Financial review

	Securities The following table analyses the book value and valuation of securities

		2000		1999		1998
		Book value	Valuation	Book value	Valuation	Book value	Valuation
		£m	£m	£m	£m	£m	£m
	Investment securities
	Debt securities:
	UK government	1,496	1,571	1,666	1,664	1,730	1,775
	other government	12,117	12,378	9,315	9,340	5,937	6,053
	other public bodies	20	19	69	71	87	89
	other issuers	16,087	16,103	9,741	9,748	6,548	6,595
	Equity shares	244	295	179	206	336	379
		29,964	30,366	20,970	21,029	14,638	14,891
	Other securities
	Debt securities:
	UK government	845	845	1,278	1,278	3,621	3,621
	other government	15,555	15,555	7,031	7,031	10,377	10,377
	other public bodies	1,280	1,280	503	503	775	775
	bank and building society certificates of deposit	16,682	16,682	18,005	18,005	8,677	8,677
	other issuers	6,688	6,688	6,311	6,311	7,428	7,428
	Equity shares	3,818		5,425	5,425	4,552	4,552
		74,832	75,234	59,523	59,582	50,068	50,321
Investment debt securities include government securities held as part of the Group’s treasury management portfolio for asset and liability, liquidity and regulatory purposes and are for use on a continuing basis in the activities of the Group. In addition, the Group holds as investments listed and unlisted corporate securities. Investment securities are valued at cost, adjusted for the amortisation of premiums or discounts to redemption, less any provision for diminution in value. Other securities comprise dealing securities and short-term certificates of deposit and are principally valued at market value. Bank and building society certificates of deposit are freely negotiable and have original maturities of up to 5 years, but are typically held for shorter periods. A further analysis of the book value and valuation of securities is given in notes 19 & 20. In addition to UK government securities shown above, at 31st December 2000 and 1999 the Group held the following government securities which exceeded 10% of shareholders’ funds:
				2000		1999
				Book value	Valuation	Book value	Valuation
				£m	£m	£m	£m
	US government securities			6,429	6,426	5,457	5,408
	Japanese government securities			5,584	5,586	1,805	1,815
	Italian government securities			5,266	5,382	2,827	2,876
	German government securities			2,838	2,838	1,692	1,648
	French government securities			1,963	1,968	1,547	1,567
	Spanish government securities*			–	–	1,160	1,194
	* Holdings did not exceed 10% of shareholders’ funds at 31st December 2000.
	Maturities and weighted average yield of investment debt securities

		Maturing		Maturing after		Maturing after
		within		one but within		five but within		Maturing after
		one year:		five years:		ten years:		ten years:
										Total
		Amount	Yield	Amount	Yield	Amount	Yield	Amount	Yield	Amount	Yield
		£m	%	£m	%	£m	%	£m	%	£m	%
	Government	4,688	5.6	6,204	6.1	1,612	6.7	1,109	7.0	13,613	6.1
	Other public bodies	13	10.9	3	5.1	3	10.9	1	2.9	20	9.7
	Other issuers	4,358	4.9	7,441	6.0	881	7.5	3,407	6.3	16,087	5.9
	Total book value	9,059	5.2	13,648	6.1	2,496	7.0	4,517	6.5	29,720	6.0
	Total valuation	9,157		13,599		2,621		4,694		30,071

	The weighted average yield for each range of maturities is calculated by dividing the annualised interest income prevailing at 31st December 2000 by the book value of securities held at that date. Yields on certain US securities, which are exempt from tax, have been calculated using interest income adjusted to reflect a taxable equivalent basic.