Interim Results - Part 3

WOOLWICH PLC
29 July 1999


PART 3

8.  LOANS AND ADVANCES TO CUSTOMERS

a)  Gross balances

                                          UK        UK  Continental
                                   Mortgages  Consumer       Europe    Total
                                                Credit
                                          £m        £m           £m        £m

31/12/97                            23,817.3      85.1      1,617.9  25,520.3

Advances                             1,749.5      92.5        221.9   2,063.9

Redemptions and repayments          (1,577.6)    (34.4)      (116.6) (1,728.6)

Exchange differences                     -         -          (32.0)    (32.0)

30/06/98                            23,989.2     143.2      1,691.2  25,823.6

On acquisition                           -        46.8          -        46.8

Advances                             2,649.1     190.6        348.8   3,188.5

Redemptions and repayments          (1,875.2)    (65.7)      (158.5) (2,099.4)

Exchange differences                     -         -          149.6     149.6

31/12/98                            24,763.1     314.9      2,031.1  27,109.1

Advances                             2,735.1     382.2        454.4   3,571.7 
 
Redemptions and repayments          (1,962.6)   (130.0)      (167.1) (2,259.7)

Exchange differences                     -         -         (155.2)   (155.2)

30/06/99                            25,535.6     567.1      2,163.2  28,265.9 
    
          
b) Provisions for bad and doubtful debts

                            UK            UK        Continental           
                     Mortgages      Consumer             Europe         Total
                                      Credit
                            £m            £m                 £m            £m

Specific
31/12/97                  63.6           9.6               10.1          83.3
Charge                    (0.2)          5.2                2.0           7.0
Amounts written off       (7.4)         (3.5)              (0.5)        (11.4)
Exchange difference        -             -                 (0.3)         (0.3)
30/06/98                   56.0         11.3               11.3          78.6 
Charge                    (4.4)          7.5                0.7           3.8
Amounts written off       (8.5)         (4.9)              (0.9)        (14.3)
Exchange difference        -             -                  0.9           0.9 
31/12/98                  43.1          13.9               12.0          69.0 
Charge                     1.9           7.9                1.0          10.8 
Amounts written off       (5.1)         (4.1)              (0.1)         (9.3)
Exchange difference        -             -                 (0.7)         (0.7)

30/06/99                  39.9          17.7               12.2          69.8


General
31/12/97                  31.0           3.6                7.2          41.8
Charge                     1.5           0.5               (1.8)          0.2
Exchange difference        -             -                 (0.1)         (0.1)
30/06/98                  32.5           4.1                5.3          41.9 
On acquisition             -             0.9                -             0.9
Charge                     1.5           1.7               (1.3)          1.9
Exchange difference        -             -                  0.4           0.4
31/12/98                  34.0           6.7                4.4          45.1
Charge                     -             2.4                0.5           2.9
Exchange difference        -             -                 (0.3)         (0.3)
30/06/99                  34.0           9.1                4.6          47.7


Total
31/12/97                  94.6          13.2               17.3         125.1
Charge                     1.3           5.7                0.2           7.2
Amounts written off       (7.4)         (3.5)              (0.5)        (11.4)
Exchange difference        -             -                 (0.4)         (0.4)
30/06/98                  88.5          15.4               16.6         120.5
On acquisition             -             0.9                -             0.9
Charge                    (2.9)          9.2               (0.6)          5.7
Amounts written off       (8.5)         (4.9)              (0.9)        (14.3)
Exchange difference        -             -                  1.3           1.3
31/12/98                  77.1          20.6               16.4         114.1
Charge                     1.9          10.3                1.5          13.7
Amounts written off       (5.1)         (4.1)              (0.1)         (9.3)
Exchange difference        -             -                 (1.0)         (1.0)
30/06/99                  73.9          26.8               16.8         117.5


The ratios of closing provision balances to gross loans and advances balances
were as follows:

                            30/06/99     30/06/98     31/12/98
                                  %            %            %
UK Mortgages                     0.3          0.4          0.3
Consumer Credit Loans            4.7         10.8          6.5
Continental Europe               0.8          1.0          0.8
Total                            0.4          0.5          0.4


c) Percentage of mortgage balances 2.5% or more in arrears

                            30/06/99     30/06/98     31/12/98
                                  %            %            %
UK                               1.87         2.66         2.14
France                           2.20         2.83         2.54
Italy                            1.70         2.77         1.90


d) UK mortgages balances in arrears

               30/06/99                 30/06/98                31/12/98
                £m       %               £m       %              £m        %
2.5-5%       276.0      1.08          325.2      1.36         303.4       1.23
5-7.5%        86.7      0.34          121.3      0.50          88.3       0.36
7.5-10%       34.6      0.14           62.7      0.26          40.7       0.16
10%+          49.9      0.20           95.8      0.40          65.0       0.26
Possessions   29.2      0.11           34.2      0.14          31.7       0.13
             476.4      1.87          639.2      2.66         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.DEFERRED MORTGAGE INCENTIVES COSTS

                                                         Total
                                                      Mortgage
                           Cashbacks    Discounts   Incentives
                                  £m           £m           £m

31/12/97                        65.7         66.8        132.5
Expenditure incurred             
in the period                    7.0          9.1         16.1
Amount charged to              
profit and loss account        (16.6)       (14.8)       (31.4)
30/06/98                        56.1         61.1        117.2

Expenditure incurred            
in the period                   18.4         17.6         36.0
Amount charged to              
profit and loss account        (19.9)       (30.3)       (50.2)
31/12/98                        54.6         48.4        103.0

Expenditure incurred
in the period                   10.0          4.5         14.5
Amount charged to profit
and loss account               (16.5)       (18.9)       (35.4)   
30/06/99                        48.1         34.0         82.1

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 £20.9m compared with a policy of non deferral.  In the first half of 1998,
the effect was to reduce the net interest margin by £15.3m.  


10. CAPITAL STRUCTURE

                            30/06/99     30/06/98     31/12/98
                                  £m           £m           £m

Tier 1                         1,749        1,993        1,711
Tier 2                           723          726          720
Deductions                      (155)        (130)        (140)
Total capital                  2,317        2,589        2,291

Risk weighted assets          16,252       14,971       15,648


                                  %            %            %
Total capital ratio             14.3         17.3         14.6
Tier 1 ratio                    10.8         13.3         10.9

Tier 1 includes current period profits less proposed dividends.

During the period to 30 June 1999, Woolwich plc purchased in the market for
cancellation 15.35m ordinary shares.  The average purchase price was £3.98 per
share, resulting in a cost of £61.4m, 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

                                       Unaudited          Audited
                                  Half year to 30 June  Year to 31
                                                          December  
                                    1999         1998         1998
                                      £m           £m           £m
Interest receivable and 
similar income arising from
debt securities                     58.7         61.7        117.6  
Other interest receivable    
and similar income               1,009.1      1,121.4      2,340.3
Interest receivable              1,067.8      1,183.1      2,457.9
Interest payable                  (738.5)      (863.7)    (1,798.9)
Net interest income                329.3        319.4        659.0
Fees and commissions           
receivable                         128.4        107.3        246.2
Fees and commissions           
payable                            (14.0)        (9.5)       (16.1)
Other operating income              18.9         15.7         36.6
Total non-interest income          133.3        113.5        266.7
Operating income                   462.6        432.9        925.7
Administrative expenses-other     (174.1)      (161.3)      (341.7)
Depreciation and amortisation      (24.5)       (24.0)       (54.0)
Total operating expenses          (198.6)      (185.3)      (395.7)
Provisions for bad and
doubtful debts                     (13.7)        (7.2)       (12.9)
Provision for pensions review        -            -          (12.0)
Operating profit                   250.3        240.4        505.1
Loss on disposal of Group
operations                           -            -           (9.2)
Profit on ordinary activities
before tax                         250.3        240.4        495.9
Tax on profit on ordinary 
activities                         (79.5)       (78.6)      (164.6)
Profit on ordinary activities
after tax                          170.8        161.8        331.3
Minority interests - equity         (1.3)        (1.2)        (3.1)
Profit attributable to the
shareholders of Woolwich plc       169.5        160.6        328.2
Dividends                          (60.7)       (56.2)      (403.1)
Retained profit (deficit) for
the period                         108.8        104.4        (74.9)

Headline profit before tax*        250.3        240.4        505.1

*Headline profit before tax is defined as pre tax profit before loss on
disposal of Group operations in 1998   


CONSOLIDATED BALANCE SHEET

                                      Unaudited            Audited
                                30/06/99     30/06/98     31/12/98
                                      £m           £m           £m
Assets
Cash and balances at central
banks                               40.2         68.6         97.8
Loans and advances to banks      2,061.4      3,226.1      3,392.1
Loans and advances to 
customers                       28,148.4     25,703.1     26,995.0
Debt securities                  1,587.1      1,578.4      1,415.7
Interests in associates and
joint venture                        9.4          5.3          4.5
Intangible fixed assets              4.2          -            4.6
Tangible fixed assets              284.2        276.7        280.2
Other assets, prepayments
and accrued income                 522.7        525.4        590.5
Long term assurance 
policyholders' assets              564.3        430.7        458.1

Total assets                    33,221.9     31,814.3     33,238.5

Liabilities       
Deposits by banks                1,830.1      1,766.6      1,400.8
Customer accounts               21,102.8     21,867.1     21,821.8
Debt securities in issue         6,171.2      3,918.6      5,457.5
Other liabilities, accruals
and deferred income and 
provisions for liabilities 
and charges                      1,069.7      1,138.4      1,657.6
Long term assurance policy 
holders' liabilities               564.3        430.7        458.1
Subordinated liabilities           690.9        691.5        691.2
                                31,429.0     29,812.9     31,487.0

Called up share capital            155.8        160.1        157.3
Share premium account               10.2          -           10.1
Capital redemption reserve           4.6          -            3.1
Revaluation reserve                 18.4          8.6         18.4
Profit and loss account          1,589.6      1,819.5      1,548.7
Shareholders' funds - equity     1,778.6      1,988.2      1,737.6
Minority interests - equity         14.3         13.2         13.9
Minority interests and 
shareholders' funds              1,792.9      2,001.4      1,751.5

Total liabilities and 
shareholders' funds             33,221.9     31,814.3     33,238.5


STATEMENT OF CONSOLIDATED TOTAL RECOGNISED GAINS AND LOSSES

                                       Unaudited          Audited
                                 Half year to 30 June   Year to 31
                                                          December
                                    1999         1998         1998
                                      £m           £m           £m
Profit attributable to the
shareholders of Woolwich plc       169.5        160.6        328.2
Unrealised movement on 
revaluation of properties            -            -            4.9
Foreign currency translation
differences on net investments
in subsidiary undertakings          (6.4)        (1.5)         5.0
Total recognised gains for 
the year                           163.1        159.1        338.1


RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

Profit attributable to the
shareholders of Woolwich plc        169.5       160.6        328.2
Dividends                           (60.7)      (56.2)      (403.1)
                                    108.8       104.4        (74.9)
Other recognised net gains and
losses for the year                  (6.4)       (1.5)         9.9
Shares repurchased                  (61.4)        -         (104.1)
Goodwill written back 
on disposal                           -           -           21.4
Net movement in shareholders' 
funds                                41.0       102.9       (147.7)
Opening shareholders' funds       1,737.6     1,885.3      1,885.3
Closing shareholders' funds       1,778.6     1,988.2      1,737.6


DIVIDENDS PER SHARE
  
                                  Half year to 30 June  Year to 31
                                                          December
                                    1999         1998         1998
Dividends per ordinary share:
Interim                              3.9p         3.5p         3.5p
Final                                -            -            7.1p
Special                              -            -           15.0p
Total dividends                      3.9p         3.5p        25.6p


EARNINGS PER SHARE

Headline earnings per ordinary
share                               10.8p        10.0p        21.2p
Basic earnings per ordinary         
share                               10.8p        10.0p        20.6p 
Diluted earnings per ordinary       
share                               10.8p        10.0p        20.6p

The weighted average number of shares used in calculating earnings per share
was as follows:

Basic and headline ordinary
shares in issue                    1,568m       1,601m       1,592m

Diluted ordinary shares            1,571m       1,601m       1,593m


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