Quilter plc 2020 Full Year Results - Part 2

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Quilter (QLT)

UK 100

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Consolidated income statement
For the year ended 31 December 2020
			£m
	Notes	Year ended 31 December 2020	Year ended 31 December 2019 restated¹
Income
Fee income and other income from service activities	6(d)	795	837
Investment return		3,896	6,566
Other income		20	16
Total income		4,711	7,419
Expenses
Insurance contract claims and changes in liabilities		(1)	(1)
Change in investment contract liabilities	16	(3,328)	(5,810)
Fee and commission expenses, and other acquisition costs		(147)	(167)
Change in third party interest in consolidated funds		(440)	(634)
Other operating and administrative expenses		(692)	(745)
Finance costs		(17)	(17)
Total expenses		(4,625)	(7,374)
Profit before tax from continuing operations		86	45
Tax expense attributable to policyholder returns	7(a)	(36)	(98)
Profit/(loss) before tax attributable to equity holders from continuing operations		50	(53)
Income tax credit/(expense)	7(a)	3	(66)
Less: tax expense attributable to policyholder returns		36	98
Tax credit attributable to equity holders		39	32
Profit/(loss) after tax from continuing operations		89	(21)
(Loss)/profit after tax from discontinued operations	4(c)	(1)	167
Profit after tax		88	146

Attributable to:
Equity holders of Quilter plc		88	146

Earnings per Ordinary Share on profit attributable to Ordinary Shareholders of Quilter plc
Basic
From continuing operations (pence)	8(b)	5.1	(1.1)
From discontinued operations (pence)	4(c)	(0.1)	9.1
Basic earnings per Ordinary Share (pence)	8(b)	5.0	8.0
Diluted
From continuing operations (pence)	8(b)	5.0	(1.1)
From discontinued operations (pence)	4(c)	(0.1)	8.9
Diluted earnings per Ordinary Share (pence)	8(b)	4.9	7.8

Consolidated statement of comprehensive income
For the year ended 31 December 2020

			£m
	Note	Year ended 31 December 2020	Year ended 31 December 2019
Profit after tax		88	146
Exchange losses on translation of foreign operations		-	(1)
Items that may be reclassified subsequently to income statement		-	(1)

Measurement movements on defined benefit plans		-	(7)
Tax on amounts related to defined benefit pension plans		-	1
Items that will not be reclassified subsequently to income statement		-	(6)
Total other comprehensive expense, net of tax		-	(7)

Total comprehensive income		88	139
Attributable to:
Continuing operations		89	(28)
Discontinued operations	4(d)	(1)	167
Equity holders of Quilter plc		88	139

Consolidated statement of changes in equity
For the year ended 31 December 2020

									£m
31 December 2020	Notes	Share capital	Share premium	Capital redemption reserve	Merger reserve	Share-based payments reserve	Other reserves	Retained earnings	Total share- holders' equity
Balance at 1 January 2020		133	58	-	149	45	1	1,685	2,071
Profit for the year		-	-	-	-	-	-	88	88
Total comprehensive income		-	-	-	-	-	-	88	88
Dividends	9	-	-	-	-	-	-	(81)	(81)
Shares repurchased in the buyback programme ¹	15	(8)	-	8	-	-	-	(179)	(179)
Movement in own shares ²		-	-	-	-	-	-	(44)	(44)
Equity share-based payment transactions		-	-	-	-	(3)	-	28	25
Dividend equivalents paid on vested shares		-	-	-	-	-	-	(2)	(2)
Total transactions with the owners of the Company		(8)	-	8	-	(3)	-	(278)	(281)
Balance at 31 December 2020		125	58	8	149	42	1	1,495	1,878

31 December 2019	Notes	Share capital	Share premium	Merger reserve	Share-based payments reserve	Other reserves	Retained earnings	Total share- holders' equity
Shareholders' equity at beginning of the year		133	58	588	34	1	1,191	2,005
Adjustment on initial application of IFRS 16 (net of tax)		-	-	-	-	-	(5)	(5)
Balance at 1 January 2019		133	58	588	34	1	1,186	2,000
Profit for the year		-	-	-	-	-	146	146
Other comprehensive expense		-	-	-	-	-	(7)	(7)
Total comprehensive income		-	-	-	-	-	139	139
Dividends	9	-	-	-	-	-	(92)	(92)
Release of merger reserve		-	-	(439)	-	-	439	-
Movement in own shares		-	-	-	-	-	(2)	(2)
Equity share-based payment transactions		-	-	-	11	-	15	26
Total transactions with the owners of the Company		-	-	(439)	11	-	360	(68)
Balance at 31 December 2019		133	58	149	45	1	1,685	2,071

Consolidated statement of financial position
At 31 December 2020

			£m
	Notes	31 December 2020	31 December 2019 restated¹	1 January 2019 restated¹
Assets
Goodwill and intangible assets	10	556	592	550
Property, plant and equipment		142	143	17
Investments in associated undertakings		1	1	2
Deferred acquisition costs²		-	-	11
Contract costs		413	455	551
Loans and advances		219	217	222
Financial investments	11	63,274	57,207	58,054
Reinsurers' share of insurance policyholder liabilities²		-	-	2.162
Deferred tax assets		78	43	38
Current tax receivable		24	13	47
Trade, other receivables and other assets		701	605	718
Derivative assets		43	22	34
Cash and cash equivalents	14	1,921	2,253	2,305
Total assets		67,372	61,551	64,711

Equity and liabilities
Equity
Ordinary Share capital	15	125	133	133
Ordinary Share premium reserve	15	58	58	58
Capital redemption reserve	15	8	-	-
Merger reserve		149	149	588
Share-based payments reserve		42	45	34
Other reserves		1	1	1
Retained earnings		1,495	1,685	1,191
Total equity		1,878	2,071	2,005
Liabilities
Insurance contract liabilities²		-	-	602
Investment contract liabilities	16	57,407	52,455	56,450
Third-party interests in consolidated funds		6,513	5,318	3,833
Provisions	17	77	64	94
Deferred tax liabilities		106	88	59
Current tax payable		1	6	5
Borrowings and lease liabilities		319	335	197
Trade, other payables and other liabilities		672	801	979
Contract liabilities		379	403	456
Derivative liabilities		20	10	31
Total liabilities		65,494	59,480	62,706
Total equity and liabilities		67,372	61,551	64,711

Quilter plc 2020 Full Year Results - Part 2

Statement of Directors' responsibilities

5(b)(ii): Business transformation costs

5(b)(iii): Managed Separation costs

5(b)(iv): Finance costs

5(b)(v): Policyholder tax adjustments

5(b)(vi): Customer remediation

8(a): Weighted average number of Ordinary Shares

The table below summarises the calculation of the weighted average number of Ordinary Shares for the purposes of calculating basic and diluted earnings per share for each profit measure (IFRS, adjusted and headline profit):

8(b): Basic and diluted EPS (IFRS and adjusted profit)

13(d): Financial assets and liabilities measured at fair value, classified according to fair value hierarchy

Tax

Complaints and disputes

19: Capital and financial risk management

19(a): Capital management

19(a)(i): Regulatory capital (unaudited)

19(b): Credit risk

Overall exposure to credit risk

Maximum exposure to credit risk

20: Related party transactions

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			£m
	Notes	Year ended 31 December 2020	Year ended 31 December 2019 restated ¹
Cash flows from operating activities
Cash flows from/(used in) operating activities		1,473	(2,035)
Taxation paid		(28)	(37)
Total net cash from/(used in) operating activities	14(b)	1,445	(2,072)
Cash flows from investing activities
Net (acquisitions)/disposals of financial investments		(1,419)	2,159
Acquisition of property, plant and equipment		(28)	(8)
Acquisition of intangible assets	10(a)	(4)	(5)
Acquisition of interests in subsidiaries²	4(a)	(20)	(87)
Net (payments)/proceeds from the disposal of interests in subsidiaries		(3)	78
Total net cash (used in)/from investing activities		(1,474)	2,137
Cash flows from financing activities
Dividends paid to ordinary equity holders of the Company	9	(81)	(92)
Finance costs on external borrowings		(10)	(10)
Payment of interest on lease liabilities		(2)	(3)
Payment of principal lease liabilities		(14)	(13)
Repurchase of shares³		(41)	-
Repurchase and cancellation of shares⁴		(157)	-
Total net cash used in financing activities		(305)	(118)
Net increase in cash and cash equivalents		(334)	(53)
Cash and cash equivalents at the beginning of the year		2,253	2,305
Effects of exchange rate changes on cash and cash equivalents		2	1
Cash and cash equivalents at end of the year	14(a)	1,921	2,253

Area	Critical accounting estimates	Related notes
Provision for cost of Lighthouse defined benefit pension advice	An estimation of the provision required for the British Steel DB pension transfer redress was determined based upon calculations performed as part of the skilled person review, which was considered representative of the broader population to form a reasonable estimate. The estimation per case is based upon FCA guidelines and modelling performed, and factors including pension transfer value, date of retirement, discount rate, and retail price indexation. The calculations were then extrapolated to the entire population of British Steel DB cases that were advised on by Lighthouse advisers. The proportion of cases to be upheld, and therefore which requires redress payments to be made, was estimated based upon the current position of the review performed by the skilled person of the Lighthouse DB pension transfers.	17
Insurance recovery asset in respect of Lighthouse defined benefit pension advice	For Lighthouse DB pension transfer advice provided, management has determined its best estimate of the insurance recovery asset under Lighthouse's professional indemnity policies. Under the PI Policies, Lighthouse is entitled to be indemnified for a "Claim" (and defence costs) in respect of legal liabilities arising in connection with Lighthouse's DB pension transfer advice activities; however, at the current time the insurers have not confirmed coverage for legal liabilities.	17
Measurement of deferred tax	The estimation of future taxable profits is performed as part of the annual business planning process, and is based on estimated levels of AuMA, which are subject to a large number of factors including global stock market movements, related movements in foreign exchange rates and net client cash flow, together with estimates of expenses and other charges. The business plan, adjusted for known and estimated tax sensitivities, is used to determine the extent to which deferred tax assets are recognised. In general the Group assesses recoverability based on estimated taxable profits over a three-year planning horizon. Where credible longer-term profit forecasts are available, the specific entity may assess recoverability over a longer period, subject to a higher level of sensitivity testing. Following the impact that COVID-19 has had on global markets and, in particular, on the Group's expected future levels of AuMA, management have reassessed the sensitivity on the recoverability of deferred tax assets based on the latest forecast cash flows.	n/a

	31 December 2019				1 January 2019
	As Reported £m	Consolidated funds Note 3(b)(i) £m	Fee income receivable Note 3(b)(ii) £m	Restated £m	As Reported £m	Consolidated funds Note 3(b)(i) £m	Fee income receivable Note 3(b)(ii) £m	Restated £m
Financial investments	59,345	(2,138)	-	57,207	59,219	(1,165)	-	58,054
Trade, other receivables and other assets	424	(31)	212	605	530	(42)	230	718
Derivative assets	32	(10)	-	22	46	(12)	-	34
Cash and cash equivalents	2,473	(220)	-	2,253	2,395	(90)	-	2,305
Other¹	1,464	-	-	1,464	3,600	-	-	3,600
Total assets	63,738	(2,399)	212	61,551	65,790	(1,309)	230	64,711

Third-party interests in consolidated funds	7,675	(2,357)	-	5,318	5,116	(1,283)	-	3,833
Trade, other payables and other liabilities	836	(35)	-	801	999	(20)	-	979
Contract liabilities	191	-	212	403	226	-	230	456
Derivative liabilities	17	(7)	-	10	37	(6)	-	31
Other¹	52,948	-	-	52,948	57,407	-	-	57,407
Total liabilities	61,667	(2,399)	212	59,480	63,785	(1,309)	230	62,706

Total equity	2,071	-	-	2,071	2,005	-	-	2,005

		£m
	31 December 2020	31 December 2019
Opening balance	39	37
Acquisitions during the year	-	22
Payments	(20)	(21)
Financing interest charge	2	3
Other movements	(5)	(2)
Closing balance	16	39

(Loss)/profit on sale of operations
		£m
	Year ended 31 December 2020	Year ended 31 December 2019
	Quilter Life Assurance and Single Strategy business	Quilter Life Assurance
Consideration received	-	446
Less: transaction and separation costs ¹	(1)	(19)
Net (costs)/proceeds from sale	(1)	427
Carrying value of net assets disposed	-	(294)
Goodwill allocated and disposed	-	(30)
(Loss)/profit on sale of operations after tax	(1)	103
¹ An additional £1 million of transaction and separation costs relating to the historical sales of the QLA and Single Strategy businesses have been recognised in the year ended 31 December 2020.

		£m
	Year ended 31 December 2020	Year ended 31 December 2019
(Loss)/profit after tax	(1)	167
Total comprehensive (expense)/income for the period from discontinued operations	(1)	167

		£m
	Year ended 31 December 2020	Year ended 31 December 2019
Total net cash flows used in operating activities	-	(3,789)
Total net cash (used in)/from investing activities	(10)	3,765
Total net cash used in financing activities	-	(130)
Net decrease in cash and cash equivalents	(10)	(154)

							£m
Year ended 31 December 2020	Net mgmt fees ¹	Other revenue ¹	Total net fee revenue ¹	Operating Expenses¹	Adjusted profit before tax	Consol. of funds ²	IFRS income statement

Fee income and other income from service activities	680	195	875	-	875	(80)	795
Investment return	-	3,340	3,340	-	3,340	556	3,896
Other income	-	1	1	15	16	4	20
Total income	680	3,536	4,216	15	4,231	480	4,711
Expenses							-
Insurance contract claims and changes in liabilities	-	(1)	(1)	-	(1)	-	(1)
Change in investment contract liabilities	-	(3,328)	(3,328)	-	(3,328)	-	(3,328)
Fee and commission expenses, and other acquisition costs	(70)	(74)	(144)	-	(144)	(3)	(147)
Change in third party interest in consolidated funds	-	-	-	-	-	(440)	(440)
Other operating and administrative expenses	(13)	(2)	(15)	(640)	(655)	(37)	(692)
Finance costs ³	-	(1)	(1)	(16)	(17)	-	(17)
Total expenses	(83)	(3,406)	(3,489)	(656)	(4,145)	(480)	(4,625)
Tax expense attributable to policyholder returns	(36)	-	(36)	-	(36)	-	(36)
Profit/(loss) before tax attributable to equity holders from continuing operations	561	130	691	(641)	50	-	50
Adjusting items:
Impact of acquisition and disposal related accounting	-	-	-	42	42
Business transformation costs	-	-	-	70	70
Finance costs	-	-	-	10	10
Customer remediation	-	-	-	5	5
Policyholder tax adjustments	(9)	-	(9)	-	(9)
Adjusting items	(9)	-	(9)	127	118
Total Group - continuing operations	552	130	682	(514)	168

						£m
		Operating segments
	Notes	Advice and Wealth Management	Wealth Platforms	Head Office	Consolidation adjustments¹	Consolidated income statement
Income
Fee income and other income from service activities	6(d)	456	426	-	(87)	795
Investment return		4	3,335	1	556	3,896
Other income		4	117	5	(106)	20
Segmental income		464	3,878	6	363	4,711
Expenses
Insurance contract claims and changes in liabilities		-	(1)	-	-	(1)
Change in investment contract liabilities	16	-	(3,328)	-	-	(3,328)
Fee and commission expenses, and other acquisition costs		(50)	(101)	-	4	(147)
Change in third party interest in consolidated funds		-	-	-	(440)	(440)
Other operating and administrative expenses		(370)	(324)	(71)	73	(692)
Finance costs		(3)	(4)	(10)	-	(17)
Segmental expenses		(423)	(3,758)	(81)	(363)	(4,625)
Profit/(loss) before tax from continuing operations		41	120	(75)	-	86
Tax attributable to policyholder returns		-	(36)	-	-	(36)
Profit/(loss) before tax attributable to equity holders from continuing operations		41	84	(75)	-	50
Adjusted for non-operating items:
Impact of acquisition and disposal related accounting	5(b)(i)	44	-	(2)	-	42
Business transformation costs	5(b)(ii)	-	39	31	-	70
Finance costs	5(b)(iv)	-	-	10	-	10
Policyholder tax adjustments	5(b)(v)	-	(9)	-	-	(9)
Customer remediation	5(b)(vi)	5	-	-	-	5
Adjusting items before tax		49	30	39	-	118
Adjusted profit/(loss) before tax - continuing operations		90	114	(36)	-	168

						£m
	Notes	Advice & Wealth Management	Wealth Platforms	Head Office	Consolidation Adjustments ¹	Total
Assets
Goodwill and intangible assets	10	423	133	-	-	556
Property, plant and equipment		13	129	-	-	142
Investments in associated undertakings		-	-	1	-	1
Contract costs		-	413	-	-	413
Loans and advances		33	186	-	-	219
Financial investments	11	-	57,162	-	6,112	63,274
Deferred tax assets		10	25	43	-	78
Current tax receivable		-	10	14	-	24
Trade, other receivables and other assets		228	430	2	41	701
Derivative assets		-	-	-	43	43
Cash and cash equivalents	14	310	690	614	307	1,921
Inter-segment funding - assets		63	34	20	(117)	-
Total assets		1,080	59,212	694	6,386	67,372

Liabilities
Investment contract liabilities	16	-	57,407	-	-	57,407
Third-party interests in consolidated funds		-	-	-	6,513	6,513
Provisions	17	53	15	9	-	77
Deferred tax liabilities		36	70	-	-	106
Current tax payable/(receivable) ²		21	(12)	(8)	-	1
Borrowings and lease liabilities		15	105	199	-	319
Trade, other payables and other liabilities		268	396	34	(26)	672
Contract liabilities		-	379	-	-	379
Derivative liabilities		-	-	-	20	20
Inter-segment funding - liabilities		-	20	97	(117)	-
Total liabilities		393	58,380	331	6,390	65,494
Total equity						1,878
Total equity and liabilities						67,372

		£m
	31 December 2020	31 December 2019	Average estimated useful life	Average period remaining
Net carrying value
Distribution channels - Quilter Financial Planning	15	22	8 years	3 years
Customer relationships
Quilter Cheviot	114	141	10 years	4 years
Quilter Financial Planning	54	61	8 years	6 years
Other	7	9	8 years	4 years
Brand - Quilter Cheviot	-	1	n/a	n/a
Total other intangible assets	190	234

						£m
	Notes	Advice & Wealth Management	Wealth Platforms restated³	Head Office	Consolidation Adjustments¹	Total restated³
Assets
Goodwill and intangible assets	10	458	134	-	-	592
Property, plant and equipment		30	111	2	-	143
Investments in associated undertakings		-	-	1	-	1
Contract costs		-	455	-	-	455
Loans and advances		31	180	6	-	217
Financial investments	11	1	52,249	-	4,957	57,207
Deferred tax assets		11	22	10	-	43
Current tax receivable		-	-	13	-	13
Trade, other receivables and other assets³		207	389	3	6	605
Derivative assets		-	-	-	22	22
Cash and cash equivalents	14	383	725	838	307	2,253
Inter-segment funding - assets		-	12	-	(12)	-
Total assets		1,121	54,277	873	5,280	61,551

Liabilities
Investment contract liabilities	16	-	52,455	-	-	52,455
Third-party interests in consolidated funds		-	-	-	5,318	5,318
Provisions	17	28	26	10	-	64
Deferred tax liabilities		38	50	-	-	88
Current tax payable/(receivable) ²		1	(7)	12	-	6
Borrowings		26	108	201	-	335
Trade, other payables and other liabilities		322	477	37	(35)	801
Contract liabilities³		1	402	-	-	403
Derivative liabilities		-	-	-	10	10
Inter-segment funding - liabilities		-	-	12	(12)	-
Total liabilities		416	53,511	272	5,281	59,480
Total equity						2,071
Total equity and liabilities						61,551

						£m	£m
	UK			International			UK
Year ended 31 December 2020	Advice and Wealth Management	Wealth Platforms	Head Office	Wealth Platforms	Consolidation adjustments	Total continuing operations	Discontinued operations
Premium based fees	113	-	-	70	-	183	-
Fund based fees ¹	343	167	-	88	(93)	506	-
Retrocessions received, intragroup	-	2	-	6	(8)	-	-
Fixed fees	-	2	-	29	-	31	-
Exit fees	-	-	-	13	-	13	-
Other fee and commission income	-	48	-	-	14	62	-
Fee income and other income from service activities	456	220	-	206	(87)	795	-
Investment return	4	2,273	2	1,062	555	3,896	-
Other income	4	143	5	-	(132)	20	-
Total income	464	2,636	7	1,268	336	4,711	-


							£m
	UK			International			UK
Year ended 31 December 2019	Advice and Wealth Management	Wealth Platforms	Head Office	Wealth Platforms	Consolidation adjustments²	Total continuing operations	Discontinued operations
Gross earned premiums	-	-	-	1	-	1	145
Premiums ceded to reinsurers	-	-	-	(1)	-	(1)	(86)
Net earned premiums	-	-	-	-	-	-	59
Premium based fees	103	-	-	72	-	175	11
Fund based fees ¹	383	175	-	101	(95)	564	65
Retrocessions received, intragroup	-	2	-	2	(4)	-	10
Fixed fees	-	3	-	28	-	31	2
Exit fees	-	-	-	16	-	16	1
Other fee and commission income	-	39	-	-	12	51	75
Fee income and other income from service activities	486	219	-	219	(87)	837	164
Investment return ²	10	3,825	3	1,998	730	6,566	1,386
Other income	1	161	6	(1)	(151)	16	-
Total income	497	4,205	9	2,216	492	7,419	1,609
¹ Income from fiduciary activities is included within fund based fees.
² See note 3(b) for details of changes to comparative amounts.

				Pence
	Source of guidance	Notes	Year ended 31 December 2020	Year ended 31 December 2019
Basic earnings per share	IFRS	8(b)	5.0	8.0
Diluted basic earnings per share	IFRS	8(b)	4.9	7.8
Adjusted basic earnings per share	Group policy	8(b)	8.6	11.4
Adjusted diluted earnings per share	Group policy	8(b)	8.5	11.3
Headline basic earnings per share (net of tax)	JSE Listing Requirements	8(c)	5.2	2.3
Headline diluted earnings per share (net of tax)	JSE Listing Requirements	8(c)	5.1	2.3

		Millions
	Year ended 31 December 2020	Year ended 31 December 2019
Weighted average number of Ordinary Shares	1,842	1,902
Treasury shares including those held in EBTs	(82)	(67)
Basic weighted average number of Ordinary Shares	1,760	1,835
Adjustment for dilutive share awards and options	37	28
Diluted weighted average number of Ordinary Shares	1,797	1,863

		+	+		£m
		Year ended 31 December 2020		Year ended 31 December 2019
	Note	Gross	Net of tax	Gross	Net of tax
Profit attributable to ordinary equity holders			88		146
Adjusted for:
Loss/(profit) on business disposals	4(b)	1	1	(103)	(103)
Impairment loss on right-of-use assets		3	2	-	-
Headline earnings			91		43
Headline basic EPS (pence)			5.2		2.3
Headline diluted EPS (pence)			5.1		2.3


			£m
	Payment date	Year ended 31 December 2020	Year ended 31 December 2019
2018 Final dividend paid - 3.3p per Ordinary Share	20 May 2019	-	61
2019 Interim dividend paid - 1.7p per Ordinary Share	20 September 2019	-	31
2019 Final dividend paid - 3.5p per Ordinary Share	18 May 2020	64	-
2020 Interim dividend paid - 1.0p per Ordinary Share	21 September 2020	17
Dividends paid to Ordinary Shareholders		81	92

				£m
	Goodwill	Software development costs	Other intangible assets	Total
Gross amount
1 January 2019	314	100	380	794
Acquisitions through business combinations	68	-	49	117
Additions	-	5	-	5
Disposals	(30)	(4)	(4)	(38)
Other movements¹	(2)	-	3	1
31 December 2019	350	101	428	879
Acquisitions through business combinations²	6	-	1	7
Additions	-	4	-	4
31 December 2020	356	105	429	890

Accumulated amortisation and impairment losses
1 January 2019	-	(95)	(149)	(244)
Amortisation charge for the year	-	(2)	(45)	(47)
Disposals	-	4	4	8
Other movements¹	-	-	(4)	(4)
31 December 2019	-	(93)	(194)	(287)
Amortisation charge for the year	-	(2)	(45)	(47)
31 December 2020	-	(95)	(239)	(334)

Carrying amount

31 December 2019	350	8	234	592
31 December 2020	356	10	190	556

		£m
	31 December 2020	31 December 2019
Goodwill (net carrying amount)
Advice and Wealth Management	225	219
Wealth Platforms	131	131
Total goodwill	356	350

	Advice and Wealth Management	Wealth Platforms
Reduction in forecast cash flows	46%	69%
Increase in discount rate required	21% (from 9% to 30%)	27% (from 9% to 36%)

		£m
	31 December 2020	31 December 2019 restated ¹
Government and government-guaranteed securities	632	558
Other debt securities, preference shares and debentures	1,952	1,897
Equity securities	14,163	8,560
Pooled investments	46,518	46,177
Short-term funds and securities treated as investments	9	15
Total financial investments	63,274	57,207

Recoverable within 12 months	63,274	57,206
Recoverable after 12 months	-	1
Total financial investments	63,274	57,207

31 December 2020
					£m
	Fair value
Measurement basis	Mandatorily at FVTPL	Designated at FVTPL	Amortised cost	Non-financial assets and liabilities	Total
Assets
Investments in associated undertakings ¹	-	-	-	1	1
Loans and advances	186	-	33	-	219
Financial investments	63,248	1	25	-	63,274
Trade, other receivables and other assets	-	-	444	257	701
Derivative assets	43	-	-	-	43
Cash and cash equivalents	1,064	-	857	-	1,921
Total assets that include financial instruments	64,541	1	1,359	258	66,159
Total other non-financial assets	-	-	-	1,213	1,213
Total assets	64,541	1	1,359	1,471	67,372

Liabilities
Investment contract liabilities	-	57,407	-	-	57,407
Third-party interests in consolidation of funds	6,513	-	-	-	6,513
Borrowings and lease liabilities	-	-	319	-	319
Trade, other payables and other liabilities	-	-	590	82	672
Derivative liabilities	20	-	-	-	20
Total liabilities that include financial instruments	6,533	57,407	909	82	64,931
Total other non-financial liabilities	-	-	-	563	563
Total liabilities	6,533	57,407	909	645	65,494

31 December 2019 (restated)³
					£m
Measurement basis	Fair value
	Mandatorily at FVTPL	Designated at FVTPL ²	Amortised cost	Non-financial assets and liabilities²	Total
Assets
Investments in associated undertakings ¹	-	-	-	1	1
Loans and advances	180	-	37	-	217
Financial investments	57,205	2	-	-	57,207
Trade, other receivables and other assets ²	-	-	342	263	605
Derivative assets	22	-	-	-	22
Cash and cash equivalents	1,159	-	1,094	-	2,253
Total assets that include financial instruments	58,566	2	1,473	264	60,305
Total other non-financial assets	-	-	-	1,246	1,246
Total assets	58,566	2	1,473	1,510	61,551

Liabilities
Investment contract liabilities ²	-	52,455	-	-	52,455
Third-party interests in consolidation of funds	5,318	-	-	-	5,318
Borrowings and lease liabilities	-	-	335	-	335
Trade, other payables and other liabilities	-	-	695	106	801
Derivative liabilities	10	-	-	-	10
Total liabilities that include financial instruments	5,328	52,455	1,030	106	58,919
Total other non-financial liabilities	-	-	-	561	561
Total liabilities	5,328	52,455	1,030	667	59,480

Description of hierarchy	Types of instruments classified in the respective levels
Level 1 - quoted market prices: financial assets and liabilities with quoted prices for identical instruments in active markets.	Listed equity securities, government securities and other listed debt securities and similar instruments that are actively traded, actively traded pooled investments, certain quoted derivative assets and liabilities, policyholder loans (where they form part of a policyholders' unit-linked policy) and investment contract liabilities directly linked to other Level 1 financial assets.
Level 2 - valuation techniques using observable inputs: financial assets and liabilities with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial assets and liabilities valued using models where all significant inputs are observable.	Unlisted equity and debt securities where the valuation is based on models involving no significant unobservable data. Over-the-counter ("OTC") derivatives, certain privately placed debt instruments and third-party interests in consolidated funds which meet the definition of Level 2 financial instruments.
Level 3 - valuation techniques using significant unobservable inputs: financial assets and liabilities valued using valuation techniques where one or more significant inputs are unobservable.	Unlisted equity and securities with significant unobservable inputs, securities where the market is not considered sufficiently active, including certain inactive pooled investments.

	31 December 2020		31 December 2019 restated ¹
	£m	%	£m	%
Financial assets measured at fair value
Level 1	56,927	88.2%	48,009	82.0%
Level 2	5,793	9.0%	8,842	15.1%
Level 3	1,822	2.8%	1,717	2.9%
Total	64,542	100.0%	58,568	100.0%
Financial liabilities measured at fair value
Level 1	55,135	86.3%	50,315	87.0%
Level 2	6,985	10.9%	5,751	10.0%
Level 3	1,820	2.8%	1,717	3.0%
Total	63,940	100.0%	57,783	100.0%

				£m
31 December 2019 (restated) ¹	Level 1	Level 2	Level 3	Total
Financial assets measured at fair value
Mandatorily (fair value through profit or loss)	48,007	8,842	1,717	58,566
Loans and advances ²	180	-	-	180
Financial investments	46,668	8,820	1,717	57,205
Cash and cash equivalents	1,159	-	-	1,159
Derivative assets	-	22	-	22

Designated (fair value through profit or loss)	2	-	-	2
Financial investments	2	-	-	2

Total assets measured at fair value	48,009	8,842	1,717	58,568

Financial liabilities measured at fair value
Mandatorily (fair value through profit or loss)	-	5,328	-	5,328
Third-party interests in consolidated funds	-	5,318	-	5,318
Derivative liabilities	-	10	-	10

Designated (fair value through profit or loss)	50,315	423	1,717	52,455
Investment contract liabilities ³	50,315	423	1,717	52,455

Total liabilities measured at fair value	50,315	5,751	1,717	57,783

		£m
	31 December 2020	31 December 2019
At beginning of the year ¹	1,717	1,154
Fair value losses charged to income statement	(121)	(20)
Purchases	16	314
Sales	(8)	(24)
Transfers in	930	369
Transfers out	(714)	(71)
Foreign exchange and other	2	(5)
Total Level 3 financial assets	1,822	1,717
Unrealised fair value losses charged to income statement relating to assets held at the year end	(110)	(20)

		£m
	31 December 2020	31 December 2019
At beginning of the year	1,717	1,151
Fair value losses charged to income statement	(120)	(20)
Purchases	16	314
Sales	(8)	(24)
Transfers in	927	369
Transfers out	(714)	(71)
Foreign exchange and other	2	(2)
Total Level 3 financial liabilities	1,820	1,717
Unrealised fair value losses charged to income statement relating to liabilities held at the year end	(110)	(20)

		£m
	31 December 2020	31 December 2019 restated ¹
Cash at bank	550	787
Money market funds	1,064	1,159
Cash and cash equivalents in consolidated funds	307	307
Total cash and cash equivalents per statement of financial position	1,921	2,253

		£m	£m
	Number of shares	Nominal value	Share premium
At 1 January 2019	1,902,251,098	133	58
At 31 December 2019	1,902,251,098	133	58
Shares cancelled through share buyback programme	(118,282,047)	(8)	-
At 31 December 2020	1,783,969,051	125	58

					£m
31 December 2020	Compensation provisions	Sale of QLA	Sale of Single Strategy business	Clawback and other provisions	Total
Balance at beginning of the year	31	6	10	17	64
Additions from business combinations	12	-	-	-	12
Charge to income statement	10	-	-	1	11
Utilised during the year	(5)	(3)	(1)	(4)	(13)
Unused amounts reversed	(6)	-	(2)	(3)	(11)
Reclassification within statement of financial position ¹	-	-	-	14	14
Balance at 31 December 2020	42	3	7	25	77


					£m
31 December 2019	Compensation provisions	Sale of QLA	Sale of Single Strategy business	Clawback and other provisions	Total
Balance at beginning of the year	54	-	20	20	94
Adjustment on initial application of IFRS 16	-	-	-	(5)	(5)
Additions from business combinations	14	-	-	1	15
Charge to income statement ²	9	6	1	7	23
Utilised during the year	(19)	-	(11)	(1)	(31)
Unused amounts reversed	(13)	-	-	(4)	(17)
Disposals	(11)	-	-	(1)	(12)
Reclassification within statement of financial position	(3)	-	-	-	(3)
Balance at 31 December 2019	31	6	10	17	64