Group 1-5 5+
As at 31 December 2013 Years Years
£ mil £ mil £ mil £ mil £ mil
Assets Note
Cash and advances to banks A £ 2,221 £ - £ - £ 79 £ 2,300
Marketable securities F - - - - -
Derivative financial instruments E 21 14 37 - 72
- Retail/Lease B 543 1,733 3,842 19 6,137
- Wholesale B 490 3,388 38 - 3,916
Loans and advances to customers B 1,033 5,121 3,880 19 10,053
Operating leases B 55 96 - - 151
Other assets D 129 - - - 129
Total asset inflows £ 3,459 £ 5,231 £ 3,917 £ 98 12,705
Liabilities
Due to banks and other financial institutions C £ 467 £ 1,674 £ 1,462 £ - £ 3,603
Deposits C 25 26 - - 51
Due to parent and related undertakings C 92 75 1,360 - 1,527
Debt securities in issue C 596 344 3,907 265 5,112
Derivative financial instruments E 25 23 27 8 83
Other liabilities D 80 120 9 1 210
Subordinated loans D 1 5 34 211 251
Total liability outflows £ 1,286 £ 2,267 £ 6,799 £ 485 £ 10,837
Net liquidity gap excluding off balance sheet items £ 2,173 £ 2,964 £ (2,882) £ (387) £ 1,868
Cumulative net liquidity gap
excluding off balance sheet items £ 2,173 £ 5,137 £ 2,255 £ 1,868
Available for use credit facilities:
Granted by financial institutions to the company £ 628 (58) (570) -
Granted by the company (Note 36) - - - -
Total available for use credit facilities £ 628 (58) (570) -
Guarantees callable £ (62)
Cumulative net liquidity gap
including off balance sheet items £ 2,739 £ 5,645 £ 2,193 £ 1,806
4-12 Total
Months Months 0-3
FCE Bank plc – ANNUAL REPORT AND ACCOUNTS – 2013 111
ended 31 December 2013
41 LIQUIDITY RISK continued
Group
1-5 5+As at 31 December 2012
Years YearsAssets Note
Cash and advances A £ 2,477 £ - £ - £ 68 £ 2,545
Marketable securities F 1 - - - 1
Derivative financial instruments E 26 37 63 - 126
- Retail/Lease B 526 1,798 3,081 12 5,417
- Wholesale B 540 3,380 42 - 3,962
Loans and advances to customers B 1,066 5,178 3,123 12 9,379
Operating leases B 65 109 - - 174
Other assets D 260 - - - 260
Total asset inflows £ 3,895 £ 5,324 £ 3,186 £ 80 12,485 Liabilities
Due to banks and other financial institutions C £ 701 £ 1,668 £ 1,182 £ 1 £ 3,552
Deposits C 45 8 - - 53
Due to parent and related undertakings C 102 342 875 - 1,319
Debt securities in issue C 1,219 867 2,805 4 4,895
Derivative financial instruments E 15 39 43 - 97
Other liabilities D 78 16 8 3 105
Subordinated loans D 1 6 36 212 255
Total liability outflows £ 2,161 £ 2,946 £ 4,949 £ 220 £ 10,276 Net liquidity gap excluding off balance sheet items £ 1,734 £ 2,378 £ (1,763) £ (140) £ 2,209 Cumulative net liquidity gap
excluding off balance sheet items £ 1,734 £ 4,112 £ 2,349 £ 2,209 Available for use credit facilities:
Granted by financial institutions to the company £ 490 - (490) -
Granted by the company (Note 36) - - - -
Total available for use credit facilities £ 490 - (490) - Guarantees callable £ (50)
Cumulative net liquidity gap
including off balance sheet items £ 2,174 £ 4,552 £ 2,299 £ 2,159
Months £ mil 0-3 £ mil £ mil £ mil £ mil 4-12 Total Months
ended 31 December 2013
41 LIQUIDITY RISK continued
Company 1-5 5+
As at 31 December 2013 Years Years
£ mil £ mil £ mil £ mil £ mil
Assets Note
Cash and advances to banks A £ 1,717 £ - £ - £ 79 £ 1,796
Marketable securities F - - - - -
Derivative financial instruments E 22 15 34 - 71
- Retail/Lease B 493 1,585 3,591 19 5,688
- Wholesale B 472 3,219 36 - 3,727
Loans and advances to customers B 965 4,804 3,627 19 9,415
Operating leases B 55 96 - - 151
Other assets D 403 - 81 - 484
Total asset inflows £ 3,162 £ 4,915 £ 3,742 £ 98 11,917
Liabilities
Due to banks and other financial institutions C £ 239 £ 295 £ 323 £ - £ 857
Deposits C 25 26 - - 51
Due to parent and related undertakings C 432 1,581 2,728 - 4,741
Debt securities in issue C 504 94 3,249 265 4,112
Derivative financial instruments E 12 4 11 8 35
Other liabilities D 68 118 9 1 196
Subordinated loans D 1 5 34 211 251
Total liability outflows £ 1,281 £ 2,123 £ 6,354 £ 485 £ 10,243
Net liquidity gap excluding off balance sheet items £ 1,881 £ 2,792 £ (2,612) £ (387) £ 1,674
Cumulative net liquidity gap
excluding off balance sheet items £ 1,881 £ 4,673 £ 2,061 £ 1,674
Available for use credit facilities:
Granted by financial institutions to the company £ 620 (50) (570) -
Granted by the company (Note 36) (40) 40 - -
Total available for use credit facilities £ 580 (10) (570) -
Guarantees callable £ (64)
Cumulative net liquidity gap
including off balance sheet items £ 2,397 £ 5,179 £ 1,997 £ 1,610 Months Months
FCE Bank plc – ANNUAL REPORT AND ACCOUNTS – 2013 113
ended 31 December 2013
41 LIQUIDITY RISK continued
Company 1-5 5+
As at 31 December 2012 Years Years
Assets Note
Cash and advances to banks A £ 1,947 £ - £ - £ 68 £ 2,015
Marketable securities F 1 - - - 1
Derivative financial instruments E 26 37 63 - 126
- Retail/Lease B 516 1,772 3,054 12 5,354
- Wholesale B 517 3,258 40 - 3,815
Loans and advances to customers B 1,033 5,030 3,094 12 9,169
Operating leases B 65 109 - - 174
Other assets D 378 - - - 378
Total asset inflows £ 3,450 £ 5,176 £ 3,157 £ 80 £ 11,863
Liabilities
Due to banks and other financial institutions C £ 361 £ 295 £ 52 £ - £ 708
Deposits C 45 8 - - 53
Due to parent and related undertakings C 564 2,005 3,023 3 5,595
Debt securities in issue C 1,088 395 2,166 - 3,649
Derivative financial instruments E 7 18 15 - 40
Other liabilities D 77 16 8 3 104
Subordinated loans D 1 6 36 212 255
Total liability outflows £ 2,143 £ 2,743 £ 5,300 £ 218 £ 10,404
Net liquidity gap excluding off balance sheet items £ 1,307 £ 2,433 £ (2,143) £ (138) £ 1,459
Cumulative net liquidity gap
excluding off balance sheet items £ 1,307 £ 3,740 £ 1,597 £ 1,459
Available for use credit facilities:
Granted by financial institutions to the company £ 490 - (490) -
Granted by the company (Note 36) (40) 40 - -
Total available for use credit facilities £ 450 40 (490) -
Guarantees callable £ (50)
Cumulative net liquidity gap
including off balance sheet items £ 1,707 £ 4,180 £ 1,547 £ 1,409 0-3 £ mil £ mil 4-12 Total Months £ mil £ mil Months £ mil
ended 31 December 2013
41 LIQUIDITY RISK continued Basis of liquidity risk analysis
The tables within this note analyse gross undiscounted contractual cash flows from assets and liabilities, with the exception of derivative financial instruments which are settled net, into relevant maturity groupings based on the criteria detailed in the following table.
The 'Net liquidity gap excluding off balance sheet items' is reported excluding behavioural adjustments for customer early settlements.
The 'Net liquidity gap including off balance sheet items' includes available for use credit facilities.
Both of the above gap figures assume that the inflows related to retail, leasing and wholesale financing plans occur on the latest contractual date and that the repayment of debt occurs at the earliest possible repayment date. Accordingly FCE's expected liquidity position based on cash inflows and outflows is more favourable than as presented within this note.
Note Cash flows from assets and liabilities are allocated to the appropriate time bands as follows:
A Based on availability of 'cash and advances' as follows (Note 11): • 'Cash and cash equivalents' classified by contractual maturity date.
• 'Other deposits' which are typically not available for use in day to day operations classified based on the latest possible repayment date.
B Customer payments are assumed to occur on the latest contractual date and no behavioral adjustments are made for customer early settlements:
• Retail finance and lease contracts and operating lease vehicles (reported within Note 19 'Property and equipment') generally require customers to pay equal monthly installments over the life of the contract. • Wholesale financing for new and used vehicles held in dealers inventory - A bullet repayment schedule is
utilised as the principal is typically repaid in one lump sum at the end of the financing period.
C Classified to the earliest possible repayment date which means the first rollover date, or the shortest period of notice required to withdraw the funds or exercise a break clause where applicable.
D Classified according to the remaining period to maturity.
E Forward foreign exchange contracts and cross currency interest rate swaps are presented as settled on a net basis.
F Marketable securities are considered as available liquidity on demand. (when applicable) Available for use credit facilities
Available committed securitisation capacity
FCE maintains committed securitisation capacity consisting of agreements with banks and asset backed commercial paper conduits under which these parties are contractually obligated, at FCE's option, to purchase eligible receivables, or make advances under asset backed securities. Refer to the Capital and Funding section of the Directors’ report and Note 18 ‘Securitisation and related financing’ for further details.
Unsecured credit facilities granted by financial institutions to the Group and Company
At 31 December 2013 the Company had £770 million(2012: £490 million) contractually committed unsecured credit facilities with financial institutions, of which £150 million (2012: £0 million) was utilised. The remaining undrawn amounts totaling £620 million (2012: £490 million) are available for use and reported within the Liquidity Risk tables as 'Available for use credit facilities – Granted by financial institutions to the Group'. The credit facilities, of which £50 million expires in 2014, and £720 million in 2016, contain certain covenants including an obligation for FCE to maintain its ratio of regulatory capital risk-weighted assets at no less than the applicable regulatory minimum, and for the support agreement between FCE and FMCC to remain in full force
and effect (and enforced by FCE to ensure that its net worth is maintained at no less than US $500 million). In addition to customary payment, representation, bankruptcy and judgment defaults, the credit facility contains cross-payment and cross-acceleration defaults with respect to other debt. The Group also includes £18m of contractually committed unsecured credit facilities in FCE’s subsidiaries (of which £10m was utilised at 31 December 2013).
Unsecured credit facilities granted by FMCC to the Group
A €1.5 billion (2012: €1.5 billion) short term revolving facility has been provided by FMCC to the Group which matures on 1 December 2014 or earlier upon 45 days’ notice from FMCC. As at 31 December 2013 no amounts had been drawn under this facility (2012: nil).
Liquid assets
Included within 'Cash and advances' is £1,596 million (2012: £1,766 million) of cash and cash equivalents held centrally, primarily as deposits eligible under the PRA’s definition of Liquid Assets Buffer (£1,569 million), both to meet regulatory requirements and to provide liquidity for short-term funding needs and flexibility in the use of other funding programmes.
FCE Bank plc – ANNUAL REPORT AND ACCOUNTS – 2013 115