Notes to the consolidated financial statements
ANALYSIS BY REMAINING MATURITY
(in € million) 2003 2002 2001
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Demand . . . . 4,271.1 4,762.6 4,557.6 Time . . . . 24,703.1 24,576.6 27,639.5 3 months or less . . . 8,057.8 8,591.2 11,090.0 1 year or less but over 3 months . . . 4,062.1 4,121.1 4,296.9 5 years or less but over 1 year . . . 6,619.4 6,465.4 6,500.0 Over 5 years . . . 5,963.8 5,398.9 5,752.6 Provisions for doubtful debts . . . . (255.4) (911.8) (969.4) Provisions for bad debts . . . . (682.9) – – Accrued interest . . . . 140.7 179.9 230.7
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TOTAL . . . . 28,176.6 28,607.3 31,458.4
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6 Treasury bills, debt securities and equity shares
ANALYSIS BY TYPE OF SECURITY 2003 2002 2001
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Net Net Net
(in € million) book value book value book value
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Treasury bills and other eligible bills . . . . 14,045.1 9,847.8 6,296.1 – Trading securities . . . 10,758.5 8,737.3 5,386.0 – Available-for-sale securities . . . 225.8 948.2 754.3 – Held-to maturity securities . . . 2,990.0 141.6 142.1 – Accrued interest . . . 70.8 20.7 13.7 Debt securities . . . . 4,063.7 3,631.5 6,602.7 Trading securities . . . 2,454.0 2,074.0 2,910.0 – Bonds and other listed securities . . . 1,794.8 1,253.1 1,821.2 – Unlisted bonds, interbank market instruments
and negotiable debt securities . . . 659.2 820.9 1,088.8 Available-for-sale securities . . . 929.4 785.0 2,768.0 – Bonds and other listed securities . . . 827.0 409.3 938.9 – Unlisted bonds, money market instruments
and negotiable debt securities . . . 102.4 375.7 1,829.1 Held-to maturity securities . . . 650.1 739.2 840.2 – Listed bonds . . . 321.2 355.6 642.3 – Unlisted bonds, money market instruments
and negotiable debt securities . . . 328.9 383.6 197.9 Accrued interest . . . 30.2 33.3 84.5 Equity shares . . . . 3,330.7 3,002.0 2,686.5 Trading securities . . . 1,853.5 1,526.1 1,259.2 – Listed . . . 1,845.0 1,526.1 1,255.8 – Unlisted and other variable-income securities . . . 8.5 – 3.4 Available-for-sale securities . . . 923.6 893.1 776.6 – Listed . . . 73.0 41.9 140.7 – Unlisted and other variable-income securities . . . 850.6 851.2 635.9 Portfolio securities . . . 553.4 582.4 650.3 – Unlisted . . . 239.0 268.0 340.7 – Listed . . . 314.4 314.4 309.6 Accrued income . . . 0.2 0.4 0.4
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TOTAL . . . . 21,439.5 16,481.3 15,585.3
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6 Treasury bills, debt securities and equity shares (continued)
Analysis of treasury bills, other eligible bills and debt securities by remaining maturity TYPE OF SECURITY
(in € million) 2003 2002 2001
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Treasury bills and other eligible bills
1 year or less . . . 2,451.4 2,914.2 2,002.4 5 years or less but over 1 year . . . 6,508.7 5,157.2 2,748.6 Over 5 years . . . 5,014.2 1,755.7 1,531.4 Accrued interest . . . 70.8 20.7 13.7
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TOTAL . . . . 14,045.1 9,847.8 6,296.1
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Debt securities
1 year or less . . . 1,356.4 1,937.2 3,481.5 5 years or less but over 1 year . . . 1,836.2 984.6 1,997.2 Over 5 years . . . 840.9 676.4 1,040.8 Accrued interest . . . 30.2 33.3 83.2
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TOTAL . . . . 4,063.7 3,631.5 6,602.7
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Estimated value of available-for-sale securities and portfolio securities TYPE OF SECURITY
(in € million) 2003 2002 2001
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Treasury bills and other eligible bills . . . 232.5 950.5 755.9 Debt securities . . . 958.1 785.8 2,768.2 Equity shares . . . 1,709.2 1,629.5 1,672.0
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Total available-for-sale securities
(excluding accrued income) . . . . 2,899.8 3,365.8 5,196.1
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Additional information on securities provided under article 16 of regulation 90-01 of the French Banking Regulations Committee (CRBF 90-01)
Securities reclassified as at 31 December 2003
Available-for-sale securities reclassified as held-to-maturity securities:€915 million.
Held-to-maturity securities sold as at 31 December 2002 Disposals amounted to €217.3 million in 2003.
Unamortised difference between acquisition price and redemption price of held-to-maturity securities The difference is equal to €82.9 million.
7 Long term securities and other participating interests
a Analysis by issuer type
(in € million) 2003 2002 2001
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Estimated Estimated Estimated
Net book fair value Net book fair value Net book fair value
ISSUER TYPE value (unaudited) value (unaudited) value (unaudited)
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– Listed securities . . 145.9 182.7 185.4 233.9 266.5 281.9
Banks . . . 52.6 76.2 68.7 105.8 34.5 44.3
Other . . . 93.3 106.5 116.7 128.1 232.0 237.6
– Unlisted securities . 1,787.8 1,821.9 1,895.8 1,932.3 1,559.4 1,586.9
Banks . . . 728.3 730.8 776.5 777.0 797.0 810.2
Other . . . 1,059.5 1,091.1 1,119.3 1,155.3 762.4 776.7
– Advances to property companies and
accrued interest . . . 10.2 10.2 9.0 9.0 11.1 11.1
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TOTAL... 1,943.9 2,014.8 2,090.2 2,175.2 1,837.0 1,879.9
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b Movements in other participating interests and long-term securities
(in € million) 2003
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Cost at January 1 (excluding advances and accrued interest) . . . . 2,242.0 Movements during the year:
Purchases . . . 400.0 Disposals . . . (388.9) Impact of translation differences and other . . . (172.8) Other movements . . . (3.4)
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Cost at December 31 (excluding advances and accrued interest) 2,076.9
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Provisions at January 1 (excluding advances and accrued interest) . . . . (160.8) Movements during the year
Provisions for the year . . . (6.3) Recovery of provisions . . . 25.5 Impact of translation differences and other . . . 0.3 Other movements . . . (1.9)
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Provisions at December 31 (excluding advances and accrued interest) . . . . (143.2) Advances to property companies and accrued interest . . . 10.2
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Net book value including advances and accrued interest . . . . 1,943.9
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7 Long term securities and other participating interests (continued)
c Companies in which the Group’s interest exceeded €30 million as of 31 December 2003 (net book value) Consolidated
shareholders’ Consolidated Net book
Registered funds net profit value %
(in million of currency units) office 2002 2002 2003 holding
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– Merck Boringuen Holding1 . . . Wilmington US $18,200.5 US $7,149.5 US $300.0 5.0 – Swiss Life Holding . . . Zurich CHF4,170.0 (CHF1,694.0) CHF89.4 1.8 – HSBC Private Banking Switzerland
(Suisse) SA . . . Geneva CHF3,621.4 CHF232.4 CHF995.9 13.4 – HSBC Guyerzeller Bank AG . . . Geneva CHF449.6 CHF26.3 CHF72.9 10.0 – Banian Investment UK2 . . . St Helier CHF16,686.0 (CHF91.0) GBP300.0 19.0
(Jersey)
– VEA Limited3 . . . St Peter Port GBP2,660.2 GBP187.4 GBP199.8 19.0 (Guernsey)
1 Amounts shown for consolidated shareholders’ funds and consolidated net profit are those of the parent company, Merck & Co.
2 Amounts shown for consolidated shareholders’ funds and consolidated net profit are those of the parent company, Swiss Ré.
3 Amounts shown for consolidated shareholders’ funds and consolidated net profit are those of the parent company, Hanson plc.
The interest in VEA Limited was made during 2003.
8 Intangible fixed assets
(in € million) 2003 2002 2001
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Cost at 1stJanuary . . . . 275.2 249.3 211.9 Movements during the year:
Change in scope of consolidation, disposals, retirements
and other movements . . . 1.2 (10.8) (9.3) Acquisitions . . . 39.3 36.7 46.7
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Cost at 31 December . . . . 315.7 275.2 249.3
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Amortisation and provisions at 1stJanuary . . . . 173.7 152.5 117.9 Movements during the year:
Change in scope of consolidation, disposals, retirements
and other movements . . . 0.3 (12.8) (0.7) Amortisation and provisions for the year . . . 35.6 34.0 35.3
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Amortisation and provisions at 31 December . . . . 209.6 173.7 152.5
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Net book value at 31 December . . . . 106.1 101.5 96.8
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9 Tangible fixed assets
(in € million) 2003 2002 2001
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Cost at 1stJanuary . . . . 1,327.2 1,504.6 1,439.9 Movements during the year:
Change in scope of consolidation . . . 19.9 (161.3) 38.8 Acquisitions . . . 71.3 61.6 144.3 Disposals . . . (98.4) (71.1) (77.4) Retirements and other movements . . . (9.7) (6.6) (41.0)
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Cost at 31 December . . . . 1,310.3 1,327.2 1,504.6
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Depreciation at 1stJanuary . . . . 693.0 674.7 602.6 Movements during the year:
Change in scope of consolidation . . . (3.9) (16.1) 13.5 Depreciation and provisions for the year . . . 68.5 74.6 93.4 Disposals, retirements and other movements . . . (34.7) (40.2) (34.8)
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Depreciation at 31 December . . . . 722.9 693.0 674.7
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Net book value at 31 December . . . . 587.4 634.2 829.9
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Land and buildings used by the group for operating purposes . . . 363.2 419.8 405.8 Other land and buildings . . . 23.1 23.91 190.7 Other tangible fixed assets . . . 201.1 190.5 233.4
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Net book value at 31 December . . . . 587.4 634.2 829.9
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1 Change due to the disposal of HSIL: £99.9 million (€163.6 million).
10 Provisions
At Amounts Other At
(in € million) 31.12.2002 Additions Recoveries written off movements1 31.12.2003
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Provisions deducted directly from assets – Provisions against
advances to banks and customers (excluding doubtful
interest) . . . 915.9 235.3 (66.3) (116.9) (26.2) 941.8 – Provisions for
country risk . . . 42.3 1.3 – (8.2) (0.1) 35.3
– Provisions for counterparty risk
on securities held . . 3.6 24.5 – – – 28.1
Provisions recognised as liabilities – Provisions for
contingent liabilities
and litigation . . . . 237.6 93.9 (3.6) (84.5) (1.7) 241.7
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TOTAL PROVISIONS . . 1,199.4 355.0 (69.9) (209.6) (28.0) 1,246.9
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1 “Other movements” include the impact of consolidation changes and exchange movements.
Net charge to profit and loss 2003
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Net provisions for the year1 . . . (145.4) – Provisions against advances to banks and customers (excluding doubtful interest) . . . (118.4) – Country risk . . . 6.9 – Counterparty risk on securities held . . . (24.5) – Provisions for contingent liabilities and litigation . . . (9.4) Recoveries of amounts written off . . . 7.8
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NET CREDIT TO PROFIT AND LOSS . . . . (137.6)
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1 Including losses not covered by provisions.
11 Other assets
(in € million) 2003 2002 2001
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Securities transaction settlement accounts . . . 2,043.5 707.5 901.9 Deferred taxation (note 17) . . . 4.6 3.1 32.0 Sundry debtors and other assets . . . 3,352.1 3,434.9 1,599.5
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TOTAL . . . . 5,400.2 4,145.5 2,533.4
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12 Prepayments and accrued income
(in € million) 2003 2002 2001
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Items in the course of collection from other banks . . . 461.7 592.2 808.8 Other . . . 1,511.0 997.6 1,034.6
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TOTAL . . . . 1,972.7 1,589.8 1,843.4
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13 Goodwill
GOODWILL (ASSETS)