Final Results - Year Ended 31 Dec 1999, Part 2

Woolwich PLC 16 February 2000 PART TWO 1.SUMMARISED PROFIT AND LOSS ACCOUNT 1999 1998 £m £m Net interest income 663.5 659.0 Non-interest income 312.4 266.7 ------- ------- OPERATING INCOME 975.9 925.7 Operating expenses* (410.9) (395.7) Provisions for bad and doubtful debts (32.9) (12.9) Provision for pensions review - (12.0) Share of operating loss in joint (1.8) - ventures ------- ------- HEADLINE PROFIT BEFORE TAX 530.3 505.1 Cost of restructuring (9.9) - Loss on disposal of Group operations - (9.2) ------- ------- PROFIT ON ORDINARY ACTIVITIES BEFORE 520.4 495.9 TAX Tax on profit on ordinary activities (165.7) (164.6) ------- ------- PROFIT ON ORDINARY ACTIVITIES AFTER TAX 354.7 331.3 Minority interests - equity (4.1) (3.1) ------- ------- PROFIT ATTRIBUTABLE TO THE 350.6 328.2 SHAREHOLDERS OF WOOLWICH PLC Dividends (185.2) (403.1) ------- ------- PROFIT/(DEFICIT) FOR THE YEAR 165.4 (74.9) ------- ------- DIVIDENDS PER ORDINARY SHARE: Interim 3.9p 3.5p Final 8.1p 7.1p Special - 15.0p * Operating expenses in 1999 excludes cost of restructuring 2.SEGMENTAL PROFIT AND LOSS ACCOUNT For the year ended 31 December 1999 UK Continental Treasury Capital Total Retail Europe £m £m £m £m £m Net interest 470.7 38.0 36.7 118.1 663.5 income Non-interest 306.8 5.1 0.5 - 312.4 income ------- ------- ------- ------- ------- Total income 777.5 43.1 37.2 118.1 975.9 Operating (375.0) (29.9) (6.0) - (410.9) expenses* Provisions (29.6) (3.3) - - (32.9) for bad and doubtful debts Share of (1.8) - - - (1.8) operating loss in joint ventures ------- ------- ------- ------- ------- Operational 371.1 9.9 31.2 118.1 530.3 profit Income from 75.6 3.0 4.0 (82.6) - capital ------- ------- ------- ------- ------- Headline 446.7 12.9 35.2 35.5 530.3 profit before tax ------- ------- ------- ------- ------- *Operating expenses in 1999 excludes cost of restructuring For the year ended 31 December 1998 UK Con- Treasury Capital Total Retail tinental £m £m £m £m Europe £m Net interest 454.6 35.0 27.7 141.7 659.0 income Non-interest 266.3 1.0 (0.6) - 266.7 income ------ ------ ------ ------ ----- Total income 720.9 36.0 27.1 141.7 925.7 Operating (364.0) (26.6) (5.1) - (395.7) expenses Provisions for (13.3) 0.4 - - (12.9) bad and doubtful debts Provision for (12.0) - - - (12.0) pensions review ------ ------ ------ ------ ------ Operational 331.6 9.8 22.0 141.7 505.1 profit Income from 70.1 4.2 4.6 (78.9) - capital ------ ------ ------ ------ ------ Headline profit 401.7 14.0 26.6 62.8 505.1 before tax* ------ ------ ------ ------ ------ *Headline profit before tax is stated before loss on disposal of Group operations Note: Income from capital comprises notional and actual interest earnings on equity capital. Within Woolwich plc capital is allocated to UK Retail and Treasury on the basis of risk weighted assets and a Tier 1 ratio of 7%. 3. PROFIT BEFORE TAX AND INTEREST ON CAPITAL 1999 1998 £m £m Headline profit before tax 530.3 505.1 Deduct: interest earnings on (118.1) (141.7) capital ------- ------- Profit before tax and 412.2 363.4 interest on capital ------- ------- 4. NET INTEREST INCOME a) Group Net Interest Margin 1999 1998 £m £m Interest receivable 2,094.5 2,457.9 Interest payable (1,431.0) (1,798.9) -------- -------- Net interest income 663.5 659.0 -------- -------- Average interest earning 31,743.6 30,632.8 assets Average interest bearing 29,712.4 28,340.1 liabilities Gross yield on interest 6.60% 8.02% earning assets Cost of interest bearing 4.82% 6.35% liabilities ------ ------- Net interest spread 1.78% 1.67% ------ ------- Net interest margin on 2.09% 2.15% average interest earning assets Net interest margin on total 1.98% 2.02% assets b) Segmental Analysis For the year ended 31 December 1999 UK Con- Treasury Capital Total Retail tinental £m £m £m £m Europe £m Operating 470.7 38.0 36.7 118.1 663.5 interest income Interest income 75.6 3.0 4.0 (82.6) - from capital ------ ------ ------ ------ ----- Total interest 546.3 41.0 40.7 35.5 663.5 income ------ ------ ------ ------ ------ Average interest 26,063 2,173 10,100 31,744 earning assets Customer 2.15 1.76 2.11 spread % Net interest 2.10 1.89 0.40 2.09 margin % For the year ended 31 December 1998 UK Con- Treasury Capital Total Retail tinental £m £m £m £m Europe £m Operating 454.6 35.0 27.7 141.7 659.0 interest income Interest income 70.1 4.2 4.6 (78.9) - from capital ------ ------ ------ ------ ------ Total interest 524.7 39.2 32.3 62.8 659.0 income ------ ------ ------ ------ ------ Average interest 24,281 1,771 8,057 30,633 earning assets Customer 2.13 2.01 2.12 spread % Net interest 2.16 2.21 0.40 2.15 margin % UK customer spreads improved from 2.13% to 2.15% with that on the retail deposit book being maintained and that on UK mortgage lending improving. The expansion of the unsecured lending portfolio has also enhanced the figure. Continental European customer spreads have fallen from 2.01% to 1.76% reflecting the effect of increased competition and lower absolute interest rates on the reduced spreads available in both France and Italy on new business. Interest on capital has reduced from £141.7m to £118.1m with the capital return programme producing lower average balances and lower market rates reducing the return available on them. Notes: Net interest margins on average interest earning assets are calculated by dividing total interest income, including income from capital, by the average of the month end interest earning assets. Net interest margins on total assets are calculated by dividing total interest income, including income from capital, by the average of the opening and closing total assets. Customer spread is the combination of the average spread over the cost of wholesale funds earned on loans and advances to customers, plus the average spread below the cost of wholesale funds payable on customer accounts. Total customer spread is the weighted average of the UK retail and Continental Europe customer spreads. 5. NON-INTEREST INCOME a) Summary analysis 1999 1998 From: £m £m Loans and advances 36.9 41.7 Retail banking 42.9 32.6 General insurance 63.5 57.1 Independent financial advice 51.4 26.0 Life assurance and pensions 51.3 34.7 Unit Trusts and PEPs 33.3 24.8 Property services 27.5 49.4 ------ ------ UK Retail 306.8 266.3 Continental Europe 5.1 1.0 Treasury 0.5 (0.6) ------ ------ 312.4 266.7 ------ ------ Income from loans and advances in 1998 included £6m of mortgage indemnity guarantee profits relating to prior years. When this is taken into account the 1999 income is £1.2m higher. During the year, competition reduced the proportion of new mortgage business attracting arrangement fees but this was offset by a full year's contribution from the FirstPlus operation. Retail banking fees increased by 32% with the expansion of our current account activities together with uplifts in volumes of services such as ATM usage and travellers cheques. General insurance was 11% higher at £63.5m with increased volumes of mortgage related business together with a significant increase in personal creditor insurance. WIFAS' rise to £51.4m is attributable to both the increase in productivity of advisers and the expansion of the salesforce from 163 to 215. Life assurance and pension income reflects the growth in both regular premium and single premium bond business together with a £6.5m uplift consequent on the rationalisation of the commission structure on pre 1996 business. Income from unit trusts and PEPs is up 34% with both higher sales volumes and increased annual management charges on the larger fund. 1998 property services income included £25.8m in respect of the estate agency operation disposed of in November 1998. Excluding this income from the comparative, total non-interest income for 1999 was £71.5m (29.7%) higher than 1998. 1999 1998 b) Unit trusts and PEPs Funds under management (£m) 2,200 1,599 Number of accounts 342,000 294,000 c) Life assurance and pensions Funds under management (£m) 659 458 Number of accounts 184,000 169,000 Sums assured (£m) 6,000 5,500 6. OTHER OPERATING EXPENSES a) Summary Analysis 1999 1998 £m £m Salaries 160.8 154.4 Other staff costs 27.6 23.5 Other administrative 173.3 163.8 expenses Depreciation and 49.2 54.0 amortisation ------ ------ OPERATING EXPENSES 410.9 395.7 Cost of restructuring 9.9 - ------ ------ Total operating expenses 420.8 395.7 ------ ------ b) Staff Numbers Average number of employees Full Time 1999 1998 United Kingdom 5,386 5,656 Continental Europe 370 320 ------ ------ TOTAL 5,756 5,976 ------ ------ Part Time United Kingdom 1,551 1,620 Continental Europe 3 2 ------ ------ TOTAL 1,554 1,622 ------ ------ Period end number of employees Full Time 31/12/99 31/12/98 United Kingdom 4,758 5,167 Continental Europe 376 333 ------ ------ TOTAL 5,134 5,500 ------ ----- Part Time United Kingdom 1,374 1,542 Continental Europe 3 1 ------ ------ TOTAL 1,377 1,543 ------ ------ The reduction in the number of UK staff during the year is primarily attributable to the transfer of 731 staff to the mortgage processing joint venture, Global Home Loans Limited. Continental European staff numbers have increased primarily with the expansion of the distribution network. c) Distribution 1999 1998 UK branch and service 415 417 centres Woolwich ATMs 529 472 Tied financial advisers 458 450 Independent financial 215 163 advisers d) Year 2000 Following comprehensive preparations and testing, there have been no customer service interruptions or systems problems relating to Year 2000. We remain vigilant and whilst we do not anticipate problems, maintenance of our customer and business systems remains a key priority. The total cost of year 2000 activities, including monitoring during 2000, is estimated to be £26m, the majority of which was expended before the end of 1999. e) Economic and Monetary Union The Group's preparations for the launch of the euro at the beginning of 1999 were all completed and implemented successfully. The Group's Treasury operation and subsidiary companies in France and Italy saw most change as a result of the introduction of the new currency. The Group introduced an offshore euro denominated savings account and added euro denominated travellers' cheques to the range of products and services available for customers travelling abroad. The Woolwich recognises monetary union as a key business issue. At an early stage a Group-wide EMU Programme, headed by the Group Finance Director, was established to oversee and co- ordinate preparations, including those for possible UK entry, across all areas of the business. The impact on the Group of the UK joining EMU was assessed in 1998 and a review of this work was conducted in 1999. Full costs for UK entry are estimated at between £23m and £30m. While the position on UK entry remains uncertain the Group will seek to avoid significant expenditure on preparation where it may prudently do so. 7. TAXATION The Group taxation charge is 31.8% (1998: 33.2%). The rate is greater than the current UK rate due primarily to depreciation of that part of the Group's property assets which do not qualify for tax allowances. 8. LOANS AND ADVANCES TO CUSTOMERS a) Gross balances UK UK Consumer Continental Total £m Mortgages Credit £m Europe £m £m 31/12/97 23,817.3 85.1 1,617.9 25,520.3 On acquisition - 46.8 - 46.8 Advances 4,398.6 283.1 570.7 5,252.4 Redemptions (3,452.8) (100.1) (275.1) (3,828.0) and repayments Exchange - - 117.6 117.6 differences ------- ------- ------- ------- 31/12/98 24,763.1 314.9 2,031.1 27,109.1 Advances 6,012.3 807.6 917.8 7,737.7 Redemptions (4,448.6) (357.7) (348.5) (5,154.8) and repayments Exchange - - (273.2) (273.2) differences ------- ------- ------- ------- 31/12/99 26,326.8 764.8 2,327.2 29,418.8 ------- ------- ------- ------- UK Consumer Credit net lending comprises: 1999 1998 £m £m Personal loans 213.1 141.4 FirstPlus loans 202.8 26.5 Credit cards 19.0 11.9 Overdrafts 16.6 2.0 Other (1.6) 1.2 ------- ------- 449.9 183.0 ------- ------- PROVISIONS FOR BAD AND DOUBTFUL DEBTS UK UK Continental Total Mortgages Consumer Europe £m £m £m Credit £m SPECIFIC 31/12/97 63.6 9.6 10.1 83.3 Charge for the year (4.6) 12.7 2.7 10.8 Amounts written off (15.9) (8.4) (1.4) (25.7) Exchange difference - - 0.6 0.6 ------- ------- ------- ------ 31/12/98 43.1 13.9 12.0 69.0 Charge for the year (1.2) 26.3 2.6 27.7 Amounts written off (11.7) (14.7) (0.4) (26.8) Exchange difference - - (1.5) (1.5) ------- ------- ------- ------ 31/12/99 30.2 25.5 12.7 68.4 ------- ------- ------- ------ GENERAL 31/12/97 31.0 3.6 7.2 41.8 On acquisition - 0.9 - 0.9 Charge for the year 3.0 2.2 (3.1) 2.1 Exchange difference - - 0.3 0.3 ------- ------ ------- ------- 31/12/98 34.0 6.7 4.4 45.1 Charge for the year - 4.5 0.7 5.2 Exchange difference - - (0.6) (0.6) ------- ------- ------- ------- 31/12/99 34.0 11.2 4.5 49.7 ------- ------- ------- ------- TOTAL 31/12/97 94.6 13.2 17.3 125.1 On acquisition - 0.9 - 0.9 Charge for the year (1.6) 14.9 (0.4) 12.9 Amounts written off (15.9) (8.4) (1.4) (25.7) Exchange difference - - 0.9 0.9 ------- ------- ------- ------- 31/12/98 77.1 20.6 16.4 114.1 Charge for the year (1.2) 30.8 3.3 32.9 Amounts written off (11.7) (14.7) (0.4) (26.8) Exchange difference - - (2.1) (2.1) ------- ------- ------- ------- 31/12/99 64.2 36.7 17.2 118.1 ------- ------- ------- ------- The ratios of closing provision balances to gross loans and advances balances were as follows: 31/12/99 31/12/98 % % UK Mortgages 0.2 0.3 Consumer Credit Loans 4.8 6.5 Continental Europe 0.7 0.8 Total 0.4 0.4 b) Percentage of mortgage balances 2.5% or more in arrears 31/12/99 31/12/98 % % UK 1.75 2.14 France 1.84 2.54 Italy 1.32 1.90 c)UK mortgage balances in arrears 31/12/99 31/12/98 £m % £m % 2.5 - 5% 283.5 1.08 303.4 1.23 5 - 7.5% 81.4 0.31 88.3 0.36 7.5 - 10% 31.1 0.12 40.7 0.16 10%+ 41.8 0.16 65.0 0.26 Possessions 22.4 0.08 31.7 0.13 ----- ----- ------ ----- 460.2 1.75 529.1 2.14 Arrears experience has continued to improve, both in terms of the number of cases in arrears and the number of cases in possession, reflecting improved arrears management associated with the centralisation of processing and the rising house price trend. 9. CAPITAL EXPENDITURE Capital expenditure rose 42% to £69.4 million (1998: £49.0 million). The capital expenditure in 1999 was as follows: £m £m £m Open Plan Services Clacton Call Centre - Premises enhancement 2.0 - Technology infrastructure 9.9 11.9 ----- Group Application Processing 3.8 Workflow technology 3.3 Other (including digital TV and 2.5 21.5 customer database) ----- Data warehouse development 2.9 Branch enhancements 21.9 Other expenditure mainly of a 23.1 normal recurring nature ----- 69.4 ----- 10. DEFERRED MORTGAGE INCENTIVES COSTS Cashbacks Discounts Total Mortgage Incentives £m £m £m 31/12/97 65.7 66.8 132.5 Expenditure incurred in 25.4 26.7 52.1 the year Amount charged to profit (36.5) (45.1) (81.6) and loss account ------ ------ ------ 31/12/98 54.6 48.4 103.0 ------ ------ ------ Expenditure incurred in 23.3 9.0 32.3 the year Amount charged to profit (34.1) (35.6) (69.7) and loss account ------ ------ ------ 31/12/99 43.8 21.8 65.6 ------ ------ ------ In common with a number of other lenders, mortgage incentives are deferred and written off over the penalty period of the loan concerned. The level of this type of business being written has declined considerably, especially discounted products, with fixed rate lending predominating. The effect of adopting this accounting treatment has been to reduce the net interest margin by £37.4m compared with a policy of non deferral. In 1998, the effect was to reduce the net interest margin by £29.5m. 11. CAPITAL STRUCTURE 31/12/99 31/12/98 £m £m Tier 1 1,733 1,711 Tier 2 870 720 Deductions (191) (140) ------ ------- Total capital 2,412 2,291 ------ ------ Risk weighted assets 16,838 15,648 % % Total capital ratio 14.3 14.6 Tier 1 ratio 10.3 10.9 Tier 1 includes current year profits less proposed final dividends. During the year, Woolwich plc purchased in the market for cancellation 32.7m ordinary shares. The average purchase price was £3.66 per share, resulting in a cost of £120.6m, which has been charged to reserves. Note: Deductions from capital are mainly investments in subsidiaries not consolidated for risk asset ratio purposes. STATUTORY INFORMATION CONSOLIDATED PROFIT AND LOSS ACCOUNT 1999 1998 £m £m Interest receivable and similar income arising from debt securities 114.6 117.6 Other interest receivable and 1,979.9 2,340.3 similar income ------- ------- Interest receivable 2,094.5 2,457.9 Interest payable (1,431.0) (1,798.9) -------- -------- NET INTEREST INCOME 663.5 659.0 -------- -------- Fees and commissions receivable 296.0 246.2 Fees and commissions payable (33.0) (16.1) Other operating income 49.4 36.6 -------- -------- Total non-interest income 312.4 266.7 -------- -------- OPERATING INCOME 975.9 925.7 -------- -------- Administrative expenses - other (371.6) (341.7) Depreciation and amortisation (49.2) (54.0) -------- -------- TOTAL OPERATING EXPENSES (420.8) (395.7) Provisions for bad and doubtful (32.9) (12.9) debts Provision for pensions review - (12.0) -------- -------- OPERATING PROFIT 522.2 505.1 Share of operating loss in joint (1.8) - ventures Loss on disposal of Group - (9.2) operations -------- -------- PROFIT ON ORDINARY ACTIVITIES 520.4 495.9 BEFORE TAX Tax on profit on ordinary (165.7) (164.6) activities -------- -------- PROFIT ON ORDINARY ACTIVITIES 354.7 331.3 AFTER TAX Minority interests - equity (4.1) (3.1) -------- -------- PROFIT ATTRIBUTABLE TO THE 350.6 328.2 SHAREHOLDERS OF WOOLWICH PLC Dividends (185.2) (403.1) -------- -------- RETAINED PROFIT (DEFICIT) FOR THE 165.4 (74.9) YEAR ======== ======== HEADLINE PROFIT BEFORE TAX* 530.3 505.1 ======== ======== * Headline profit before tax is defined as pre tax profit before costs of restructuring in 1999 and loss on disposal of Group operations in 1998 EARNINGS PER SHARE Headline earnings per ordinary share 23.0p 21.2p Basic earnings per ordinary share 22.5p 20.6p Diluted earnings per ordinary share 22.5p 20.6p The weighted average number of shares used in calculating earnings per share was as follows: Basic and headline ordinary 1,557m 1,592m shares in issue Diluted ordinary shares 1,559m 1,593m CONSOLIDATED BALANCE SHEET 31/12/99 31/12/98 £m £m ASSETS Cash and balances at central 257.9 97.8 banks Loans and advances to banks 910.1 3,392.1 Loans and advances to customers 29,300.7 26,995.0 Debt securities 1,758.3 1,415.7 Interests in associates and 31.5 4.5 joint ventures Intangible fixed assets 3.8 4.6 Tangible fixed assets 303.1 280.2 Other assets, prepayments and 533.3 590.5 accrued income Long term assurance 658.9 458.1 policyholders' assets -------- -------- Total assets 33,757.6 33,238.5 -------- -------- LIABILITIES Deposits by banks 1,763.5 1,400.8 Customer accounts 20,061.3 21,821.8 Debt securities in issue 7,385.8 5,457.5 Other liabilities, accruals and 1,250.2 1,657.6 deferred income and provisions for liabilities and charges Long term assurance 658.9 458.1 policyholders' liabilities Subordinated liabilities 844.7 691.2 -------- -------- 31,964.4 31,487.0 -------- -------- MINORITY INTERESTS AND SHAREHOLDERS' FUNDS Called up share capital 154.0 157.3 Share premium account 10.4 10.1 Capital redemption reserve 6.4 3.1 Revaluation reserve 25.4 18.4 Profit and loss account 1,581.3 1,548.7 ------- ------- Shareholders' funds - equity 1,777.5 1,737.6 Minority interests - equity 15.7 13.9 ------- ------- 1,793.2 1,751.5 ------- ------- TOTAL LIABILITIES AND 33,757.6 33,238.5 SHAREHOLDERS' FUNDS -------- -------- STATEMENT OF CONSOLIDATED TOTAL RECOGNISED GAINS AND LOSSES 1999 1998 £m £m Profit attributable to the 350.6 328.2 shareholders of Woolwich plc Unrealised movement on 7.2 4.9 revaluation of properties Foreign currency translation (12.4) 5.0 differences on net investments in subsidiary undertakings ------ ------ Total recognised gains for the 345.4 338.1 year ------ ------ RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Profit attributable to the 350.6 328.2 shareholders of Woolwich plc Dividends (185.2) (403.1) ------- ------- 165.4 (74.9) Other recognised net gains and (5.2) 9.9 losses for the year Ordinary shares issued 0.3 - Shares repurchased (120.6) (104.1) Goodwill written back on - 21.4 disposal ------- ------- Net movement in shareholders' 39.9 (147.7) funds Opening shareholders' funds 1,737.6 1,885.3 ------- ------- Closing shareholders' funds 1,777.5 1,737.6 ------- ------- DIVIDENDS PER SHARE 1999 1998 Dividends per ordinary share: Interim 3.9p 3.5p Final 8.1p 7.1p Special - 15.0p ----- ------ Total dividends 12.0p 25.6p ----- ------ CONSOLIDATED CASH FLOW STATEMENT 1999 1998 £m £m Net cash inflow from operating 1,271.3 46.1 activities Returns on investments and servicing of finance Dividends paid to minority shareholdings (1.3) (1.1) in subsidiary undertakings Interest paid on subordinated (63.2) (65.9) liabilities ------ ------ Net cash outflow from returns on (64.5) (67.0) investments and servicing of finance Tax paid (159.1) (207.0) Capital expenditure and financial investment Purchase of investment securities (2,576.2) (1,633.8) Sale of investment securities 2,232.6 2,145.2 Purchase of tangible fixed assets (69.4) (49.0) Sale of tangible fixed assets 4.6 5.6 ------- ------- Net cash (outflow) inflow from capital (408.4) 468.0 expenditure and financial investment Acquisitions and disposals Investment in joint ventures (29.1) - Purchase of subsidiary - (7.9) Net cash inflow from the disposal of - 23.0 Group operations ------- ------- Net cash (outflow) inflow from (29.1) 15.1 acquisitions and disposals Equity dividends paid (407.7) (264.1) ------- ------- Net cash inflow (outflow) before 202.5 (8.9) financing Financing Issue of ordinary share capital 0.3 - Issue of subordinated loan capital 163.7 - Repurchase of ordinary share capital (120.6) (104.1) Repayment of minority interest capital (0.9) - ------- ------- Net cash inflow (outflow) from financing 42.5 (104.1) ------- ------- Increase (decrease) in cash 245.0 (113.0) ------- ------- CONSOLIDATED CASH FLOW STATEMENT 1999 1998 £m £m RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES Operating profit 522.2 505.1 Change in prepayments and accrued 124.5 1.9 income Change in accruals and deferred income (232.8) 193.3 Interest on subordinated liabilities 66.4 65.2 Provision for liabilities and charges (0.6) 10.2 Provision for bad and doubtful debts 32.9 12.9 Net advances written off (26.8) (25.7) Depreciation and amortisation 49.2 54.0 Loss on disposal of fixed assets 0.1 0.9 ------ ------ NET CASH INFLOW FROM TRADING ACTIVITIES 535.1 817.8 Change in items in the course of (15.3) 12.1 collection or transmission Change in loans and advances to banks 263.2 (1,796.2) and customers Change in other assets (67.3) (17.2) Change in deposits by banks and (1,388.5) 577.4 customer accounts Change in debt securities in issue 1,928.3 528.5 Change in other liabilities 52.9 (63.0) Other non-cash movements (37.1) (13.3) -------- ------- NET CASH INFLOW FROM OPERATING 1,271.3 46.1 ACTIVITIES ------- ------ SEGMENTAL BALANCE SHEET As at 31 December 1999 UK Continental Treasury Retail Europe £m £m £m ASSETS Due from banks 461.1 18.9 688.0 Loans and 26,990.7 2,310.0 - advances to customers Debt securities - - 1,758.3 Other assets 1,491.1 39.5 - Inter-business - - 8,736.8 balances -------- -------- ------- TOTAL ASSETS 28,942.9 2,368.4 11,183.1 -------- -------- -------- LIABILITIES Deposits by 97.0 479.5 1,187.0 banks Customer 18,271.3 5.4 1,784.6 accounts Debt securities - 599.5 6,786.3 in issue Other 1,628.8 56.8 - liabilities Inter-business 7,602.6 1,134.2 1,373.3 balances ------- ------- -------- 27,599.7 2,275.4 11,131.2 Shareholders' 1,343.2 93.0 51.9 funds and minority interests -------- -------- -------- TOTAL 28,942.9 2,368.4 11,183.1 LIABILITIES AND SHAREHOLDERS' FUNDS -------- -------- -------- Capital Eliminations Total £m £m £m ASSETS Due from banks - - 1,168.0 Loans and - - 29,300.7 advances to customers Debt securities - - 1,758.3 Other assets - - 1,530.6 Inter-business 1,373.3 (10,110.1) - balances ------- ---------- -------- TOTAL ASSETS 1,373.3 (10,110.1) 33,757.6 ------- ---------- -------- LIABILITIES Deposits by - - 1,763.5 banks Customer - - 20,061.3 accounts Debt securities - - 7,385.8 in issue Other 1,068.2 - 2,753.8 liabilities Inter-business - (10,110.1) - balances ------- --------- -------- 1,068.2 (10,110.1) 31,964.4 Shareholders' 305.1 - 1,793.2 funds and minority interests ------- --------- -------- TOTAL 1,373.3 (10,110.1) 33,757.6 LIABILITIES AND SHAREHOLDERS' FUNDS ------- --------- -------- SEGMENTAL BALANCE SHEET As at 31 December 1998 UK Continental Treasury Retail Europe £m £m £m ASSETS Due from banks 279.6 8.0 3,202.3 Loans and 24,980.3 2,014.7 - advances to customers Debt securities - - 1,415.7 Other assets 1,295.3 42.6 - Inter-business - - 4,303.8 balances -------- ------- ------- TOTAL ASSETS 26,555.2 2,065.3 8,921.8 -------- ------- -------- LIABILITIES Deposits by 114.5 601.1 685.2 banks Customer 19,999.0 7.3 1,815.5 accounts Debt securities - 646.4 4,811.1 in issue Other 1,611.5 58.9 - liabilities Inter-business 3,648.1 655.7 1,530.8 balances -------- ------- ------- 25,373.1 1,969.4 8,842.6 Shareholders' 1,182.1 95.9 79.2 funds and minority interests -------- ------- ------- TOTAL 26,555.2 2,065.3 8,921.8 LIABILITIES AND SHAREHOLDERS' FUNDS -------- ------- ------- Capital Eliminations Total £m £m £m ASSETS Due from banks - - 3,489.9 Loans and - - 26,995.0 advances to customers Debt securities - - 1,415.7 Other assets - - 1,337.9 Inter-business 1,530.8 (5,834.6) - balances ------- -------- -------- TOTAL ASSETS 1,530.8 (5,834.6) 33,238.5 ------- -------- -------- LIABILITIES Deposits by - - 1,400.8 banks Customer - - 21,821.8 accounts Debt securities - - 5,457.5 in issue Other 1,136.5 - 2,806.9 liabilities Inter-business - (5,834.6) - balances ------- --------- -------- 1,136.5 (5,834.6) 31,487.0 Shareholders' 394.3 - 1,751.5 funds and minority interests ------- -------- -------- TOTAL 1,530.8 (5,834.6) 33,238.5 LIABILITIES AND SHAREHOLDERS' FUNDS ------- --------- -------- Note: Equity capital within Woolwich plc is allocated to UK Retail and Treasury on the basis of risk weighted assets and a Tier 1 ratio of 7%. SHAREHOLDER INFORMATION Distribution of shares by size of holding 31 December 1999 31 December 1998 Size of Number of % of total Number of % of total holding holdings number of holdings number of shares shares ------------ ---------- ----------- ---------- ---------- - - 1- 10,000* 1,177,511 57.1 1,215,836 59.4 10,001 - 405 0.5 411 0.6 40,000 40,001 - 163 0.7 184 0.8 100,000 100,001 - 170 1.8 180 1.9 250,000 250,001 - 185 6.0 209 6.8 1,000,000 1,000,001 115 33.9 112 30.5 and above ------------ ---------- ----------- ---------- ---------- - - Total 1,178,549 100.0 1,216,932 100.0 ------------ ---------- ----------- ---------- ---------- - - * Includes identifiable holdings within Sharestore and the Woolwich Single Company PEP and late validations BASIS OF PREPARATION The financial information included in this report has been prepared on a basis consistent with the accounting policies set out on pages 44 and 45 of the Annual Report and Accounts for the year ended 31 December 1998 and was approved by the Board of Directors on 15 February 2000. The information in this announcement does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. It includes abridged details from the statutory accounts for the year ended 31 December 1999 which have been reported on by the auditors and will be filed with the Registrar of Companies for England and Wales. The report of the auditors was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. The annual report will be available on 6 March 2000. FINANCIAL CALENDAR Ex-dividend date for final dividend 20 March 2000 Record date for final dividend 24 March 2000 Annual General Meeting 12 April 2000 Payment date for final dividend 8 May 2000 Announcement of interim results 2 August 2000 Ex-dividend date for interim dividend 21 August 2000 Record date for interim dividend 25 August 2000 Payment date for interim dividend 9 October 2000 CONTACTS For further information please contact:- Raghnall Craighead Group Investor Relations Manager Woolwich plc 020-8298-5037 David Blake Head of Corporate Communications Woolwich plc 020-8298-5500 Hilary McVitty Group Media Relations Manager Woolwich plc 020-8298-5507 Angus Maitland Philip Gawith The Maitland Consultancy 020-7379-5151 Registered Office Woolwich plc Watling Street Bexleyheath Kent DA6 7RR Registered in England No. 3295699

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