Ann: Half Yearly Report and Accounts including Appendix 4D, page-41

So the only reasonable presumption I can make is that the 3.1M provision for the lending criteria issue is an earmarking of the existing provision rather than new money allocated to the issue in this half

This is the exact conclusion I came to, but one I am not comfortable with. They haven't specifically stated that the provision had already been made, therefore it's possible that it was also done through the impairment charge, leading to 'profit massaging'.

FWIW - I have contacted Investor Relations for clarity on the accounting treatment of this provision. I will post the response, if there is one.


As for the 'one-off' charge - it shouldn't be treated as 'one-off' from the facts we have, as we have not seen it charged to this set of accounts. From the current set of financials, there are the two possibilities:
1) It is within the Impairment amount, in which case they have taken away from their usual impairment amounts to allow for this event
2) It already existed in previous provisions, hence does not need to be accounted for.

Either way, I wouldn't go adding back 2cps to the earnings result.