42. Contingent liabilities and commitments

The table below shows the contract or underlying principal amounts of unmatured off-balance sheet transactions at the balance sheet date. The contract or underlying principal amounts indicate the volume of business outstanding and do not represent amounts at risk.

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2011
$million

2010
$million

Contingent liabilities1

 

 

1

Includes amounts relating to the Group’s share of its joint ventures

2

Amounts have been restated to include facilities extended to certain Consumer Banking customers

Guarantees and irrevocable letters of credit

27,022

31,765

Other contingent liabilities

15,858

10,039

 

42,880

41,804

Commitments1

 

 

Documentary credits and short-term trade-related transactions

8,612

7,505

Forward asset purchases and forward deposits placed

733

877

Undrawn formal standby facilities, credit lines and other commitments to lend:

 

 

One year and over

28,507

24,014

Less than one year

24,193

21,610

Unconditionally cancellable

88,652

80,5252

 

150,697

134,531

Contingent liabilities

Where the Group undertakes to make a payment on behalf of its customers for guarantees issued such as for performance bonds or as irrevocable letters of credit as part of the Group’s transaction banking business for which an obligation to make a payment has not arisen at the reporting date those are included in these financial statements as contingent liabilities.

Other contingent liabilities primarily include revocable letters of credit and bonds issued on behalf of customers to customs officials, for bids or offers and as shipping guarantees.

The Group receives legal claims against it in a number of jurisdictions arising in the normal course of business. The Group considers none of these matters as material either individually or in aggregate. Where appropriate the Group recognises a provision for liabilities when it is probable that an outflow of economic resources embodying economic benefits will be required and for which a reliable estimate can be made of the obligation (see note 33).

Commitments

Where the Group has confirmed its intention to provide funds to a customer or on behalf of a customer in the form of loans, overdrafts, future guarantees whether cancellable or not or letters of credit and the Group has not made payments at the balance sheet date, those instruments are included in these financial statements as commitments.

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