n (7)\n \n | \n \n \n (64)\n \n | \n
| \n Derecognition-repossessions \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (3)\n \n | \n \n \n (3)\n \n | \n
| \n Derecognition-write offs* \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n (26)\n \n | \n \n \n (27)\n \n | \n
| \n \n Derecognition\n \n | \n \n \n (1)\n \n | \n \n \n (57)\n \n | \n \n \n (36)\n \n | \n \n \n (94)\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n ECL as at 31 December 2022\n \n | \n \n \n 136\n \n | \n \n \n 163\n \n | \n \n \n 222\n \n | \n \n \n 521\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n \n Net movement excluding derecognition (from above)\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 11\n \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n (8)\n \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 4\n \n | \n
| \n \n Impairment charge on loans and advances to customers for the year ended 31 December 2022\n \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \n 7\n \n | \n
* The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write off may be earlier than collateral realisation.
\n \n| \n \n Total by stage\n \n | \n \n \n Stage 1\n \n | \n \n \n Stage 2\n \n | \n \n \n Stage 3\n \n | \n \n \n Total\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 1 January 2021 \n | \n \n 55 \n | \n \n 286 \n | \n \n 387 \n | \n \n 728 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Transfer to Stage 1 \n | \n \n 23 \n | \n \n (23) \n | \n \n - \n | \n \n - \n | \n
| \n Transfer to Stage 2 \n | \n \n (4) \n | \n \n 42 \n | \n \n (38) \n | \n \n - \n | \n
| \n Transfer to Stage 3 \n | \n \n - \n | \n \n (44) \n | \n \n 44 \n | \n \n - \n | \n
| \n Stage transfers \n | \n \n 19 \n | \n \n (25) \n | \n \n 6 \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Redemptions and repayments \n | \n \n (4) \n | \n \n (27) \n | \n \n (21) \n | \n \n (52) \n | \n
| \n Net remeasurement of loss allowance \n | \n \n (26) \n | \n \n (9) \n | \n \n 58 \n | \n \n 23 \n | \n
| \n Loan originations \n | \n \n 17 \n | \n \n 17 \n | \n \n - \n | \n \n 34 \n | \n
| \n Net movement excluding derecognition \n | \n \n (13) \n | \n \n (19) \n | \n \n 37 \n | \n \n 5 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Derecognition-disposals \n | \n \n - \n | \n \n (2) \n | \n \n (84) \n | \n \n (86) \n | \n
| \n Derecognition-repossessions \n | \n \n - \n | \n \n - \n | \n \n (1) \n | \n \n (1) \n | \n
| \n Derecognition-write offs* \n | \n \n - \n | \n \n (2) \n | \n \n (40) \n | \n \n (42) \n | \n
| \n Derecognition \n | \n \n - \n | \n \n (4) \n | \n \n (125) \n | \n \n (129) \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n ECL as at 31 December 2021 \n | \n \n 61 \n | \n \n 238 \n | \n \n 305 \n | \n \n 604 \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Net movement excluding derecognition (from above) \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 5 \n | \n
| \n Interest income booked but not recognised \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (8) \n | \n
| \n Write offs net of recoveries \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n 2 \n | \n
| \n Impairment write-back on loans and advances to customers for the year ended 31 December 2021 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n \n (1) \n | \n
*The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write off may be earlier than collateral realisation.
\n\n Modified Financial Assets\n
\nAt 31 December 2022 there have been no significant modified financial assets for which the loss allowance has changed from lifetime to
\n12-month ECL.
\nFrom time to time, the original terms of a customer\u2019s loan is modified either as part of the ongoing relationship or arising from changes in the customer\u2019s circumstances such as when that customer is unable to make the agreed original contractual repayments. The risk of default of such assets after modification is assessed at the reporting date and compared with the risk under the original terms at initial recognition, when the modification is not substantial and so does not result in de-recognition of the original asset.
\nThe gross carrying amount of modified financial assets for which impairment loss allowance has changed from lifetime to 12-month expected credit losses during the year is \u20ac52m.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f189973": { "value": "\n \n \n\n 24. Interest in associated undertakings\n
\n| \n \u00a0 \n | \n \n \n 31 December\n \n | \n \n \n 31 December\n \n | \n
| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Synch Payments and Clearpay \n | \n \n \n 3 \n \n | \n \n 2 \n | \n
| \n First Home Scheme Ireland \n | \n \n \n 10 \n \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 13 \n \n | \n \n 2 \n | \n
The Group owns a non-controlling interest in Synch Payments DAC (25%) and Clearpay DAC (33%). These investments are accounted for under the equity method in the consolidated financial statements and have a carrying value of \u20ac3m at 31 December 2022 (31 December 2021: \u20ac2m). Post-acquisition costs of \u20ac0.4m have been capitalised in 2022.
\nThese investments will be increased or decreased by the Group\u2019s share of the profit or loss which will be assessed annually.
\nOn 1 July 2022, The Group entered into a joint venture with First Home Scheme Ireland DAC. This investment is accounted for under the equity method in the consolidated financial statements and was initially recognised at \u20ac11m, post-acquisition losses of \u20ac1m have been recognised.
\nIn presenting details of the associates of the Group, the exemption permitted by Section 316 of the Companies Act 2014 has been availed of and the Group will annex a full listing of associates to its annual return to the Companies Registration Office.
\n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f189974": { "value": "\n \n\n 24. Interest in associated undertakings\n
\n| \n \u00a0 \n | \n \n \n 31 December\n \n | \n \n \n 31 December\n \n | \n
| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Synch Payments and Clearpay \n | \n \n \n 3 \n \n | \n \n 2 \n | \n
| \n First Home Scheme Ireland \n | \n \n \n 10 \n \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 13 \n \n | \n \n 2 \n | \n
The Group owns a non-controlling interest in Synch Payments DAC (25%) and Clearpay DAC (33%). These investments are accounted for under the equity method in the consolidated financial statements and have a carrying value of \u20ac3m at 31 December 2022 (31 December 2021: \u20ac2m). Post-acquisition costs of \u20ac0.4m have been capitalised in 2022.
\nThese investments will be increased or decreased by the Group\u2019s share of the profit or loss which will be assessed annually.
\nOn 1 July 2022, The Group entered into a joint venture with First Home Scheme Ireland DAC. This investment is accounted for under the equity method in the consolidated financial statements and was initially recognised at \u20ac11m, post-acquisition losses of \u20ac1m have been recognised.
\nIn presenting details of the associates of the Group, the exemption permitted by Section 316 of the Companies Act 2014 has been availed of and the Group will annex a full listing of associates to its annual return to the Companies Registration Office.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f189975": { "value": "\n\n 24. Interest in associated undertakings\n
\n| \n \u00a0 \n | \n \n \n 31 December\n \n | \n \n \n 31 December\n \n | \n
| \n \u00a0 \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \u00a0 \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \u00a0 \n | \n \n \u00a0 \n | \n \n \u00a0 \n | \n
| \n Synch Payments and Clearpay \n | \n \n \n 3 \n \n | \n \n 2 \n | \n
| \n First Home Scheme Ireland \n | \n \n \n 10 \n \n | \n \n - \n | \n
| \n \u00a0 \n | \n \n \n 13 \n \n | \n \n 2 \n | \n
The Group owns a non-controlling interest in Synch Payments DAC (25%) and Clearpay DAC (33%). These investments are accounted for under the equity method in the consolidated financial statements and have a carrying value of \u20ac3m at 31 December 2022 (31 December 2021: \u20ac2m). Post-acquisition costs of \u20ac0.4m have been capitalised in 2022.
\nThese investments will be increased or decreased by the Group\u2019s share of the profit or loss which will be assessed annually.
\nOn 1 July 2022, The Group entered into a joint venture with First Home Scheme Ireland DAC. This investment is accounted for under the equity method in the consolidated financial statements and was initially recognised at \u20ac11m, post-acquisition losses of \u20ac1m have been recognised.
\nIn presenting details of the associates of the Group, the exemption permitted by Section 316 of the Companies Act 2014 has been availed of and the Group will annex a full listing of associates to its annual return to the Companies Registration Office.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f190051": { "value": "\n \n\n 25. Property and equipment \n
\n| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n Right-of-use assets*\n \n | \n \n \n | \n |
| \n \n 2022\n \n | \n \n \n Held at fair value land and buildings\n \n | \n \n \n Held at cost buildings\n \n | \n \n \n Held at cost office and computer equipment\n \n | \n \n \n Leased buildings\n \n | \n \n \n Leased motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Cost or valuation\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n 99 \n \n | \n \n \n 117 \n \n | \n \n \n 91 \n \n | \n \n \n 49 \n \n | \n \n \n 2 \n \n | \n \n \n 358 \n \n | \n
| \n Additions \n | \n \n \n -\n \n | \n \n \n 11 \n \n | \n \n \n 18 \n \n | \n \n \n 13 \n \n | \n \n \n 1 \n \n | \n \n \n 43 \n \n | \n
| \n Revaluations \n | \n \n \n (7)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (7)\n \n | \n
| \n Depreciation write-back on revaluation \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n Disposals/lease exits or cancellations \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n \n At 31 December \n \n | \n \n \n 91 \n \n | \n \n \n 128 \n \n | \n \n \n 109 \n \n | \n \n \n 61 \n \n | \n \n \n 3 \n \n | \n \n \n 392 \n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Accumulated depreciation \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n -\n \n | \n \n \n (77)\n \n | \n \n \n (69)\n \n | \n \n \n (20)\n \n | \n \n \n (2)\n \n | \n \n \n (168)\n \n | \n
| \n Provided in the year \n | \n \n \n (1)\n \n | \n \n \n (7)\n \n | \n \n \n (8)\n \n | \n \n \n (5)\n \n | \n \n \n -\n \n | \n \n \n (21)\n \n | \n
| \n Eliminate on revaluation \n | \n \n \n 1 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1 \n \n | \n
| \n \n At 31 December \n \n | \n \n \n -\n \n | \n \n \n (84)\n \n | \n \n \n (77)\n \n | \n \n \n (25)\n \n | \n \n \n (2)\n \n | \n \n \n (188)\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n -\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Net book value at 31 December \n \n | \n \n \n 91 \n \n | \n \n \n 44 \n \n | \n \n \n 32 \n \n | \n \n \n 36 \n \n | \n \n \n 1 \n \n | \n \n \n 204 \n \n | \n
* For further details on right-of-use assets refer to note 34.
\nOf the \u20ac7m net revaluation loss, \u20ac8m is included in the revaluation reserve in the statement of comprehensive income and \u20ac1m impairment write-back is recognised on land and buildings in the income statement.
\n| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n Right-of-use assets*\n \n | \n \n \n | \n |
| \n \n 2021\n \n | \n \n \n Held at fair value land and buildings\n \n | \n \n \n Held at cost land and buildings\n \n | \n \n \n Held at cost office and computer equipment\n \n | \n \n \n Leased buildings\n \n | \n \n \n Leased motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cost or valuation \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n 98 \n | \n \n 107 \n | \n \n 85 \n | \n \n 46 \n | \n \n 2 \n | \n \n 338 \n | \n
| \n Additions \n | \n \n - \n | \n \n 10 \n | \n \n 6 \n | \n \n 3 \n | \n \n - \n | \n \n 19 \n | \n
| \n Revaluations \n | \n \n 2 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 2 \n | \n
| \n Depreciation write-back on revaluation \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (1) \n | \n
| \n At 31 December \n | \n \n 99 \n | \n \n 117 \n | \n \n 91 \n | \n \n 49 \n | \n \n 2 \n | \n \n 358 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Accumulated depreciation \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n - \n | \n \n (71) \n | \n \n (61) \n | \n \n (14) \n | \n \n (2) \n | \n \n (148) \n | \n
| \n Provided in the year \n | \n \n (1) \n | \n \n (6) \n | \n \n (8) \n | \n \n (6) \n | \n \n - \n | \n \n (21) \n | \n
| \n Eliminate on revaluation \n | \n \n 1 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n
| \n At 31 December \n | \n \n - \n | \n \n (77) \n | \n \n (69) \n | \n \n (20) \n | \n \n (2) \n | \n \n (168) \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Net book value at 31 December \n | \n \n 99 \n | \n \n 40 \n | \n \n 22 \n | \n \n 29 \n | \n \n - \n | \n \n 190 \n | \n
* For further details on right-of-use assets refer to note 34.
\nOf the \u20ac2m revaluation gain, \u20ac2m is included in the revaluation reserve in the statement of comprehensive income and no impairment write-back is recognised on land and buildings in the income statement.
\n \n \n \nThe net book value of land and buildings includes the following:
\n| \n \n | \n \n \n 31 December\n \n | \n \n \n 31 December\n \n | \n
| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Land \n | \n \n \n 30 \n \n | \n \n 32 \n | \n
| \n Buildings - freehold fair value \n | \n \n \n 61 \n \n | \n \n 67 \n | \n
| \n Buildings - freehold cost \n | \n \n \n 33 \n \n | \n \n 26 \n | \n
| \n Buildings - leasehold \n | \n \n \n 47\n \n | \n \n 43 \n | \n
| \n \n | \n \n \n 171\n \n | \n \n 168 \n | \n
Land and buildings at 31 December 2022 held at fair value was \u20ac91m (31 December 2021: \u20ac99m). The historic cost of land and buildings under the cost model is \u20ac92m (31 December 2021: \u20ac117m).
\n\n Fair value measurement of Group\u2019s land and buildings\n
\nThe Group\u2019s freehold land and buildings are stated at their revalued amounts, being the fair value at the date of revaluation less any accumulated depreciation recognised from the date of the latest revaluation. On the date of revaluation any accumulated depreciation is eliminated. The fair value measurements of the Group\u2019s freehold land and buildings as at 31 December 2022 and 31 December 2021 were performed by independent professional valuers having appropriate qualifications and recent experience in the fair value measurement of properties in the locations and categories being valued. The effective date of revaluation is 31 October 2022 and 31 October 2021.
\nThe fair value of the freehold land and buildings was determined based on a market comparable approach that reflects recent transaction prices for similar properties using capitalisation yields ranging from 5% to 10.75%. There has been no change to the valuation techniques during the year.
\nDetails of the freehold land and buildings and information about the fair value hierarchy as defined in the Group\u2019s accounting policy as at 31 December 2022 and 31 December 2021 are as follows:
\n| \n \n 31 December 2022\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair value\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Land \n | \n \n \n -\n \n | \n \n \n 30 \n \n | \n \n \n -\n \n | \n \n \n 30 \n \n | \n
| \n Buildings - freehold \n | \n \n \n -\n \n | \n \n \n 61 \n \n | \n \n \n -\n \n | \n \n \n 61 \n \n | \n
| \n \n | \n \n \n -\n \n | \n \n \n 91 \n \n | \n \n \n -\n \n | \n \n \n 91 \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair value\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Land \n | \n \n - \n | \n \n 32 \n | \n \n - \n | \n \n 32 \n | \n
| \n Buildings - freehold \n | \n \n - \n | \n \n 67 \n | \n \n - \n | \n \n 67 \n | \n
| \n \n | \n \n - \n | \n \n 99 \n | \n \n - \n | \n \n 99 \n | \n
\n 26. Intangible assets\n
\n| \n \n Software\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Cost\n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n 224 \n \n | \n \n 178 \n | \n
| \n Additions \n | \n \n \n 69 \n \n | \n \n 46 \n | \n
| \n \n At 31 December\n \n | \n \n \n 293 \n \n | \n \n 224 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Accumulated amortisation\n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n (102)\n \n | \n \n (76) \n | \n
| \n Provided in the year \n | \n \n \n (31)\n \n | \n \n (26) \n | \n
| \n \n At 31 December\n \n | \n \n \n (133)\n \n | \n \n (102) \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Net book value at 31 December\n \n | \n \n \n 160 \n \n | \n \n 122 \n | \n
\n 25. Property and equipment \n
\n| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n Right-of-use assets*\n \n | \n \n \n | \n |
| \n \n 2022\n \n | \n \n \n Held at fair value land and buildings\n \n | \n \n \n Held at cost buildings\n \n | \n \n \n Held at cost office and computer equipment\n \n | \n \n \n Leased buildings\n \n | \n \n \n Leased motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Cost or valuation\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n 99 \n \n | \n \n \n 117 \n \n | \n \n \n 91 \n \n | \n \n \n 49 \n \n | \n \n \n 2 \n \n | \n \n \n 358 \n \n | \n
| \n Additions \n | \n \n \n -\n \n | \n \n \n 11 \n \n | \n \n \n 18 \n \n | \n \n \n 13 \n \n | \n \n \n 1 \n \n | \n \n \n 43 \n \n | \n
| \n Revaluations \n | \n \n \n (7)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (7)\n \n | \n
| \n Depreciation write-back on revaluation \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n Disposals/lease exits or cancellations \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n \n At 31 December \n \n | \n \n \n 91 \n \n | \n \n \n 128 \n \n | \n \n \n 109 \n \n | \n \n \n 61 \n \n | \n \n \n 3 \n \n | \n \n \n 392 \n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Accumulated depreciation \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n -\n \n | \n \n \n (77)\n \n | \n \n \n (69)\n \n | \n \n \n (20)\n \n | \n \n \n (2)\n \n | \n \n \n (168)\n \n | \n
| \n Provided in the year \n | \n \n \n (1)\n \n | \n \n \n (7)\n \n | \n \n \n (8)\n \n | \n \n \n (5)\n \n | \n \n \n -\n \n | \n \n \n (21)\n \n | \n
| \n Eliminate on revaluation \n | \n \n \n 1 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1 \n \n | \n
| \n \n At 31 December \n \n | \n \n \n -\n \n | \n \n \n (84)\n \n | \n \n \n (77)\n \n | \n \n \n (25)\n \n | \n \n \n (2)\n \n | \n \n \n (188)\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n -\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Net book value at 31 December \n \n | \n \n \n 91 \n \n | \n \n \n 44 \n \n | \n \n \n 32 \n \n | \n \n \n 36 \n \n | \n \n \n 1 \n \n | \n \n \n 204 \n \n | \n
* For further details on right-of-use assets refer to note 34.
\nOf the \u20ac7m net revaluation loss, \u20ac8m is included in the revaluation reserve in the statement of comprehensive income and \u20ac1m impairment write-back is recognised on land and buildings in the income statement.
\n| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n Right-of-use assets*\n \n | \n \n \n | \n |
| \n \n 2021\n \n | \n \n \n Held at fair value land and buildings\n \n | \n \n \n Held at cost land and buildings\n \n | \n \n \n Held at cost office and computer equipment\n \n | \n \n \n Leased buildings\n \n | \n \n \n Leased motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cost or valuation \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n 98 \n | \n \n 107 \n | \n \n 85 \n | \n \n 46 \n | \n \n 2 \n | \n \n 338 \n | \n
| \n Additions \n | \n \n - \n | \n \n 10 \n | \n \n 6 \n | \n \n 3 \n | \n \n - \n | \n \n 19 \n | \n
| \n Revaluations \n | \n \n 2 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 2 \n | \n
| \n Depreciation write-back on revaluation \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (1) \n | \n
| \n At 31 December \n | \n \n 99 \n | \n \n 117 \n | \n \n 91 \n | \n \n 49 \n | \n \n 2 \n | \n \n 358 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Accumulated depreciation \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n - \n | \n \n (71) \n | \n \n (61) \n | \n \n (14) \n | \n \n (2) \n | \n \n (148) \n | \n
| \n Provided in the year \n | \n \n (1) \n | \n \n (6) \n | \n \n (8) \n | \n \n (6) \n | \n \n - \n | \n \n (21) \n | \n
| \n Eliminate on revaluation \n | \n \n 1 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n
| \n At 31 December \n | \n \n - \n | \n \n (77) \n | \n \n (69) \n | \n \n (20) \n | \n \n (2) \n | \n \n (168) \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Net book value at 31 December \n | \n \n 99 \n | \n \n 40 \n | \n \n 22 \n | \n \n 29 \n | \n \n - \n | \n \n 190 \n | \n
* For further details on right-of-use assets refer to note 34.
\nOf the \u20ac2m revaluation gain, \u20ac2m is included in the revaluation reserve in the statement of comprehensive income and no impairment write-back is recognised on land and buildings in the income statement.
\n \nThe net book value of land and buildings includes the following:
\n| \n \n | \n \n \n 31 December\n \n | \n \n \n 31 December\n \n | \n
| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Land \n | \n \n \n 30 \n \n | \n \n 32 \n | \n
| \n Buildings - freehold fair value \n | \n \n \n 61 \n \n | \n \n 67 \n | \n
| \n Buildings - freehold cost \n | \n \n \n 33 \n \n | \n \n 26 \n | \n
| \n Buildings - leasehold \n | \n \n \n 47\n \n | \n \n 43 \n | \n
| \n \n | \n \n \n 171\n \n | \n \n 168 \n | \n
Land and buildings at 31 December 2022 held at fair value was \u20ac91m (31 December 2021: \u20ac99m). The historic cost of land and buildings under the cost model is \u20ac92m (31 December 2021: \u20ac117m).
\n\n Fair value measurement of Group\u2019s land and buildings\n
\nThe Group\u2019s freehold land and buildings are stated at their revalued amounts, being the fair value at the date of revaluation less any accumulated depreciation recognised from the date of the latest revaluation. On the date of revaluation any accumulated depreciation is eliminated. The fair value measurements of the Group\u2019s freehold land and buildings as at 31 December 2022 and 31 December 2021 were performed by independent professional valuers having appropriate qualifications and recent experience in the fair value measurement of properties in the locations and categories being valued. The effective date of revaluation is 31 October 2022 and 31 October 2021.
\nThe fair value of the freehold land and buildings was determined based on a market comparable approach that reflects recent transaction prices for similar properties using capitalisation yields ranging from 5% to 10.75%. There has been no change to the valuation techniques during the year.
\nDetails of the freehold land and buildings and information about the fair value hierarchy as defined in the Group\u2019s accounting policy as at 31 December 2022 and 31 December 2021 are as follows:
\n| \n \n 31 December 2022\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair value\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Land \n | \n \n \n -\n \n | \n \n \n 30 \n \n | \n \n \n -\n \n | \n \n \n 30 \n \n | \n
| \n Buildings - freehold \n | \n \n \n -\n \n | \n \n \n 61 \n \n | \n \n \n -\n \n | \n \n \n 61 \n \n | \n
| \n \n | \n \n \n -\n \n | \n \n \n 91 \n \n | \n \n \n -\n \n | \n \n \n 91 \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair value\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Land \n | \n \n - \n | \n \n 32 \n | \n \n - \n | \n \n 32 \n | \n
| \n Buildings - freehold \n | \n \n - \n | \n \n 67 \n | \n \n - \n | \n \n 67 \n | \n
| \n \n | \n \n - \n | \n \n 99 \n | \n \n - \n | \n \n 99 \n | \n
\n 26. Intangible assets\n
\n| \n \n Software\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Cost\n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n 224 \n \n | \n \n 178 \n | \n
| \n Additions \n | \n \n \n 69 \n \n | \n \n 46 \n | \n
| \n \n At 31 December\n \n | \n \n \n 293 \n \n | \n \n 224 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Accumulated amortisation\n \n | \n \n \n | \n \n \n | \n
| \n At 1 January \n | \n \n \n (102)\n \n | \n \n (76) \n | \n
| \n Provided in the year \n | \n \n \n (31)\n \n | \n \n (26) \n | \n
| \n \n At 31 December\n \n | \n \n \n (133)\n \n | \n \n (102) \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Net book value at 31 December\n \n | \n \n \n 160 \n \n | \n \n 122 \n | \n
\n 28. Deposits by banks\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Placed by other banks and institutions on repurchase agreements \n | \n \n \n 611 \n \n | \n \n 347 \n | \n
| \n Other deposits \n | \n \n \n 3 \n \n | \n \n - \n | \n
| \n \n Deposits by banks\n \n | \n \n \n 614 \n \n | \n \n 347 \n | \n
Securities which are sold under agreements to repurchase are secured by Irish and other eligible Government bonds. These agreements are completed under market standard Global Master Repurchase Agreements. The fair value of the financial assets pledged under existing agreement to repurchase is \u20ac654m at 31 December 2022 (31 December 2021: \u20ac732m).Other deposits include \u20ac3m (31 December 2021: \u20acnil) of cash collateral placed in relation to derivative positions and repurchase agreements.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromBanksExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f191513": { "value": "\n\n 29. Customer accounts\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Term deposits \n | \n \n \n 1,509\n \n | \n \n 2,226 \n | \n
| \n Demand deposits \n | \n \n \n 8,871\n \n | \n \n 7,657 \n | \n
| \n Current accounts \n | \n \n \n 8,983\n \n | \n \n 7,104 \n | \n
| \n Notice and other accounts \n | \n \n \n 2,367\n \n | \n \n 2,102 \n | \n
| \n \n Customer accounts\n \n | \n \n \n 21,730\n \n | \n \n 19,089 \n | \n
At 31 December 2022, the Group held corporate deposits of \u20ac1.2bn (31 December 2021: \u20ac1.4bn).
\nAn analysis of the contractual maturity profile of customer accounts is set out in the liquidity risk section of note 38 of the consolidated financial statements.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromCustomersExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f191712": { "value": "\n \n\n 31. Other liabilities\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Amounts falling due within one year\n \n | \n \n \n | \n \n \n | \n
| \n PAYE and social insurance \n | \n \n \n 5\n \n | \n \n 4 \n | \n
| \n Creditor accruals \n | \n \n \n 84\n \n | \n \n 79 \n | \n
| \n Other* \n | \n \n \n 54\n \n | \n \n 56 \n | \n
| \n Lease liability (see note 34 for further information on lease liabilities) \n | \n \n \n 6\n \n | \n \n 5 \n | \n
| \n \n Total amounts falling due within one year\n \n | \n \n \n 149\n \n | \n \n 144 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Amounts falling due greater than one year\n \n | \n \n \n | \n \n \n | \n
| \n Lease liability (see note 34 for further information on lease liabilities) \n | \n \n \n 32 \n \n | \n \n 26 \n | \n
| \n \n Total amounts falling due greater than one year\n \n | \n \n \n 32 \n \n | \n \n 26 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Total other liabilities \n \n | \n \n \n 181 \n \n | \n \n 170 \n | \n
* Other includes \u20ac38m relating to additional cash consideration payable for the Ulster business acquired by the Group in 2022 and other miscellaneous liabilities. In 2021, other includes \u20ac48m relating to the deposit received by the Group on 11 November 2021 as part of the purchase price for the sale of the Glenbeigh III portfolio and miscellaneous liabilities.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f191713": { "value": "\n\n 31. Other liabilities\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Amounts falling due within one year\n \n | \n \n \n | \n \n \n | \n
| \n PAYE and social insurance \n | \n \n \n 5\n \n | \n \n 4 \n | \n
| \n Creditor accruals \n | \n \n \n 84\n \n | \n \n 79 \n | \n
| \n Other* \n | \n \n \n 54\n \n | \n \n 56 \n | \n
| \n Lease liability (see note 34 for further information on lease liabilities) \n | \n \n \n 6\n \n | \n \n 5 \n | \n
| \n \n Total amounts falling due within one year\n \n | \n \n \n 149\n \n | \n \n 144 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Amounts falling due greater than one year\n \n | \n \n \n | \n \n \n | \n
| \n Lease liability (see note 34 for further information on lease liabilities) \n | \n \n \n 32 \n \n | \n \n 26 \n | \n
| \n \n Total amounts falling due greater than one year\n \n | \n \n \n 32 \n \n | \n \n 26 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Total other liabilities \n \n | \n \n \n 181 \n \n | \n \n 170 \n | \n
* Other includes \u20ac38m relating to additional cash consideration payable for the Ulster business acquired by the Group in 2022 and other miscellaneous liabilities. In 2021, other includes \u20ac48m relating to the deposit received by the Group on 11 November 2021 as part of the purchase price for the sale of the Glenbeigh III portfolio and miscellaneous liabilities.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f191858": { "value": "\n\n 32. Provisions\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n ||||||
| \n \n | \n \n \n Restructuring costs\n \n | \n \n \n Provision for legacy, legal and compliance liabilities\n \n | \n \n \n Other\n \n | \n \n \n Total\n \n | \n \n \n Restructuring costs\n \n | \n \n \n Provision for legacy, legal and compliance liabilities\n \n | \n \n \n Other\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January\n \n | \n \n \n 6\n \n | \n \n \n 28\n \n | \n \n \n 21\n \n | \n \n \n 55\n \n | \n \n 28 \n | \n \n 29 \n | \n \n 20 \n | \n \n 77 \n | \n
| \n Provisions made during the year \n | \n \n \n 2\n \n | \n \n \n 8\n \n | \n \n \n 39\n \n | \n \n \n 49\n \n | \n \n 7 \n | \n \n 21 \n | \n \n 9 \n | \n \n 37 \n | \n
| \n Write-back of provisions during the year \n | \n \n \n -\n \n | \n \n \n (3)\n \n | \n \n \n (6)\n \n | \n \n \n (9)\n \n | \n \n - \n | \n \n (3) \n | \n \n (7) \n | \n \n (10) \n | \n
| \n Provisions used during the year \n | \n \n \n (4)\n \n | \n \n \n (10)\n \n | \n \n \n (1)\n \n | \n \n \n (15)\n \n | \n \n (29) \n | \n \n (19) \n | \n \n (1) \n | \n \n (49) \n | \n
| \n \n As at 31 December\n \n | \n \n \n 4\n \n | \n \n \n 23\n \n | \n \n \n 53\n \n | \n \n \n 80\n \n | \n \n 6 \n | \n \n 28 \n | \n \n 21 \n | \n \n 55 \n | \n
The provision at 31 December 2022 is \u20ac80m (31 December 2021: \u20ac55m) which is comprised of the following:
\n\n
\n Restructuring costs\n
\nDuring 2020, the Group announced an Enterprise Transformation programme. At 31 December 2020, a provision for restructuring of \u20ac27m was recognised based on the estimate of the costs of this programme. During 2021 an additional provision of \u20ac7m was made and an amount of \u20ac29m was utilised as part of this programme. During 2022 a further provision of \u20ac2m was made and an amount of \u20ac4m was utilised. The remaining provision of \u20ac3m is based on an estimate of the remaining costs to bring the programme to a conclusion. This programme is expected to conclude within the next 12 months.
\nThe Group remains a lessee on a number of non-cancellable leases over properties that it no longer occupies following a restructure in 2013. The remaining provision of \u20ac1m relates to dilapidation costs associated with the remaining properties.
\n\n Provision for legacy, legal and compliance liabilities\n
\nAs at 31 December 2022, the Group has provisions of \u20ac23m relating to legal, compliance and other costs of on-going disputes in relation to legacy business issues (31 December 2021: \u20ac28m).
\nA provision of \u20ac8m was made during 2022 relating to legal, compliance and other costs of on-going disputes in relation to legacy business issues.
\nManagement has exercised judgment in arriving at the estimated provision in respect of the potential liabilities.
\n\n
\n Other\n
\nAs at 31 December 2022, the provision of \u20ac53m (31 December 2021: \u20ac21m) primarily relates to Stamp Duty (\u20ac25m) arising as a result of the Ulster Bank transaction. Other amounts include indemnities and guarantees provided by the Group, together with further costs, relating to the deleveraging of various asset portfolios.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f192078": { "value": "\n\n 33. Subordinated liabilities\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n At amortised cost: \n | \n \n \n | \n \n \n | \n
| \n \u20ac250m Tier 2 capital notes due August 2031, Callable 2026 \n | \n \n \n 252\n \n | \n \n 252 \n | \n
| \n \n | \n \n \n 252\n \n | \n \n 252 \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Maturity date \n | \n \n \n | \n \n \n | \n
| \n Repayable in less than 1 year \n | \n \n \n 3\n \n | \n \n 3 \n | \n
| \n Repayable in greater than 1 year but less than 5 years \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Repayable in greater than 5 years \n | \n \n \n 249\n \n | \n \n 249 \n | \n
| \n \n | \n \n \n 252\n \n | \n \n 252 \n | \n
\n Tier 2 capital notes \u2013 PTSBGH\n
\nIn May 2021, PTSBGH issued \u20ac250m of Tier 2 capital notes at a fixed rate of 3% per annum. The notes mature on 19 August 2031 with a call date of any date from and including 19 May 2026 to and including 19 August 2026. The call is subject to approval of the regulatory authorities, with approval conditional on meeting the requirements of the EU CRR.
\nThe interest rate will be reset, in the event that the securities are not called, on 19 August 2026 to Euro 5 year Mid Swap rate plus a margin of 3.221% per annum. The loan is subordinated and ranks as Tier 2 capital with interest paid annually in arrears on 19 August. The loan may be subject to the exercise of Irish Statutory loss absorption powers by the relevant resolution authority.
\nIn the event of winding up of PTSBGH, the Tier 2 capital notes will be:
\n\n 34. Leases\n
\n| \n \n Right-of-use assets*\n \n | \n \n \n Land and buildings\n \n | \n \n \n Motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January 2022\n \n | \n \n \n 29\n \n | \n \n \n -\n \n | \n \n \n 29\n \n | \n
| \n Additions \n | \n \n \n 13\n \n | \n \n \n 1\n \n | \n \n \n 14\n \n | \n
| \n Lease exits and cancellations \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n Depreciation of right-of-use assets \n | \n \n \n (5)\n \n | \n \n \n -\n \n | \n \n \n (5)\n \n | \n
| \n \n Balance as at 31 December 2022\n \n | \n \n \n 36\n \n | \n \n \n 1\n \n | \n \n \n 37\n \n | \n
| \n \n Right-of-use assets*\n \n | \n \n \n Land and buildings\n \n | \n \n \n Motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January 2021 \n | \n \n 32 \n | \n \n - \n | \n \n 32 \n | \n
| \n Additions \n | \n \n 3 \n | \n \n - \n | \n \n 3 \n | \n
| \n Lease exits and cancellations \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Depreciation of right-of-use assets \n | \n \n (6) \n | \n \n - \n | \n \n (6) \n | \n
| \n Balance as at 31 December 2021 \n | \n \n 29 \n | \n \n - \n | \n \n 29 \n | \n
| \n \n Lease liabilities*\n \n | \n \n \n Land and buildings\n \n | \n \n \n Motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January 2022\n \n | \n \n \n 31\n \n | \n \n \n -\n \n | \n \n \n 31\n \n | \n
| \n Additions \n | \n \n \n 13\n \n | \n \n \n 1\n \n | \n \n \n 14\n \n | \n
| \n Lease exits or cancellations \n | \n \n \n (1)\n \n | \n \n \n -\n \n | \n \n \n (1)\n \n | \n
| \n Repayment of lease liabilities \n | \n \n \n (6)\n \n | \n \n \n -\n \n | \n \n \n (6)\n \n | \n
| \n \n Balance as at 31 December 2022\n \n | \n \n \n 37\n \n | \n \n \n 1\n \n | \n \n \n 38\n \n | \n
| \n \n Lease liabilities*\n \n | \n \n \n Land and buildings\n \n | \n \n \n Motor vehicles\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January 2021 \n | \n \n 34 \n | \n \n - \n | \n \n 34 \n | \n
| \n Additions \n | \n \n 3 \n | \n \n - \n | \n \n 3 \n | \n
| \n Lease exits or cancellations \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Repayment of lease liabilities \n | \n \n (6) \n | \n \n - \n | \n \n (6) \n | \n
| \n Balance as at 31 December 2021 \n | \n \n 31 \n | \n \n - \n | \n \n 31 \n | \n
* Right-of-use assets are included in PPE and lease liabilities are included in Other liabilities.
\n| \n \n Lease liabilities\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Maturity analysis - contractual undiscounted cash flows*\n \n | \n \n \n | \n \n \n | \n
| \n Less than one year \n | \n \n \n 7\n \n | \n \n 6 \n | \n
| \n One to five years \n | \n \n \n 18\n \n | \n \n 16 \n | \n
| \n More than five years \n | \n \n \n 15\n \n | \n \n 10 \n | \n
| \n \n Total undiscounted lease liabilities\n \n | \n \n \n 40\n \n | \n \n 32 \n | \n
| \n \n Lease liabilities included in the statement of financial position\n \n | \n \n \n 38\n \n | \n \n 31 \n | \n
| \n Current lease liability \n | \n \n \n 6\n \n | \n \n 5 \n | \n
| \n Non-current lease liability \n | \n \n \n 32\n \n | \n \n 26 \n | \n
* The maturity analysis of undiscounted lease liabilities are disclosed in note 38.
\n\n Amounts recognised in income statement*\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Interest on lease liabilities \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Expenses relating to short-term leases \n | \n \n \n (1)\n \n | \n \n (1) \n | \n
| \n Depreciation of right-of-use assets \n | \n \n \n (5)\n \n | \n \n (6) \n | \n
| \n \n Total charge in income statement\n \n | \n \n \n (6)\n \n | \n \n (7) \n | \n
* Interest expense on the lease liabilities amounted to \u20ac0.4m (31 December 2021: \u20ac0.4m) whereas expenses relating to short-term leases amounted to \u20ac0.6m (31 December 2021: \u20ac0.6m) and is included in Administrative, staff and other expenses (excluding exceptional items).
\n\n Amounts recognised in statement of cash flow\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Cash outflow for leases \n | \n \n \n (6)\n \n | \n \n (6) \n | \n
| \n \n Total\n \n | \n \n \n (6)\n \n | \n \n (6) \n | \n
\n As a lessee\n
\n\n i. Real estate\n
\nThe Group leases retail properties for its branch operations. The lease term of retail properties typically run for a period of 10-35 years. The Group does not have variable lease payments and its leases do not contain extension options.
\n\n ii. Vehicles\n
\nThe Group leases vehicles with lease terms of three to five years. The Group has no option to purchase the assets at the end of the contract term and it does not guarantee the residual value of the leased assets at the end of the contract term.
\n\n iii. Sub-leases\n
\nThe Group has no sub leases as at 31 December 2022 (31 December 2021: two properties).
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f192825": { "value": "\n\n 35. Share capital, reserves and other equity instruments\n
\n\n Share capital\n
\nShare capital is the funds raised as a result of a share issue and comprises the ordinary shares of the holding company Permanent TSB Group Holdings plc.
\nThe holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Bank. All ordinary rank equally with regard to the Bank\u2019s residual assets.
\n\n Authorised share capital\n
\n| \n \n 31 December 2022\n \n | \n \n \n Number of shares\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Ordinary shares of \u20ac0.50 each \n | \n \n \n 1,550,000,000\n \n | \n \n \n 775\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Number of shares\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Ordinary shares of \u20ac0.50 each \n | \n \n 1,550,000,000 \n | \n \n 775 \n | \n
\n Issued share capital \n
\nThe movement in the number of paid up ordinary shares is as follows:
\n| \n \n Balances as at 31 December 2022\n \n | \n \n \n \u20ac 0.50 Ordinary shares\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January 2022\n \n | \n \n \n 454,695,492\n \n | \n \n \n | \n
| \n \n Movement\n \n | \n \n \n 90,893,627\n \n | \n \n \n | \n
| \n \n As at 31 December 2022\n \n | \n \n \n 545,589,119\n \n | \n \n \n | \n
| \n \n Issued share capital (\u20acm)\n \n | \n \n \n 273\n \n | \n \n \n 273\n \n | \n
| \n \n Shares held under employee benefit trust\n \n | \n \n \n 4,580\n \n | \n \n \n | \n
| \n \n % of authorised capital issued\n \n | \n \n \n | \n \n \n 35%\n \n | \n
On 7 November 2022, the Group issued 90,893,627 shares at \u20ac5.68 per share as part of the consideration transferred for the Ulster Bank transaction. The share price on the issue date of \u20ac1.70 was recognised in Share Capital at \u20ac0.50 per share and the excess in Share Premium. The remaining premium of \u20ac3.98 is recognised in Share Premium and represents the gain on bargain purchase that is transferred from Retained Earnings to Share Premium as per below. See notes 2 and 3 for further detail.
\n| \n \n Balances as at 31 December 2021\n \n | \n \n \n \u20ac 0.50 Ordinary shares\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January 2021 \n | \n \n 454,695,492 \n | \n \n \n | \n
| \n Movement \n | \n \n - \n | \n \n \n | \n
| \n As at 31 December 2021 \n | \n \n 454,695,492 \n | \n \n \n | \n
| \n Issued share capital (\u20acm) \n | \n \n 227 \n | \n \n 227 \n | \n
| \n Shares held under employee benefit trust \n | \n \n 4,580 \n | \n \n \n | \n
| \n % of authorised capital issued \n | \n \n \n | \n \n 29% \n | \n
\n Share Premium\n
\nThe share premium reserve represents the excess of amounts received for share issues less associated issue costs over the par value of those shares of the Company.
\nUnder section 71 of the Companies Act 2014 as the consideration for the Ulster Bank transaction includes the issuance of ordinary shares, Company law requires that the share premium be recognised as the difference between the nominal value of shares and the fair value of the consideration received. This results in the shares being issued at \u20ac5.68 per share as part of the consideration transferred. The share price on the issuance date was \u20ac1.70 per share with \u20ac0.50 being recognised in Share Capital and \u20ac1.20 being recognised in Share Premium. As the remaining fair value of the consideration received is in excess of the fair value of the shares this excess is required by law to be included in share premium and is, therefore, reclassified directly in equity between Retained Earnings and Share Premium. The excess amount is the gain on bargain purchase of \u20ac362m.
\n \n \n\n Other Reserves \n
\n\n Revaluation reserve (Non-distributable)\n
\nThe revaluation reserve is a non-distributable reserve comprising unrealised gains or losses, net of tax, on the revaluation of owner occupied properties.
\n\n Fair value reserve (Non-distributable) \n
\nThe fair value reserve comprises:
\n\n Other capital reserves (Non-distributable)\n
\nOther capital reserves includes \u20ac1,087m capital issued by the Company net of \u20ac7m capital redemption reserve from the repurchase and cancellation of shares and \u20ac224m incurred in the cancellation of the share capital and share premium of PTSB on the incorporation of the Company.
\n\n Retained earnings\n
\nRetained earnings include distributable and non-distributable earnings. This reserve represents the retained earnings of the holding company and subsidiaries after consolidation adjustments.
\n\u20ac10m (2021: \u20ac21m) coupon interest on the AT1 securities was paid from this reserve during 2022.
\n\n
\n Other equity instruments - Non-distributable\n
\n\n Additional Tier 1 Securities\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January \n \n | \n \n \n 123\n \n | \n \n 245 \n | \n
| \n Issued during the period \n | \n \n \n | \n \n \n | \n
| \n Additional Tier 1 Securities - net of the transaction costs \n | \n \n \n 245\n \n | \n \n - \n | \n
| \n \n Redemption during the period \n \n | \n \n \n | \n \n \n | \n
| \n Additional Tier 1 Securities (issued 2015) \n | \n \n \n -\n \n | \n \n (122) \n | \n
| \n \n Additional Tier 1 securities\n \n | \n \n \n 368\n \n | \n \n 123 \n | \n
On 26 October 2022, PTSBGH issued additional \u20ac250m AT1 Fixed Rate Reset Perpetual Temporary Write Down Securities. The transaction costs incurred were \u20ac5m. The first reset date for the fixed rate is 26 April 2028.
\nThe AT1 securities are perpetual and redeemable financial instruments with a semi-annual coupon of 13.25% paid in arrears on 26 April and 26 October of each year, commencing on 26 April 2023. On the first reset date on 26 April 2028, in the event the securities are not redeemed, interest will be reset to Euro 5 year Mid Swap rate plus a margin of 10.546% (converted from an annual to a semi-annual rate). The Company may elect at its full discretion at any time to cancel permanently (in whole or in part) the interest amount otherwise scheduled to be paid on an interest payment date.
\nOn 25 November 2020, PTSBGH issued \u20ac125m nominal value of AT1 Perpetual Temporary Write Down Securities as part of capital raise. The transaction costs incurred were \u20ac2m. The first reset date for the fixed rate is 25 May 2026.
\nThe AT1 securities are perpetual and redeemable financial instruments with a semi-annual coupon of 7.875% paid in arrears on 25 May and 25 November. On the first reset date on 25 May 2026, in the event the securities are not redeemed, interest will be reset to Euro 5 year Mid Swap rate plus a margin of 8.468% (converted from an annual to a semi-annual rate). The Company may elect at its full discretion at any time to cancel permanently (in whole or in part) the interest amount otherwise scheduled to be paid on an interest payment date.
\n \nThe Company may use such cancelled payments without restriction, including to make distributions or any other payments to the holders of its shares or any other securities issued by the Company. Any cancellation of interest payments will be permanent and on a non-cumulative basis and such cancellation will not give rise to or impose any restriction on the Company.
\nAlthough the AT1 securities are perpetual, the Company may, in its sole discretion, redeem the AT1 securities in full on any day falling in the period commencing 25 November 2025 and the first reset date above and on every interest payment date thereafter (subject to the approval of the Supervisory Authority) at the prevailing principal amount together with accrued but unpaid interest. In addition, the securities are redeemable at the option of the Company for certain regulatory or tax reasons, subject to regulatory approval.
\nThe securities, which do not carry voting rights, rank pari passu with holders of other tier 1 instruments (excluding the Company\u2019s ordinary shares). They rank ahead of the holders of ordinary share capital of the Company but junior to the claims of senior creditors and to Tier 2 capital of the Company.
\nUnder the EU (Bank Recovery and Resolution) Regulations 2015, these securities are loss absorbing at the point of non-viability.
\nOn the occurrence of a trigger event, at any time, any accrued and unpaid interest up to (but excluding) the write down date shall be automatically and irrevocably cancelled, and the then Prevailing Principal Amount of each Security shall be automatically and irrevocably reduced by the write down amount. This will occur if the CET1 Capital Ratio of PTSB or the Group at any time falls below 7%. Subsequent to any write-down event the Company may, at its sole discretion, write-up some or all of the written-down principal amount of the AT1 instrument provided regulatory capital requirements and certain conditions are met.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f192888": { "value": "\n\n Issued share capital \n
\nThe movement in the number of paid up ordinary shares is as follows:
\n| \n \n Balances as at 31 December 2022\n \n | \n \n \n \u20ac 0.50 Ordinary shares\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January 2022\n \n | \n \n \n 454,695,492\n \n | \n \n \n | \n
| \n \n Movement\n \n | \n \n \n 90,893,627\n \n | \n \n \n | \n
| \n \n As at 31 December 2022\n \n | \n \n \n 545,589,119\n \n | \n \n \n | \n
| \n \n Issued share capital (\u20acm)\n \n | \n \n \n 273\n \n | \n \n \n 273\n \n | \n
| \n \n Shares held under employee benefit trust\n \n | \n \n \n 4,580\n \n | \n \n \n | \n
| \n \n % of authorised capital issued\n \n | \n \n \n | \n \n \n 35%\n \n | \n
On 7 November 2022, the Group issued 90,893,627 shares at \u20ac5.68 per share as part of the consideration transferred for the Ulster Bank transaction. The share price on the issue date of \u20ac1.70 was recognised in Share Capital at \u20ac0.50 per share and the excess in Share Premium. The remaining premium of \u20ac3.98 is recognised in Share Premium and represents the gain on bargain purchase that is transferred from Retained Earnings to Share Premium as per below. See notes 2 and 3 for further detail.
\n| \n \n Balances as at 31 December 2021\n \n | \n \n \n \u20ac 0.50 Ordinary shares\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January 2021 \n | \n \n 454,695,492 \n | \n \n \n | \n
| \n Movement \n | \n \n - \n | \n \n \n | \n
| \n As at 31 December 2021 \n | \n \n 454,695,492 \n | \n \n \n | \n
| \n Issued share capital (\u20acm) \n | \n \n 227 \n | \n \n 227 \n | \n
| \n Shares held under employee benefit trust \n | \n \n 4,580 \n | \n \n \n | \n
| \n % of authorised capital issued \n | \n \n \n | \n \n 29% \n | \n
\n Other Reserves \n
\n\n Revaluation reserve (Non-distributable)\n
\nThe revaluation reserve is a non-distributable reserve comprising unrealised gains or losses, net of tax, on the revaluation of owner occupied properties.
\n\n Fair value reserve (Non-distributable) \n
\nThe fair value reserve comprises:
\n\n Other capital reserves (Non-distributable)\n
\nOther capital reserves includes \u20ac1,087m capital issued by the Company net of \u20ac7m capital redemption reserve from the repurchase and cancellation of shares and \u20ac224m incurred in the cancellation of the share capital and share premium of PTSB on the incorporation of the Company.
\n\n Retained earnings\n
\nRetained earnings include distributable and non-distributable earnings. This reserve represents the retained earnings of the holding company and subsidiaries after consolidation adjustments.
\n\u20ac10m (2021: \u20ac21m) coupon interest on the AT1 securities was paid from this reserve during 2022.
\n\n
\n Other equity instruments - Non-distributable\n
\n\n Additional Tier 1 Securities\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n As at 1 January \n \n | \n \n \n 123\n \n | \n \n 245 \n | \n
| \n Issued during the period \n | \n \n \n | \n \n \n | \n
| \n Additional Tier 1 Securities - net of the transaction costs \n | \n \n \n 245\n \n | \n \n - \n | \n
| \n \n Redemption during the period \n \n | \n \n \n | \n \n \n | \n
| \n Additional Tier 1 Securities (issued 2015) \n | \n \n \n -\n \n | \n \n (122) \n | \n
| \n \n Additional Tier 1 securities\n \n | \n \n \n 368\n \n | \n \n 123 \n | \n
\n 37. Measurement basis and fair values of financial instruments\n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1. The table below sets out an overview of financial instruments held by the Group and their fair values.
\n\n (a) Measurement basis and fair value of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 19,593\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 21,730\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 143\n \n | \n \n \n -\n \n | \n \n \n 38\n \n | \n \n \n 181\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n - \n | \n \n 20 \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n - \n | \n \n 4,174 \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n \n 1 \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n - \n | \n \n - \n | \n \n 2,494 \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n - \n | \n \n 26 \n | \n \n - \n | \n \n 26 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,256 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n - \n | \n \n 19,089 \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n - \n | \n \n - \n | \n \n 524 \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n - \n | \n \n - \n | \n \n 252 \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n - \n | \n \n 170 \n | \n \n 170 \n | \n
* In addition the Group had an other asset of \u20ac310m and an other liability of \u20ac48m in respect of the sale of the sale of the Glenbeigh III, both of which were settled in early 2022.
\nThe following table sets out the fair value of financial instruments that the Group holds at 31 December 2022. It categorises these financial instruments into the relevant level on the fair value hierarchy.
\nThe fair values of financial instruments are measured according to the following fair value hierarchy:
\n\n Basis and fair values of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n 30\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 20,059\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n 13\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n 2,526 \n | \n \n - \n | \n \n - \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n 26 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,050 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n 19,092 \n | \n \n - \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n 357 \n | \n \n 173 \n | \n \n - \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n 256 \n | \n \n - \n | \n \n - \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n
\n (b) Fair value measurement principles \n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1 and note 2 and contains details on the critical accounting estimates and judgements made by management in relation to the fair value measurement of financial instruments. The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
\nWhere possible, the Group calculates fair value using observable market prices in an active market. Where market prices are not available, fair values are determined using valuation techniques. These techniques are subjective in nature and may involve assumptions which are based upon management\u2019s view of market conditions at year end, which may not necessarily be indicative of any subsequent fair value. Any minor changes in the assumptions used could have a significant impact on the resulting estimated fair values and, as a result, it may be difficult for the users to make a reasonable comparison of the fair value information disclosed in this note, against that disclosed by other financial institutions or to evaluate the Group\u2019s financial position and, therefore, are advised to exercise caution in interpreting these fair values. Also the fair values disclosed above do not represent, nor should it be interpreted to represent, the underlying value of the Group as a going concern at the reporting date.
\n\n
\n Financial assets and financial liabilities not subsequently measured at fair value \n
\nOther than the HTC&S debt securities, derivative financial instruments and equity securities, all other financial assets and liabilities are not measured at fair value at the reporting date. A description of the methods and assumptions used to calculate fair values of these assets and liabilities is set out below.
\n\n Cash at bank \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature in an active market.
\n\n Items in course of collection \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature.
\n\n
\n Loans and advances to banks \n
\nFor the purposes of fair value valuation, loans and advances to banks have been treated as cash and cash equivalents. These loans and advances are repayable on demand and short-term in nature; hence, the fair value of each financial instrument is equal to their carrying value.
\n\n Loans and advances to customers \n
\nLoans and advances to customers are carried net of impairments. The Group uses a discounted cash flow valuation model to estimate the fair value for the ROI residential and commercial mortgages. Cash flows are discounted using the current weighted average interest rate based on the specific portfolio. The fair value calculation also takes into account loan impairment provisions at the balance sheet date. The carrying value of the consumer finance portfolio is considered equal to its fair value due to its short duration.
\n\n Debt securities (HTC securities)\n
\nDebt securities at 31 December 2022 are \u20ac3,177m (31 December 2021 \u20ac2,494m) and consist of HTC securities. HTC securities are derived from observable inputs through independent pricing sources such as Bloomberg. A weighted average method is used to apply the prices to the Group\u2019s retained holding in the securitisation.
\n\n Deposits by banks/customer accounts\n
\nThe estimated fair value of deposit liabilities and current accounts with no stated maturity which are repayable on demand (including non-interest bearing deposits), approximates to their book value. The estimated fair value of fixed-interest bearing deposits and other borrowings is based on discounted cash flows using interest rates for new deposits with similar remaining maturities.
\n\n Debt securities in issue/subordinated liabilities\n
\nThe fair values of debt securities in issue/subordinated liabilities are estimated using market prices of instruments that are substantially the same as those issued by the Group. Where a readily available market price is unavailable in relation to the instrument, an estimated price is calculated using observable market data for similar instruments. If observable market data is not available, an appropriate credit spread linked to similar instruments, is used within the valuation technique.
\n \n \n \n \n \n \n \n \n \n\n Financial assets and financial liabilities subsequently measured at fair value\n
\nOn initial recognition, all financial instruments are measured at fair value. Following this, the Group measures HTC&S financial assets at fair value through other comprehensive income. Derivative financial instruments are held for trading and fair valued through the income statement.
\n\n Derivative financial instruments\n
\nThe fair values of derivatives are determined using valuation techniques such as discounted cash flow and pricing models which are commonly used by market participants. These valuations are provided by third party brokers and the models used incorporate observable market inputs such as current interest rate, time to maturity, forward foreign exchange rates, yield curves and volatility measures.
\n\n Equity securities \n
\nPTSB Group holds Series A and Series B preferred stock in Visa Inc. at 31 December 2022. The Series A preferred stock was acquired during 2020 upon the conversion of Series B preferred stock by Visa Inc. These were fair valued at \u20ac30m at 31 December 2022 (31 December 2021: \u20ac26m) and are recognised in the statement of financial position at FVOCI.
\nThe fair values of the Series A preferred stock in Visa Inc. is classified as Level 1 and the fair value of the Series B preferred stock is classified as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data.
\n\n Fair value measurements recognised in the Statement of financial position\n
\n| \n \n 31 December 2022\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Equity instruments \n | \n \n \n 20\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets measured at fair value \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Equity instruments \n | \n \n 20 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities measured at fair value \n | \n \n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n Reconciliation of level 3 fair value measurements of financial assets\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Equity Instruments\n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January \n | \n \n \n 9 \n \n | \n \n 8 \n | \n
| \n Revaluation movement in OCI \u2013 fair value reserve (equity instruments) \n | \n \n \n - \n \n | \n \n 1 \n | \n
| \n Conversion of Series B preferred stock to Series A preferred stock \n | \n \n \n (5) \n \n | \n \n - \n | \n
| \n \n As at 31 December \n \n | \n \n \n 4 \n \n | \n \n 9 \n | \n
There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial assets.
\n\n Level 3 fair value measurements of financial liabilities\n
\nThere were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial liabilities. The level 3 of \u20ac12m relates to business combination forwards. The fair value of the forward derivative at the acquisition date was a liability of \u20ac16m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired. See notes 2 and 3 for further detail.
\n\n Level 3 sensitivity analysis\n
\nThe table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.
\nFinancial instruments
\n| \n \n 31 December 2022\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Visa Inc. Series B Preferred Stock\n \n | \n \n \n Quoted market price (Discounted)*\n \n | \n \n \n Final share conversion rate\n \n | \n \n \n 0 - 90%\n \n | \n \n \n 4\n \n | \n \n \n 0 - 90%\n \n | \n
* Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n| \n \n 31 December 2021\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable \n \n\n inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Visa Inc. Series B Preferred Stock \n | \n \n Quoted market price (Discounted)* \n | \n \n Final share conversion rate \n | \n \n 0 - 90% \n | \n \n 9 \n | \n \n 0 - 90% \n | \n
*Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n\n Significant unobservable inputs\n
\n\n Visa Inc. Series A and Series B preferred stock \n
\nThe Visa Inc. Series A preferred stock held by PTSB was acquired during 2020 upon the partial conversion of Series B preferred stock by Visa Inc. These Series A and B preferred stock were fair valued at \u20ac26m and \u20ac4m respectively at 31 December 2022 (31 December 2021: \u20ac17m and \u20ac9m) and are recognised in the statement of financial position at FVOCI.
\nValuation Methodology: The Visa Inc. Class A Common stock price and conversion ratios were applied to the PTSB shareholding of Visa Inc. Series A and Series B preferred shares at 31 December 2022 and 31 December 2021. Future conversions are calculated using discounted cash follows. The stock was revalued at the year-end exchange rate.
\nUnobservable input: The unobservable inputs are the discount factor used to discount the future conversions of Series B preferred stock.
\nThe Visa Inc. Series A and Series B preferred stock is denominated in US dollars and is exposed to FX risk.
\n \n \n \n \n \n \n \n \n \n\n Business combination forwards\n
\nThere was a transfer in to Level 3 per the fair value hierarchy of \u20ac12m. As noted in note 3 the business combination became binding on 7 November 2022.
\nValuation Methodology: The fair value of the forward derivative at 31 December 2022 was a liability of \u20ac12m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired.
\nUnobservable input: The unobservable inputs are the prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio. Taking account of the various uncertainties, Management estimate the range of changes in fair value on the receive leg (loans acquired) to be 95% to 105%, with no material change expected on the pay leg (the consideration).
\n \n \n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f193407": { "value": "\n \n \n \n\n 37. Measurement basis and fair values of financial instruments\n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1. The table below sets out an overview of financial instruments held by the Group and their fair values.
\n\n (a) Measurement basis and fair value of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 19,593\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 21,730\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 143\n \n | \n \n \n -\n \n | \n \n \n 38\n \n | \n \n \n 181\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n - \n | \n \n 20 \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n - \n | \n \n 4,174 \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n \n 1 \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n - \n | \n \n - \n | \n \n 2,494 \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n - \n | \n \n 26 \n | \n \n - \n | \n \n 26 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,256 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n - \n | \n \n 19,089 \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n - \n | \n \n - \n | \n \n 524 \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n - \n | \n \n - \n | \n \n 252 \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n - \n | \n \n 170 \n | \n \n 170 \n | \n
* In addition the Group had an other asset of \u20ac310m and an other liability of \u20ac48m in respect of the sale of the sale of the Glenbeigh III, both of which were settled in early 2022.
\nThe following table sets out the fair value of financial instruments that the Group holds at 31 December 2022. It categorises these financial instruments into the relevant level on the fair value hierarchy.
\nThe fair values of financial instruments are measured according to the following fair value hierarchy:
\n\n Basis and fair values of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n 30\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 20,059\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n 13\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n 2,526 \n | \n \n - \n | \n \n - \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n 26 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,050 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n 19,092 \n | \n \n - \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n 357 \n | \n \n 173 \n | \n \n - \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n 256 \n | \n \n - \n | \n \n - \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n
\n (b) Fair value measurement principles \n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1 and note 2 and contains details on the critical accounting estimates and judgements made by management in relation to the fair value measurement of financial instruments. The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
\nWhere possible, the Group calculates fair value using observable market prices in an active market. Where market prices are not available, fair values are determined using valuation techniques. These techniques are subjective in nature and may involve assumptions which are based upon management\u2019s view of market conditions at year end, which may not necessarily be indicative of any subsequent fair value. Any minor changes in the assumptions used could have a significant impact on the resulting estimated fair values and, as a result, it may be difficult for the users to make a reasonable comparison of the fair value information disclosed in this note, against that disclosed by other financial institutions or to evaluate the Group\u2019s financial position and, therefore, are advised to exercise caution in interpreting these fair values. Also the fair values disclosed above do not represent, nor should it be interpreted to represent, the underlying value of the Group as a going concern at the reporting date.
\n\n
\n Financial assets and financial liabilities not subsequently measured at fair value \n
\nOther than the HTC&S debt securities, derivative financial instruments and equity securities, all other financial assets and liabilities are not measured at fair value at the reporting date. A description of the methods and assumptions used to calculate fair values of these assets and liabilities is set out below.
\n\n Cash at bank \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature in an active market.
\n\n Items in course of collection \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature.
\n\n
\n Loans and advances to banks \n
\nFor the purposes of fair value valuation, loans and advances to banks have been treated as cash and cash equivalents. These loans and advances are repayable on demand and short-term in nature; hence, the fair value of each financial instrument is equal to their carrying value.
\n\n Loans and advances to customers \n
\nLoans and advances to customers are carried net of impairments. The Group uses a discounted cash flow valuation model to estimate the fair value for the ROI residential and commercial mortgages. Cash flows are discounted using the current weighted average interest rate based on the specific portfolio. The fair value calculation also takes into account loan impairment provisions at the balance sheet date. The carrying value of the consumer finance portfolio is considered equal to its fair value due to its short duration.
\n\n Debt securities (HTC securities)\n
\nDebt securities at 31 December 2022 are \u20ac3,177m (31 December 2021 \u20ac2,494m) and consist of HTC securities. HTC securities are derived from observable inputs through independent pricing sources such as Bloomberg. A weighted average method is used to apply the prices to the Group\u2019s retained holding in the securitisation.
\n\n Deposits by banks/customer accounts\n
\nThe estimated fair value of deposit liabilities and current accounts with no stated maturity which are repayable on demand (including non-interest bearing deposits), approximates to their book value. The estimated fair value of fixed-interest bearing deposits and other borrowings is based on discounted cash flows using interest rates for new deposits with similar remaining maturities.
\n\n Debt securities in issue/subordinated liabilities\n
\nThe fair values of debt securities in issue/subordinated liabilities are estimated using market prices of instruments that are substantially the same as those issued by the Group. Where a readily available market price is unavailable in relation to the instrument, an estimated price is calculated using observable market data for similar instruments. If observable market data is not available, an appropriate credit spread linked to similar instruments, is used within the valuation technique.
\n \n \n \n \n \n \n \n\n Financial assets and financial liabilities subsequently measured at fair value\n
\nOn initial recognition, all financial instruments are measured at fair value. Following this, the Group measures HTC&S financial assets at fair value through other comprehensive income. Derivative financial instruments are held for trading and fair valued through the income statement.
\n\n Derivative financial instruments\n
\nThe fair values of derivatives are determined using valuation techniques such as discounted cash flow and pricing models which are commonly used by market participants. These valuations are provided by third party brokers and the models used incorporate observable market inputs such as current interest rate, time to maturity, forward foreign exchange rates, yield curves and volatility measures.
\n\n Equity securities \n
\nPTSB Group holds Series A and Series B preferred stock in Visa Inc. at 31 December 2022. The Series A preferred stock was acquired during 2020 upon the conversion of Series B preferred stock by Visa Inc. These were fair valued at \u20ac30m at 31 December 2022 (31 December 2021: \u20ac26m) and are recognised in the statement of financial position at FVOCI.
\nThe fair values of the Series A preferred stock in Visa Inc. is classified as Level 1 and the fair value of the Series B preferred stock is classified as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data.
\n\n Fair value measurements recognised in the Statement of financial position\n
\n| \n \n 31 December 2022\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Equity instruments \n | \n \n \n 20\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets measured at fair value \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Equity instruments \n | \n \n 20 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities measured at fair value \n | \n \n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n Reconciliation of level 3 fair value measurements of financial assets\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Equity Instruments\n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January \n | \n \n \n 9 \n \n | \n \n 8 \n | \n
| \n Revaluation movement in OCI \u2013 fair value reserve (equity instruments) \n | \n \n \n - \n \n | \n \n 1 \n | \n
| \n Conversion of Series B preferred stock to Series A preferred stock \n | \n \n \n (5) \n \n | \n \n - \n | \n
| \n \n As at 31 December \n \n | \n \n \n 4 \n \n | \n \n 9 \n | \n
There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial assets.
\n\n Level 3 fair value measurements of financial liabilities\n
\nThere were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial liabilities. The level 3 of \u20ac12m relates to business combination forwards. The fair value of the forward derivative at the acquisition date was a liability of \u20ac16m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired. See notes 2 and 3 for further detail.
\n\n Level 3 sensitivity analysis\n
\nThe table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.
\nFinancial instruments
\n| \n \n 31 December 2022\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Visa Inc. Series B Preferred Stock\n \n | \n \n \n Quoted market price (Discounted)*\n \n | \n \n \n Final share conversion rate\n \n | \n \n \n 0 - 90%\n \n | \n \n \n 4\n \n | \n \n \n 0 - 90%\n \n | \n
* Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n| \n \n 31 December 2021\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable \n \n\n inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Visa Inc. Series B Preferred Stock \n | \n \n Quoted market price (Discounted)* \n | \n \n Final share conversion rate \n | \n \n 0 - 90% \n | \n \n 9 \n | \n \n 0 - 90% \n | \n
*Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n\n Significant unobservable inputs\n
\n\n Visa Inc. Series A and Series B preferred stock \n
\nThe Visa Inc. Series A preferred stock held by PTSB was acquired during 2020 upon the partial conversion of Series B preferred stock by Visa Inc. These Series A and B preferred stock were fair valued at \u20ac26m and \u20ac4m respectively at 31 December 2022 (31 December 2021: \u20ac17m and \u20ac9m) and are recognised in the statement of financial position at FVOCI.
\nValuation Methodology: The Visa Inc. Class A Common stock price and conversion ratios were applied to the PTSB shareholding of Visa Inc. Series A and Series B preferred shares at 31 December 2022 and 31 December 2021. Future conversions are calculated using discounted cash follows. The stock was revalued at the year-end exchange rate.
\nUnobservable input: The unobservable inputs are the discount factor used to discount the future conversions of Series B preferred stock.
\nThe Visa Inc. Series A and Series B preferred stock is denominated in US dollars and is exposed to FX risk.
\n \n \n \n \n \n \n \n\n Business combination forwards\n
\nThere was a transfer in to Level 3 per the fair value hierarchy of \u20ac12m. As noted in note 3 the business combination became binding on 7 November 2022.
\nValuation Methodology: The fair value of the forward derivative at 31 December 2022 was a liability of \u20ac12m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired.
\nUnobservable input: The unobservable inputs are the prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio. Taking account of the various uncertainties, Management estimate the range of changes in fair value on the receive leg (loans acquired) to be 95% to 105%, with no material change expected on the pay leg (the consideration).
\n \n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f193408": { "value": "\n \n \n\n 37. Measurement basis and fair values of financial instruments\n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1. The table below sets out an overview of financial instruments held by the Group and their fair values.
\n\n (a) Measurement basis and fair value of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 19,593\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 21,730\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 143\n \n | \n \n \n -\n \n | \n \n \n 38\n \n | \n \n \n 181\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n - \n | \n \n 20 \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n - \n | \n \n 4,174 \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n \n 1 \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n - \n | \n \n - \n | \n \n 2,494 \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n - \n | \n \n 26 \n | \n \n - \n | \n \n 26 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,256 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n - \n | \n \n 19,089 \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n - \n | \n \n - \n | \n \n 524 \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n - \n | \n \n - \n | \n \n 252 \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n - \n | \n \n 170 \n | \n \n 170 \n | \n
* In addition the Group had an other asset of \u20ac310m and an other liability of \u20ac48m in respect of the sale of the sale of the Glenbeigh III, both of which were settled in early 2022.
\nThe following table sets out the fair value of financial instruments that the Group holds at 31 December 2022. It categorises these financial instruments into the relevant level on the fair value hierarchy.
\nThe fair values of financial instruments are measured according to the following fair value hierarchy:
\n\n Basis and fair values of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n 30\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 20,059\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n 13\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n 2,526 \n | \n \n - \n | \n \n - \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n 26 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,050 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n 19,092 \n | \n \n - \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n 357 \n | \n \n 173 \n | \n \n - \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n 256 \n | \n \n - \n | \n \n - \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n
\n (b) Fair value measurement principles \n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1 and note 2 and contains details on the critical accounting estimates and judgements made by management in relation to the fair value measurement of financial instruments. The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
\nWhere possible, the Group calculates fair value using observable market prices in an active market. Where market prices are not available, fair values are determined using valuation techniques. These techniques are subjective in nature and may involve assumptions which are based upon management\u2019s view of market conditions at year end, which may not necessarily be indicative of any subsequent fair value. Any minor changes in the assumptions used could have a significant impact on the resulting estimated fair values and, as a result, it may be difficult for the users to make a reasonable comparison of the fair value information disclosed in this note, against that disclosed by other financial institutions or to evaluate the Group\u2019s financial position and, therefore, are advised to exercise caution in interpreting these fair values. Also the fair values disclosed above do not represent, nor should it be interpreted to represent, the underlying value of the Group as a going concern at the reporting date.
\n\n
\n Financial assets and financial liabilities not subsequently measured at fair value \n
\nOther than the HTC&S debt securities, derivative financial instruments and equity securities, all other financial assets and liabilities are not measured at fair value at the reporting date. A description of the methods and assumptions used to calculate fair values of these assets and liabilities is set out below.
\n\n Cash at bank \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature in an active market.
\n\n Items in course of collection \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature.
\n\n
\n Loans and advances to banks \n
\nFor the purposes of fair value valuation, loans and advances to banks have been treated as cash and cash equivalents. These loans and advances are repayable on demand and short-term in nature; hence, the fair value of each financial instrument is equal to their carrying value.
\n\n Loans and advances to customers \n
\nLoans and advances to customers are carried net of impairments. The Group uses a discounted cash flow valuation model to estimate the fair value for the ROI residential and commercial mortgages. Cash flows are discounted using the current weighted average interest rate based on the specific portfolio. The fair value calculation also takes into account loan impairment provisions at the balance sheet date. The carrying value of the consumer finance portfolio is considered equal to its fair value due to its short duration.
\n\n Debt securities (HTC securities)\n
\nDebt securities at 31 December 2022 are \u20ac3,177m (31 December 2021 \u20ac2,494m) and consist of HTC securities. HTC securities are derived from observable inputs through independent pricing sources such as Bloomberg. A weighted average method is used to apply the prices to the Group\u2019s retained holding in the securitisation.
\n\n Deposits by banks/customer accounts\n
\nThe estimated fair value of deposit liabilities and current accounts with no stated maturity which are repayable on demand (including non-interest bearing deposits), approximates to their book value. The estimated fair value of fixed-interest bearing deposits and other borrowings is based on discounted cash flows using interest rates for new deposits with similar remaining maturities.
\n\n Debt securities in issue/subordinated liabilities\n
\nThe fair values of debt securities in issue/subordinated liabilities are estimated using market prices of instruments that are substantially the same as those issued by the Group. Where a readily available market price is unavailable in relation to the instrument, an estimated price is calculated using observable market data for similar instruments. If observable market data is not available, an appropriate credit spread linked to similar instruments, is used within the valuation technique.
\n \n \n \n \n \n\n Financial assets and financial liabilities subsequently measured at fair value\n
\nOn initial recognition, all financial instruments are measured at fair value. Following this, the Group measures HTC&S financial assets at fair value through other comprehensive income. Derivative financial instruments are held for trading and fair valued through the income statement.
\n\n Derivative financial instruments\n
\nThe fair values of derivatives are determined using valuation techniques such as discounted cash flow and pricing models which are commonly used by market participants. These valuations are provided by third party brokers and the models used incorporate observable market inputs such as current interest rate, time to maturity, forward foreign exchange rates, yield curves and volatility measures.
\n\n Equity securities \n
\nPTSB Group holds Series A and Series B preferred stock in Visa Inc. at 31 December 2022. The Series A preferred stock was acquired during 2020 upon the conversion of Series B preferred stock by Visa Inc. These were fair valued at \u20ac30m at 31 December 2022 (31 December 2021: \u20ac26m) and are recognised in the statement of financial position at FVOCI.
\nThe fair values of the Series A preferred stock in Visa Inc. is classified as Level 1 and the fair value of the Series B preferred stock is classified as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data.
\n\n Fair value measurements recognised in the Statement of financial position\n
\n| \n \n 31 December 2022\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Equity instruments \n | \n \n \n 20\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets measured at fair value \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Equity instruments \n | \n \n 20 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities measured at fair value \n | \n \n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n Reconciliation of level 3 fair value measurements of financial assets\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Equity Instruments\n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January \n | \n \n \n 9 \n \n | \n \n 8 \n | \n
| \n Revaluation movement in OCI \u2013 fair value reserve (equity instruments) \n | \n \n \n - \n \n | \n \n 1 \n | \n
| \n Conversion of Series B preferred stock to Series A preferred stock \n | \n \n \n (5) \n \n | \n \n - \n | \n
| \n \n As at 31 December \n \n | \n \n \n 4 \n \n | \n \n 9 \n | \n
There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial assets.
\n\n Level 3 fair value measurements of financial liabilities\n
\nThere were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial liabilities. The level 3 of \u20ac12m relates to business combination forwards. The fair value of the forward derivative at the acquisition date was a liability of \u20ac16m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired. See notes 2 and 3 for further detail.
\n\n Level 3 sensitivity analysis\n
\nThe table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.
\nFinancial instruments
\n| \n \n 31 December 2022\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Visa Inc. Series B Preferred Stock\n \n | \n \n \n Quoted market price (Discounted)*\n \n | \n \n \n Final share conversion rate\n \n | \n \n \n 0 - 90%\n \n | \n \n \n 4\n \n | \n \n \n 0 - 90%\n \n | \n
* Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n| \n \n 31 December 2021\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable \n \n\n inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Visa Inc. Series B Preferred Stock \n | \n \n Quoted market price (Discounted)* \n | \n \n Final share conversion rate \n | \n \n 0 - 90% \n | \n \n 9 \n | \n \n 0 - 90% \n | \n
*Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n\n Significant unobservable inputs\n
\n\n Visa Inc. Series A and Series B preferred stock \n
\nThe Visa Inc. Series A preferred stock held by PTSB was acquired during 2020 upon the partial conversion of Series B preferred stock by Visa Inc. These Series A and B preferred stock were fair valued at \u20ac26m and \u20ac4m respectively at 31 December 2022 (31 December 2021: \u20ac17m and \u20ac9m) and are recognised in the statement of financial position at FVOCI.
\nValuation Methodology: The Visa Inc. Class A Common stock price and conversion ratios were applied to the PTSB shareholding of Visa Inc. Series A and Series B preferred shares at 31 December 2022 and 31 December 2021. Future conversions are calculated using discounted cash follows. The stock was revalued at the year-end exchange rate.
\nUnobservable input: The unobservable inputs are the discount factor used to discount the future conversions of Series B preferred stock.
\nThe Visa Inc. Series A and Series B preferred stock is denominated in US dollars and is exposed to FX risk.
\n \n \n \n \n \n\n Business combination forwards\n
\nThere was a transfer in to Level 3 per the fair value hierarchy of \u20ac12m. As noted in note 3 the business combination became binding on 7 November 2022.
\nValuation Methodology: The fair value of the forward derivative at 31 December 2022 was a liability of \u20ac12m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired.
\nUnobservable input: The unobservable inputs are the prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio. Taking account of the various uncertainties, Management estimate the range of changes in fair value on the receive leg (loans acquired) to be 95% to 105%, with no material change expected on the pay leg (the consideration).
\n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f193409": { "value": "\n \n\n 37. Measurement basis and fair values of financial instruments\n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1. The table below sets out an overview of financial instruments held by the Group and their fair values.
\n\n (a) Measurement basis and fair value of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 19,593\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 21,730\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 143\n \n | \n \n \n -\n \n | \n \n \n 38\n \n | \n \n \n 181\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n - \n | \n \n 20 \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n - \n | \n \n 4,174 \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n \n 1 \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n - \n | \n \n - \n | \n \n 2,494 \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n - \n | \n \n 26 \n | \n \n - \n | \n \n 26 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,256 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n - \n | \n \n 19,089 \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n - \n | \n \n - \n | \n \n 524 \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n - \n | \n \n - \n | \n \n 252 \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n - \n | \n \n 170 \n | \n \n 170 \n | \n
* In addition the Group had an other asset of \u20ac310m and an other liability of \u20ac48m in respect of the sale of the sale of the Glenbeigh III, both of which were settled in early 2022.
\nThe following table sets out the fair value of financial instruments that the Group holds at 31 December 2022. It categorises these financial instruments into the relevant level on the fair value hierarchy.
\nThe fair values of financial instruments are measured according to the following fair value hierarchy:
\n\n Basis and fair values of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n 30\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 20,059\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n 13\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n 2,526 \n | \n \n - \n | \n \n - \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n 26 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,050 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n 19,092 \n | \n \n - \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n 357 \n | \n \n 173 \n | \n \n - \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n 256 \n | \n \n - \n | \n \n - \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n
\n (b) Fair value measurement principles \n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1 and note 2 and contains details on the critical accounting estimates and judgements made by management in relation to the fair value measurement of financial instruments. The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
\nWhere possible, the Group calculates fair value using observable market prices in an active market. Where market prices are not available, fair values are determined using valuation techniques. These techniques are subjective in nature and may involve assumptions which are based upon management\u2019s view of market conditions at year end, which may not necessarily be indicative of any subsequent fair value. Any minor changes in the assumptions used could have a significant impact on the resulting estimated fair values and, as a result, it may be difficult for the users to make a reasonable comparison of the fair value information disclosed in this note, against that disclosed by other financial institutions or to evaluate the Group\u2019s financial position and, therefore, are advised to exercise caution in interpreting these fair values. Also the fair values disclosed above do not represent, nor should it be interpreted to represent, the underlying value of the Group as a going concern at the reporting date.
\n\n
\n Financial assets and financial liabilities not subsequently measured at fair value \n
\nOther than the HTC&S debt securities, derivative financial instruments and equity securities, all other financial assets and liabilities are not measured at fair value at the reporting date. A description of the methods and assumptions used to calculate fair values of these assets and liabilities is set out below.
\n\n Cash at bank \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature in an active market.
\n\n Items in course of collection \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature.
\n\n
\n Loans and advances to banks \n
\nFor the purposes of fair value valuation, loans and advances to banks have been treated as cash and cash equivalents. These loans and advances are repayable on demand and short-term in nature; hence, the fair value of each financial instrument is equal to their carrying value.
\n\n Loans and advances to customers \n
\nLoans and advances to customers are carried net of impairments. The Group uses a discounted cash flow valuation model to estimate the fair value for the ROI residential and commercial mortgages. Cash flows are discounted using the current weighted average interest rate based on the specific portfolio. The fair value calculation also takes into account loan impairment provisions at the balance sheet date. The carrying value of the consumer finance portfolio is considered equal to its fair value due to its short duration.
\n\n Debt securities (HTC securities)\n
\nDebt securities at 31 December 2022 are \u20ac3,177m (31 December 2021 \u20ac2,494m) and consist of HTC securities. HTC securities are derived from observable inputs through independent pricing sources such as Bloomberg. A weighted average method is used to apply the prices to the Group\u2019s retained holding in the securitisation.
\n\n Deposits by banks/customer accounts\n
\nThe estimated fair value of deposit liabilities and current accounts with no stated maturity which are repayable on demand (including non-interest bearing deposits), approximates to their book value. The estimated fair value of fixed-interest bearing deposits and other borrowings is based on discounted cash flows using interest rates for new deposits with similar remaining maturities.
\n\n Debt securities in issue/subordinated liabilities\n
\nThe fair values of debt securities in issue/subordinated liabilities are estimated using market prices of instruments that are substantially the same as those issued by the Group. Where a readily available market price is unavailable in relation to the instrument, an estimated price is calculated using observable market data for similar instruments. If observable market data is not available, an appropriate credit spread linked to similar instruments, is used within the valuation technique.
\n \n \n \n\n Financial assets and financial liabilities subsequently measured at fair value\n
\nOn initial recognition, all financial instruments are measured at fair value. Following this, the Group measures HTC&S financial assets at fair value through other comprehensive income. Derivative financial instruments are held for trading and fair valued through the income statement.
\n\n Derivative financial instruments\n
\nThe fair values of derivatives are determined using valuation techniques such as discounted cash flow and pricing models which are commonly used by market participants. These valuations are provided by third party brokers and the models used incorporate observable market inputs such as current interest rate, time to maturity, forward foreign exchange rates, yield curves and volatility measures.
\n\n Equity securities \n
\nPTSB Group holds Series A and Series B preferred stock in Visa Inc. at 31 December 2022. The Series A preferred stock was acquired during 2020 upon the conversion of Series B preferred stock by Visa Inc. These were fair valued at \u20ac30m at 31 December 2022 (31 December 2021: \u20ac26m) and are recognised in the statement of financial position at FVOCI.
\nThe fair values of the Series A preferred stock in Visa Inc. is classified as Level 1 and the fair value of the Series B preferred stock is classified as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data.
\n\n Fair value measurements recognised in the Statement of financial position\n
\n| \n \n 31 December 2022\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Equity instruments \n | \n \n \n 20\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets measured at fair value \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Equity instruments \n | \n \n 20 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities measured at fair value \n | \n \n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n Reconciliation of level 3 fair value measurements of financial assets\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Equity Instruments\n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January \n | \n \n \n 9 \n \n | \n \n 8 \n | \n
| \n Revaluation movement in OCI \u2013 fair value reserve (equity instruments) \n | \n \n \n - \n \n | \n \n 1 \n | \n
| \n Conversion of Series B preferred stock to Series A preferred stock \n | \n \n \n (5) \n \n | \n \n - \n | \n
| \n \n As at 31 December \n \n | \n \n \n 4 \n \n | \n \n 9 \n | \n
There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial assets.
\n\n Level 3 fair value measurements of financial liabilities\n
\nThere were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial liabilities. The level 3 of \u20ac12m relates to business combination forwards. The fair value of the forward derivative at the acquisition date was a liability of \u20ac16m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired. See notes 2 and 3 for further detail.
\n\n Level 3 sensitivity analysis\n
\nThe table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.
\nFinancial instruments
\n| \n \n 31 December 2022\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Visa Inc. Series B Preferred Stock\n \n | \n \n \n Quoted market price (Discounted)*\n \n | \n \n \n Final share conversion rate\n \n | \n \n \n 0 - 90%\n \n | \n \n \n 4\n \n | \n \n \n 0 - 90%\n \n | \n
* Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n| \n \n 31 December 2021\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable \n \n\n inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Visa Inc. Series B Preferred Stock \n | \n \n Quoted market price (Discounted)* \n | \n \n Final share conversion rate \n | \n \n 0 - 90% \n | \n \n 9 \n | \n \n 0 - 90% \n | \n
*Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n\n Significant unobservable inputs\n
\n\n Visa Inc. Series A and Series B preferred stock \n
\nThe Visa Inc. Series A preferred stock held by PTSB was acquired during 2020 upon the partial conversion of Series B preferred stock by Visa Inc. These Series A and B preferred stock were fair valued at \u20ac26m and \u20ac4m respectively at 31 December 2022 (31 December 2021: \u20ac17m and \u20ac9m) and are recognised in the statement of financial position at FVOCI.
\nValuation Methodology: The Visa Inc. Class A Common stock price and conversion ratios were applied to the PTSB shareholding of Visa Inc. Series A and Series B preferred shares at 31 December 2022 and 31 December 2021. Future conversions are calculated using discounted cash follows. The stock was revalued at the year-end exchange rate.
\nUnobservable input: The unobservable inputs are the discount factor used to discount the future conversions of Series B preferred stock.
\nThe Visa Inc. Series A and Series B preferred stock is denominated in US dollars and is exposed to FX risk.
\n \n \n \n\n Business combination forwards\n
\nThere was a transfer in to Level 3 per the fair value hierarchy of \u20ac12m. As noted in note 3 the business combination became binding on 7 November 2022.
\nValuation Methodology: The fair value of the forward derivative at 31 December 2022 was a liability of \u20ac12m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired.
\nUnobservable input: The unobservable inputs are the prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio. Taking account of the various uncertainties, Management estimate the range of changes in fair value on the receive leg (loans acquired) to be 95% to 105%, with no material change expected on the pay leg (the consideration).
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f193410": { "value": "\n\n 37. Measurement basis and fair values of financial instruments\n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1. The table below sets out an overview of financial instruments held by the Group and their fair values.
\n\n (a) Measurement basis and fair value of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 19,593\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 21,730\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 143\n \n | \n \n \n -\n \n | \n \n \n 38\n \n | \n \n \n 181\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Held at \n \n\n amortised cost\n \n | \n \n \n At fair value through OCI\n \n | \n \n \n At fair value through profit or loss\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n - \n | \n \n 20 \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n - \n | \n \n 4,174 \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n 1 \n | \n \n 1 \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n - \n | \n \n - \n | \n \n 2,494 \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n - \n | \n \n 26 \n | \n \n - \n | \n \n 26 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,256 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities* \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n - \n | \n \n 19,089 \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n - \n | \n \n - \n | \n \n 524 \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n - \n | \n \n - \n | \n \n 252 \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n - \n | \n \n 170 \n | \n \n 170 \n | \n
* In addition the Group had an other asset of \u20ac310m and an other liability of \u20ac48m in respect of the sale of the sale of the Glenbeigh III, both of which were settled in early 2022.
\nThe following table sets out the fair value of financial instruments that the Group holds at 31 December 2022. It categorises these financial instruments into the relevant level on the fair value hierarchy.
\nThe fair values of financial instruments are measured according to the following fair value hierarchy:
\n\n Basis and fair values of financial instruments\n
\n| \n \n 31 December 2022\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n \n 2,929\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 2,929\n \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n \n 30\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 20,059\n \n | \n \n \n 20,059\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,730\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n \n \n -\n \n | \n \n \n 21,726\n \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n 13\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 658\n \n | \n \n \n 634\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 634\n \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 252\n \n | \n \n \n 204\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 204\n \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n \n \n -\n \n | \n \n \n 181\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Note\n \n | \n \n \n Total carrying \n \n\n value\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total fair\n \n\n value\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n 57 \n | \n \n 57 \n | \n \n - \n | \n \n - \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n 2,494 \n | \n \n 2,526 \n | \n \n - \n | \n \n - \n | \n \n 2,526 \n | \n
| \n Equity securities \n | \n \n 20 \n | \n \n 26 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n 14,256 \n | \n \n - \n | \n \n - \n | \n \n 14,050 \n | \n \n 14,050 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n 19,089 \n | \n \n - \n | \n \n 19,092 \n | \n \n - \n | \n \n 19,092 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n 524 \n | \n \n 357 \n | \n \n 173 \n | \n \n - \n | \n \n 530 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n 252 \n | \n \n 256 \n | \n \n - \n | \n \n - \n | \n \n 256 \n | \n
| \n Other financial liabilities \n | \n \n 31 \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n \n - \n | \n \n 170 \n | \n
\n (b) Fair value measurement principles \n
\nThe Group\u2019s accounting policy on valuation of financial instruments is described in note 1 and note 2 and contains details on the critical accounting estimates and judgements made by management in relation to the fair value measurement of financial instruments. The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
\nWhere possible, the Group calculates fair value using observable market prices in an active market. Where market prices are not available, fair values are determined using valuation techniques. These techniques are subjective in nature and may involve assumptions which are based upon management\u2019s view of market conditions at year end, which may not necessarily be indicative of any subsequent fair value. Any minor changes in the assumptions used could have a significant impact on the resulting estimated fair values and, as a result, it may be difficult for the users to make a reasonable comparison of the fair value information disclosed in this note, against that disclosed by other financial institutions or to evaluate the Group\u2019s financial position and, therefore, are advised to exercise caution in interpreting these fair values. Also the fair values disclosed above do not represent, nor should it be interpreted to represent, the underlying value of the Group as a going concern at the reporting date.
\n\n
\n Financial assets and financial liabilities not subsequently measured at fair value \n
\nOther than the HTC&S debt securities, derivative financial instruments and equity securities, all other financial assets and liabilities are not measured at fair value at the reporting date. A description of the methods and assumptions used to calculate fair values of these assets and liabilities is set out below.
\n\n Cash at bank \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature in an active market.
\n\n Items in course of collection \n
\nThe fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature.
\n\n
\n Loans and advances to banks \n
\nFor the purposes of fair value valuation, loans and advances to banks have been treated as cash and cash equivalents. These loans and advances are repayable on demand and short-term in nature; hence, the fair value of each financial instrument is equal to their carrying value.
\n\n Loans and advances to customers \n
\nLoans and advances to customers are carried net of impairments. The Group uses a discounted cash flow valuation model to estimate the fair value for the ROI residential and commercial mortgages. Cash flows are discounted using the current weighted average interest rate based on the specific portfolio. The fair value calculation also takes into account loan impairment provisions at the balance sheet date. The carrying value of the consumer finance portfolio is considered equal to its fair value due to its short duration.
\n\n Debt securities (HTC securities)\n
\nDebt securities at 31 December 2022 are \u20ac3,177m (31 December 2021 \u20ac2,494m) and consist of HTC securities. HTC securities are derived from observable inputs through independent pricing sources such as Bloomberg. A weighted average method is used to apply the prices to the Group\u2019s retained holding in the securitisation.
\n\n Deposits by banks/customer accounts\n
\nThe estimated fair value of deposit liabilities and current accounts with no stated maturity which are repayable on demand (including non-interest bearing deposits), approximates to their book value. The estimated fair value of fixed-interest bearing deposits and other borrowings is based on discounted cash flows using interest rates for new deposits with similar remaining maturities.
\n\n Debt securities in issue/subordinated liabilities\n
\nThe fair values of debt securities in issue/subordinated liabilities are estimated using market prices of instruments that are substantially the same as those issued by the Group. Where a readily available market price is unavailable in relation to the instrument, an estimated price is calculated using observable market data for similar instruments. If observable market data is not available, an appropriate credit spread linked to similar instruments, is used within the valuation technique.
\n \n\n Financial assets and financial liabilities subsequently measured at fair value\n
\nOn initial recognition, all financial instruments are measured at fair value. Following this, the Group measures HTC&S financial assets at fair value through other comprehensive income. Derivative financial instruments are held for trading and fair valued through the income statement.
\n\n Derivative financial instruments\n
\nThe fair values of derivatives are determined using valuation techniques such as discounted cash flow and pricing models which are commonly used by market participants. These valuations are provided by third party brokers and the models used incorporate observable market inputs such as current interest rate, time to maturity, forward foreign exchange rates, yield curves and volatility measures.
\n\n Equity securities \n
\nPTSB Group holds Series A and Series B preferred stock in Visa Inc. at 31 December 2022. The Series A preferred stock was acquired during 2020 upon the conversion of Series B preferred stock by Visa Inc. These were fair valued at \u20ac30m at 31 December 2022 (31 December 2021: \u20ac26m) and are recognised in the statement of financial position at FVOCI.
\nThe fair values of the Series A preferred stock in Visa Inc. is classified as Level 1 and the fair value of the Series B preferred stock is classified as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data.
\n\n Fair value measurements recognised in the Statement of financial position\n
\n| \n \n 31 December 2022\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial assets measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Equity instruments \n | \n \n \n 20\n \n | \n \n \n 26\n \n | \n \n \n -\n \n | \n \n \n 4\n \n | \n \n \n 30\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Financial liabilities measured at fair value\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n \n 16\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 12\n \n | \n \n \n 13\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Notes\n \n | \n \n \n Level 1\n \n | \n \n \n Level 2\n \n | \n \n \n Level 3\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial assets measured at fair value \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Equity instruments \n | \n \n 20 \n | \n \n 17 \n | \n \n - \n | \n \n 9 \n | \n \n 26 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Financial liabilities measured at fair value \n | \n \n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Derivative financial instrument \n | \n \n 16 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n Reconciliation of level 3 fair value measurements of financial assets\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Equity Instruments\n \n | \n \n \n | \n \n \n | \n
| \n As at 1 January \n | \n \n \n 9 \n \n | \n \n 8 \n | \n
| \n Revaluation movement in OCI \u2013 fair value reserve (equity instruments) \n | \n \n \n - \n \n | \n \n 1 \n | \n
| \n Conversion of Series B preferred stock to Series A preferred stock \n | \n \n \n (5) \n \n | \n \n - \n | \n
| \n \n As at 31 December \n \n | \n \n \n 4 \n \n | \n \n 9 \n | \n
There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial assets.
\n\n Level 3 fair value measurements of financial liabilities\n
\nThere were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2022 or 2021 for financial liabilities. The level 3 of \u20ac12m relates to business combination forwards. The fair value of the forward derivative at the acquisition date was a liability of \u20ac16m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired. See notes 2 and 3 for further detail.
\n\n Level 3 sensitivity analysis\n
\nThe table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.
\nFinancial instruments
\n| \n \n 31 December 2022\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Visa Inc. Series B Preferred Stock\n \n | \n \n \n Quoted market price (Discounted)*\n \n | \n \n \n Final share conversion rate\n \n | \n \n \n 0 - 90%\n \n | \n \n \n 4\n \n | \n \n \n 0 - 90%\n \n | \n
* Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n| \n \n 31 December 2021\n \n | \n \n \n Valuation technique \n \n | \n \n \n Significant unobservable \n \n\n inputs \n \n | \n \n \n Range of estimates for unobservable inputs\n \n | \n \n \n Fair value\n \n\n \u20acm\n \n | \n \n \n Ranges of estimates\n \n\n changes in the fair value\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Visa Inc. Series B Preferred Stock \n | \n \n Quoted market price (Discounted)* \n | \n \n Final share conversion rate \n | \n \n 0 - 90% \n | \n \n 9 \n | \n \n 0 - 90% \n | \n
*Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
\n\n Significant unobservable inputs\n
\n\n Visa Inc. Series A and Series B preferred stock \n
\nThe Visa Inc. Series A preferred stock held by PTSB was acquired during 2020 upon the partial conversion of Series B preferred stock by Visa Inc. These Series A and B preferred stock were fair valued at \u20ac26m and \u20ac4m respectively at 31 December 2022 (31 December 2021: \u20ac17m and \u20ac9m) and are recognised in the statement of financial position at FVOCI.
\nValuation Methodology: The Visa Inc. Class A Common stock price and conversion ratios were applied to the PTSB shareholding of Visa Inc. Series A and Series B preferred shares at 31 December 2022 and 31 December 2021. Future conversions are calculated using discounted cash follows. The stock was revalued at the year-end exchange rate.
\nUnobservable input: The unobservable inputs are the discount factor used to discount the future conversions of Series B preferred stock.
\nThe Visa Inc. Series A and Series B preferred stock is denominated in US dollars and is exposed to FX risk.
\n \n\n Business combination forwards\n
\nThere was a transfer in to Level 3 per the fair value hierarchy of \u20ac12m. As noted in note 3 the business combination became binding on 7 November 2022.
\nValuation Methodology: The fair value of the forward derivative at 31 December 2022 was a liability of \u20ac12m. This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired.
\nUnobservable input: The unobservable inputs are the prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio. Taking account of the various uncertainties, Management estimate the range of changes in fair value on the receive leg (loans acquired) to be 95% to 105%, with no material change expected on the pay leg (the consideration).
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f195392": { "value": "\n \n \n \n\n 38. Financial risk management\n
\n\n Maximum exposure to credit risk before collateral held or other credit enhancements\n
\nThe following table outlines the maximum exposure to credit risk before collateral held or other credit enhancements in respect of the Group\u2019s financial assets as at the statement of financial position date.
\n| \n \n | \n \n \n Notes\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n 57 \n | \n
| \n Items in course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n 20 \n | \n
| \n Loans and advances to banks (iii) \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments (ii) \n | \n \n 16 \n | \n \n \n -\n \n | \n \n 1 \n | \n
| \n Debt securities (i) \n | \n \n 19 \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
| \n Loans and advances to customers (iv) \n | \n \n 22 \n | \n \n \n 19,593\n \n | \n \n 14,256 \n | \n
| \n \n | \n \n \n | \n \n \n 24,991\n \n | \n \n 21,002 \n | \n
| \n Commitments and contingencies \n | \n \n 43 \n | \n \n \n 1,342\n \n | \n \n 1,181 \n | \n
| \n \n | \n \n \n | \n \n \n 26,333\n \n | \n \n 22,183 \n | \n
\n The following tables outline the Group\u2019s exposure to credit risk by asset class\n
\n\n (i) Debt securities\n
\nThe Group is exposed to the credit risk on third parties where the Group holds debt securities (primarily sovereign debt). These exposures are subject to the limitations contained within Board approved policies, with sovereign debt restricted to those countries that have an External Credit Assessment Institution (ECAI) rating of investment grade.
\nThe following table gives an indication of the level of the credit worthiness of the Group\u2019s debt securities and is based on the Group\u2019s internal rating policy which was approved by the CBI. The inputs to the ratings used in the table below are those prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the EU.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating\n \n | \n \n \n | \n \n \n | \n
| \n Aaa \n | \n \n \n 49\n \n | \n \n 60 \n | \n
| \n AA+ \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n Aa2 \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n A1 \n | \n \n \n 1,734\n \n | \n \n - \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 1,463 \n | \n
| \n Baa1 \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n Baa2 \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Baa3 \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
The following table discloses, by country, the Group\u2019s exposure to sovereign debt and corporate debt as at:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Country\n \n | \n \n \n | \n \n \n | \n
| \n Ireland \n | \n \n \n 1,783\n \n | \n \n 1,523 \n | \n
| \n Portugal \n | \n \n \n 456\n \n | \n \n 465 \n | \n
| \n Spain \n | \n \n \n 497\n \n | \n \n 506 \n | \n
| \n France \n | \n \n \n 250\n \n | \n \n - \n | \n
| \n Italy \n | \n \n \n 81\n \n | \n \n - \n | \n
| \n EU \n | \n \n \n 110\n \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 3,177\n \n | \n \n 2,494 \n | \n
\n (ii) Derivative financial instruments\n
\nThe Group has executed standard ISDA agreements with all of its counterparties. The Group has also executed CSAs with all of its counterparties in respect of the majority of derivative instruments to mitigate its credit risk. As part of these agreements, the Group exchanges collateral in line with movements in the market values of derivative positions daily. FX forward derivatives are settled gross. The cumulative positive market value of derivative assets at 31 December 2022 was \u20acnil (31 December 2021: \u20ac1m). The Group manages its collateral derivative positions with counterparties on a net basis. The uncollaterised derivative positions are all held with investment grade counterparties.
\n\n (iii) Loans and advances to banks\n
\nThe Group has a policy to ensure that, where possible, loans and advances to banks are held with investment grade counterparties with any exceptions subject to prior approval by the BRCC. The following table gives an indication of the level of creditworthiness of the Group\u2019s loans and advances to banks and is based on the ratings prescribed by Moody\u2019s Investor Services Limited and Standard and Poor\u2019s for the CBI.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Rating \n \n | \n \n \n | \n \n \n | \n
| \n AAA \n | \n \n \n 1,620\n \n | \n \n 3,709 \n | \n
| \n Aa2 \n | \n \n \n 199\n \n | \n \n 199 \n | \n
| \n Aa3 \n | \n \n \n 286\n \n | \n \n 258 \n | \n
| \n A1 \n | \n \n \n 10\n \n | \n \n 2 \n | \n
| \n A2 \n | \n \n \n -\n \n | \n \n 6 \n | \n
| \n Ba1 \n | \n \n \n 8\n \n | \n \n - \n | \n
| \n \n Total \n \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n
The following sections detail additional disclosures on asset quality.
\n\n (iv) Loans and advances to customers\n
\n\n Gross customer loans and advances\n
\nThe tables below outline total loans and advances to customers for the Group analysed by home loan, buy-to-let, commercial and consumer finance.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n Measured at amortised cost\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Residential mortgages: \n | \n \n \n | \n \n \n | \n
| \n Home loan \n | \n \n \n 18,340\n \n | \n \n 12,568 \n | \n
| \n Buy-to-let \n | \n \n \n 824\n \n | \n \n 1,623 \n | \n
| \n \n Total residential mortgages\n \n | \n \n \n 19,164\n \n | \n \n 14,191 \n | \n
| \n Commercial \n | \n \n \n 239\n \n | \n \n 196 \n | \n
| \n Consumer finance \n | \n \n \n 401\n \n | \n \n 358 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Analysed by ECL staging:\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 17,455 \n \n | \n \n 11,689 \n | \n
| \n Stage 2 \n | \n \n \n 1,699 \n \n | \n \n 2,239 \n | \n
| \n Stage 3 \n | \n \n \n 649\n \n | \n \n 815 \n | \n
| \n POCI \n | \n \n \n 1\n \n | \n \n 2 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Of which at the reporting date \n \n | \n \n \n | \n \n \n | \n
| \n Neither past due nor Stage 3 \n | \n \n \n 19,118\n \n | \n \n 13,885 \n | \n
| \n Past due but not Stage 3 \n | \n \n \n 36\n \n | \n \n 43 \n | \n
| \n Stage 3 \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n Total measured at amortised cost\n \n | \n \n \n 19,804\n \n | \n \n 14,745 \n | \n
| \n \n Of which are reported as non-performing loans\n \n | \n \n \n 650\n \n | \n \n 817 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Deferred fees, discounts and fair value adjustments\n \n | \n \n \n 310\n \n | \n \n 115 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n \n Asset quality*\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 1\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 12,826\n \n | \n \n \n 65\n \n | \n \n \n 12,891\n \n | \n \n \n 11\n \n | \n \n \n 143\n \n | \n \n \n 13,045\n \n | \n
| \n Satisfactory \n | \n \n \n 4,064\n \n | \n \n \n 141\n \n | \n \n \n 4,205\n \n | \n \n \n 17\n \n | \n \n \n 61\n \n | \n \n \n 4,283\n \n | \n
| \n Fair \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 22\n \n | \n \n \n -\n \n | \n \n \n 21\n \n | \n \n \n 43\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 84\n \n | \n \n \n 84\n \n | \n
| \n \n | \n \n \n 16,912\n \n | \n \n \n 206\n \n | \n \n \n 17,118\n \n | \n \n \n 28\n \n | \n \n \n 309\n \n | \n \n \n 17,455\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 79\n \n | \n \n \n 44\n \n | \n \n \n 123\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n 128\n \n | \n
| \n Satisfactory \n | \n \n \n 296\n \n | \n \n \n 107\n \n | \n \n \n 403\n \n | \n \n \n 27\n \n | \n \n \n 21\n \n | \n \n \n 451\n \n | \n
| \n Fair \n | \n \n \n 711\n \n | \n \n \n 197\n \n | \n \n \n 908\n \n | \n \n \n 161\n \n | \n \n \n 26\n \n | \n \n \n 1,095\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 25\n \n | \n \n \n 25\n \n | \n
| \n \n | \n \n \n 1,086\n \n | \n \n \n 348\n \n | \n \n \n 1,434\n \n | \n \n \n 188\n \n | \n \n \n 77\n \n | \n \n \n 1,699\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n Total measured at amortised cost \n | \n \n \n 18,340\n \n | \n \n \n 824\n \n | \n \n \n 19,164\n \n | \n \n \n 239\n \n | \n \n \n 401\n \n | \n \n \n 19,804\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer\n \n | \n \n \n Total\n \n | \n
| \n Asset quality* \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 7,096 \n | \n \n 184 \n | \n \n 7,280 \n | \n \n 1 \n | \n \n 160 \n | \n \n 7,441 \n | \n
| \n Satisfactory \n | \n \n 3,807 \n | \n \n 289 \n | \n \n 4,096 \n | \n \n 10 \n | \n \n 65 \n | \n \n 4,171 \n | \n
| \n Fair \n | \n \n 20 \n | \n \n 1 \n | \n \n 21 \n | \n \n - \n | \n \n 6 \n | \n \n 27 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 50 \n | \n \n 50 \n | \n
| \n \n | \n \n 10,923 \n | \n \n 474 \n | \n \n 11,397 \n | \n \n 11 \n | \n \n 281 \n | \n \n 11,689 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 146 \n | \n \n 209 \n | \n \n 355 \n | \n \n 7 \n | \n \n 2 \n | \n \n 364 \n | \n
| \n Satisfactory \n | \n \n 344 \n | \n \n 334 \n | \n \n 678 \n | \n \n 58 \n | \n \n 17 \n | \n \n 753 \n | \n
| \n Fair \n | \n \n 735 \n | \n \n 267 \n | \n \n 1,002 \n | \n \n 76 \n | \n \n 29 \n | \n \n 1,107 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 15 \n | \n \n 15 \n | \n
| \n \n | \n \n 1,225 \n | \n \n 810 \n | \n \n 2,035 \n | \n \n 141 \n | \n \n 63 \n | \n \n 2,239 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Total measured at amortised cost \n | \n \n 12,568 \n | \n \n 1,623 \n | \n \n 14,191 \n | \n \n 196 \n | \n \n 358 \n | \n \n 14,745 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s independent auditor.
\n \n \n \n \n \n \n \nThe following table provides an aged analysis of customer loans and advances which are past due but not Stage 3.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n \n 16\n \n | \n \n \n 2\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n 31-60 days \n | \n \n \n 4\n \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n 61-90 days \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n \n Total past due not Stage 3\n \n | \n \n \n 25\n \n | \n \n \n 3\n \n | \n \n \n -\n \n | \n \n \n 28\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n Fair value of collateral held \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n Fair value of collateral held\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 0-30 days \n | \n \n 18 \n | \n \n 3 \n | \n \n - \n | \n \n 21 \n | \n
| \n 31-60 days \n | \n \n 4 \n | \n \n 1 \n | \n \n - \n | \n \n 5 \n | \n
| \n 61-90 days \n | \n \n 2 \n | \n \n 2 \n | \n \n - \n | \n \n 4 \n | \n
| \n Total past due not Stage 3 \n | \n \n 24 \n | \n \n 6 \n | \n \n - \n | \n \n 30 \n | \n
Collateral held against residential mortgages is principally comprised of residential properties; their fair value has been estimated based upon the last actual valuation, adjusted to take into account subsequent movement in house prices and is capped at the lower of the loan balance or the valuation amount.
\n\n Non-performing loans\n
\nNon-performing loans (NPLs) are loans which are credit impaired or loans which are classified as defaulted in accordance with the Group\u2019s definition of default. The Group\u2019s definition of default considers objective indicators of default including the 90 days past due criterion, evidence of exercise of concessions or modifications to terms and conditions is designed to be consistent with European Banking Authority (EBA) guidance on the definition of forbearance.
\nForeclosed assets are assets held on the balance sheet which are obtained by taking possession of collateral or by calling on similar credit enhancements.
\n \n \n \n \n \n \n \nNon-performing assets are defined as NPLs plus foreclosed assets.
\n| \n \n 31 December 2022\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n \n 175\n \n | \n \n \n 118\n \n | \n \n \n 17\n \n | \n \n \n 2\n \n | \n \n \n 312\n \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n \n 31\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n 3\n \n | \n \n \n 49\n \n | \n
| \n NPL is 1-2 years past due \n | \n \n \n 31\n \n | \n \n \n 80\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 113\n \n | \n
| \n NPL is 2-5 years past due \n | \n \n \n 51\n \n | \n \n \n 28\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 81\n \n | \n
| \n NPL is > 5 years past due \n | \n \n \n 54\n \n | \n \n \n 29\n \n | \n \n \n 6\n \n | \n \n \n 5\n \n | \n \n \n 94\n \n | \n
| \n POCI \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n
| \n \n Non-performing loans\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 650\n \n | \n
| \n \n Foreclosed assets\n \n | \n \n \n 3\n \n | \n \n \n 15\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n
| \n \n Non-performing assets\n \n | \n \n \n 345\n \n | \n \n \n 285\n \n | \n \n \n 23\n \n | \n \n \n 15\n \n | \n \n \n 668\n \n | \n
| \n \n NPLs as % of gross loans\n \n | \n \n \n 1.9%\n \n | \n \n \n 32.8%\n \n | \n \n \n 9.6%\n \n | \n \n \n 3.7%\n \n | \n \n \n 3.3%\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Stage 3 \n \n | \n ||||
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Commercial\n \n | \n \n \n Consumer finance\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n NPL is < 90 days \n | \n \n 251 \n | \n \n 177 \n | \n \n 40 \n | \n \n 1 \n | \n \n 469 \n | \n
| \n NPL is > 90 days and < 1 year past due \n | \n \n 32 \n | \n \n 89 \n | \n \n 1 \n | \n \n 6 \n | \n \n 128 \n | \n
| \n NPL is 1-2 years past due \n | \n \n 39 \n | \n \n 25 \n | \n \n - \n | \n \n 2 \n | \n \n 66 \n | \n
| \n NPL is 2-5 years past due \n | \n \n 36 \n | \n \n 10 \n | \n \n - \n | \n \n 1 \n | \n \n 47 \n | \n
| \n NPL is > 5 years past due \n | \n \n 62 \n | \n \n 38 \n | \n \n 3 \n | \n \n 2 \n | \n \n 105 \n | \n
| \n POCI \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 2 \n | \n \n 2 \n | \n
| \n Non-performing loans \n | \n \n 420 \n | \n \n 339 \n | \n \n 44 \n | \n \n 14 \n | \n \n 817 \n | \n
| \n Foreclosed assets \n | \n \n 4 \n | \n \n 24 \n | \n \n - \n | \n \n - \n | \n \n 28 \n | \n
| \n Non-performing assets \n | \n \n 424 \n | \n \n 363 \n | \n \n 44 \n | \n \n 14 \n | \n \n 845 \n | \n
| \n NPLs as % of gross loans \n | \n \n 3.3% \n | \n \n 20.9% \n | \n \n 22.5% \n | \n \n 3.9% \n | \n \n 5.5% \n | \n
Non-performing loans as a percentage of total loans and advances was 3.3% at 31 December 2022, a reduction from 5.5% at 31 December 2021.
\n\n Total portfolio loss allowance: statement of financial position\n
\nThe tables below outline the ECL loss allowance total at 31 December 2022 in respect of total customer loans and advances.
\nThe impairment charge in respect of the total loans and advances for year ended 31 December 2022 is \u20ac7m, compared to a write-back of \u20ac1m for the year ended 31 December 2021.
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Loss allowance - statement of financial position\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 136 \n \n | \n \n 61 \n | \n
| \n Stage 2 \n | \n \n \n 163 \n \n | \n \n 238 \n | \n
| \n Stage 3 \n | \n \n \n 222 \n \n | \n \n 305 \n | \n
| \n \n Total loss allowance\n \n | \n \n \n 521\n \n | \n \n 604 \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Provision coverage ratio*\n \n | \n \n \n | \n \n \n | \n
| \n Stage 1 \n | \n \n \n 0.8%\n \n | \n \n 0.5% \n | \n
| \n Stage 2 \n | \n \n \n 9.6%\n \n | \n \n 10.6% \n | \n
| \n Stage 3 \n | \n \n \n 34.1%\n \n | \n \n 37.3% \n | \n
| \n \n Total provisions/total loans\n \n | \n \n \n 2.6%\n \n | \n \n 4.1% \n | \n
*Provision coverage ratio is calculated as loss allowance/impairment provision as a percentage of gross loan balance.
\n\n Origination profile\n
\nLoan origination profile of the residential mortgage loan portfolio before provision for impairment:
\nThe table below illustrates that \u20ac2bn or 11% of the residential mortgage portfolio originated before 2006. Between 2006 and 2008 origination was \u20ac5bn or 24% of the residential mortgages. The residual of 65% of the residential mortgages were originated between 2009 and 2022.
\n| \n \n 31 December 2022\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1999 and before \n | \n \n 1,786 \n | \n \n 30 \n | \n \n 113 \n | \n \n 4 \n | \n
| \n 2000 \n | \n \n 1,483 \n | \n \n 40 \n | \n \n 57 \n | \n \n 3 \n | \n
| \n 2001 \n | \n \n 1,938 \n | \n \n 66 \n | \n \n 79 \n | \n \n 4 \n | \n
| \n 2002 \n | \n \n 2,801 \n | \n \n 127 \n | \n \n 99 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,360 \n | \n \n 255 \n | \n \n 166 \n | \n \n 14 \n | \n
| \n 2004 \n | \n \n 7,729 \n | \n \n 514 \n | \n \n 220 \n | \n \n 23 \n | \n
| \n 2005 \n | \n \n 11,134 \n | \n \n 1,006 \n | \n \n 397 \n | \n \n 57 \n | \n
| \n 2006 \n | \n \n 14,396 \n | \n \n 1,796 \n | \n \n 723 \n | \n \n 169 \n | \n
| \n 2007 \n | \n \n 12,439 \n | \n \n 1,730 \n | \n \n 740 \n | \n \n 203 \n | \n
| \n 2008 \n | \n \n 7,912 \n | \n \n 1,006 \n | \n \n 408 \n | \n \n 90 \n | \n
| \n 2009 \n | \n \n 2,301 \n | \n \n 213 \n | \n \n 65 \n | \n \n 7 \n | \n
| \n 2010 \n | \n \n 936 \n | \n \n 70 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2011 \n | \n \n 819 \n | \n \n 69 \n | \n \n 5 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 1,190 \n | \n \n 110 \n | \n \n 3 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 1,673 \n | \n \n 163 \n | \n \n 4 \n | \n \n - \n | \n
| \n 2014 \n | \n \n 2,960 \n | \n \n 316 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 4,058 \n | \n \n 471 \n | \n \n 29 \n | \n \n 1 \n | \n
| \n 2016 \n | \n \n 4,664 \n | \n \n 639 \n | \n \n 23 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 5,804 \n | \n \n 899 \n | \n \n 24 \n | \n \n 4 \n | \n
| \n 2018 \n | \n \n 7,607 \n | \n \n 1,345 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n 2019 \n | \n \n 9,633 \n | \n \n 1,863 \n | \n \n 37 \n | \n \n 7 \n | \n
| \n 2020 \n | \n \n 7,940 \n | \n \n 1,735 \n | \n \n 14 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 8,871 \n | \n \n 2,164 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2022 \n | \n \n 9,409 \n | \n \n 2,537 \n | \n \n 4 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 134,843\n \n | \n \n \n 19,164\n \n | \n \n \n 3,297\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Residential mortgages portfolio\n \n | \n \n \n Stage 3 residential mortgages portfolio\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n \n \n Number\n \n | \n \n \n Balance\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 1998 and before \n | \n \n 967 \n | \n \n 13 \n | \n \n 75 \n | \n \n 2 \n | \n
| \n 1999 \n | \n \n 754 \n | \n \n 18 \n | \n \n 53 \n | \n \n 2 \n | \n
| \n 2000 \n | \n \n 1,204 \n | \n \n 38 \n | \n \n 73 \n | \n \n 4 \n | \n
| \n 2001 \n | \n \n 1,561 \n | \n \n 61 \n | \n \n 103 \n | \n \n 6 \n | \n
| \n 2002 \n | \n \n 3,485 \n | \n \n 132 \n | \n \n 120 \n | \n \n 6 \n | \n
| \n 2003 \n | \n \n 5,145 \n | \n \n 273 \n | \n \n 189 \n | \n \n 18 \n | \n
| \n 2004 \n | \n \n 7,697 \n | \n \n 574 \n | \n \n 259 \n | \n \n 32 \n | \n
| \n 2005 \n | \n \n 11,173 \n | \n \n 1,105 \n | \n \n 487 \n | \n \n 76 \n | \n
| \n 2006 \n | \n \n 15,474 \n | \n \n 2,125 \n | \n \n 881 \n | \n \n 215 \n | \n
| \n 2007 \n | \n \n 13,532 \n | \n \n 2,005 \n | \n \n 842 \n | \n \n 239 \n | \n
| \n 2008 \n | \n \n 8,712 \n | \n \n 1,207 \n | \n \n 513 \n | \n \n 111 \n | \n
| \n 2009 \n | \n \n 2,135 \n | \n \n 193 \n | \n \n 79 \n | \n \n 8 \n | \n
| \n 2010 \n | \n \n 889 \n | \n \n 67 \n | \n \n 23 \n | \n \n 3 \n | \n
| \n 2011 \n | \n \n 550 \n | \n \n 44 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2012 \n | \n \n 315 \n | \n \n 21 \n | \n \n 5 \n | \n \n - \n | \n
| \n 2013 \n | \n \n 716 \n | \n \n 67 \n | \n \n 8 \n | \n \n 1 \n | \n
| \n 2014 \n | \n \n 1,497 \n | \n \n 156 \n | \n \n 14 \n | \n \n 3 \n | \n
| \n 2015 \n | \n \n 1,648 \n | \n \n 179 \n | \n \n 39 \n | \n \n 3 \n | \n
| \n 2016 \n | \n \n 1,811 \n | \n \n 227 \n | \n \n 25 \n | \n \n 4 \n | \n
| \n 2017 \n | \n \n 3,202 \n | \n \n 487 \n | \n \n 31 \n | \n \n 5 \n | \n
| \n 2018 \n | \n \n 4,974 \n | \n \n 924 \n | \n \n 48 \n | \n \n 10 \n | \n
| \n 2019 \n | \n \n 6,282 \n | \n \n 1,306 \n | \n \n 40 \n | \n \n 8 \n | \n
| \n 2020 \n | \n \n 5,153 \n | \n \n 1,184 \n | \n \n 21 \n | \n \n 1 \n | \n
| \n 2021 \n | \n \n 7,099 \n | \n \n 1,785 \n | \n \n 18 \n | \n \n 1 \n | \n
| \n \n Total\n \n | \n \n \n 105,975\n \n | \n \n \n 14,191\n \n | \n \n \n 3,954\n \n | \n \n \n 759\n \n | \n
\n Loan-to-value profile\n
\n\n Loan-to-value (LTV) of mortgage lending (index linked):\n
\nThe LTV ratio is calculated at a property level and is the average of indexed property values in proportion to the outstanding loan balance. LTV is a key input to the impairment provisioning process. The tables below outline the composition of this ratio for the residential loan portfolio.
\n\n Actual and average LTVs across principal mortgage portfolios:\n
\nThe tables below outline the weighted average LTVs for the total residential mortgage portfolios analysed across home loan and buy-to-let facilities by value. The weighted average LTV on the existing residential mortgage portfolios is 54% at 31 December 2022 compared to 58% at 31 December 2021.
\nThe Group\u2019s residential mortgage lending LTVs at December 2022 reflect updated valuations obtained on high-exposure NPLs (largely impacting on high-exposure buy-to-let properties).
\n \n \n \n \n \n \n \n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 44%\n \n | \n \n \n 32%\n \n | \n \n \n 44%\n \n | \n
| \n 50% to 70% \n | \n \n \n 40%\n \n | \n \n \n 18%\n \n | \n \n \n 39%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 24%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n 1%\n \n | \n \n \n 8%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 99%\n \n | \n \n \n 82%\n \n | \n \n \n 98%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 1%\n \n | \n \n \n 5%\n \n | \n \n \n 1%\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 3%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 1%\n \n | \n \n \n 18%\n \n | \n \n \n 2%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of existing residential mortgages \n | \n \n \n 53%\n \n | \n \n \n 76%\n \n | \n \n \n 54%\n \n | \n
| \n New residential mortgages \n | \n \n \n 68%\n \n | \n \n \n 58%\n \n | \n \n \n 68%\n \n | \n
| \n Acquired residential mortgages \n | \n \n \n 47%\n \n | \n \n \n 39%\n \n | \n \n \n 47%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 74%\n \n | \n \n \n 100%\n \n | \n \n \n 85%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 38% \n | \n \n 32% \n | \n \n 37% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 16% \n | \n \n 32% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 21% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 11% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 98% \n | \n \n 80% \n | \n \n 96% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 6% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 4% \n | \n \n 1% \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 3% \n | \n \n 1% \n | \n
| \n 131% to 140% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 2% \n | \n \n 20% \n | \n \n 4% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 56% \n | \n \n 74% \n | \n \n 58% \n | \n
| \n New residential mortgages \n | \n \n 69% \n | \n \n 54% \n | \n \n 69% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 105% \n | \n \n 90% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is neither past due nor Stage 3:\n
\nThe tables below illustrates that 100% of residential home loan mortgages (31 December 2021: 99%) and 94% of residential buy-to-let mortgages (31 December 2021: 87%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 45%\n \n | \n \n \n 44%\n \n | \n \n \n 45%\n \n | \n
| \n 50% to 70% \n | \n \n \n 41%\n \n | \n \n \n 23%\n \n | \n \n \n 40%\n \n | \n
| \n 71% to 90% \n | \n \n \n 14%\n \n | \n \n \n 23%\n \n | \n \n \n 14%\n \n | \n
| \n 91% to 100% \n | \n \n \n -\n \n | \n \n \n 4%\n \n | \n \n \n 1%\n \n | \n
| \n Subtotal \n | \n \n \n 100%\n \n | \n \n \n 94%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n -\n \n | \n \n \n 2%\n \n | \n \n \n -\n \n | \n
| \n 111% to 120% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 121% to 130% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 131% to 140% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 141% to 150% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n 151% to 160% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 161% to 170% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n 171% to 180% \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Greater than 180% \n | \n \n \n -\n \n | \n \n \n 1%\n \n | \n \n \n -\n \n | \n
| \n Subtotal \n | \n \n \n -\n \n | \n \n \n 6%\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 39% \n | \n \n 39% \n | \n \n 39% \n | \n
| \n 50% to 70% \n | \n \n 34% \n | \n \n 19% \n | \n \n 34% \n | \n
| \n 71% to 90% \n | \n \n 25% \n | \n \n 20% \n | \n \n 25% \n | \n
| \n 91% to 100% \n | \n \n 1% \n | \n \n 9% \n | \n \n 2% \n | \n
| \n Subtotal \n | \n \n 99% \n | \n \n 87% \n | \n \n 99% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 1% \n | \n \n 5% \n | \n \n 1% \n | \n
| \n 111% to 120% \n | \n \n - \n | \n \n 3% \n | \n \n - \n | \n
| \n 121% to 130% \n | \n \n - \n | \n \n 2% \n | \n \n - \n | \n
| \n 131% to 140% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 141% to 150% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n 151% to 160% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 161% to 170% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Greater than 180% \n | \n \n - \n | \n \n 1% \n | \n \n - \n | \n
| \n Subtotal \n | \n \n 1% \n | \n \n 13% \n | \n \n 1% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
\n Analysis by LTV of the Group\u2019s residential mortgage lending which is classified as Stage 3:\n
\nThe tables below illustrates that 79% of residential home loan mortgages (31 December 2021: 75%) and 55% of residential buy-to-let mortgages (31 December 2021: 53%) that are classified as Stage 3 are in positive equity as at 31 December 2022
\n| \n \n 31 December 2022\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 33%\n \n | \n \n \n 7%\n \n | \n \n \n 22%\n \n | \n
| \n 50% to 70% \n | \n \n \n 22%\n \n | \n \n \n 8%\n \n | \n \n \n 16%\n \n | \n
| \n 71% to 90% \n | \n \n \n 19%\n \n | \n \n \n 27%\n \n | \n \n \n 22%\n \n | \n
| \n 91% to 100% \n | \n \n \n 5%\n \n | \n \n \n 13%\n \n | \n \n \n 8%\n \n | \n
| \n Subtotal \n | \n \n \n 79%\n \n | \n \n \n 55%\n \n | \n \n \n 68%\n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 12%\n \n | \n \n \n 7%\n \n | \n
| \n 111% to 120% \n | \n \n \n 5%\n \n | \n \n \n 10%\n \n | \n \n \n 7%\n \n | \n
| \n 121% to 130% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 6%\n \n | \n
| \n 131% to 140% \n | \n \n \n 2%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 3%\n \n | \n \n \n 2%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 2%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n Greater than 180% \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n \n \n 4%\n \n | \n
| \n Subtotal \n | \n \n \n 21%\n \n | \n \n \n 45%\n \n | \n \n \n 32%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Stage 3\n \n | \n \n \n 342\n \n | \n \n \n 270\n \n | \n \n \n 612\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 29% \n | \n \n 7% \n | \n \n 19% \n | \n
| \n 50% to 70% \n | \n \n 19% \n | \n \n 8% \n | \n \n 14% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 21% \n | \n \n 20% \n | \n
| \n 91% to 100% \n | \n \n 7% \n | \n \n 17% \n | \n \n 11% \n | \n
| \n Subtotal \n | \n \n 75% \n | \n \n 53% \n | \n \n 64% \n | \n
| \n 101% to 110% \n | \n \n 6% \n | \n \n 12% \n | \n \n 9% \n | \n
| \n 111% to 120% \n | \n \n 4% \n | \n \n 6% \n | \n \n 5% \n | \n
| \n 121% to 130% \n | \n \n 4% \n | \n \n 8% \n | \n \n 6% \n | \n
| \n 131% to 140% \n | \n \n 3% \n | \n \n 6% \n | \n \n 4% \n | \n
| \n 141% to 150% \n | \n \n 2% \n | \n \n 4% \n | \n \n 3% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 3% \n | \n \n 2% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 4% \n | \n \n 5% \n | \n \n 5% \n | \n
| \n Subtotal \n | \n \n 25% \n | \n \n 47% \n | \n \n 36% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \u20acm \n | \n \n \u20acm \n | \n \n \u20acm \n | \n
| \n Stage 3 \n | \n \n 420 \n | \n \n 339 \n | \n \n 759 \n | \n
\n (v) Group portfolios: Collateral in possession\n
\nCollateral in possession occurs where the obligor either (i) voluntarily surrenders the property or (ii) the Group takes legal ownership due to the non-repayment of the loan facility. The following tables outline the main movements in this category during the year.
\n \n \n \n \n \n \n\n Stock of collateral in possession\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n
| \n \n Residential collateral in possession\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 14\n \n | \n \n \n 7\n \n | \n \n 27 \n | \n \n 10 \n | \n
| \n Buy-to-let \n | \n \n \n 105\n \n | \n \n \n 27\n \n | \n \n 165 \n | \n \n 42 \n | \n
| \n \n Total\n \n | \n \n \n 119\n \n | \n \n \n 34\n \n | \n \n 192 \n | \n \n 52 \n | \n
Collateral in possession assets are sold as soon as practicable. These assets which total \u20ac18m as at 31 December 2022 (31 December 2021: \u20ac28m) are included in assets held for sale (see note 18 for further details).
\nDuring the year the ownership of 16 properties were transferred to the Group.
\nThe details of the transfers are provided in the table below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n - \n | \n
| \n Buy-to-let \n | \n \n 16 \n | \n
| \n \n Total\n \n | \n \n 16 \n | \n
During the year 89 properties were disposed. The details of the disposals are provided in the tables below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 13 \n | \n
| \n Buy-to-let \n | \n \n 76 \n | \n
| \n Total \n | \n \n 89 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at \n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 13 \n \n | \n \n \n 3 \n \n | \n \n \n 2 \n \n | \n \n \n -\n \n | \n \n \n 1 \n \n | \n
| \n Buy-to-let \n | \n \n \n 76 \n \n | \n \n \n 18 \n \n | \n \n \n 13 \n \n | \n \n \n 1 \n \n | \n \n \n 6 \n \n | \n
| \n \n Year ended 31 December 2022\n \n | \n \n \n 89 \n \n | \n \n \n 21 \n \n | \n \n \n 15 \n \n | \n \n \n 1 \n \n | \n \n \n 7 \n \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n| \n \n 31 December 2021\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at\n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 23 \n | \n \n 7 \n | \n \n 5 \n | \n \n - \n | \n \n 2 \n | \n
| \n Buy-to-let \n | \n \n 114 \n | \n \n 25 \n | \n \n 16 \n | \n \n 1 \n | \n \n 10 \n | \n
| \n Year ended 31 December 2021 \n | \n \n 137 \n | \n \n 32 \n | \n \n 21 \n | \n \n 1 \n | \n \n 12 \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n \n \n \n \n \n \n \n \n\n (vi) Additional disclosures on forborne loans\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with the current Code of Conduct on Mortgages Arrears (CCMA).
\nThe tables below set out the asset quality and volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers for the years ended 31 December 2022 and 2021. The number and balances of loans in forbearance arrangements for residential home loan mortgages and buy-to-let residential mortgages are analysed below.
\n\n (a) Asset quality\n
\nThe method of splitting the forborne loans and advances to customers over the different asset quality categories:
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential mortgages\n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n *Stage 2\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n \n \n -\n \n | \n \n \n 5\n \n | \n
| \n Satisfactory \n | \n \n \n 33\n \n | \n \n \n 5\n \n | \n \n \n 38\n \n | \n \n \n 1\n \n | \n \n \n 39\n \n | \n
| \n Fair \n | \n \n \n 92\n \n | \n \n \n 26\n \n | \n \n \n 118\n \n | \n \n \n 1\n \n | \n \n \n 119\n \n | \n
| \n Standardised \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n \n | \n \n \n 130\n \n | \n \n \n 31\n \n | \n \n \n 161\n \n | \n \n \n 2\n \n | \n \n \n 163\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Stage 3\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n \n 228\n \n | \n \n \n 68\n \n | \n \n \n 296\n \n | \n \n \n 6\n \n | \n \n \n 302\n \n | \n
| \n \n Total measured at amortised costs \n \n | \n \n \n 358\n \n | \n \n \n 99\n \n | \n \n \n 457\n \n | \n \n \n 8\n \n | \n \n \n 465\n \n | \n
Where a borrower has been granted a forbearance treatment, the loan is considered to have experienced a significant increase in credit risk and is classified as Stage 2 for Expected Credit Loss assessment purposes under IFRS 9.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total residential Mortgages \n \n | \n \n \n Commercial\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n * Stage 2 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Excellent \n | \n \n 6 \n | \n \n 5 \n | \n \n 11 \n | \n \n 1 \n | \n \n 12 \n | \n
| \n Satisfactory \n | \n \n 76 \n | \n \n 37 \n | \n \n 113 \n | \n \n - \n | \n \n 113 \n | \n
| \n Fair \n | \n \n 96 \n | \n \n 30 \n | \n \n 126 \n | \n \n 3 \n | \n \n 129 \n | \n
| \n Standardised \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n \n | \n \n 178 \n | \n \n 72 \n | \n \n 250 \n | \n \n 4 \n | \n \n 254 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stage 3 \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Defaulted \n | \n \n 289 \n | \n \n 94 \n | \n \n 383 \n | \n \n 33 \n | \n \n 416 \n | \n
| \n Total measured at amortised costs \n | \n \n 467 \n | \n \n 166 \n | \n \n 633 \n | \n \n 37 \n | \n \n 670 \n | \n
* The information in the shaded box has not been subject to audit by the Group\u2019s Independent Auditor.
\n \n \n \n \n \n \n \n\n (b) Weighted Average - LTV\n
\n\n LTV on total portfolio in forbearance\n
\nThe tables below illustrates that 85% of residential home loan mortgages (31 December 2021: 84%) and 69% of residential buy-to-let mortgages (31 December 2021: 67%) that are neither past due nor Stage 3 are in positive equity as at 31 December 2022.
\n| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n \n 37%\n \n | \n \n \n 7%\n \n | \n \n \n 31%\n \n | \n
| \n 50% to 70% \n | \n \n \n 27%\n \n | \n \n \n 11%\n \n | \n \n \n 24%\n \n | \n
| \n 71% to 90% \n | \n \n \n 17%\n \n | \n \n \n 42%\n \n | \n \n \n 23%\n \n | \n
| \n 91% to 100% \n | \n \n \n 4%\n \n | \n \n \n 9%\n \n | \n \n \n 5%\n \n | \n
| \n Subtotal \n | \n \n \n 85%\n \n | \n \n \n 69%\n \n | \n \n \n 83%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n \n 3%\n \n | \n \n \n 11%\n \n | \n \n \n 4%\n \n | \n
| \n 111% to 120% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 121% to 130% \n | \n \n \n 3%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n 131% to 140% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 141% to 150% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 151% to 160% \n | \n \n \n 1%\n \n | \n \n \n 2%\n \n | \n \n \n 1%\n \n | \n
| \n 161% to 170% \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n \n \n 1%\n \n | \n
| \n 171% to 180% \n | \n \n \n - \n \n | \n \n \n 1%\n \n | \n \n \n - \n \n | \n
| \n Greater than 180% \n | \n \n \n 2%\n \n | \n \n \n 4%\n \n | \n \n \n 3%\n \n | \n
| \n Subtotal \n | \n \n \n 15%\n \n | \n \n \n 31%\n \n | \n \n \n 17%\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Total\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n \n \n 100%\n \n | \n
| \n \n Weighted average LTV:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n \n 66%\n \n | \n \n \n 92%\n \n | \n \n \n 72%\n \n | \n
| \n New residential mortgages \n | \n \n \n 73%\n \n | \n \n \n - \n \n | \n \n \n 73%\n \n | \n
| \n Stage 3 mortgages \n | \n \n \n 75%\n \n | \n \n \n 97%\n \n | \n \n \n 80%\n \n | \n
| \n \n | \n \n \n Home loans\n \n | \n \n \n Buy-to-let\n \n | \n \n \n Total\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Less than 50% \n | \n \n 33% \n | \n \n 7% \n | \n \n 26% \n | \n
| \n 50% to 70% \n | \n \n 25% \n | \n \n 11% \n | \n \n 21% \n | \n
| \n 71% to 90% \n | \n \n 20% \n | \n \n 30% \n | \n \n 23% \n | \n
| \n 91% to 100% \n | \n \n 6% \n | \n \n 19% \n | \n \n 9% \n | \n
| \n Subtotal \n | \n \n 84% \n | \n \n 67% \n | \n \n 79% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n 101% to 110% \n | \n \n 4% \n | \n \n 12% \n | \n \n 6% \n | \n
| \n 111% to 120% \n | \n \n 3% \n | \n \n 8% \n | \n \n 4% \n | \n
| \n 121% to 130% \n | \n \n 2% \n | \n \n 1% \n | \n \n 2% \n | \n
| \n 131% to 140% \n | \n \n 2% \n | \n \n 4% \n | \n \n 2% \n | \n
| \n 141% to 150% \n | \n \n 1% \n | \n \n 2% \n | \n \n 1% \n | \n
| \n 151% to 160% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 161% to 170% \n | \n \n 1% \n | \n \n 1% \n | \n \n 1% \n | \n
| \n 171% to 180% \n | \n \n - \n | \n \n 1% \n | \n \n 1% \n | \n
| \n Greater than 180% \n | \n \n 2% \n | \n \n 3% \n | \n \n 3% \n | \n
| \n Subtotal \n | \n \n 16% \n | \n \n 33% \n | \n \n 21% \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Total \n | \n \n 100% \n | \n \n 100% \n | \n \n 100% \n | \n
| \n Weighted average LTV: \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Stock of residential mortgages \n | \n \n 70% \n | \n \n 95% \n | \n \n 76% \n | \n
| \n New residential mortgages \n | \n \n 47% \n | \n \n - \n | \n \n 47% \n | \n
| \n Stage 3 mortgages \n | \n \n 78% \n | \n \n 104% \n | \n \n 84% \n | \n
\n (c) Forbearance arrangements - residential mortgages\n
\nThe Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with existing CCMA. These are set out in the table below.
\n\n Residential mortgages\n
\nThe tables below set out the volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers as at 31 December 2022 and 31 December 2021.
\n\n (i) Residential home loan mortgages:\n
\nThe incidence of the main type of forbearance arrangements for owner occupied residential mortgages are analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 21\n \n | \n \n \n 6\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Reduced payment (less than interest only) \n | \n \n \n 34\n \n | \n \n \n 3\n \n | \n \n \n 22\n \n | \n \n \n 2\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 1,369\n \n | \n \n \n 192\n \n | \n \n \n 782\n \n | \n \n \n 120\n \n | \n
| \n Payment moratorium \n | \n \n \n 32\n \n | \n \n \n 5\n \n | \n \n \n 19\n \n | \n \n \n 3\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 433\n \n | \n \n \n 53\n \n | \n \n \n 252\n \n | \n \n \n 31\n \n | \n
| \n Term extension \n | \n \n \n 428\n \n | \n \n \n 32\n \n | \n \n \n 209\n \n | \n \n \n 17\n \n | \n
| \n Hybrid* \n | \n \n \n 277\n \n | \n \n \n 41\n \n | \n \n \n 178\n \n | \n \n \n 26\n \n | \n
| \n Split mortgages \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n \n \n 153\n \n | \n \n \n 26\n \n | \n
| \n \n Total\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 61 \n | \n \n 12 \n | \n \n 52 \n | \n \n 8 \n | \n
| \n Reduced payment (less than interest only) \n | \n \n 35 \n | \n \n 5 \n | \n \n 33 \n | \n \n 5 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 1,815 \n | \n \n 255 \n | \n \n 1,015 \n | \n \n 157 \n | \n
| \n Payment moratorium \n | \n \n 64 \n | \n \n 8 \n | \n \n 47 \n | \n \n 6 \n | \n
| \n Arrears capitalisation \n | \n \n 524 \n | \n \n 66 \n | \n \n 264 \n | \n \n 36 \n | \n
| \n Term extension \n | \n \n 483 \n | \n \n 38 \n | \n \n 245 \n | \n \n 20 \n | \n
| \n Hybrid* \n | \n \n 378 \n | \n \n 55 \n | \n \n 190 \n | \n \n 29 \n | \n
| \n Split mortgages \n | \n \n 164 \n | \n \n 28 \n | \n \n 164 \n | \n \n 28 \n | \n
| \n Total \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 2,010 \n | \n \n 289 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 777 cases in the year to 31 December 2022 for the Group in the number of residential home loan mortgages in forbearance arrangements, a decrease of \u20ac109m. The average balance of forborne loans is \u20ac0.130m at 31 December 2022 (31 December 2021: \u20ac0.133m).
\n \n \n \n \n \n \n \n\n (ii) Residential buy-to-let mortgages:\n
\nThe incidence of the main type of forbearance arrangements for residential buy-to-let mortgages only is analysed below:
\n| \n \n 31 December 2022\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n 19\n \n | \n \n \n 8\n \n | \n \n \n 17\n \n | \n \n \n 7\n \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 99\n \n | \n \n \n 29\n \n | \n \n \n 76\n \n | \n \n \n 24\n \n | \n
| \n Payment moratorium \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n
| \n Arrears capitalisation \n | \n \n \n 18\n \n | \n \n \n 8\n \n | \n \n \n 10\n \n | \n \n \n 4\n \n | \n
| \n Term extension \n | \n \n \n 27\n \n | \n \n \n 6\n \n | \n \n \n 12\n \n | \n \n \n 3\n \n | \n
| \n Hybrid* \n | \n \n \n 70\n \n | \n \n \n 41\n \n | \n \n \n 51\n \n | \n \n \n 23\n \n | \n
| \n Split mortgages \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n \n \n 22\n \n | \n \n \n 7\n \n | \n
| \n \n Total\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 188\n \n | \n \n \n 68\n \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\n| \n \n 31 December 2021\n \n | \n \n \n All loans\n \n | \n \n \n Stage 3\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n 54 \n | \n \n 27 \n | \n \n 31 \n | \n \n 15 \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n 190 \n | \n \n 58 \n | \n \n 121 \n | \n \n 38 \n | \n
| \n Payment moratorium \n | \n \n 2 \n | \n \n - \n | \n \n 2 \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n 62 \n | \n \n 31 \n | \n \n 21 \n | \n \n 11 \n | \n
| \n Term extension \n | \n \n 32 \n | \n \n 6 \n | \n \n 13 \n | \n \n 3 \n | \n
| \n Hybrid* \n | \n \n 86 \n | \n \n 37 \n | \n \n 56 \n | \n \n 20 \n | \n
| \n Split mortgages \n | \n \n 23 \n | \n \n 7 \n | \n \n 23 \n | \n \n 7 \n | \n
| \n Total \n | \n \n 449 \n | \n \n 166 \n | \n \n 267 \n | \n \n 94 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe tables above reflect a decrease of 193 cases in the year to 31 December 2022 for the Group in the number of residential buy-to-let in forbearance arrangements, a decrease of \u20ac67m in balances. The average balance of forborne loans is \u20ac0.39m at 31 December 2022 (31 December 2021: \u20ac0.37m).
\n\n Commercial mortgages\n
\nThe incidence of the main type of forbearance arrangements for commercial mortgages are analysed below:
\n| \n \n Commercial mortgages\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n \n \n Number\n \n | \n \n \n Balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Interest only \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Reduced payment (greater than interest only) \n | \n \n \n 11\n \n | \n \n \n 5\n \n | \n \n 13 \n | \n \n 23 \n | \n
| \n Payment moratorium \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n Arrears capitalisation \n | \n \n \n 1\n \n | \n \n \n 1\n \n | \n \n 5 \n | \n \n 7 \n | \n
| \n Term extension \n | \n \n \n 7\n \n | \n \n \n 1\n \n | \n \n 9 \n | \n \n 4 \n | \n
| \n Hybrid* \n | \n \n \n 6\n \n | \n \n \n 1\n \n | \n \n 10 \n | \n \n 3 \n | \n
| \n Split mortgages \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n - \n | \n \n - \n | \n
| \n \n Total\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n 37 \n | \n \n 37 \n | \n
* Hybrid is a combination of two or more forbearance arrangements.
\nThe table above reflects a decrease of 12 cases in the year to 31 December 2022 for the Group in the number of commercial mortgages in forbearance arrangements, a decrease of \u20ac29m in balances.
\n \n \n \n \n \n \n \n\n (d) Reconciliation of movement in forborne loans for all classes\n
\nThe tables below provide an analysis of the movement of total forborne loans and Stage 3 forborne loans during the year. It outlines the number and balances of forbearance treatments offered, expired and loans paid down during the year.
\n\n (i) Reconciliation of movement of total forborne loans\n
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2022\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 3,524\n \n | \n \n \n 467\n \n | \n \n \n 449\n \n | \n \n \n 166\n \n | \n \n \n 37\n \n | \n \n \n 37\n \n | \n \n \n 4,010\n \n | \n \n \n 670\n \n | \n
| \n New forbearance extended during the year* \n | \n \n \n 307\n \n | \n \n \n 39\n \n | \n \n \n 30\n \n | \n \n \n 17\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 337\n \n | \n \n \n 56\n \n | \n
| \n Deleveraged loans \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (138)\n \n | \n \n \n (51)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (141)\n \n | \n \n \n (52)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n \n (18)\n \n | \n \n \n (3)\n \n | \n \n \n (7)\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (25)\n \n | \n \n \n (7)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (816)\n \n | \n \n \n (106)\n \n | \n \n \n (34)\n \n | \n \n \n (13)\n \n | \n \n \n (4)\n \n | \n \n \n (21)\n \n | \n \n \n (854)\n \n | \n \n \n (140)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (247)\n \n | \n \n \n (25)\n \n | \n \n \n (44)\n \n | \n \n \n (12)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (299)\n \n | \n \n \n (45)\n \n | \n
| \n Balance shift** \n | \n \n \n -\n \n | \n \n \n (13)\n \n | \n \n \n -\n \n | \n \n \n (4)\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n (17)\n \n | \n
| \n \n Closing balance of loans in forbearance as at 31 December 2022\n \n | \n \n \n 2,747\n \n | \n \n \n 358\n \n | \n \n \n 256\n \n | \n \n \n 99\n \n | \n \n \n 25\n \n | \n \n \n 8\n \n | \n \n \n 3,028\n \n | \n \n \n 465\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n | \n \n \n Residential mortgages\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n |||
| \n \n 31 December 2021\n \n | \n \n \n Home loans cases\n \n | \n \n \n Home loans balances\n \n | \n \n \n Buy -to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 5,066 \n | \n \n 726 \n | \n \n 679 \n | \n \n 231 \n | \n \n 44 \n | \n \n 20 \n | \n \n 5,789 \n | \n \n 977 \n | \n
| \n New forbearance extended during the year* \n | \n \n 458 \n | \n \n 62 \n | \n \n 76 \n | \n \n 30 \n | \n \n 7 \n | \n \n 24 \n | \n \n 541 \n | \n \n 116 \n | \n
| \n Deleveraged loans \n | \n \n (845) \n | \n \n (115) \n | \n \n (214) \n | \n \n (48) \n | \n \n (4) \n | \n \n (3) \n | \n \n (1,063) \n | \n \n (166) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - re-classified to Stage 3 non-forborne \n | \n \n (16) \n | \n \n (3) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (17) \n | \n \n (3) \n | \n
| \n - expired forbearance treatment \n | \n \n (753) \n | \n \n (139) \n | \n \n (58) \n | \n \n (29) \n | \n \n (3) \n | \n \n (1) \n | \n \n (814) \n | \n \n (169) \n | \n
| \n - expired loan paid down \n | \n \n (386) \n | \n \n (49) \n | \n \n (33) \n | \n \n (13) \n | \n \n (7) \n | \n \n (2) \n | \n \n (426) \n | \n \n (64) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (15) \n | \n \n - \n | \n \n (5) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n (21) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 3,524 \n | \n \n 467 \n | \n \n 449 \n | \n \n 166 \n | \n \n 37 \n | \n \n 37 \n | \n \n 4,010 \n | \n \n 670 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n \n \n \n \n \n \n \n\n (ii) Reconciliation of movement in forborne loans Stage 3\n
\n| \n \n 31 December 2022\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2022 \n | \n \n \n 2,010 \n \n | \n \n \n 289 \n \n | \n \n \n 267 \n \n | \n \n \n 94 \n \n | \n \n \n 32 \n \n | \n \n \n 33 \n \n | \n \n \n 2,309 \n \n | \n \n \n 416 \n \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n \n 354 \n \n | \n \n \n 43 \n \n | \n \n \n 29 \n \n | \n \n \n 15 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 383 \n \n | \n \n \n 58 \n \n | \n
| \n Deleveraged loans \n | \n \n \n (3) \n \n | \n \n \n (1) \n \n | \n \n \n (32) \n \n | \n \n \n (10) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (35) \n \n | \n \n \n (11) \n \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n \n (550)\n \n | \n \n \n (70)\n \n | \n \n \n (29)\n \n | \n \n \n (11)\n \n | \n \n \n (4)\n \n | \n \n \n (1)\n \n | \n \n \n (583)\n \n | \n \n \n (82)\n \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n \n (10)\n \n | \n \n \n (2)\n \n | \n \n \n (4)\n \n | \n \n \n (4)\n \n | \n \n - \n | \n \n \n - \n \n | \n \n \n (14)\n \n | \n \n \n (6)\n \n | \n
| \n - expired forbearance treatment \n | \n \n \n (19)\n \n | \n \n \n (9)\n \n | \n \n \n (4)\n \n | \n \n \n (3)\n \n | \n \n \n (1)\n \n | \n \n \n (17)\n \n | \n \n \n (24)\n \n | \n \n \n (29)\n \n | \n
| \n - expired loan paid down \n | \n \n \n (148)\n \n | \n \n \n (18)\n \n | \n \n \n (39)\n \n | \n \n \n (11)\n \n | \n \n \n (8)\n \n | \n \n \n (8)\n \n | \n \n \n (195)\n \n | \n \n \n (37)\n \n | \n
| \n Balance shift** \n | \n \n \n - \n \n | \n \n \n (4)\n \n | \n \n \n - \n \n | \n \n \n (2)\n \n | \n \n \n - \n \n | \n \n \n (1) \n \n | \n \n \n - \n \n | \n \n \n (7)\n \n | \n
| \n \n Closing balance loans in forbearance as at 31 December 2022\n \n | \n \n \n 1,634\n \n | \n \n \n 228\n \n | \n \n \n 188 \n \n | \n \n \n 68\n \n | \n \n \n 19\n \n | \n \n \n 6\n \n | \n \n \n 1,841\n \n | \n \n \n 302\n \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n| \n \n 31 December 2021\n \n | \n \n \n Home loan cases\n \n | \n \n \n Home loan balances\n \n | \n \n \n Buy-to-let cases\n \n | \n \n \n Buy-to-let balances\n \n | \n \n \n Commercial cases\n \n | \n \n \n Commercial balances\n \n | \n \n \n Total cases\n \n | \n \n \n Total balances\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Opening balance 1 January 2021 \n | \n \n 2,850 \n | \n \n 438 \n | \n \n 478 \n | \n \n 151 \n | \n \n 36 \n | \n \n 14 \n | \n \n 3,364 \n | \n \n 603 \n | \n
| \n New Stage 3 forborne extended during the year* \n | \n \n 538 \n | \n \n 74 \n | \n \n 77 \n | \n \n 31 \n | \n \n 6 \n | \n \n 25 \n | \n \n 621 \n | \n \n 130 \n | \n
| \n Deleveraged loans \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Exited forborne Stage 3, now performing forborne \n | \n \n (392) \n | \n \n (46) \n | \n \n (32) \n | \n \n (13) \n | \n \n (1) \n | \n \n (1) \n | \n \n (425) \n | \n \n (60) \n | \n
| \n Exited forbearance \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - exited forborne Stage 3, now Stage 3 non-forborne \n | \n \n (12) \n | \n \n (2) \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (13) \n | \n \n (2) \n | \n
| \n - expired forbearance treatment \n | \n \n (112) \n | \n \n (25) \n | \n \n (76) \n | \n \n (19) \n | \n \n (1) \n | \n \n (1) \n | \n \n (189) \n | \n \n (45) \n | \n
| \n - expired loan paid down \n | \n \n (862) \n | \n \n (146) \n | \n \n (179) \n | \n \n (55) \n | \n \n (8) \n | \n \n (4) \n | \n \n (1,049) \n | \n \n (205) \n | \n
| \n Balance shift** \n | \n \n - \n | \n \n (4) \n | \n \n - \n | \n \n (1) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (5) \n | \n
| \n Closing balance of loans in forbearance as at 31 December 2021 \n | \n \n 2,010 \n | \n \n 289 \n | \n \n 267 \n | \n \n 94 \n | \n \n 32 \n | \n \n 33 \n | \n \n 2,309 \n | \n \n 416 \n | \n
* Balance movements are stated net of portfolio re-classification.
\n** Balance movements in respect of loans which are in forbearance at the start and end of the year.
\n\n (vii) Funding profile\n
\nThe ALCO monitors sources of funding and their respective maturities with a focus on establishing a stable and cost effective funding profile. Excluding equity, the Group\u2019s funding profile as at the 31 December 2022 can be broken down into the below component parts:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n %\n \n | \n \n \n %\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Customer accounts \n | \n \n \n 93\n \n | \n \n 94 \n | \n
| \n Long-term debt \n | \n \n \n 4\n \n | \n \n 4 \n | \n
| \n Short-term debt \n | \n \n \n 3\n \n | \n \n 2 \n | \n
| \n \u00a0 \n | \n \n \n 100 \n \n | \n \n 100 \n | \n
Long-term debt refers to debt with a maturity greater than 12 months from year-end and short-term debt is that which has a maturity of less than 12 months from year-end.
\n \n \n \n \n \n \n \nIn accordance with IFRS 7, Financial Instruments: Disclosures, the following tables present the maturity analysis of financial liabilities on an undiscounted basis, by remaining contractual maturity at the statement of financial position date. These will not agree directly with the balances on the consolidated statement of financial position due to the inclusion of future interest payments.
\n| \n \n 31 December 2022\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n Liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n \n 614 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 614 \n \n | \n
| \n Customer accounts \n | \n \n \n 19,906 \n \n | \n \n \n 689 \n \n | \n \n \n 261 \n \n | \n \n \n 385 \n \n | \n \n \n 157 \n \n | \n \n \n 342 \n \n | \n \n \n 21,740 \n \n | \n
| \n Debt securities in issue \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 6 \n \n | \n \n \n 11 \n \n | \n \n \n 371 \n \n | \n \n \n 308 \n \n | \n \n \n 702 \n \n | \n
| \n Derivative financial instruments \n | \n \n \n 10 \n \n | \n \n \n 169\n \n | \n \n \n 1,343 \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 1,522 \n \n | \n
| \n Subordinated liabilities \n | \n \n \n 1 \n \n | \n \n \n 1 \n \n | \n \n \n 2 \n \n | \n \n \n 4 \n \n | \n \n \n 7 \n \n | \n \n \n 300 \n \n | \n \n \n 315 \n \n | \n
| \n Other financial liabilities \n | \n \n \n 145\n \n | \n \n \n -\n \n | \n \n \n 2\n \n | \n \n \n 3\n \n | \n \n \n 6\n \n | \n \n \n 27\n \n | \n \n \n 183\n \n | \n
| \n \n Total liabilities\n \n | \n \n \n 20,678 \n \n | \n \n \n 863 \n \n | \n \n \n 1,614 \n \n | \n \n \n 403 \n \n | \n \n \n 541 \n \n | \n \n \n 977 \n \n | \n \n \n 25,076 \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Liabilities \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 347 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 16,032 \n | \n \n 1,416 \n | \n \n 454 \n | \n \n 575 \n | \n \n 221 \n | \n \n 405 \n | \n \n 19,103 \n | \n
| \n Debt securities in issue \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 537 \n | \n \n 552 \n | \n
| \n Derivative financial instruments \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Subordinated liabilities \n | \n \n 1 \n | \n \n 1 \n | \n \n 2 \n | \n \n 4 \n | \n \n 7 \n | \n \n 304 \n | \n \n 319 \n | \n
| \n Other financial liabilities \n | \n \n 92 \n | \n \n 48 \n | \n \n 1 \n | \n \n 3 \n | \n \n 4 \n | \n \n 22 \n | \n \n 170 \n | \n
| \n Total liabilities \n | \n \n 16,473 \n | \n \n 1,466 \n | \n \n 459 \n | \n \n 586 \n | \n \n 239 \n | \n \n 1,268 \n | \n \n 20,491 \n | \n
When managing the Group\u2019s liquidity and funding profile, for products where the contractual maturity date may be different from actual behaviour, the Group uses statistical methodologies to manage liquidity on an expected or behaviourally adjusted basis.
\n\n
The following table details the Group\u2019s liquidity analysis for derivative instruments that do not qualify as hedging instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates from the yield curves at the end of the reporting year. These will not agree directly with the balances on the consolidated statement of financial position.
\n| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2022\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n 82 \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n 82 \n \n | \n
| \n - outflow \n | \n \n \n (83)\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (83)\n \n | \n
| \n Business combinations forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n \n -\n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n -\n \n | \n
| \n - outflow \n | \n \n \n (9)\n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,521)\n \n | \n
| \n \n Balance at 31 December 2022\n \n | \n \n \n (10) \n \n | \n \n \n (169) \n \n | \n \n \n (1,343) \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n - \n \n | \n \n \n (1,522) \n \n | \n
| \n \n | \n \n \n Up to\n \n | \n \n \n 1-3\n \n | \n \n \n 3-6\n \n | \n \n \n 6-12\n \n | \n \n \n 1-2\n \n | \n \n \n Over 2\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n 1 month\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n months\n \n | \n \n \n years\n \n | \n \n \n years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n Gross settled: \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n FX forwards \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n - inflow \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n - outflow \n | \n \n (84) \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n (84) \n | \n
| \n Balance at 31 December 2021 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
\n (viii) Interest rate gap position\n
\nGap analysis is a technique for measuring the Group\u2019s interest rate risk exposure beginning with a maturity/re-pricing schedule that distributes interest sensitive assets, liabilities, and derivative positions into \u201ctime bands\u201d according to their maturity (if fixed rate), time remaining to their next re-pricing (if floating rate) or behavioural convention in order to identify any sources of significant mismatches. The below December 2022 IRRBB profile also includes interest cash flows based on the next re-price date i.e. one month\u2019s interest included for variable rate products and lifetime interest for fixed rate products.
\nA summary of the Group\u2019s interest rate gap position is as follows:
\n\n Interest rate re-pricing\n
\n| \n \n 31 December 2022\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Assets\n \n | \n \n \n 9,884\n \n | \n \n \n 697\n \n | \n \n \n 1,757\n \n | \n \n \n 11,516\n \n | \n \n \n 2,148\n \n | \n \n \n 26,002\n \n | \n
| \n \n Liabilities\n \n | \n \n \n (6,048)\n \n | \n \n \n (996)\n \n | \n \n \n (2,425)\n \n | \n \n \n (12,932)\n \n | \n \n \n (2,836)\n \n | \n \n \n (25,237)\n \n | \n
| \n \n Derivatives \n \n | \n \n \n 81\n \n | \n \n \n -\n \n | \n \n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n 81\n \n | \n
| \n \n Interest rate re-pricing gap \n \n | \n \n \n 3,917\n \n | \n \n \n (299)\n \n | \n \n \n (668)\n \n | \n \n \n (1,416)\n \n | \n \n \n (688)\n \n | \n \n \n 846\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Cumulative interest rate re-pricing gap\n \n | \n \n \n 3,917\n \n | \n \n \n 3,618\n \n | \n \n \n 2,950\n \n | \n \n \n 1,534\n \n | \n \n \n 846\n \n | \n \n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Not more than 3 months\n \n | \n \n \n Over 3 months but not more than 6 months\n \n | \n \n \n Over 6 months but not more than 1 year\n \n | \n \n \n Over 1 year but not more than 5 years\n \n | \n \n \n Over 5 years\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Assets \n | \n \n 12,608 \n | \n \n 587 \n | \n \n 1264 \n | \n \n 6505 \n | \n \n 1079 \n | \n \n 22043 \n | \n
| \n Liabilities \n | \n \n (11,769) \n | \n \n (973) \n | \n \n (1,395) \n | \n \n (6,137) \n | \n \n (1,546) \n | \n \n -21820 \n | \n
| \n Derivatives \n | \n \n 84 \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n - \n | \n \n 84 \n | \n
| \n Interest rate re-pricing gap \n | \n \n 923 \n | \n \n (386) \n | \n \n (131) \n | \n \n 368 \n | \n \n (467) \n | \n \n 307 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cumulative interest rate re-pricing gap \n | \n \n 923 \n | \n \n 537 \n | \n \n 406 \n | \n \n 774 \n | \n \n 307 \n | \n \n \n | \n
An increase in ECB interest rates of 100bps would increase net interest income by \u20ac58m and a decrease in ECB interest rates of 100bps would decrease net interest income by \u20ac58m.
\n \n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f200091": { "value": "\n\n (v) Group portfolios: Collateral in possession\n
\nCollateral in possession occurs where the obligor either (i) voluntarily surrenders the property or (ii) the Group takes legal ownership due to the non-repayment of the loan facility. The following tables outline the main movements in this category during the year.
\n \n \n \n \n\n Stock of collateral in possession\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||
| \n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n \n \n Number\n \n | \n \n \n Balance outstanding at transfer of ownership\n \n | \n
| \n \n Residential collateral in possession\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 14\n \n | \n \n \n 7\n \n | \n \n 27 \n | \n \n 10 \n | \n
| \n Buy-to-let \n | \n \n \n 105\n \n | \n \n \n 27\n \n | \n \n 165 \n | \n \n 42 \n | \n
| \n \n Total\n \n | \n \n \n 119\n \n | \n \n \n 34\n \n | \n \n 192 \n | \n \n 52 \n | \n
Collateral in possession assets are sold as soon as practicable. These assets which total \u20ac18m as at 31 December 2022 (31 December 2021: \u20ac28m) are included in assets held for sale (see note 18 for further details).
\nDuring the year the ownership of 16 properties were transferred to the Group.
\nThe details of the transfers are provided in the table below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n - \n | \n
| \n Buy-to-let \n | \n \n 16 \n | \n
| \n \n Total\n \n | \n \n 16 \n | \n
During the year 89 properties were disposed. The details of the disposals are provided in the tables below:
\n| \n \n | \n \n \n Number\n \n | \n
| \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 13 \n | \n
| \n Buy-to-let \n | \n \n 76 \n | \n
| \n Total \n | \n \n 89 \n | \n
| \n \n 31 December 2022\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at \n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n \n 13 \n \n | \n \n \n 3 \n \n | \n \n \n 2 \n \n | \n \n \n -\n \n | \n \n \n 1 \n \n | \n
| \n Buy-to-let \n | \n \n \n 76 \n \n | \n \n \n 18 \n \n | \n \n \n 13 \n \n | \n \n \n 1 \n \n | \n \n \n 6 \n \n | \n
| \n \n Year ended 31 December 2022\n \n | \n \n \n 89 \n \n | \n \n \n 21 \n \n | \n \n \n 15 \n \n | \n \n \n 1 \n \n | \n \n \n 7 \n \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n| \n \n 31 December 2021\n \n | \n \n \n Number of disposals\n \n | \n \n \n Balance \n \n\n outstanding at\n \n\n transfer of ownership\n \n | \n \n \n Gross sales proceeds\n \n | \n \n \n Costs to sell\n \n | \n \n \n Pre \n \n\n provisioning \n \n\n loss on sale*\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Collateral in possession \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Home loans \n | \n \n 23 \n | \n \n 7 \n | \n \n 5 \n | \n \n - \n | \n \n 2 \n | \n
| \n Buy-to-let \n | \n \n 114 \n | \n \n 25 \n | \n \n 16 \n | \n \n 1 \n | \n \n 10 \n | \n
| \n Year ended 31 December 2021 \n | \n \n 137 \n | \n \n 32 \n | \n \n 21 \n | \n \n 1 \n | \n \n 12 \n | \n
* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.
\n \n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f204926": { "value": "\n\n 39. Capital management \n
\nThe core objective of the Group\u2019s capital management policy is to ensure that the Group complies with its regulatory capital requirements and maintains sufficient capital to cover its business risks and support its strategy. The Group has established an Internal Capital Adequacy Assessment Process (ICAAP) to ensure that it is adequately capitalised against the inherent risks to which its business operations are exposed and to maintain an appropriate level of capital to meet the minimum capital requirements. The ICAAP is subject to review and evaluation by the Regulator. The management of capital within the Group is monitored by the Board Risk and Compliance Committee (BRCC) and the Assets and Liabilities Committee (ALCo) in accordance with Board approved policy.
\nThe Group\u2019s regulatory capital comprises of three tiers:
\nThe Group\u2019s 2022 regulatory CET1 (transitional) minimum requirement is 8.94% (December 2021: 8.94%). The CET1 ratio requirement of 8.94% consists of a Pillar 1 CRR requirement of 4.50%, a Pillar 2 Requirement (P2R) of 1.94% (December 2021: 1.94%) and the Capital Conservation Buffer (CCB) of 2.50%.
\nThe Group\u2019s Total Capital minimum requirement of 13.95% at 31 December 2022 (31 December 2021: 13.95%) consists of a Pillar 1 CRR requirement of 8%, P2R of 3.45%, and CCB of 2.5%.
\n \nThese requirements exclude Pillar 2 Guidance (P2G) which is not publicly disclosed.
\nThe following table summarises the composition of regulatory capital and the ratios of PTSB, the primary regulated entity of the Group as at 31 December 2022 and 31 December 2021 which are calculated in accordance with CRD IV regulatory capital requirements.
\n\n The following information has not been subject to audit by the Group\u2019s independent auditor.\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Common Equity Tier 1 capital\n \n | \n \n \n | \n \n \n | \n
| \n Share capital and share premium \n | \n \n \n 1,077\n \n | \n \n 561 \n | \n
| \n Reserves \n | \n \n \n 940\n \n | \n \n 1,104 \n | \n
| \n Prudential filters \n | \n \n \n (299)\n \n | \n \n (208) \n | \n
| \n \n Total qualifying CET1 capital\n \n | \n \n \n 1,718\n \n | \n \n 1,457 \n | \n
| \n Additional Tier 1 capital \n | \n \n \n 369\n \n | \n \n 123 \n | \n
| \n \n Total qualifying Tier 1 capital\n \n | \n \n \n 2,087\n \n | \n \n 1,580 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Tier 2 capital\n \n | \n \n \n | \n \n \n | \n
| \n Subordinated liabilities \n | \n \n \n 250\n \n | \n \n 250 \n | \n
| \n Other \n | \n \n \n 32\n \n | \n \n 40 \n | \n
| \n \n Total qualifying Tier 2 capital\n \n | \n \n \n 282\n \n | \n \n 290 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Total own funds\n \n | \n \n \n 2,369\n \n | \n \n 1,870 \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \u20acm \n | \n
| \n \n Risk weighted assets\n \n | \n \n \n | \n \n \n | \n
| \n Total risk-weighted assets \n | \n \n \n 10,627\n \n | \n \n 8,600 \n | \n
| \n - Credit risk (including CVA) \n | \n \n \n 9,927\n \n | \n \n 7,961 \n | \n
| \n - Operational risk \n | \n \n \n 700\n \n | \n \n 639 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Capital Ratios\n \n | \n \n \n | \n \n \n | \n
| \n Common Equity Tier 1 Capital ratio (Transitional basis) \n | \n \n \n 16.2%\n \n | \n \n 16.9% \n | \n
| \n Total capital ratio (Transitional basis) \n | \n \n \n 22.3%\n \n | \n \n 21.8% \n | \n
\n The CET1 and Total Capital ratios are calculated and reported to the CBI on a quarterly basis.\n
\n\n The movement in the Group\u2019s regulatory capital is summarised below:\n
\n| \n \n | \n \n \n 2022\n \n | \n \n \n 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Balance as at 1 January \n | \n \n \n 1,870\n \n | \n \n 1,779 \n | \n
| \n NatWest Equity Investment \n | \n \n \n 155\n \n | \n \n 0 \n | \n
| \n Operating profit/(loss) after tax \n | \n \n \n 223\n \n | \n \n (20) \n | \n
| \n Other intangible assets add-back/(deduction) \n | \n \n \n (33)\n \n | \n \n 19 \n | \n
| \n Deferred tax assets write-back/(deduction) \n | \n \n \n 2\n \n | \n \n (36) \n | \n
| \n IFRS 9 phase-in \n | \n \n \n (54)\n \n | \n \n (28) \n | \n
| \n AT1 securities \n | \n \n \n 245\n \n | \n \n (80) \n | \n
| \n Tier 2 Sub Debt \n | \n \n \n (8)\n \n | \n \n 250 \n | \n
| \n Other movements* \n | \n \n \n (31)\n \n | \n \n (14) \n | \n
| \n \n Balance as at 31 December \n \n | \n \n \n 2,369\n \n | \n \n 1,870 \n | \n
*Other movements include AT1 Coupons (-\u20ac17m), Calendar Provisioning (-\u20ac11m) and Revaluation Reserves (-\u20ac5m).
\n\n 40. Current/non-current assets and liabilities\n
\nThe following table provides an analysis of certain asset and liability line items as at 31 December 2022 and 31 December 2021. The analysis includes amounts expected to be recovered or settled no more than 12 months after the statement of financial position date (current) and more than 12 months after the statement of financial position date (non-current).
\n| \n \n | \n \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||
| \n \n | \n \n \n Note\n \n | \n \n \n Current\n \n | \n \n \n Non-current\n \n | \n \n \n Total\n \n | \n \n \n Current\n \n | \n \n \n Non-current\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n \n 57 \n | \n \n - \n | \n \n 57 \n | \n
| \n Items in the course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Other assets \n | \n \n 17 \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n 310 \n | \n \n - \n | \n \n 310 \n | \n
| \n Assets classified as held for sale \n | \n \n 18 \n | \n \n \n 18\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n \n 28 \n | \n \n - \n | \n \n 28 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 735\n \n | \n \n \n 2,442\n \n | \n \n \n 3,177\n \n | \n \n 214 \n | \n \n 2,280 \n | \n \n 2,494 \n | \n
| \n Equity Securities \n | \n \n 20 \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n 30\n \n | \n \n - \n | \n \n 26 \n | \n \n 26 \n | \n
| \n Prepayments and accrued income \n | \n \n 21 \n | \n \n \n 207\n \n | \n \n \n -\n \n | \n \n \n 207\n \n | \n \n 205 \n | \n \n - \n | \n \n 205 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 2,521\n \n | \n \n \n 17,072\n \n | \n \n \n 19,593\n \n | \n \n 2,071 \n | \n \n 12,185 \n | \n \n 14,256 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,240\n \n | \n \n \n 490\n \n | \n \n \n 21,730\n \n | \n \n 18,476 \n | \n \n 613 \n | \n \n 19,089 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n 13\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 10\n \n | \n \n \n 648\n \n | \n \n \n 658\n \n | \n \n 2 \n | \n \n 522 \n | \n \n 524 \n | \n
| \n Other liabilities \n | \n \n 31 \n | \n \n \n 149\n \n | \n \n \n 32\n \n | \n \n \n 181\n \n | \n \n 144 \n | \n \n 26 \n | \n \n 170 \n | \n
| \n Accruals \n | \n \n \n | \n \n \n 7\n \n | \n \n \n -\n \n | \n \n \n 7\n \n | \n \n 8 \n | \n \n - \n | \n \n 8 \n | \n
| \n Provisions \n | \n \n 32 \n | \n \n \n 52\n \n | \n \n \n 28\n \n | \n \n \n 80\n \n | \n \n 19 \n | \n \n 36 \n | \n \n 55 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 3\n \n | \n \n \n 249\n \n | \n \n \n 252\n \n | \n \n 3 \n | \n \n 249 \n | \n \n 252 \n | \n
\n 40. Current/non-current assets and liabilities\n
\nThe following table provides an analysis of certain asset and liability line items as at 31 December 2022 and 31 December 2021. The analysis includes amounts expected to be recovered or settled no more than 12 months after the statement of financial position date (current) and more than 12 months after the statement of financial position date (non-current).
\n| \n \n | \n \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n ||||
| \n \n | \n \n \n Note\n \n | \n \n \n Current\n \n | \n \n \n Non-current\n \n | \n \n \n Total\n \n | \n \n \n Current\n \n | \n \n \n Non-current\n \n | \n \n \n Total\n \n | \n
| \n \n | \n \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Assets\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Cash at bank \n | \n \n 14 \n | \n \n \n 58\n \n | \n \n \n -\n \n | \n \n \n 58\n \n | \n \n 57 \n | \n \n - \n | \n \n 57 \n | \n
| \n Items in the course of collection \n | \n \n 14 \n | \n \n \n 40\n \n | \n \n \n -\n \n | \n \n \n 40\n \n | \n \n 20 \n | \n \n - \n | \n \n 20 \n | \n
| \n Loans and advances to banks \n | \n \n 15 \n | \n \n \n 2,123\n \n | \n \n \n -\n \n | \n \n \n 2,123\n \n | \n \n 4,174 \n | \n \n - \n | \n \n 4,174 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n \n -\n \n | \n \n 1 \n | \n \n - \n | \n \n 1 \n | \n
| \n Other assets \n | \n \n 17 \n | \n \n \n 1\n \n | \n \n \n -\n \n | \n \n \n 1\n \n | \n \n 310 \n | \n \n - \n | \n \n 310 \n | \n
| \n Assets classified as held for sale \n | \n \n 18 \n | \n \n \n 18\n \n | \n \n \n -\n \n | \n \n \n 18\n \n | \n \n 28 \n | \n \n - \n | \n \n 28 \n | \n
| \n Debt securities \n | \n \n 19 \n | \n \n \n 735\n \n | \n \n \n 2,442\n \n | \n \n \n 3,177\n \n | \n \n 214 \n | \n \n 2,280 \n | \n \n 2,494 \n | \n
| \n Equity Securities \n | \n \n 20 \n | \n \n \n -\n \n | \n \n \n 30\n \n | \n \n \n 30\n \n | \n \n - \n | \n \n 26 \n | \n \n 26 \n | \n
| \n Prepayments and accrued income \n | \n \n 21 \n | \n \n \n 207\n \n | \n \n \n -\n \n | \n \n \n 207\n \n | \n \n 205 \n | \n \n - \n | \n \n 205 \n | \n
| \n Loans and advances to customers \n | \n \n 22 \n | \n \n \n 2,521\n \n | \n \n \n 17,072\n \n | \n \n \n 19,593\n \n | \n \n 2,071 \n | \n \n 12,185 \n | \n \n 14,256 \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Liabilities\n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Deposits by banks \n | \n \n 28 \n | \n \n \n 614\n \n | \n \n \n -\n \n | \n \n \n 614\n \n | \n \n 347 \n | \n \n - \n | \n \n 347 \n | \n
| \n Customer accounts \n | \n \n 29 \n | \n \n \n 21,240\n \n | \n \n \n 490\n \n | \n \n \n 21,730\n \n | \n \n 18,476 \n | \n \n 613 \n | \n \n 19,089 \n | \n
| \n Derivative financial instruments \n | \n \n 16 \n | \n \n \n 13\n \n | \n \n \n -\n \n | \n \n \n 13\n \n | \n \n - \n | \n \n - \n | \n \n - \n | \n
| \n Debt securities in issue \n | \n \n 30 \n | \n \n \n 10\n \n | \n \n \n 648\n \n | \n \n \n 658\n \n | \n \n 2 \n | \n \n 522 \n | \n \n 524 \n | \n
| \n Other liabilities \n | \n \n 31 \n | \n \n \n 149\n \n | \n \n \n 32\n \n | \n \n \n 181\n \n | \n \n 144 \n | \n \n 26 \n | \n \n 170 \n | \n
| \n Accruals \n | \n \n \n | \n \n \n 7\n \n | \n \n \n -\n \n | \n \n \n 7\n \n | \n \n 8 \n | \n \n - \n | \n \n 8 \n | \n
| \n Provisions \n | \n \n 32 \n | \n \n \n 52\n \n | \n \n \n 28\n \n | \n \n \n 80\n \n | \n \n 19 \n | \n \n 36 \n | \n \n 55 \n | \n
| \n Subordinated liabilities \n | \n \n 33 \n | \n \n \n 3\n \n | \n \n \n 249\n \n | \n \n \n 252\n \n | \n \n 3 \n | \n \n 249 \n | \n \n 252 \n | \n
\n 43. Commitments and Contingencies \n
\nThe table below gives the contractual amounts of irrevocable credit commitments. Even though these obligations are not recognised in statement of financial position they do involve credit risk. The maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.
\n \n| \n \n Credit commitments\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Guarantees and irrevocable letters of credit\n \n | \n \n \n 2 \n \n | \n \n 2 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Commitments to extend credit \n | \n \n \n | \n \n \n | \n
| \n - less than 1 year \n | \n \n \n 1,284 \n \n | \n \n 1,113 \n | \n
| \n - 1 year and over \n | \n \n \n 56 \n \n | \n \n 66 \n | \n
| \n \n Total commitments to extend credit\n \n | \n \n \n 1,340 \n \n | \n \n 1,179 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Total credit commitments\n \n | \n \n \n 1,342 \n \n | \n \n 1,181 \n | \n
\n Other contingencies\n
\nThe Group, like all other banks, is subject to litigation in the normal course of its business. Based on legal advice, other than matters referred to in note 32, the Group does not believe that any such litigation will have a material effect on its income statement or SOFP.
\nA number of different statutory and regulatory bodies, including the CBI, commenced investigations into a series of transactions involving deposits placed by Irish Life Assurance plc with Irish Bank Resolution Corporation (formerly Anglo Irish Bank) (on 31 March 2008, 26 September 2008, 29 September 2008 and 30 September 2008). While these investigations commenced a number of years ago, they were put on hold pending the determination of criminal proceedings against a number of individuals in respect of the same transactions. The Bank understands that those criminal proceedings have concluded and so the Bank is waiting to see if the investigations, which, from the Bank\u2019s perspective, have been dormant for some time will now be re-commenced.
\nAs part of the agreement in August 2011 to dispose of Irish Life International Limited, the Group provided certain indemnities and warranties to the purchaser under a number of identified scenarios.
\nLike other banks, in the normal course of business, customers bring complaints to the Financial Services and Pensions Ombudsman (FSPO) in relation to a variety of issues. The Bank considers the applicability of FSPO decisions and findings to other customers in similar circumstances.\u00a0 The Bank provides for these cases, where based on legal advice, the directors believe that it is more likely than not that an outflow of resources embodying economic benefits, will be required to settle a present obligation arising from a past event. The Bank has recently commenced appeals against two FSPO decisions in tracker mortgage related complaints to the High Court and, while the timing and outcome of these appeals is uncertain, based on legal advice received, no provision has been made for these cases. However, if the Bank is unsuccessful in these appeals the impact on the financial statements could be material.
\nECL held against commitments are reported under loans and advances to customers.
\nIn June 2021 PTSB committed to participate in the First Home Scheme along with the State and AIB and Bank of Ireland. PTSB has engaged with these parties over the last year to determine the structure of the Scheme as well as the mechanism for funding the operations of the scheme. The Group committed \u20ac54m in funding to the Joint venture. \u20ac10m was recognised in the Statement of Financial Position in respect of the scheme as at 31 December 2022.
\n \n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f206379": { "value": "\n\n 43. Commitments and Contingencies \n
\nThe table below gives the contractual amounts of irrevocable credit commitments. Even though these obligations are not recognised in statement of financial position they do involve credit risk. The maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.
\n \n| \n \n Credit commitments\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Guarantees and irrevocable letters of credit\n \n | \n \n \n 2 \n \n | \n \n 2 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Commitments to extend credit \n | \n \n \n | \n \n \n | \n
| \n - less than 1 year \n | \n \n \n 1,284 \n \n | \n \n 1,113 \n | \n
| \n - 1 year and over \n | \n \n \n 56 \n \n | \n \n 66 \n | \n
| \n \n Total commitments to extend credit\n \n | \n \n \n 1,340 \n \n | \n \n 1,179 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Total credit commitments\n \n | \n \n \n 1,342 \n \n | \n \n 1,181 \n | \n
\n Other contingencies\n
\nThe Group, like all other banks, is subject to litigation in the normal course of its business. Based on legal advice, other than matters referred to in note 32, the Group does not believe that any such litigation will have a material effect on its income statement or SOFP.
\nA number of different statutory and regulatory bodies, including the CBI, commenced investigations into a series of transactions involving deposits placed by Irish Life Assurance plc with Irish Bank Resolution Corporation (formerly Anglo Irish Bank) (on 31 March 2008, 26 September 2008, 29 September 2008 and 30 September 2008). While these investigations commenced a number of years ago, they were put on hold pending the determination of criminal proceedings against a number of individuals in respect of the same transactions. The Bank understands that those criminal proceedings have concluded and so the Bank is waiting to see if the investigations, which, from the Bank\u2019s perspective, have been dormant for some time will now be re-commenced.
\nAs part of the agreement in August 2011 to dispose of Irish Life International Limited, the Group provided certain indemnities and warranties to the purchaser under a number of identified scenarios.
\nLike other banks, in the normal course of business, customers bring complaints to the Financial Services and Pensions Ombudsman (FSPO) in relation to a variety of issues. The Bank considers the applicability of FSPO decisions and findings to other customers in similar circumstances.\u00a0 The Bank provides for these cases, where based on legal advice, the directors believe that it is more likely than not that an outflow of resources embodying economic benefits, will be required to settle a present obligation arising from a past event. The Bank has recently commenced appeals against two FSPO decisions in tracker mortgage related complaints to the High Court and, while the timing and outcome of these appeals is uncertain, based on legal advice received, no provision has been made for these cases. However, if the Bank is unsuccessful in these appeals the impact on the financial statements could be material.
\nECL held against commitments are reported under loans and advances to customers.
\nIn June 2021 PTSB committed to participate in the First Home Scheme along with the State and AIB and Bank of Ireland. PTSB has engaged with these parties over the last year to determine the structure of the Scheme as well as the mechanism for funding the operations of the scheme. The Group committed \u20ac54m in funding to the Joint venture. \u20ac10m was recognised in the Statement of Financial Position in respect of the scheme as at 31 December 2022.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f206383": { "value": "\n| \n \n Credit commitments\n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20acm\n \n | \n \n \n \u20acm\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Guarantees and irrevocable letters of credit\n \n | \n \n \n 2 \n \n | \n \n 2 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Commitments to extend credit \n | \n \n \n | \n \n \n | \n
| \n - less than 1 year \n | \n \n \n 1,284 \n \n | \n \n 1,113 \n | \n
| \n - 1 year and over \n | \n \n \n 56 \n \n | \n \n 66 \n | \n
| \n \n Total commitments to extend credit\n \n | \n \n \n 1,340 \n \n | \n \n 1,179 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Total credit commitments\n \n | \n \n \n 1,342 \n \n | \n \n 1,181 \n | \n
\n Other contingencies\n
\nThe Group, like all other banks, is subject to litigation in the normal course of its business. Based on legal advice, other than matters referred to in note 32, the Group does not believe that any such litigation will have a material effect on its income statement or SOFP.
\nA number of different statutory and regulatory bodies, including the CBI, commenced investigations into a series of transactions involving deposits placed by Irish Life Assurance plc with Irish Bank Resolution Corporation (formerly Anglo Irish Bank) (on 31 March 2008, 26 September 2008, 29 September 2008 and 30 September 2008). While these investigations commenced a number of years ago, they were put on hold pending the determination of criminal proceedings against a number of individuals in respect of the same transactions. The Bank understands that those criminal proceedings have concluded and so the Bank is waiting to see if the investigations, which, from the Bank\u2019s perspective, have been dormant for some time will now be re-commenced.
\nAs part of the agreement in August 2011 to dispose of Irish Life International Limited, the Group provided certain indemnities and warranties to the purchaser under a number of identified scenarios.
\nLike other banks, in the normal course of business, customers bring complaints to the Financial Services and Pensions Ombudsman (FSPO) in relation to a variety of issues. The Bank considers the applicability of FSPO decisions and findings to other customers in similar circumstances.\u00a0 The Bank provides for these cases, where based on legal advice, the directors believe that it is more likely than not that an outflow of resources embodying economic benefits, will be required to settle a present obligation arising from a past event. The Bank has recently commenced appeals against two FSPO decisions in tracker mortgage related complaints to the High Court and, while the timing and outcome of these appeals is uncertain, based on legal advice received, no provision has been made for these cases. However, if the Bank is unsuccessful in these appeals the impact on the financial statements could be material.
\nECL held against commitments are reported under loans and advances to customers.
\nIn June 2021 PTSB committed to participate in the First Home Scheme along with the State and AIB and Bank of Ireland. PTSB has engaged with these parties over the last year to determine the structure of the Scheme as well as the mechanism for funding the operations of the scheme. The Group committed \u20ac54m in funding to the Joint venture. \u20ac10m was recognised in the Statement of Financial Position in respect of the scheme as at 31 December 2022.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f206499": { "value": "\n\n 44. Related parties\n
\n \nRelated parties include individuals and entities that can exercise significant influence on operational and financial policies of the Group.
\n \nThe Group has a related party relationship with its Directors, Senior Executives, the Group\u2019s pension schemes, the Minister for Finance and with the Irish Government and Irish Government related entities on the basis that the Irish Government is deemed to have control over the Group.
\n \n\n (a) Directors\u2019 and Secretary\u2019s interest \n
\nThe interests of the Directors and the Company Secretary, including interests of their close family members in the share capital of the Company are as follows:
\n| \n \n Number of beneficial ordinary shares held \n \n | \n \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n Ordinary\n \n | \n \n \n Ordinary\n \n | \n
| \n \n | \n \n \n Position\n \n | \n \n \n shares\n \n | \n \n \n shares\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Robert Elliott \n | \n \n Chairman \n | \n \n \n 16,500 \n \n | \n \n 16,500 \n | \n
| \n Eamonn Crowley \n | \n \n Chief Executive Officer \n | \n \n \n 50,000 \n \n | \n \n 50,000 \n | \n
| \n Nicola O\u2019Brien (appointed 04 August 2022) \n | \n \n Chief Financial Officer \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Michael Frawley (retired 31 March 2022) \n | \n \n Chief Risk Officer \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Conor Ryan \n | \n \n Company Secretary \n | \n \n \n 10 \n \n | \n \n 10 \n | \n
| \n Donal Courtney \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Ronan O\u2019Neill \n | \n \n Non-Executive Director \n | \n \n \n 4 \n \n | \n \n 4 \n | \n
| \n Andrew Power \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Ken Slattery \n | \n \n Non-Executive Director \n | \n \n \n 10,000 \n \n | \n \n 10,000 \n | \n
| \n Ruth Wandh\u00f6fer \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Marian Corcoran \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Paul Doddrell \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Celine Fitzgerald \n | \n \n Non-Executive Director \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Anne Bradley \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
Conor Ryan, as trustee of the employee benefit trust set up under the terms of the long-term incentive plan, has non-beneficial interest in 4,580 shares held in the plan (31 December 2021: 4,580).
\nThere were no transactions in the above Directors\u2019 and Secretary\u2019s interests between 31 December 2022 and 28 February 2023.
\nDetails of the Directors\u2019 remuneration is included in the Directors\u2019 Remuneration Report on pages 142 to 146.
\n \n\n (b) Transactions with key management personnel \n
\nKey management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group. Key management personnel include Non-Executive Directors, Executive Directors and members of the Executive Committee (ExCo). The Executive Directors and members of the ExCo are listed below:
\n| \n \n Members of the ExCo at 31 December 2022\n \n | \n \n \n | \n
| \n Eamonn Crowley \n | \n \n Chief Executive \n | \n
| \n Nicola O\u2019Brien \n | \n \n Chief Financial Officer \n | \n
| \n Patrick Farrell \n | \n \n Retail Sales Director \n | \n
| \n Tom Hayes \n | \n \n Chief Technology Officer \n | \n
| \n Ger Mitchell \n | \n \n CHRO and Corporate Development Director \n | \n
| \n Andrew Walsh \n | \n \n Chief Legal Officer \n | \n
| \n Peter Vance \n | \n \n Chief Operations Officer \n | \n
| \n David Curtis \n | \n \n Interim Chief Risk Officer \n | \n
During the year ended 31 December 2022, the following key management personnel changes occurred;
\nNicola O\u2019Brien was appointed as Chief Financial Officer following the retirement of Declan Norgrove as Interim Chief Financial Officer. David Curtis was appointed Interim Chief Risk Officer following the retirement of Michael Frawley as Chief Risk Officer.
\nDeclan Norgrove, Breege Timoney and Shane O\u2019Sullivan retired as members of the ExCo during 2021. Their details are included in the comparative figures for 2021.
\nNon-Executive Directors are compensated by way of fees. In certain circumstances, expenses incurred by Non-Executive Directors during the normal course of business are paid by the Group and are included in taxable benefits. The compensation of Executive Directors and members of the ExCo comprises salary and other benefits together with pension benefits. Previously they also participated in the Group\u2019s profit sharing, share option schemes and long-term incentive plans. No awards have been issued under these schemes and plans since 2008.
\n \n\n Number of key management personnel as at year end is as follows:\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Non-Executive Directors \n | \n \n \n 10 \n \n | \n \n 10 \n | \n
| \n Executive Directors and Senior Management \n | \n \n \n 8 \n \n | \n \n 8 \n | \n
| \n \n | \n \n \n 18 \n \n | \n \n 18 \n | \n
\n (b) (i) Total compensation to Executive and Non-Executive Directors is as follows:\n
\n| \n \n | \n \n \n Year ended \n \n | \n \n \n Year ended\n \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Fees \n | \n \n \n 1,044 \n \n | \n \n 946 \n | \n
| \n Taxable benefits \n | \n \n \n 2 \n \n | \n \n 2 \n | \n
| \n Salary and other benefits \n | \n \n \n 742 \n \n | \n \n 856 \n | \n
| \n Pension benefits \n | \n \n \n | \n \n \n | \n
| \n - defined contribution \n | \n \n \n 106 \n \n | \n \n 122 \n | \n
| \n \n Total\n \n | \n \n \n 1,894 \n \n | \n \n 1,926 \n | \n
Total compensation to other key management personnel is as follows:
\n| \n \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Taxable benefits \n | \n \n \n 5 \n \n | \n \n 2 \n | \n
| \n Salary and other benefits \n | \n \n \n 2,395 \n \n | \n \n 2,221 \n | \n
| \n Pension benefits \n | \n \n \n | \n \n \n | \n
| \n - defined contribution \n | \n \n \n 332 \n \n | \n \n 282 \n | \n
| \n CFO Fees \n | \n \n - \n | \n \n 359 \n | \n
| \n \n Total\n \n | \n \n \n 2,732 \n \n | \n \n 2,864 \n | \n
There were no connected persons to key management personnel employed by the group during 2022 or 2021,
\n\n (b) (ii) Balances and transactions with key management personnel:\n
\nIn the normal course of its business, the Group had loan balances and transactions with key management personnel and their connected persons. The loans are granted on normal commercial terms and conditions with the exception of certain home loans where Executive Directors and Senior Managers may avail of subsidised loans on the same terms as other eligible management of the Group. All of the loans in the scope of the related party guidelines as outlined under the Companies Act 2014, the Central Bank Related Party lending code 2013 and IAS 24 Related party disclosures are secured, and all interest and principal due at the statement of financial position date has been repaid on schedule and therefore, no provision for loan impairment is required. Total outstanding balances of loans, credit cards, overdrafts and deposits are as follows:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Balances\n \n | \n \n \n | \n \n \n | \n
| \n Loans \n | \n \n \n 1,059 \n \n | \n \n 1,948 \n | \n
| \n Unsecured credit card balances and overdrafts \n | \n \n \n 1 \n \n | \n \n - \n | \n
| \n Deposits \n | \n \n \n 3,354 \n \n | \n \n 4,663 \n | \n
| \n \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Transactions during the year\n \n | \n \n \n | \n \n \n | \n
| \n Loan advances \n | \n \n \n - \n \n | \n \n 660 \n | \n
| \n Loan repayments \n | \n \n \n 892 \n \n | \n \n 327 \n | \n
| \n Interest received on loans \n | \n \n \n 41 \n \n | \n \n 43 \n | \n
| \n Interest paid on deposits \n | \n \n \n (1) \n \n | \n \n (1) \n | \n
\n Loans to Directors\n
\n| \n \n 31 December 2022\n \n | \n \n \n Balance as at 1 Jan\n \n | \n \n \n Advances during year\n \n | \n \n \n Principal repaid\n \n | \n \n \n Balance\n \n\n as at \n \n\n 31 Dec\n \n | \n \n \n Interest \n \n\n paid\n \n | \n \n \n Maximum balance\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Ronan O\u2019Neill*\n \n | \n \n \n 652\n \n | \n \n \n - \n \n | \n \n \n 12\n \n | \n \n \n 640\n \n | \n \n \n 16\n \n | \n \n \n 652\n \n | \n
| \n \n | \n \n \n 652 \n \n | \n \n \n - \n \n | \n \n \n 12\n \n | \n \n \n 640\n \n | \n \n \n 16\n \n | \n \n \n 652\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Balance as at 1 Jan\n \n | \n \n \n Advances \n \n\n during \n \n\n year\n \n | \n \n \n Principal repaid\n \n | \n \n \n Balance \n \n\n as at \n \n\n 31 Dec\n \n | \n \n \n Interest \n \n\n paid\n \n | \n \n \n Maximum balance\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Marian Corcoran \n | \n \n 248 \n | \n \n - \n | \n \n 248 \n | \n \n - \n | \n \n 2 \n | \n \n 248 \n | \n
| \n Ronan O\u2019Neill* \n | \n \n - \n | \n \n 660 \n | \n \n 8 \n | \n \n 652 \n | \n \n 11 \n | \n \n 660 \n | \n
| \n \n | \n \n 248 \n | \n \n 660 \n | \n \n 256 \n | \n \n 652 \n | \n \n 13 \n | \n \n 908 \n | \n
* Represents a loan for a person connected with this Director in accordance with section 307(3) of the Companies Act 2014.
\n \n\n (c) Irish Government and Irish Government related entities\n
\nThe Minister for Finance continues to be the majority shareholder of the Group (and the ultimate controlling party per IAS 24). The Irish Government is recognised as a related party as the Government is deemed to have control over the Group as defined by IAS 24. The Group has applied the amended IAS 24 which exempts an entity from the related party disclosure requirements in respect of the Government and Government related entities unless transactions are individually or collectively significant. In the normal course of business, the Group has entered into transactions with the Government and Government related entities involving deposits and senior debt.
\nThe following are transactions and balances between the Group and the Government and Government related entities that are collectively significant:
\nThe Government also has a controlling interest in Allied Irish Bank plc including EBS Limited. Due to the Group\u2019s related party relationship with the Irish Government as described above, balances between these financial institutions and the Group are considered related party transactions in accordance with IAS 24. There are no balances between these entities as at 31 December 2022 or 31 December 2021. As at 31 December 2022, the Irish Government no longer has significant influence over Bank of Ireland.
\n\n (d) Other related party transactions\n
\nRelated parties include individuals and entities that can exercise significant influence on operational and financial policies of the Group.
\n ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f206505": { "value": "\n\n (a) Directors\u2019 and Secretary\u2019s interest \n
\nThe interests of the Directors and the Company Secretary, including interests of their close family members in the share capital of the Company are as follows:
\n| \n \n Number of beneficial ordinary shares held \n \n | \n \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n Ordinary\n \n | \n \n \n Ordinary\n \n | \n
| \n \n | \n \n \n Position\n \n | \n \n \n shares\n \n | \n \n \n shares\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Robert Elliott \n | \n \n Chairman \n | \n \n \n 16,500 \n \n | \n \n 16,500 \n | \n
| \n Eamonn Crowley \n | \n \n Chief Executive Officer \n | \n \n \n 50,000 \n \n | \n \n 50,000 \n | \n
| \n Nicola O\u2019Brien (appointed 04 August 2022) \n | \n \n Chief Financial Officer \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Michael Frawley (retired 31 March 2022) \n | \n \n Chief Risk Officer \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Conor Ryan \n | \n \n Company Secretary \n | \n \n \n 10 \n \n | \n \n 10 \n | \n
| \n Donal Courtney \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Ronan O\u2019Neill \n | \n \n Non-Executive Director \n | \n \n \n 4 \n \n | \n \n 4 \n | \n
| \n Andrew Power \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Ken Slattery \n | \n \n Non-Executive Director \n | \n \n \n 10,000 \n \n | \n \n 10,000 \n | \n
| \n Ruth Wandh\u00f6fer \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Marian Corcoran \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Paul Doddrell \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
| \n Celine Fitzgerald \n | \n \n Non-Executive Director \n | \n \n \n -\n \n | \n \n - \n | \n
| \n Anne Bradley \n | \n \n Non-Executive Director \n | \n \n \n - \n \n | \n \n - \n | \n
Conor Ryan, as trustee of the employee benefit trust set up under the terms of the long-term incentive plan, has non-beneficial interest in 4,580 shares held in the plan (31 December 2021: 4,580).
\nThere were no transactions in the above Directors\u2019 and Secretary\u2019s interests between 31 December 2022 and 28 February 2023.
\nDetails of the Directors\u2019 remuneration is included in the Directors\u2019 Remuneration Report on pages 142 to 146.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f206774": { "value": "\n\n Number of key management personnel as at year end is as follows:\n
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Non-Executive Directors \n | \n \n \n 10 \n \n | \n \n 10 \n | \n
| \n Executive Directors and Senior Management \n | \n \n \n 8 \n \n | \n \n 8 \n | \n
| \n \n | \n \n \n 18 \n \n | \n \n 18 \n | \n
\n (b) (i) Total compensation to Executive and Non-Executive Directors is as follows:\n
\n| \n \n | \n \n \n Year ended \n \n | \n \n \n Year ended\n \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Fees \n | \n \n \n 1,044 \n \n | \n \n 946 \n | \n
| \n Taxable benefits \n | \n \n \n 2 \n \n | \n \n 2 \n | \n
| \n Salary and other benefits \n | \n \n \n 742 \n \n | \n \n 856 \n | \n
| \n Pension benefits \n | \n \n \n | \n \n \n | \n
| \n - defined contribution \n | \n \n \n 106 \n \n | \n \n 122 \n | \n
| \n \n Total\n \n | \n \n \n 1,894 \n \n | \n \n 1,926 \n | \n
Total compensation to other key management personnel is as follows:
\n| \n \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n Taxable benefits \n | \n \n \n 5 \n \n | \n \n 2 \n | \n
| \n Salary and other benefits \n | \n \n \n 2,395 \n \n | \n \n 2,221 \n | \n
| \n Pension benefits \n | \n \n \n | \n \n \n | \n
| \n - defined contribution \n | \n \n \n 332 \n \n | \n \n 282 \n | \n
| \n CFO Fees \n | \n \n - \n | \n \n 359 \n | \n
| \n \n Total\n \n | \n \n \n 2,732 \n \n | \n \n 2,864 \n | \n
There were no connected persons to key management personnel employed by the group during 2022 or 2021,
\n\n (b) (ii) Balances and transactions with key management personnel:\n
\nIn the normal course of its business, the Group had loan balances and transactions with key management personnel and their connected persons. The loans are granted on normal commercial terms and conditions with the exception of certain home loans where Executive Directors and Senior Managers may avail of subsidised loans on the same terms as other eligible management of the Group. All of the loans in the scope of the related party guidelines as outlined under the Companies Act 2014, the Central Bank Related Party lending code 2013 and IAS 24 Related party disclosures are secured, and all interest and principal due at the statement of financial position date has been repaid on schedule and therefore, no provision for loan impairment is required. Total outstanding balances of loans, credit cards, overdrafts and deposits are as follows:
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Balances\n \n | \n \n \n | \n \n \n | \n
| \n Loans \n | \n \n \n 1,059 \n \n | \n \n 1,948 \n | \n
| \n Unsecured credit card balances and overdrafts \n | \n \n \n 1 \n \n | \n \n - \n | \n
| \n Deposits \n | \n \n \n 3,354 \n \n | \n \n 4,663 \n | \n
| \n \n | \n \n \n Year ended\n \n | \n \n \n Year ended\n \n | \n
| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000 \n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \n Transactions during the year\n \n | \n \n \n | \n \n \n | \n
| \n Loan advances \n | \n \n \n - \n \n | \n \n 660 \n | \n
| \n Loan repayments \n | \n \n \n 892 \n \n | \n \n 327 \n | \n
| \n Interest received on loans \n | \n \n \n 41 \n \n | \n \n 43 \n | \n
| \n Interest paid on deposits \n | \n \n \n (1) \n \n | \n \n (1) \n | \n
\n Loans to Directors\n
\n| \n \n 31 December 2022\n \n | \n \n \n Balance as at 1 Jan\n \n | \n \n \n Advances during year\n \n | \n \n \n Principal repaid\n \n | \n \n \n Balance\n \n\n as at \n \n\n 31 Dec\n \n | \n \n \n Interest \n \n\n paid\n \n | \n \n \n Maximum balance\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Ronan O\u2019Neill*\n \n | \n \n \n 652\n \n | \n \n \n - \n \n | \n \n \n 12\n \n | \n \n \n 640\n \n | \n \n \n 16\n \n | \n \n \n 652\n \n | \n
| \n \n | \n \n \n 652 \n \n | \n \n \n - \n \n | \n \n \n 12\n \n | \n \n \n 640\n \n | \n \n \n 16\n \n | \n \n \n 652\n \n | \n
| \n \n 31 December 2021\n \n | \n \n \n Balance as at 1 Jan\n \n | \n \n \n Advances \n \n\n during \n \n\n year\n \n | \n \n \n Principal repaid\n \n | \n \n \n Balance \n \n\n as at \n \n\n 31 Dec\n \n | \n \n \n Interest \n \n\n paid\n \n | \n \n \n Maximum balance\n \n | \n
| \n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n \n \n \u20ac\u2019000\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Marian Corcoran \n | \n \n 248 \n | \n \n - \n | \n \n 248 \n | \n \n - \n | \n \n 2 \n | \n \n 248 \n | \n
| \n Ronan O\u2019Neill* \n | \n \n - \n | \n \n 660 \n | \n \n 8 \n | \n \n 652 \n | \n \n 11 \n | \n \n 660 \n | \n
| \n \n | \n \n 248 \n | \n \n 660 \n | \n \n 256 \n | \n \n 652 \n | \n \n 13 \n | \n \n 908 \n | \n
* Represents a loan for a person connected with this Director in accordance with section 307(3) of the Companies Act 2014.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f207432": { "value": "\n \n\n 46. Principal subsidiary undertakings and interest in subsidiaries and structured entities\n
\nUnder IFRS 10 \u2018Consolidated financial statements\u2019, the Group has control over an entity when it has the power to direct relevant activities that significantly affect the investee return, it is exposed or has rights to variable returns from its involvement in the investee and has the ability to affect those returns through its powers over the entity.
\nA subsidiary is considered material if the value of the consolidated total assets at the end of the financial year of the subsidiary and the entities it controls (if any) is more than 1% of the total assets of the Group.
\nThe key subsidiary of the parent meeting the criteria outlined above is:
\n| \n \n | \n \n \n Nature of\n \n | \n \n \n Incorporated\n \n | \n \n \n % of ordinary\n \n | \n
| \n \n Name and registered office\n \n | \n \n \n business\n \n | \n \n \n in\n \n | \n \n \n shares held\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Held directly by the company:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Permanent TSB plc \n56-59 St. Stephen\u2019s Green, Dublin 2 \n | \n \n Retail banking \n | \n \n Ireland \n | \n \n 100 \n | \n
In presenting details of the principal subsidiary undertakings, the exemption permitted by section 315 (a) (i) of the Companies Act 2014 in relation to disclosing related undertaking net assets or profit or loss, has been availed of, and the Company will annex a full listing of Group undertakings to its annual return to the Companies Registration Office.
\nThe reporting date for each of the Group\u2019s principal subsidiary entities is 31 December.
\nThe principal country of operation of each company is the country in which it is incorporated.
\nThe registered office of Permanent TSB Group Holdings plc is 56-59 St. Stephen\u2019s Green, Dublin 2.
\n \n \n \n\n (A) Company\u2019s interest in subsidiary undertakings\n
\nThe Company is the ultimate holding company of the Group while PTSB is a 100% subsidiary of the Company. The investment in PTSB is carried at the recoverable amount in the holding company\u2019s statement of financial position.
\nAt 31 December 2022 the investment amounted to \u20ac2,346m (31 December 2021: \u20ac888m). The Group carried out an impairment assessment using a combination of internal group models and externally available data to inform their view of the recoverable amount of investment. As the value in use was higher than the carrying value, in line with IAS 36, no impairment charge was taken (31 December 2021: impairment charge \u20ac66m). A write back of \u20ac697m was taken as the value in use calculation indicated that there was sufficient evidence for management to reverse the impairment losses taken in prior years. See company SOFP on page 263 for further details.
\n\n (B) Structured entities (SEs)\n
\nA structured entity is an entity in which voting or similar rights are not the dominant factor in deciding control. SEs are generally created to achieve a narrow and well defined objective with restrictions around their on-going activities. Depending on the Group\u2019s power to direct the relevant activities of the investee and its exposure or rights to variable returns from its involvement in the investee and the ability to use its power over the investee to affect the amount of the investor\u2019s return, it may consolidate the entity.
\n\n Control and voting rights\n
\nThe Directors of the individual SEs are independent of the Group and neither the Group nor any of its subsidiaries have voting rights in the share capital of these entities. The Group initiated the setup of these SEs and, as architect dictated the terms relating to the operation of these SEs. The Group, as administrator, provides services to the individual SEs. The Group, as administrator, has power to:
\nThe key activities performed by the Group\u2019s subsidiaries as administrator is:
\nThese two items highlight the power the Group has to direct the relevant activities of these entities that significantly affect the investee returns and the ability to use its power to affect variable returns of investors.
\nThe Group provides funding to each of these vehicles by way of a subordinated loan and has an entitlement to deferred consideration.
\nThrough the subordinated loan and the deferred consideration the Group is exposed to the variable returns of the SEs.
\nThe Group currently has six SEs in issue in the ROI the details of which are outlined below. During 2022, Fastnet Securities 12 DAC which collapsed in 2021 went into liquidation, Fastnet Securities 13 DAC was collapsed and subsequently went into liquidation and Fastnet Securities 18 DAC was set up:
\n| \n \n | \n \n \n Sub loan provided\n \n | \n
| \n \n | \n \n \n | \n
| \n \n SEs setup with ROI Residential Mortgages\n \n | \n \n \n | \n
| \n - Fastnet Securities 11 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 14 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 15 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 16 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 17 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 18 DAC \n | \n \n \u221a \n | \n
Although the Group does not own more than half of the voting power, it has the power to control the relevant activities of the SE and the ability to affect the variable returns of the investee and hence these SEs are consolidated. In these cases, the consideration received from the investors in the notes in the form of cash is recognised as a financial asset and a corresponding financial liability is recognised.
\nAt 31 December 2022, restricted cash of \u20ac405m (31 December 2021: \u20ac329m) relates to cash held by the Group\u2019s securitisation.
\n \n ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f207433": { "value": "\n\n 46. Principal subsidiary undertakings and interest in subsidiaries and structured entities\n
\nUnder IFRS 10 \u2018Consolidated financial statements\u2019, the Group has control over an entity when it has the power to direct relevant activities that significantly affect the investee return, it is exposed or has rights to variable returns from its involvement in the investee and has the ability to affect those returns through its powers over the entity.
\nA subsidiary is considered material if the value of the consolidated total assets at the end of the financial year of the subsidiary and the entities it controls (if any) is more than 1% of the total assets of the Group.
\nThe key subsidiary of the parent meeting the criteria outlined above is:
\n| \n \n | \n \n \n Nature of\n \n | \n \n \n Incorporated\n \n | \n \n \n % of ordinary\n \n | \n
| \n \n Name and registered office\n \n | \n \n \n business\n \n | \n \n \n in\n \n | \n \n \n shares held\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n \n Held directly by the company:\n \n | \n \n \n | \n \n \n | \n \n \n | \n
| \n Permanent TSB plc \n56-59 St. Stephen\u2019s Green, Dublin 2 \n | \n \n Retail banking \n | \n \n Ireland \n | \n \n 100 \n | \n
In presenting details of the principal subsidiary undertakings, the exemption permitted by section 315 (a) (i) of the Companies Act 2014 in relation to disclosing related undertaking net assets or profit or loss, has been availed of, and the Company will annex a full listing of Group undertakings to its annual return to the Companies Registration Office.
\nThe reporting date for each of the Group\u2019s principal subsidiary entities is 31 December.
\nThe principal country of operation of each company is the country in which it is incorporated.
\nThe registered office of Permanent TSB Group Holdings plc is 56-59 St. Stephen\u2019s Green, Dublin 2.
\n \n\n (A) Company\u2019s interest in subsidiary undertakings\n
\nThe Company is the ultimate holding company of the Group while PTSB is a 100% subsidiary of the Company. The investment in PTSB is carried at the recoverable amount in the holding company\u2019s statement of financial position.
\nAt 31 December 2022 the investment amounted to \u20ac2,346m (31 December 2021: \u20ac888m). The Group carried out an impairment assessment using a combination of internal group models and externally available data to inform their view of the recoverable amount of investment. As the value in use was higher than the carrying value, in line with IAS 36, no impairment charge was taken (31 December 2021: impairment charge \u20ac66m). A write back of \u20ac697m was taken as the value in use calculation indicated that there was sufficient evidence for management to reverse the impairment losses taken in prior years. See company SOFP on page 263 for further details.
\n\n (B) Structured entities (SEs)\n
\nA structured entity is an entity in which voting or similar rights are not the dominant factor in deciding control. SEs are generally created to achieve a narrow and well defined objective with restrictions around their on-going activities. Depending on the Group\u2019s power to direct the relevant activities of the investee and its exposure or rights to variable returns from its involvement in the investee and the ability to use its power over the investee to affect the amount of the investor\u2019s return, it may consolidate the entity.
\n\n Control and voting rights\n
\nThe Directors of the individual SEs are independent of the Group and neither the Group nor any of its subsidiaries have voting rights in the share capital of these entities. The Group initiated the setup of these SEs and, as architect dictated the terms relating to the operation of these SEs. The Group, as administrator, provides services to the individual SEs. The Group, as administrator, has power to:
\nThe key activities performed by the Group\u2019s subsidiaries as administrator is:
\nThese two items highlight the power the Group has to direct the relevant activities of these entities that significantly affect the investee returns and the ability to use its power to affect variable returns of investors.
\nThe Group provides funding to each of these vehicles by way of a subordinated loan and has an entitlement to deferred consideration.
\nThrough the subordinated loan and the deferred consideration the Group is exposed to the variable returns of the SEs.
\nThe Group currently has six SEs in issue in the ROI the details of which are outlined below. During 2022, Fastnet Securities 12 DAC which collapsed in 2021 went into liquidation, Fastnet Securities 13 DAC was collapsed and subsequently went into liquidation and Fastnet Securities 18 DAC was set up:
\n| \n \n | \n \n \n Sub loan provided\n \n | \n
| \n \n | \n \n \n | \n
| \n \n SEs setup with ROI Residential Mortgages\n \n | \n \n \n | \n
| \n - Fastnet Securities 11 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 14 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 15 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 16 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 17 DAC \n | \n \n \u221a \n | \n
| \n - Fastnet Securities 18 DAC \n | \n \n \u221a \n | \n
Although the Group does not own more than half of the voting power, it has the power to control the relevant activities of the SE and the ability to affect the variable returns of the investee and hence these SEs are consolidated. In these cases, the consideration received from the investors in the notes in the form of cash is recognised as a financial asset and a corresponding financial liability is recognised.
\nAt 31 December 2022, restricted cash of \u20ac405m (31 December 2021: \u20ac329m) relates to cash held by the Group\u2019s securitisation.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f207601": { "value": "\n\n 47. Reporting currency and exchange rates\n
\nThe consolidated financial statements are presented in millions of Euro.
\nThe following table shows the closing and average rates used by the Group for the current year-end and prior year-end
\n| \n \n | \n \n \n 31 December 2022\n \n | \n \n \n 31 December 2021\n \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \u20ac / \u00a3 exchange rate \n | \n \n \n | \n \n \n | \n
| \n Closing \n | \n \n \n 0.8869\n \n | \n \n 0.8403 \n | \n
| \n Average \n | \n \n \n 0.8549\n \n | \n \n 0.8583 \n | \n
| \n \n | \n \n \n | \n \n \n | \n
| \n \u20ac / US$ exchange rate \n | \n \n \n | \n \n \n | \n
| \n Closing \n | \n \n \n 1.0666\n \n | \n \n 1.1326 \n | \n
| \n Average \n | \n \n \n 1.0500\n \n | \n \n 1.1814 \n | \n
\n 48. Events after the reporting period \n
\nSubsequent to the statement of financial position date the Group paid \u20ac41m in relation to the equity cash component amount and the Branch Properties were transferred from Ulster Bank for consideration of \u20ac9m in January 2023. The SME assets were acquired in February 2022 and cash of \u20ac162m was paid. See note 3 for further detail.
\nNo other items, transactions or events that would materially impact the consolidated financial statements and require adjustment or disclosure to these consolidated financial statements have occurred between the reporting date of 31 December 2022 and the date of the approval of these financial statements by the Board of Directors of 28 February 2023.
\n ", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:635400DTNHVYGZODKQ93", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } } } }