REG - Tesco Personal FinTesco PLC - Final Results <Origin Href="QuoteRef">TSCO.L</Origin> - Part 6
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future interest flows.
Derivatives designated in a hedging relationship are included according to their contractual maturity.
Liquidity and funding risk on financial assets and liabilities
Group2017 Within 1year Between 1 and 2 years Between 2 and 3 years Between 3 and 4 years Between 4 and 5 years Beyond 5 years Total
On balance sheet £m £m £m £m £m £m £m
Financial assets:
Cash and balances atcentral banks 803.0 - - - - - 803.0
Loans and advances to customers 5,486.5 1,143.9 934.0 709.4 482.7 2,476.0 11,232.5
Investment securities
- Available-for-sale 176.4 86.5 93.5 26.2 131.0 490.9 1,004.5
- Loans and receivables 1.4 1.4 1.5 1.5 1.6 61.4 68.8
Other assets 299.1 - - - - - 299.1
Total financial assets 6,766.4 1,231.8 1,029.0 737.1 615.3 3,028.3 13,407.9
Financial liabilities:
Deposits from banks 100.0 301.3 0.5 100.0 - - 501.8
Deposits from customers 6,662.1 1,147.1 422.5 167.5 173.5 0.3 8,573.0
Debt securities in issue 173.5 443.0 435.8 210.0 - - 1,262.3
Derivatives settledon a net basis
- Derivatives in economic but not accounting hedges (2.1) (3.4) (2.9) (2.5) - - (10.9)
- Derivatives in accounting hedge relationships 34.4 25.2 4.1 11.7 10.0 23.4 108.8
Derivatives settled ona gross basis
- Outflows 71.5 - - - - - 71.5
- Inflows (63.3) - - - - - (63.3)
Other liabilities 148.3 - - - - - 148.3
Subordinated liabilities 4.0 4.2 4.5 4.9 5.3 302.7 325.6
Total financial liabilities 7,128.4 1,917.4 864.5 491.6 188.8 326.4 10,917.1
Off balance sheet
Contractual lending commitments 12,132.0 - - - - - 12,132.0
Total off balance sheet 12,132.0 - - - - - 12,132.0
74
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
Liquidity and funding risk on financial assets and liabilities
Group2016 Within 1year Between 1 and 2 years Between 2 and 3 years Between 3 and 4 years Between 4 and 5 years Beyond 5 years Total
On balance sheet £m £m £m £m £m £m £m
Financial assets:
Cash and balances atcentral banks 565.0 - - - - - 565.0
Loans and advances to customers 4,908.0 986.3 791.8 583.4 388.5 1,965.5 9,623.5
Investment securities
- Available-for-sale 94.8 154.5 102.4 68.6 16.9 610.5 1,047.7
- Loans and receivables 1.5 1.5 1.5 1.5 1.6 61.9 69.5
Other assets 277.3 - - - - - 277.3
Total financial assets 5,846.6 1,142.3 895.7 653.5 407.0 2,637.9 11,583.0
Financial liabilities:
Deposits from banks 82.2 - - - - - 82.2
Deposits from customers 5,891.2 945.7 329.4 201.3 135.2 0.6 7,503.4
Debt securities in issue 26.1 174.7 443.7 433.6 210.0 - 1,288.1
Derivatives settledon a net basis
- Derivatives in economic but not accounting hedges 7.6 2.3 0.5 - - - 10.4
- Derivatives in accounting hedge relationships 28.3 24.3 18.1 1.8 8.4 29.3 110.2
Derivatives settled on a gross basis
- Outflows 0.3 74.1 - - - - 74.4
- Inflows (0.6) (63.3) - - - - (63.9)
Other liabilities 142.8 - - - - - 142.8
Subordinated liabilities 4.5 4.5 4.5 4.5 4.5 254.1 276.6
Total financial liabilities 6,182.4 1,162.3 796.2 641.2 358.1 284.0 9,424.2
Off balance sheet
Contractual lending commitments 11,866.8 - - - - - 11,866.8
Total off balance sheet 11,866.8 - - - - - 11,866.8
75
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
Liquidity and funding risk on financial assets and liabilities
Company2017 Within 1year Between 1 and 2 years Between 2 and 3 years Between 3 and 4 years Between 4 and 5 years Beyond 5 years Total
On balance sheet £m £m £m £m £m £m £m
Financial assets:
Cash and balances atcentral banks 694.5 - - - - - 694.5
Loans and advances to customers 5,486.5 1,143.9 934.0 709.4 482.7 2,476.0 11,232.5
Investment securities
- Available-for-sale 176.4 86.5 93.5 26.2 131.0 490.9 1,004.5
- Loans and receivables 1.4 1.4 1.5 1.5 1.6 61.4 68.8
Other assets 387.2 - - - - - 387.2
Total financial assets 6,746.0 1,231.8 1,029.0 737.1 615.3 3,028.3 13,387.5
Financial liabilities:
Deposits from banks 100.0 301.3 0.5 100.0 - - 501.8
Deposits from customers 6,662.1 1,147.1 422.5 167.5 173.5 0.3 8,573.0
Debt securities in issue 17.2 139.0 84.9 210.0 - - 451.1
Derivatives settledon a net basis
- Derivatives in economic but not accounting hedges (2.1) (3.4) (2.9) (2.5) - - (10.9)
- Derivatives in accounting hedge relationships 34.4 25.2 4.1 11.7 10.0 23.4 108.8
Derivatives settled ona gross basis
- Outflows 71.5 - - - - - 71.5
- Inflows (63.3) - - - - - (63.3)
Other liabilities 304.9 304.0 351.0 - - - 959.9
Subordinated liabilities 4.0 4.2 4.5 4.9 5.3 302.7 325.6
Total financial liabilities 7,128.7 1,917.4 864.6 491.6 188.8 326.4 10,917.5
Off balance sheet
Contractual lending commitments 12,132.0 - - - - - 12,132.0
Total off balance sheet 12,132.0 - - - - - 12,132.0
76
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
Liquidity and funding risk on financial assets and liabilities
Company2016 Within 1year Between 1 and 2 years Between 2 and 3 years Between 3 and 4 years Between 4 and 5 years Beyond 5 years Total
On balance sheet £m £m £m £m £m £m £m
Financial assets:
Cash and balances atcentral banks 506.7 - - - - - 506.7
Loans and advances to customers 4,908.0 986.3 791.8 583.4 388.5 1,965.5 9,623.5
Investment securities
- Available-for-sale 94.8 154.5 102.4 68.6 16.9 610.5 1,047.7
- Loans and receivables 1.5 1.5 1.5 1.5 1.6 61.9 69.5
Other assets 291.5 - - - - - 291.5
Total financial assets 5,802.5 1,142.3 895.7 653.5 407.0 2,637.9 11,538.9
Financial liabilities:
Deposits from banks 82.2 - - - - - 82.2
Deposits from customers 5,891.2 945.7 329.4 201.3 135.2 0.6 7,503.4
Debt securities in issue 17.1 17.1 138.9 82.5 210.0 - 465.6
Derivatives settledon a net basis
- Derivatives in economic but not accounting hedges 7.6 2.3 0.5 - - - 10.4
- Derivatives in accounting hedge relationships 28.3 24.3 18.1 1.8 8.4 29.3 110.2
Derivatives settled on a gross basis
- Outflows 0.3 74.1 - - - - 74.4
- Inflows (0.6) (63.3) - - - - (63.9)
Other liabilities 152.1 157.6 304.8 351.1 - - 965.6
Subordinated liabilities 4.5 4.5 4.5 4.5 4.5 254.1 276.6
Total financial liabilities 6,182.7 1,162.3 796.2 641.2 358.1 284.0 9,424.5
Off balance sheet
Contractual lending commitments 11,866.8 - - - - - 11,866.8
Total off balance sheet 11,866.8 - - - - - 11,866.8
77
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
The table below summarises the Group's assets which are available to support future funding and collateral needs and shows
the extent to which these assets are currently pledged for this purpose.
The Group has adopted the definition of encumbered and unencumbered in the EBA's final guidelines on disclosure of June
2014. Asset encumbrance represents a claim to an asset by another party usually in the form of a security interest such as
a pledge. Encumbrance reduces the assets available in the event of default by a bank and therefore, the recovery rate of
its depositors and other unsecured bank creditors.
Group Encumbered Unencumbered Total
2017 £m £m £m
Encumbered asset summary
Investment securities - available-for-sale - 966.1 966.1
Loans and advances to customers1 2,309.9 7,651.3 9,961.2
Other assets 156.9 142.2 299.1
2,466.8 8,759.6 11,226.4
Encumbered loans and advances to customers
Securitisation - Delamare Master Trust 1,853.5
Mortgages 456.4
2,309.9
Encumbered other assets
Initial margin held at Clearing Houses 42.4
Variation margin held at Clearing Houses 104.5
Collateral held at counterparties 10.0
156.9
1 Refer Note 1, 'Accounting Policies' for details of methodology change.
2 Market value of securities pledged as collateral under repurchase agreements with other banks. All collateral agreements mature within 12 months.
78
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
Group Encumbered Unencumbered Total
2016 £m £m £m
Encumbered asset summary
Investment securities - available-for-sale 33.1 950.5 983.6
Loans and advances to customers1 2,618.0 5,927.7 8,545.7
Other assets 120.5 156.8 277.3
2,771.6 7,035.0 9,806.6
Encumbered investment securities - available-for-sale
Repurchase transaction collateral2 33.1
Encumbered loans and advances to customers
Securitisation - Delamare Master Trust 2,040.6
Mortgages 577.4
2,618.0
Encumbered other assets
Collateral held at counterparties 120.5
Loans and advances assigned for use as collateral in securitisation transactions.
At 28 February 2017, £2,529.3m (2016: £2,638.5m) of the Credit Card portfolio had its beneficial interest assigned to a
securitisation structured entity, Delamare Cards Receivables Trustee Limited, for use as collateral in securitisation
transactions. The total encumbered portion of this portfolio is £1,853.5m (2016: £2,040.6m).
At 28 February 2017, Delamare Cards MTN Issuer plc had £1,800.0m (2016: £1,800.0m) notes in issue in relation to
securitisation transactions, of which £800.0m (2016: £800.0m) related to externally issued notes (refer to note 26). At 28
February 2017 the Group owned £1,000.0m (2016: £1,000.0m) of Credit Card backed notes issued by Delamare Cards MTN Issuer
plc.
Of the total £800.0m (2016: £800.0m) class A retained Credit Card backed notes, £630.0m (2016: £nil) is held in a distinct
pool for the purposes of collateralising the TFS drawings. All other prepositioned assets with the Bank of England are
held within their single collateral pool.
Loans and advances prepositioned with Bank of England
Group and Company 2017 2016
£m £m
Credit Card backed notes* 780.0 778.8
Mortgages 456.4 577.4
Unsecured personal loans 1,037.7 1,248.4
Total assets prepositioned as collateral with Bank of England 2,274.1 2,604.6
Collateralised FLS Drawings 270.0 389.0
Collateralised TFS Drawings 400.0 -
*Issued by Delamare Cards MTN Issuer plc
79
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
· Market risk
Market risk is the risk that the value of earnings or capital is altered through the movement of market rates. This
includes interest rates, foreign exchange rates, credit spreads and equities. The Group has no trading book exposures.
Market risk arises in the following ways in the Group:
· Interest rate risk in the Group's retail portfolios, certain income streams and in its funding activities arises
from the different repricing characteristics of non trading assets and liabilities, hereafter referred to as Interest Rate
Risk in the Banking Book (IRRBB);
· Foreign exchange exposures that arise from foreign currency investments, foreign currency loans, deposits, income
and other foreign currency contracts;
· Interest rate risk associated with TU's investment portfolio; and
· Investment risk relating to the Group's pension obligations.
Control and risk mitigants
Control of market risk exposure is managed by ALCo and the Market Risk Forum. These bodies provide oversight of the Group's
market risk position at a detailed level, providing regular reports and recommendations to the Board Risk Committee.
· Interest rate risk in the Banking Book
The Group offers lending and savings products with varying interest rate features and maturities which create potential
interest rate exposures. IRRBB is the main market risk that could affect the Group's net interest income and arises where
there is potential for changes in benchmark interest rates, which results in a movement in the Banking Book net interest
income.
Interest rate risk is the risk to earnings and capital arising from timing differences on the re-pricing of the Group's
loans and deposits and unexpected changes to the slope and shape of the yield curve. The Group is exposed to interest rate
risk through its dealings with retail customers as well as through lending to and borrowing from the wholesale market.
80
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
Control and risk mitigants
The Group has established limits for its Risk Appetite in this area and stress tests are performed using sensitivity to
fluctuations in underlying interest rates in order to monitor this risk.
IRRBB management information is monitored by the Asset and Liability Management (ALM) team and regularly reviewed by ALCo.
IRRBB primarily arises from the consumer lending portfolios (including the Mortgage pipeline) and retail deposits. Hedging
strategies are implemented as required to ensure that the Group remains within its stated Risk Appetite.
The main hedging instruments used are interest rate swaps and the residual exposure is reported to the ALCo monthly using
two key risk measures.
Capital at Risk (CaR): The CaR approach assesses the sensitivity of a reduction in the Bank's capital to movements in
interest rates. The scenarios considered include both parallel and non-parallel movements of the yield curve and have been
designed to assess impacts across a suitable range of severe but plausible movements in interest rates. The CaR measure is
an aggregate measure of four separate components, each being a distinct form of interest rate risk (Repricing Risk, Basis
Risk, Pipeline Risk and Prepayment Risk).
The table below shows the Group's CaR. At 29 February 2016 the Group was exposed to net residual risk via a downward rate
scenario. Due to a combination of balance growth and, in particular, an increase in fixed rate lending via mortgage
products, the net residual risk exposure at 28 February 2017 was to an upward rate scenario.
2017 2016
Upward rate scenario Downward rate scenario
Capital at Risk Sensitivity £m £m
Repricing risk (6.7) (4.4)
Basis risk 4.5 (3.9)
Pipeline risk (5.1) 0.1
Prepayment risk (18.4) -
Total (25.7) (8.2)
Net Interest Income (NII) Sensitivity: This measures the effect of a +1.0%; -0.75% (2016: +1.0%; -0.5%) parallel interest
rate shock on the next 12 months NII, based on the re-pricing gaps in the existing portfolio.
2017 2016
Upward Rate Shock Downward Rate Shock Upward Rate Shock Downward Rate Shock
NII Sensitivity (0.07)% 0.05% 0.95% (0.48)%
The sensitivity analyses presented represent, in accordance with the requirements of IFRS 7, 'Financial Instruments:
Disclosures', Management's assessment of a reasonably possible sensitivity, rather than worst case scenario positions.
· Foreign exchange risk
The Group invests in non-GBP denominated bonds and may raise funding from the wholesale markets in currencies other than
GBP. Foreign exchange exposure arises if these are not hedged. Foreign exchange exposure may also arise through invoices
received which are denominated in foreign currencies.
81
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
Control and risk mitigants
Substantially all foreign currency exposure is hedged to reduce exposure to a minimum level, within Board-approved limits.
The residual exposure is not material and, as such, no sensitivity analysis is disclosed.
The table below summarises the Group's exposure to foreign currency exchange rate risk as at 28 February 2017. Included in
the table are the Group's financial instruments at carrying amounts, categorised by currency.
Maximum exposure to foreign exchange risk
2017 EUR USD GBP Other Total
£m £m £m £m £m
Financial assets
Cash and balances with central banks* 6.6 2.9 790.1 3.3 802.9
Loans and advances to customers 32.9 - 9,928.3 - 9,961.2
Derivative financial instruments - - 28.7 - 28.7
Investment securities:
- Available-for-sale 17.4 46.1 892.5 10.1 966.1
- Loans and receivables - - 34.1 - 34.1
Other assets* 0.4 - 298.7 - 299.1
Total financial assets 57.3 49.0 11,972.4 13.4 12,092.1
Financial liabilities
Deposits from banks - - 499.8 - 499.8
Deposits from customers - - 8,466.8 - 8,466.8
Debt securities in issue - - 1,204.3 - 1,204.3
Derivative financial instruments - - 133.3 - 133.3
Other liabilities (0.2) - 148.5 - 148.3
Subordinated liabilities - - 235.0 - 235.0
Total financial liabilities (0.2) - 10,687.7 - 10,687.5
*On a Company basis, cash and balances with central banks is £694.5m (2016: £506.6m), and other assets is £387.2m (2016: £315.5m).
82
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
Maximum exposure to foreign exchange risk
2016 EUR USD GBP Other Total
£m £m £m £m £m
Financial assets
Cash and balances with central banks* 5.5 2.7 553.8 2.9 564.9
Loans and advances to customers 32.1 - 8,513.6 - 8,545.7
Derivative financial instruments - - 29.3 - 29.3
Investment securities:
- Available-for-sale 20.0 39.9 914.5 9.2 983.6
- Loans and receivables - - 34.1 - 34.1
Other assets* 1.0 - 276.3 - 277.3
Total financial assets 58.6 42.6 10,321.6 12.1 10,434.9
Financial liabilities
Deposits from banks - - 82.0 - 82.0
Deposits from customers - - 7,398.5 - 7,398.5
Debt securities in issue - - 1,206.6 - 1,206.6
Derivative financial instruments - - 150.5 - 150.5
Other liabilities (0.1) - 142.5 0.4 142.8
Subordinated liabilities - - 235.0 - 235.0
Total financial liabilities (0.1) - 9,215.1 0.4 9,215.4
83
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
· Tesco Underwriting Limited investment portfolio
The TU insurance portfolio assets are invested with a number of counterparties. These investments are predominantly
comprised of government securities, corporate bonds and short term cash investments.
The main risks relate to changes in:
· interest rates affecting fair value arising as a proportion of the bonds are fixed rate in nature; and
· credit quality, as the range of assets held are issued by a variety of institutions with different credit
characteristics.
Controls and risk mitigants
Portfolio management is undertaken by the TU investment committee. The Group's Risk function provides oversight and
challenge.
· Investment risk relating to pension obligations
Pension risk may be defined as the risk to a company caused by its contractual or other liabilities to or with respect to a
pension scheme (whether established for its employees or those of a related company or otherwise). The Group is a
participating employer in the Tesco PLC Pension Scheme. Tesco PLC has recognised the appropriate net liability of the Tesco
PLC pension scheme in accordance with IAS 19, 'Employee Benefits' (refer to note 33).
· Insurance risk
The Group is exposed to insurance risk through its 49.9% ownership of TU, an authorised insurance company.
The Group defines insurance risk as the risks accepted through the provision of insurance products in return for a premium.
These risks may or may not occur as expected and the amount and timing of these risks are uncertain and determined by
events outside of the Group's control (e.g. flood or vehicular accident). The Group's aim is to actively manage insurance
risk exposure, with particular focus on those risks that impact profit volatility.
Insurance risk is typically categorised in the following way:
· Underwriting risk - Related to the selection and pricing (or quantification) of the risk currently being transferred
from customers to an insurer; and
· Reserving risk - Related to valuation and management of financial resources sufficient to pay claims for the risk
already transferred from customers to an insurer.
Controls and risk mitigants
The Insurance Risk team is responsible for monitoring the potential for financial volatility arising from insurance risk
exposures and consistency with the Group's Risk Appetite. The team provides subject matter expertise in the monitoring of
TU. TU operates a separate risk framework with dedicated risk and compliance teams and a suite of TU risk policies to
ensure that the TU insurance portfolio is operating within agreed Risk Appetite. Performance of the portfolio is monitored
and reported to the ERC on a monthly basis against specific KPI thresholds and limits.
· Residual price risk
Residual price risk is the risk that the fair value of a financial instrument and its associated hedge will fluctuate
because of changes in market prices, for reasons other than interest rate or credit risk. The Group has available-for-sale
investment securities that are held at fair value in the Company and Consolidated Statements of Financial Position.
84
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
34. Risk Management (continued)
Controls and risk mitigants
The Group has established appropriate hedging strategies to mitigate the interest rate and foreign exchange risks. Residual
price risk remains.
The table below demonstrates the Group's exposure to residual price risk at the year end. Included in the table is the
expected impact of a 10% shock in market prices on the Group's available-for-sale investment securities. The figures shown
are prior to hedging activities which mitigate the interest rate and foreign exchange risks.
Impact of 10 % shock in market prices Fair value Impact of 10% shock Value after 10% shock
2017 2016 2017 2016 2017 2016
£m £m £m £m £m £m
Available-for-sale:
Government-backed investment securities 117.4 88.6 (11.7) (8.9) 105.7 79.7
Gilts 572.5 629.6 (57.2) (63.0) 515.3 566.6
Supranational investment securities 176.1 184.2 (17.6) (18.4) 158.5 165.8
Other investment securities 98.4 77.7 (9.8) (7.8) 88.6 69.9
Equity securities 1.7 3.5 (0.2) (0.4) 1.5 3.1
966.1 983.6 (96.5) (98.5) 869.6 885.1
· Regulatory risk
Regulatory risk is the risk of reputational damage, liability or material loss from failure to comply with the requirements
of the financial services regulators or related codes of best practice applicable to the business areas within which the
Group operates. The Group's aim is to always avoid material breaches of laws and requirements. In the event that legal or
regulatory requirements are not met, effective remediation plans will be put in place.
Controls and risk mitigants
As part of the Group's Policy Framework, a dedicated Regulatory Advice and Compliance team is responsible for the
Compliance Policy which is approved by the Group's Board, as well as monitoring, challenge and oversight of regulatory risk
and compliance across the Group's business. Guidance and advice to enable the business to operate in a compliant manner is
provided by the Regulatory Advice and Compliance and Regulatory Legal teams.
The Group's Legal function has responsibility for commercial legal work, litigation/dispute resolution matters, providing
guidance on mortgages regulatory compliance, advising on competition law and supporting the Group's Treasury activity. The
Legal team also comprises the Company Secretarial function which, in addition to its role supporting the Board and
maintaining statutory books, ensures the Company complies with all applicable governance codes.
Business areas manage conduct risk and use a range of management information to monitor the fair treatment of customers. A
framework of product-led conduct management information has been developed and is reviewed by Senior Management in the
business lines. Customer outcomes are also assessed as part of the development and design of new products and through
annual product reviews of existing products. The ERC and Board review and challenge delivery of fair outcomes for customers
and are provided with oversight of the management information.
85
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
35. Financial Instruments
Classification of financial assets and liabilities
The following tables analyse the financial assets and financial liabilities in accordance with the categories of financial
instruments in IAS 39.
Group Loans and receivables Other (amortised cost) Derivatives held for hedging Available-for-sale Total
2017 £m £m £m £m £m
Financial assets
Cash and balances with central banks 802.9 - - - 802.9
Loans and advances to customers 9,961.2 - - - 9,961.2
Derivative financial instruments - - 28.7 - 28.7
Investment securities:
- Available-for-sale - - - 966.1 966.1
- Loans and receivables 34.1 - - - 34.1
Other assets 299.1 - - - 299.1
Total financial assets 11,097.3 - 28.7 966.1 12,092.1
Financial liabilities
Deposits from banks - 499.8 - - 499.8
Deposits from customers - 8,466.8 - - 8,466.8
Debt securities in issue - 1,204.3 - - 1,204.3
Derivative financial instruments - - 133.3 - 133.3
Other liabilities - 148.3 - - 148.3
Subordinated liabilities - 235.0 - - 235.0
Total financial liabilities - 10,554.2 133.3 - 10,687.5
All derivative financial instruments are held for economic hedging purposes, although not all derivatives are designated as
hedging instruments under the terms of IAS 39.
86
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
35. Financial Instruments (continued)
Group Loans and receivables Other (amortised cost) Derivatives held for hedging Available-for-sale Total
2016 £m £m £m £m £m
Financial assets
Cash and balances with central banks 564.9 - - - 564.9
Loans and advances to customers 8,545.7 - - - 8,545.7
Derivative financial instruments - - 29.3 - 29.3
Investment securities:
- Available-for-sale - - - 983.6 983.6
- Loans and receivables 34.1 - - - 34.1
Other assets 277.3 - - - 277.3
Total financial assets 9,422.0 - 29.3 983.6 10,434.9
Financial liabilities
Deposits from banks - 82.0 - - 82.0
Deposits from customers - 7,398.5 - - 7,398.5
Debt securities in issue - 1,206.6 - - 1,206.6
Derivative financial instruments - - 150.5 - 150.5
Other liabilities - 142.8 - - 142.8
Subordinated liabilities - 235.0 - - 235.0
Total financial liabilities - 9,064.9 150.5 - 9,215.4
87
TESCO PERSONAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS (continued)
35. Financial Instruments (continued)
Company Loans and receivables Other (amortised cost) Derivatives held for hedging Available-for-sale Total
2017 £m £m £m £m £m
Financial assets
Cash and balances with central banks 694.5 - - - 694.5
Loans and advances to customers 9,961.2 - - - 9,961.2
Derivative financial instruments - - 28.7 - 28.7
Investment securities:
- Available-for-sale - - - 966.1 966.1
- Loans and receivables 34.1 - - - 34.1
Other assets 387.2 - - - 387.2
Total financial assets 11,077.0 - 28.7 966.1 12,071.8
Financial liabilities
Deposits from banks - 499.8 - - 499.8
Deposits from customers - 8,466.8 - - 8,466.8
Debt securities in issue - 406.0 -
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