Glossary

Short dated subordinated debt plus interim trading gains and losses. Eligible to cover market risk only and will be phased out under Basel III.

Shares held by the issuer. Treasury shares are stripped of voting and dividend rights and are not taken into account in the calculation of earnings per share.

French acronym for perpetual subordinated notes.

Total Shareholder Return: corresponding to return on the capital invested by shareholders, including dividends and unrealised gains on the shares.

An agreement between two counterparties that have multiple derivative contracts with each other that provides for the net settlement of all contracts through a single payment, in a single currency, in the event of default on, or termination of, any one contract. ISDA is the International Swaps and Derivatives Association.

Leveraged Buy Out. Company acquisition financed primarily by debt. In practice, a holding company is set up to take on the debt used to finance the acquisition of the target. The interest payments due by the holding company are covered by ordinary or exceptional dividends received from the acquired target.

Funding provided to a business resulting in an overall level of debt that exceeds that which would be considered usual for the business or for the industry in which it operates. Leveraged finance is commonly employed to achieve a specific, often temporary, objective: to make an acquisition, to effect a buy-out or to repurchase shares.

Amount of a secured loan as a percentage of the appraised value of the security e.g. the outstanding amount of a mortgage loan as a percentage of the property’s value.

Economic loss that may occur in the event of default i.e. the actual loss – that part of the exposure that is not expected to be recovered – plus any costs of recovery.

Value attributed to a company by the stock market. Market capitalisation corresponds to the share price multiplied by the number of shares outstanding.