El problema de la part´ıcula en un pozo infinito

Current year charge 22

-Impact of corporation tax rate change - 5

Reallocation to current tax 7 31

Prior year adjustment - (2)

Total deferred tax charge 29 34

28 Subordinated liabilities

31 December 2014 31 December 2013

£m £m

£523 million subordinated floating rate loans 2020¹ 523 523

£90 million subordinated floating rate loans 2022² 90 90

£45 million subordinated floating rate loans 2022³ 45 45

Subordinated liabilities 658 658

These liabilities constitute unsecured obligations of the Group to its Parent, subordinated in right of payments to the claim of depositors, and other unsubordinated creditors of the Group. The subordinated liabilities meet the definition of a financial liability as the Group does not have an unconditional right to avoid the repayment of the principal or interest. Therefore, the liabilities are recognised on the balance sheet at amortised cost, using the effective interest method.

All of the current notes are redeemable in whole but not in part, subject to the prior approval of the PRA, on the fifth anniversary of their drawdown date. In the event of a wind up of the Group, the loans will become immediately due and payable without demand, together with all interest accrued thereon.

1Initial call date 7 October 2015. If not repaid at this point, they are due in full on their final maturity date of 7 October 2020. They bear interest at a floating rate of 6.5% per annum above the sterling LIBOR six month rate.

2Initial call date 21 July 2017. If not repaid at this point, they are due in full on their final maturity date of 21 July 2022. They bear interest at a floating rate of 11% per annum above the sterling LIBOR six month rate.

3Initial call date 21 December 2017. If not repaid at this point, they are due in full on their final maturity date of 21 December 2022. They bear interest at a floating rate of 9% per annum above the sterling LIBOR six month rate.

C o n s o lid a te d F in a n c ia l S ta te m e n ts R is k M a n a g e m e n t ie w G o v e rn a n c e B a n k F in a n c ia l S ta te m e n ts O th e In fo rm a

The table below sets out the contractual amounts of contingent liabilities and commitments. The maximum exposure to credit loss under contingent liabilities and 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.

31 December 2014 31 December 2013

Contractual amount Contractual amount

£m £m

Contingent liabilities

Guarantees and irrevocable letters of credit 9 15

Other contingent liabilities 6 8

Total contingent liabilities 15 23

Commitments

Undrawn formal standby facilities, credit lines and other commitments to lend

- revocable or irrevocable with original maturity of 1 year or less 2,980 3,008

- irrevocable with original maturity of over 1 year 624 669

Total commitments 3,604 3,677

Guarantees and letters of credit are given as security to support the performance of a customer to third parties. As the Group will be required to meet these obligations only in the event of the customer’s default, the cash requirements of these instruments are expected to be considerably below their nominal amounts.

Other contingent liabilities primarily include performance bonds and are generally short term commitments to third parties which are not directly dependent on the customer’s credit worthiness. Documentary credits commit the Group to make payments to third parties, on production of documents, which are usually reimbursed immediately by customers.

Commitments to lend are agreements to lend to a customer in the future, subject to certain conditions.

At 31 December 2014 the Group is assessing an emerging industry-wide issue with respect to technical compliance with the Consumer Credit Act (CCA). In accordance with IAS37.92, the Group has not provided further information on this issue.

C o n s o lid a te d F in a n c ia l S ta te m e n ts R is k M a n a g e m e n t G o v e rn a n c e B a n k F in a n c ia l S ta te m e n ts n

31 December 31 December 31 December 31 December 2014 2013 2014 2013 Movements in issued ordinary and preference shares £m £m £m £m

At 1 January 851 816 300 300 Issued during the year 35 -At 31 December 851 851 300 300

At 31 December 2014 and at 31 December 2013, all ordinary and preference shares issued by the Group were held by the Parent.

All ordinary and preference shares issued were fully paid at 31 December 2014 and 31 December 2013.

Ordinary shares

• In April 2013, 35 million units of ordinary shares at a par value of £1 each were acquired by the Parent.

Preference shares

On 31 March 2014 the third non-cumulative preference dividend fell due; this was not paid as the relevant terms and conditions were not met.

The terms and conditions attaching to the preference shares are outlined below:

• the preference shares are perpetual, with an option for the Group to redeem them at 31 March 2016 and at any dividend payment date thereafter, subject to approval from the PRA and compliance with the Companies Act 2006;

• dividends are payable annually in arrears at a rate of 13% and are payable unfettered at the discretion of the Group, subject to approval from the PRA and compliance with the Companies Act 2006; and

• the holders of preference shares shall not be entitled to receive notice of, or to attend or vote at, any general meeting of the Group.

On a winding-up or other return of capital of the Group, the assets of the Group available to the holders of the preference shares shall be applied in priority to any payment to the holders of ordinary shares and any other class of shares in the capital of the Group then in issue, ranking junior to the preference shares on such return of capital and pari passu on such return of capital with the holders of any other class of shares in the capital of the Group then in issue.

Distribution upon winding up will be a sum equal to the aggregate of:

(a) an amount equal to dividends accrued thereon for the then current dividend period to the date of the commencement of the winding-up or other such return of capital; and

(b) an amount equal to £1 per preference share.

Authorised share capital

The authorised share capital is £2.5 billion.

1All shares issued are in denominations of £1, therefore the table above also represents unit values.

C o n s o lid a te d F in a n c ia l S ta te m e n ts R is k M a n a g e m e n t ie w G o v e rn a n c e B a n k F in a n c ia l S ta te m e n ts O th e In fo rm a

The tables below summarise the maturity profile of the Group’s financial liabilities, at 31 December 2014 and at 31 December 2013, based on contractual undiscounted repayment obligations. See also Risk Management section 3.1 for details of the maturity of assets and liabilities on a discounted basis.

The Group does not manage liquidity risk on the basis of contractual maturity. Instead, the Group manages liquidity risk based on expected cash flows. The balances shown below will not agree directly to the balance sheet because the table incorporates all cash flows, on an undiscounted basis, related to both principal and interest payments.

Customer accounts include a number of term accounts that contain easy access features. These allow the customer to access a portion or all of their deposit notwithstanding that this repayment could result in a financial penalty being paid by the customer. For such accounts the portion subject to the potential early access has been classified accordingly in the table below as ‘demand’.

Maturity profile of financial liabilities

Up to 3 3-12 1-5 Over 5

Demand months months years years Total 31 December 2014 £m £m £m £m £m £m

Deposits from banks 855 231 2,298 1,847 113 5,344 Customer accounts 12,302 2,546 3,104 2,285 - 20,237 Subordinated liabilities - 5 50 251 763 1,069 Contingent liabilities 15 - - - - 15 Commitments 2,980 - - 624 - 3,604 Total 16,152 2,782 5,452 5,007 876 30,269

Up to 3 3-12 1-5 Over 5

Demand months months years years Total 31 December 2013 £m £m £m £m £m £m

Deposits from banks 645 35 6,329 4,722 151 11,882 Customer accounts 12,331 3,672 3,529 1,397 - 20,929 Subordinated liabilities - 5 49 245 839 1,138 Contingent liabilities 23 - - - - 23 Commitments 3,008 - - 669 - 3,677 Total 16,007 3,712 9,907 7,033 990 37,649

The table below summarises the maturity profile of the Group’s derivative liabilities. The Group manages liquidity risk based on expected cash flows, therefore the undiscounted cash flows payable on derivatives liabilities are classified according to their contractual maturity.

Maturity profile of derivative liabilities

Up to 3 3-12 1-5 Over 5

Demand months months years years Total 31 December 2014 £m £m £m £m £m £m

Gross settled derivative liabilities - outflows - (394) (114) (4) - (512) Gross settled derivative liabilities - inflows - 387 110 4 - 501 Gross settled derivative liabilities - net flows - (7) (4) - - (11) Net settled derivative liabilities - (8) (14) (28) (4) (54) Total derivatives cash flows - (15) (18) (28) (4) (65)

C o n s o lid a te d F in a n c ia l S ta te m e n ts R is k M a n a g e m e n t G o v e rn a n c e B a n k F in a n c ia l S ta te m e n ts n

Demand months months years years Total 31 December 2013 £m £m £m £m £m £m

Gross settled derivative liabilities - outflows - (318) (142) (10) - (470) Gross settled derivative liabilities - inflows - 311 139 10 - 460 Gross settled derivative liabilities - net flows - (7) (3) - - (10) Net settled derivative liabilities - - 1 1 (3) (1) Total derivatives cash flows - (7) (2) 1 (3) (11)