v3.25.4
Derivative financial instruments (Tables)
 12 Months Ended
Dec. 31, 2025
Disclosure of derivative financial instruments [Abstract]  
Schedule of Fair Values and Notional Amounts of Derivative Instruments The fair values and notional amounts of derivative instruments are set out in the following table:
2025
2024
Contract/
notional
amount
£m
Fair value
Contract/
notional
amount
£m
Fair value
Assets
£m
Liabilities
£m
Assets
£m
Liabilities
£m
Trading and other
Exchange rate contracts
689,215
7,594
6,454
707,329
10,247
9,172
Interest rate contracts
15,086,291
11,797
8,924
12,864,265
13,436
11,644
Credit derivatives
5,566
75
170
6,103
87
172
Equity, commodity and other contracts
8,914
236
294
8,678
247
333
Total derivative assets/liabilities – trading and other
15,789,986
19,702
15,842
13,586,375
24,017
21,321
Hedging
Interest rate
Currency swaps
35
4
–
43
2
–
Interest rate swaps
211,737
8
253
231,064
6
337
Designated as fair value hedges
211,772
12
253
231,107
8
337
Foreign exchange
Currency swaps
1,554
6
33
1,963
30
14
Interest rate
Interest rate swaps
571,126
7
4
484,996
10
4
Designated as cash flow hedges
572,680
13
37
486,959
40
18
Total derivative assets/liabilities – hedging
784,452
25
290
718,066
48
355
Total recognised derivative assets/liabilities
16,574,438
19,727
16,132
14,304,441
24,065
21,676
Schedule of Hedged Items and Gains and Losses Arising from Hedge Accounting The Group’s hedged items and gains and losses arising from hedge accounting are summarised as follows:
Carrying amount of
the hedged item
Accumulated amount of
fair value adjustment on
the hedged item
Change in fair
value of hedged
item for
ineffectiveness
assessment
£m
Hedge
ineffectiveness
recognised in the
income
statement4
£m
Fair value hedges
Assets
£m
Liabilities
£m
Assets
£m
Liabilities
£m
At 31 December 2025
Interest rate
Fixed rate mortgages1
121,732
–
(178)
–
725
(68)
Fixed rate issuance2
–
45,053
–
829
(530)
10
Fixed rate bonds3
35,058
–
(1,053)
–
(138)
4
Total
156,790
45,053
(1,231)
829
57
(54)
At 31 December 2024
Interest rate
Fixed rate mortgages1
124,013
–
(890)
–
(184)
(52)
Fixed rate issuance2
–
51,499
–
1,340
(75)
(11)
Fixed rate bonds3
29,264
–
(1,070)
–
(1,158)
(18)
Total
153,277
51,499
(1,960)
1,340
(1,417)
(81)
1Included within loans and advances to customers.
2Included within debt securities in issue at amortised cost and subordinated liabilities.
3Included within financial assets at amortised cost and financial assets at fair value through other comprehensive income.
4Hedge ineffectiveness is included in the income statement within net trading income.
Schedule of Movements in Cash Flow Hedges
Gain (loss)
recognised
in other
comprehensive
income
£m
Amounts reclassified from
reserves to net interest income as:
Cash flow hedge reserve
Change in fair
value of hedged
item for
ineffectiveness
assessment
£m
Hedge
ineffectiveness
recognised in
the income
statement1
£m
Cash flow hedges
Hedged cash
flows that
will no
longer occur
£m
Hedged item
affected income
statement
£m
Continuing
hedges
£m
Discontinued
hedges
£m
At 31 December 2025
Foreign exchange
Foreign currency issuance2
(3)
–
(4)
(11)
138
7
–
Customer deposits3
–
–
4
–
9
–
–
Interest rate
Customer loans4
294
–
1,131
(2,159)
(1,475)
(802)
63
Central bank balances5
205
–
793
(100)
(831)
(487)
3
Customer deposits3
(14)
–
(55)
1,527
38
72
(12)
Total
482
–
1,869
(743)
(2,121)
(1,210)
54
At 31 December 2024
Foreign exchange
Foreign currency issuance2
61
–
(4)
75
59
(60)
–
Customer deposits3
–
–
–
–
5
–
–
Interest rate
Customer loans4
(2,700)
–
2,458
(3,470)
(1,590)
982
(61)
Central bank balances5
(780)
–
937
(1,012)
(917)
384
(7)
Customer deposits3
842
–
(794)
1,592
42
(51)
8
Total
(2,577)
–
2,597
(2,815)
(2,401)
1,255
(60)
1Hedge ineffectiveness is included in the income statement within net trading income. The reported hedge ineffectiveness includes an adjustment for off-market derivatives.
2Included within debt securities in issue at amortised cost and subordinated liabilities.
3Included within customer deposits.
4Included within loans and advances to customers.
5Included within cash and balances at central banks.
Schedule of Amount, Timing and Uncertainty of Future Cash Flows Details of the Group’s hedging instruments are set out below:
Maturity
Changes in fair
value used for
calculating
hedge
ineffectiveness
£m
Fair value hedges
Up to 1 month
£m
1 to 3 months
£m
3 to 12 months
£m
1 to 5 years
£m
Over 5 years
£m
Total
£m
At 31 December 2025
Interest rate
Cross currency swap
Notional
–
–
–
35
–
35
2
Average fixed interest rate
–
–
–
1.28%
–
Average EUR/GBP exchange rate
–
–
–
1.38
–
Interest rate swap
Notional
395
5,503
31,294
132,417
42,128
211,737
(113)
Average fixed interest rate
3.00%
3.24%
3.70%
3.33%
1.96%
211,772
(111)
Cash flow hedges
At 31 December 2025
Foreign exchange
Currency swap
Notional
152
162
157
884
199
1,554
(7)
Average EUR/GBP exchange rate
1.13
1.16
1.14
0.98
0.95
Average USD/GBP exchange rate
1.33
1.31
1.30
1.29
–
Interest rate
Interest rate swap
Notional
12,636
31,911
114,577
321,862
90,140
571,126
1,771
Average fixed interest rate
4.03%
3.43%
3.65%
3.59%
3.56%
572,680
1,764
Total
784,452
1,653
Fair value hedges
At 31 December 2024
Interest rate
Cross currency swap
Notional
–
–
–
–
43
43
–
Average fixed interest rate
–
–
–
–
1.28%
Average EUR/GBP exchange rate
–
–
–
–
1.38
Interest rate swap
Notional
5,236
13,781
55,607
111,300
45,140
231,064
1,336
Average fixed interest rate
3.04%
3.68%
4.04%
3.36%
2.27%
231,107
1,336
Cash flow hedges
At 31 December 2024
Foreign exchange
Currency swap
Notional
107
441
646
763
6
1,963
61
Average EUR/GBP exchange rate
1.17
1.16
1.15
1.10
1.06
Average USD/GBP exchange rate
1.30
1.27
1.27
1.27
1.30
Interest rate
Interest rate swap
Notional
9,195
21,010
129,436
262,387
62,968
484,996
(600)
Average fixed interest rate
4.32%
4.36%
3.84%
3.34%
3.01%
486,959
(539)
Total
718,066
797