VALUATION AND BREAKS
This table presents the combined balance sheet of all banks within the United Kingdom.
All data are available monthly from October 1997, and quarterly from Q4 1997. However some series have longer runs of monthly and quarterly data available from September 1986. From February 1999, euro assets and euro liabilities figures are also available separately. The data are not seasonally adjusted although changes data may not equal the different in amounts outstanding because they include among others, adjustments to exclude exchange rate movements and changes in the reporting population.
In order to protect the confidentiality of reporting institutions data the publication of separate series for building societies has been discontinued from January 2010.
Balance sheet data are provided by all UK-resident banks directly to the Bank of England on the form BT [link] on a quarterly basis. Banks with eligible liabilities over £400mn or private sector deposits or loans over £1,000mn report data on a monthly basis as well. For those banks who do not report monthly, data are grossed up to provide a full population figure. Prior to September 1997 data balance sheet data were reported on the BS form.
After the introduction of the Financial Services and Markets Act 2000 (FSMA), this table aggregates the balance sheets of all financial institutions recognised by the Bank of England as UK banks for statistical purposes.
(a) institutions which have a permission under Part 4 of FSMA to accept deposits but not:
- credit unions
- firms which have a permission to accept deposits only in the course of effecting or carrying out contracts of insurance in accordance with that permission
- friendly societies
- building societies.
(b) European Economic Area credit institutions with a permission under Schedule 3 of FSMA to accept deposits through a UK branch. This table excludes the Banking and Issue Departments of the Bank of England. Balance sheet data comprises of both the liabilities and assets of all UK resident banks.
Banks within the United Kingdom consist of offices in Great Britain and Northern Ireland of institutions authorised under the Banking Act 1987. From 1983, it includes the Banking Department of the Bank of England (Until March 1998), and from 1 January 1993, in accordance with the Second Banking Co-ordination Directive (2BCD), UK branches of “European Authorised Institutions” - see Press Notice of 4 January 1993.
Notes outstanding comprise the sterling notes issued by Scottish banks and the Northern Ireland banks.
Cash loaded cards comprise cash loaded cards issued by banks.
These include all credit balances on customers' accounts. This covers deposits by other UK banks (except deposits in connection with syndicated lending), deposits by non-resident offices of the reporting institution (except those invested in fixed assets which are included in capital and other funds), overdrawn accounts with UK and non-resident correspondents, and shareholders' deposits. They also include acceptances granted, liabilities under sale and repurchase agreements, certificates of deposit and other short-term paper issued (all shown separately except bills accepted by another UK bank), and all liabilities in gold bullion or gold coin (which are included in ‘Other/Foreign currency liabilities’) except that deposited for safe custody.
Sight deposits comprise balances as defined above, whether interest-bearing or not, which are transferable or can be withdrawn on demand without interest penalty (or interest indemnity). They include money at call (except where there is an agreement not to withdraw before a certain date or to call at a specific number of days’ notice) and money placed overnight. With effect from 1992 sight deposits comprise those deposits where the entire balance, whether interest-bearing or not, is accessible without penalty, either on demand or by close of business on the day following that on which the deposit was made.
Time deposits comprise all other deposits (except acceptances granted, certificates of deposits and other short-term paper apart from bills accepted by another UK bank, which are shown separately). They include from April 1999 the cash elements of all ISA deposits including those which can be withdrawn on demand, and from March 2000 bills accepted by another UK bank. Liabilities under sale and repurchase agreements are included until end-1995.
Acceptances granted represent the banks’ liabilities to the owners of the bills.
Liabilities under sale and repurchase agreements comprise cash receipts arising from the sale of securities or other assets for a finite period with a commitment to repurchase. Liabilities which arise when securities or other assets are sold in exchange for other securities or other non-cash assets are excluded. The amount of the liability (or its currency denomination) is determined by the cash consideration not the market value (or currency denomination) of the securities. There is a break in the series of liabilities to UK banks and UK public sector after March 1998, due to the reclassification of the Issue Department of the Bank of England from the latter to the former. The Issue Department was previously classified as being part of central government. Whilst this reclassification has been effected throughout the table, it is particularly noticeable here.
CDs etc. and other short-term paper issued include promissory notes issued by the reporting institutions, and instruments such as silver and other commodity deposit receipts (silver and other commodity deposit receipts are not included with effect from 1992). Also included are unsubordinated capital market instruments (except debentures and secured loan stocks) of any maturity, and subordinated loan stocks of less than five years’ original maturity (a maturity of five years or less with effect from 1992). Other subordinated loan stocks and debentures are included in ‘Capital and other funds’. Issues of bills accepted by another UK bank are included in time deposits placed by UK banks.
Items in suspense and transmission comprise credit balances not in customers' names but relating to customers' funds rather than to the reporting institution's internal funds or to shareholders' funds; balances awaiting settlement of securities transactions, and standing orders and credit transfers debited to customers' accounts, and other items for which the corresponding payment has not yet been made by the reporting institution. Also included are credits in course of transmission to UK branches of the reporting institution, to other UK banks, and to non-resident banks.
Net derivatives comprise the overall net derivatives position of contracts which are included within the trading and banking books of the reporting institutions.
Accrued amounts payable are gross amounts payable which have not yet been paid or credited to accounts.
Capital and other funds include shareholders’ funds, working capital provided by non-resident offices, and all internal accounts (both liability and asset). Included here is loan capital such as debentures and subordinated loan stocks with an original maturity of five years or more (original maturity of more than five years with effect from 1992).
Balances with the Bank of England/UK Central Bank
Cash ratio deposits: On 1 June 1998 a statutory scheme came into effect whereby both banks and building societies with average eligible liabilities of £400mn or more were required to hold non-interest-bearing deposits with the Bank of 0.15% of their eligible liabilities in excess of £400mn. With effect from 1 June 2004 the threshold for average eligible liabilities was changed to £500mn and the percentage was reduced to 0.11% on 2 June 2008. Adjustments to the amount of cash ratio deposits take place in June and December each year based on average eligible liabilities in the six months to April and October respectively. Arrangements prior to 1 June 1998 are detailed in the valuations and breaks section of these explanatory notes.
Other: These comprise balances with the Bank of England other than cash ratio deposits.
Claims under sale and repurchase agreements are included until end-1995, after which time they are shown separately.
UK banks includes all money (including correspondent balances, finance leasing and initial margin payments relating to futures and options contracts) lent to, or placed with, other UK banks (excluding the Bank of England); and bills drawn by other UK banks under acceptance credit facilities which the reporting institution has itself discounted. Overdrawn accounts are included under deposits.
UK banks’ CDs include holdings of promissory notes and other short-term paper issued by other UK banks, and holdings of stocks and bonds having an original maturity of less than one year (up to and including one year’s original maturity with effect from 1992) which have been issued by other UK banks.
UK bank commercial paper includes banks’ holdings of commercial paper issued by UK resident banks.
UK building societies CDs etc. and deposits includes banks’ holdings of commercial paper issued by building societies and all deposits with building societies including finance leasing.
Non-residents includes all balances (including correspondent balances) with, and funds lent to, non-resident banks (except trade and portfolio investments); bills drawn by non-resident banks under acceptance credit facilities opened by the reporting institution which the reporting institution has itself discounted; and certificates of deposit, promissory notes, commercial paper and other short-term paper issued by non-resident banks and owned by the reporting institution.
Acceptances granted comprise a claim on the counterparty whose bill the banks have accepted except for bills both accepted and discounted by the same bank which are included as lending (unless subsequently rediscounted). Acceptances are classified according to the customer who has asked for the acceptance facility to be opened.
Eligible local government bills comprise UK local government bills which are eligible for rediscount at the Bank of England.
Eligible bank bills comprise all sterling bills which are payable in the United Kingdom and have been accepted by a reporting institution whose bills are eligible for rediscount at the Bank of England until 14 March 2005. (See the September 1981 Quarterly Bulletin, page 348).
UK bank bills comprise all sterling bills which have been accepted by another UK bank, including sterling bills issued by the Bank of England.
Other bills include local government and bank bills which were not eligible for rediscount at the Bank of England, together with holdings of non-resident bills, UK commercial bills, commercial paper except that issued by banks or building societies, and other UK paper not included elsewhere. They exclude bills connected with lending under the special schemes for exports and domestic shipbuilding, and bills that the reporting institution has disposed of by rediscounting. Bills and notes are classified according to the currency in which they are drawn.
Other UK includes local government bills, public corporation bills not accepted by UK banks, sterling commercial paper issued by other UK residents, and UK paper not included elsewhere. It excludes bills connected with lending under the special schemes for exports and domestic shipbuilding, and bills which the reporting institution has disposed of by rediscounting. Bills and notes are classified according to the currency in which they are drawn.
Bank of England euro bills are included from April 1999, when the Bank assumed HM Treasury’s responsibility for issuing these instruments, last issued in April 2006.
Claims under sale and repurchase agreements comprise cash claims arising from the purchase of securities for a finite period with a commitment to re-sell. Claims which arise when securities or other assets are purchased in exchange for other securities etc. are excluded. The amount of the claim (or its currency denomination) is determined by the cash consideration not the market value (or currency denomination) of the securities.
These include all balances with, and lending (whether against collateral or not) to, customers, not included elsewhere. They include amounts receivable under finance leases and the reporting institution’s own acceptances which it has also discounted (except those drawn by other UK and non-resident banks, which are included in market loans). Own acceptances discounted are shown as advances to the party who has asked for the acceptance credit to be opened. Claims under sale and repurchase agreements are included until end-1995, after which these are shown separately.
Advances purchased by or assigned to the reporting institution under a transferable loan facility or similar arrangement are included, but loans where the borrower is a UK bank, a UK building society, a non-resident office of the reporting institution or another non-resident bank are reported under market loans. Provisions for bad and doubtful debts are not deducted. Where the reporting institution participates in (or acts as manager or co-manager of) a loan financed by more than one institution, only the reporting institution's participation for its own account is included, the loan being classified according to the ultimate borrower. See the note below on residential status for the definition of UK and non-residents.
Advances to the UK private sector include all medium and long-term lending (i.e. with an original maturity of two years or over), at fixed rates under Department of Trade and Industry guarantee for shipbuilding in the United Kingdom for UK buyers, excluding any amounts refinanced. Also included is all money placed with Stock Exchange money brokers and gilt-edged market makers.
Advances to other UK residents includes all medium and long-term lending (i.e. with an original maturity of two years or over), at fixed rates under Department of Trade and Industry guarantee for shipbuilding in the United Kingdom for UK buyers, excluding any amounts refinanced.
Advances to non-residents include all lending for exports under ECGD bank guarantee (excluding any amounts refinanced).
Banking Department lending to central government (net) comprises (from 1983) holdings by the Banking Department of the Bank of England of all forms of central government debt (including bank notes) less its deposit liabilities to the National Loans Fund and the Paymaster General. This item was discontinued from 1998 as a result of the removal of the Banking Department’s balance sheet from this table.
These include all securities beneficially owned by the reporting institution. They include securities which the reporting institution has sold for a finite period, but with a commitment to repurchase (i.e. repos), but exclude securities which have been bought for a finite period, but with a commitment to resell (i.e. reverse repos). Securities are defined as marketable or potentially marketable income-yielding instruments including bonds, FRNs, preference shares and other debt instruments but excluding certificates of deposit and commercial paper issued by banks and building societies, which are shown under market loans.
All investments are reported on a net basis, so that a negative position represents a short position in that particular type of security, for example as a result of borrowing that security.
UK government bonds include all bonds issued by the central government.
Other public sector investments include certificates of tax deposit, local government stocks and bonds which are listed on The London Stock Exchange and UK public corporation stocks and bonds.
Investments in UK banks include Bank of England Euro Notes from January 2001.
Investments in non-residents include deposits (including retained profits) with non-resident offices which have been invested in fixed assets such as premises and equipment.
Other investments include all investments in other UK banks, and deposits (including retained profits) with non-resident offices which have been invested in fixed assets such as premises and equipment.
Items in suspense and collection include all debit balances not in customers' names but relating to customers' funds rather than to the reporting institution's own internal funds (e.g. debit balances awaiting transfer to customers' accounts) and balances awaiting settlement of securities transactions. Collections comprise cheques etc. drawn, and in course of collection, on other UK banks and building societies. They include cheques that have been credited to customers’ accounts but are held overnight before being presented or paid into the reporting institution’s account with another UK bank or non-resident bank; they exclude cheques already passed to other UK banks for collection (these are included under ‘Market loans’ to UK banks). They include all collections on non-resident banks and items in transit to non-resident offices of the reporting institution, where the reporting institution is acting as principal and not as an agent for collection and where it has already given credit or value for the items.
Assets leased comprise all plant and equipment beneficially owned by the reporting institution which has been leased under finance lease agreements.
Accrued amounts receivable are gross amounts receivable but which have not yet been received and include interest and other revenues.
Other includes holdings of gold bullion and gold coin (in ‘Other currency assets’), other commodities (e.g. silver), together with land, premises, plant and equipment and other physical assets owned, or recorded as such, including assets leased under operating leases.
Other assets include holdings of gold bullion and gold coin (in ‘Other foreign currency assets'), other commodities, together with land, premises, plant and equipment and other physical assets owned, or recorded as such, including assets leased out under operating leases and leased in under finance leases. Assets leased out under finance leases are included as loans.
Acceptances comprise all bills accepted by the reporting institution which are still outstanding, excluding those which the reporting institution has itself discounted, but including any such discounts which have subsequently been rediscounted. Acceptances are classified according to the customer who has asked for the acceptance facility to be opened.
Holdings of own acceptances comprise all bills accepted by the reporting institution which the reporting institution has itself discounted, but excluding any such discounts which have subsequently been rediscounted.
Eligible banks’ total sterling acceptances comprises all bills accepted by a reporting institution whose bills are eligible for rediscount at the Bank of England including those which the reporting institution has itself discounted.
Eligible liabilities comprise, in broad terms, sterling deposit liabilities, excluding deposits with an original maturity of over two years, plus any sterling resources obtained by switching foreign currencies into sterling. Interbank transactions (excluding cash ratio and special deposits with the Bank of England) are taken into the calculation of an individual institution’s eligible liabilities on a net basis, irrespective of term, except for unsubordinated capital market instruments with a maturity of five years or more (more than five years from 1992) which are not taken into account. Adjustments are also made in respect of transit items and liabilities and claims under sale and repurchase agreements.
For statistical purposes, the United Kingdom comprises Great Britain and Northern Ireland, but from end-September 1997, excludes the Channel Islands and the Isle of Man. UK residents include: HM Government and other UK public authorities; enterprises which produce goods and services in the United Kingdom, including non-resident enterprises' branches and subsidiaries located and operating in the United Kingdom; individuals permanently resident in the United Kingdom (including temporary residents who have stayed, or who intend to stay, for a year or more) together with individuals normally resident in the United Kingdom who are overseas for less than a year; and members of UK armed forces and officials of HM Government serving overseas, as well as their dependants.
Non-residents include: non-resident governments, together with their diplomatic and military offices and representatives in the United Kingdom; international organisations, including their branches or representatives in the United Kingdom; UK representative offices of non-resident banks; non-resident offices of the reporting institution; enterprises located and operating overseas, including branches and subsidiaries of businesses which are themselves UK residents; and persons (including those of UK origin) who are residing outside the United Kingdom for a year or more.
VALUATION AND BREAKS
All data is reported in sterling, with foreign currency data converted to sterling at the middle spot sterling exchange rate at 4pm on the last working day of the month.
Prior to the implementation of the Bank of England Act on 1 June 1998, monthly reporting institutions with average eligible liabilities of £10 million or more were liable to lodge with the Bank of England non-operational, non-interest-bearing deposits of 0.35% of their eligible liabilities until 1 April 1998 and 0.25% thereafter. However, for institutions for which Northern Ireland was the main place of business in the United Kingdom, the ratio was always 0.25%. Adjustments to the amount of cash ratio deposits that each institution was required to lodge with the Bank of England took place in October and April each year, based on average eligible liabilities in the six months to September and to March respectively.
Prior to the Banking Act 1987 “Banks in the United Kingdom” were referred to as the Monetary Sector. This in turn was introduced on 18 November 1981, and resulted in a break in series. Seventy new institutions were introduced into the monthly reporting network, and a number of institutions omitted. The latter include those institutions in the Channel Islands and the Isle of Man, which opted not to join the monetary sector, and a number of smaller institutions which reported at end-quarters only. The Bank’s paper Monetary Control - provisions (reproduced on page 347 of the September 1981 Quarterly Bulletin) and the note ‘Money and banking figures: forthcoming changes’ (page 531 of the December 1981 Quarterly Bulletin) contain further details of changes arising from the introduction of these Monetary Control arrangements. Full definitions for the series prior to 1981 can be found in the December 1981 Quarterly Bulletin.
Before 1975 only selected balance sheet items are available; in particular items in suspense and transmission, capital and other funds were not included. Market loans to the public sector are included within advances from 1975 to 1981.
The reporting day was changed in October 1986 from the third Wednesday to the last day in each month.
Before 1991, some banks were including notional principal amounts associated with cross-currency interest rate swaps on their reported balance sheet, whereas most banks were not. From 1991 all banks exclude these items from their balance sheet. As a result of this change, there are discontinuities in some series, affecting in particular the American and the Other non-resident bank groups (see February 1992 Quarterly Bulletin).
At end-December 1995, the reporting of data on sale and repurchase agreements was changed to bring it into line with the internationally agreed national accounting conventions. The effect of this change was to inflate the aggregate balance sheet of all monthly banks by £1.3 billion in sterling and £49.3 billion in other currency.
From end-January 1999, the stock of assets and liabilities denominated in euros (including the legacy currencies of the 11 members of the eurozone from that date, and Greece from end-January 2001) are shown separately as well as being aggregated with those denominated in other foreign currencies.
Building society conversions
The transfer of business of a number of building societies to the bank sector has affected both bank and building society flows and levels data. From the month of transfer, the business of these societies is included in the bank rather than building society sector. Flows for the month of transfer have been adjusted for the change in both populations; levels data however are not break-adjusted.
- Cheltenham & Gloucester Building Society joined the Lloyds Bank Group in August 1995.
- National & Provincial Building Society transferred its business to Abbey National plc in August 1996.
- Alliance & Leicester Building Society converted to public limited company status in April 1997.
- Halifax Building Society converted to public limited company status in June 1997.
- Woolwich Building Society converted to public limited company status in July 1997.
- Bristol & West Building Society joined the Bank of Ireland Group in July 1997.
- Northern Rock Building Society converted to public limited company status in October 1997.
- Birmingham Midshires Building Society joined the Halifax Group in April 1999.
- Bradford & Bingley Building Society converted to public limited company status in December 2000.
O'Connor, P (2010), ' Changes to the Publication of Bank and Building Societies Statistics, January
Bank of England (2006) ‘The implications of money market reform for data’, Monetary and Financial Statistics, June
Docker, S (2006), ‘Suspense items – allocation within aggregate banks’ data’, Monetary and Financial Statistics, February
Bigwood, J (2004), ‘Data cleansing for Banking and monetary statistics’ Monetary and Financial Statistics, May
Bank of England (1981), ‘Money and banking figures: forthcoming changes’ Bank of England Quarterly Bulletin, December, pages 531-538.
Bank of England (1981), ‘Monetary control – provisions’ Bank of England Quarterly Bulletin, September, pages 347‑350.