Final Results - Part 4 of 13
Condensed consolidated balance sheet
at 31 December 2010 - pro forma
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
|
|
|
|
|
Assets |
|
|
|
|
Cash and balances at central banks |
57,014 |
61,416 |
51,548 |
|
Net loans and advances to banks |
57,909 |
60,330 |
48,777 |
|
Reverse repurchase agreements and stock borrowing |
42,607 |
48,407 |
35,097 |
|
Loans and advances to banks |
100,516 |
108,737 |
83,874 |
|
Net loans and advances to customers |
502,748 |
528,049 |
554,654 |
|
Reverse repurchase agreements and stock borrowing |
52,512 |
44,503 |
41,040 |
|
Loans and advances to customers |
555,260 |
572,552 |
595,694 |
|
Debt securities |
217,480 |
226,410 |
249,095 |
|
Equity shares |
22,198 |
21,755 |
15,960 |
|
Settlement balances |
11,605 |
22,874 |
12,024 |
|
Derivatives |
427,077 |
548,805 |
438,199 |
|
Intangible assets |
14,448 |
14,369 |
14,786 |
|
Property, plant and equipment |
16,543 |
17,398 |
17,773 |
|
Deferred tax |
6,373 |
5,907 |
6,492 |
|
Prepayments, accrued income and other assets |
12,568 |
11,903 |
18,604 |
|
Assets of disposal groups |
11,552 |
16,537 |
18,432 |
|
|
|
|
|
|
Total assets |
1,452,634 |
1,628,663 |
1,522,481 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Bank deposits |
65,938 |
80,186 |
115,642 |
|
Repurchase agreements and stock lending |
32,739 |
41,465 |
38,006 |
|
Deposits by banks |
98,677 |
121,651 |
153,648 |
|
Customer deposits |
428,599 |
420,639 |
414,251 |
|
Repurchase agreements and stock lending |
82,094 |
87,287 |
68,353 |
|
Customer accounts |
510,693 |
507,926 |
482,604 |
|
Debt securities in issue |
218,372 |
235,083 |
246,329 |
|
Settlement balances |
10,991 |
20,628 |
10,412 |
|
Short positions |
43,118 |
44,004 |
40,463 |
|
Derivatives |
423,967 |
543,397 |
421,534 |
|
Accruals, deferred income and other liabilities |
23,074 |
23,650 |
24,624 |
|
Retirement benefit liabilities |
2,288 |
2,606 |
2,715 |
|
Deferred tax |
2,111 |
2,237 |
2,161 |
|
Insurance liabilities |
6,794 |
6,782 |
7,633 |
|
Subordinated liabilities |
27,053 |
27,890 |
31,538 |
|
Liabilities of disposal groups |
8,940 |
15,667 |
18,857 |
|
|
|
|
|
|
Total liabilities |
1,376,078 |
1,551,521 |
1,442,518 |
|
|
|
|
|
|
Equity |
|
|
|
|
Non-controlling interests |
1,424 |
1,542 |
2,227 |
|
Owners' equity* |
75,132 |
75,600 |
77,736 |
|
|
|
|
|
|
Total equity |
76,556 |
77,142 |
79,963 |
|
|
|
|
|
|
Total liabilities and equity |
1,452,634 |
1,628,663 |
1,522,481 |
|
|
|
|
|
|
|
|
|
|
|
* Owners' equity attributable to: |
|
|
|
|
Ordinary and B shareholders |
70,388 |
70,856 |
69,890 |
|
Other equity owners |
4,744 |
4,744 |
7,846 |
|
|
|
|
|
|
|
75,132 |
75,600 |
77,736 |
Commentary on condensed consolidated balance sheet - pro forma
Total assets of £1,452.6 billion at 31 December 2010 were down £69.8 billion, 5%, compared with 31 December 2009. This principally reflects the continuing planned disposal of Non-Core assets, together with a reduction in the level of debt securities and mark-to-market value of derivatives in Global Banking & Markets.
Cash and balances at central banks were up £5.5 billion, 11%, to £57.0 billion due to an improvement in the Group's structural liquidity position during 2010.
Loans and advances to banks increased by £16.6 billion, 20%, to £100.5 billion. Reverse repurchase agreements and stock borrowing ('reverse repos') were up £7.5 billion, 21%, to £42.6 billion and bank placings rose £9.1 billion, 19%, to £57.9 billion, primarily as a result of the investment of surplus liquidity in short-term assets .
Loans and advances to customers were down £40.4 billion, 7%, at £555.3 billion. Within this, reverse repurchase agreements were up £11.5 billion, 28%, to £52.5 billion. Customer lending decreased by £51.9 billion to £502.7 billion or £48.9 billion before impairment provisions. This reflected planned reductions in Non-Core of £39.7 billion along with declines in Global Banking & Markets £16.7 billion, US Retail & Commercial, £2.6 billion and Ulster Bank, £2.0 billion. These were partially offset by growth in UK Retail, £5.4 billion, Wealth, £2.4 billion and Global Transaction Services, £1.7 billion, together with the effect of exchange rate and other movements, £2.6 billion.
Debt securities were down £31.6 billion, 13%, to £217.5 billion driven mainly by reductions in Global Banking & Markets.
The value of derivative assets were down £11.1 billion, 3%, to £427.1 billion, primarily reflecting a decrease in interest contracts, movements in five to ten year interest yields, and the combined effect of currency movements, with Sterling weakening against the dollar but strengthening against the Euro.
The reduction in assets and liabilities of disposal groups resulted from completion of disposals of certain of the Group's Asian and Latin American businesses, and substantially all of the RBS Sempra Commodities JV business.
Deposits by banks declined £55.0 billion, 36%, to £98.7 billion, with reduced inter-bank deposits, down £49.7 billion, 43%, to £65.9 billion and lower repurchase agreements and stock lending ('repos'), down £5.3 billion, 14%, to £32.7 billion.
Customer accounts rose £28.1 billion, 6%, to £510.7 billion. Within this, repos increased £13.7 billion, 20%, to £82.1 billion. Excluding repos, customer deposits were up £14.3 billion, 3%, to £428.6 billion, reflecting growth in UK Corporate, £12.2 billion, Global Transaction Services £7.8 billion, UK Retail, £7.0 billion, Ulster Bank, £1.7 billion and Wealth, £0.8 billion, together with exchange rate and other movements of £3.0 billion. This was partially offset by decreases in Global Banking & Markets, £8.3 billion, US Retail & Commercial, £4.0 billion and Non-Core, £5.9 billion.
Commentary on condensed consolidated balance sheet - pro forma
Debt securities in issue were down £28.0 billion, 11% to £218.4 billion. Reductions in the level of certificates of deposit and commercial paper in Global Banking & Markets were partially offset by a programme of new term issuances totalling £38.4 billion.
Subordinated liabilities decreased by £4.5 billion, 14% to £27.1 billion. This reflected the redemption of £2.6 billion undated loan capital, debt preference shares and trust preferred securities under the liability management exercise completed in May, together with the conversion of £0.8 billion US dollar and Sterling preference shares and the redemption of £1.6 billion of other dated and undated loan capital, which were partially offset by the effect of exchange rate movements and other adjustments of £0.5 billion.
The Group's non-controlling interests decreased by £0.8 billion, 36%, to £1.4 billion, primarily reflecting the disposal of the majority of the RBS Sempra Commodities JV business, £0.6 billion, and the life assurance business, £0.2 billion.
Owner's equity decreased by £2.6 billion, 3%, to £75.1 billion. This was driven by the partial redemption of preference shares and paid in equity, £3.1 billion less related gains of £0.6 billion, the attributable loss for the period, £1.1 billion, together with an increase in own shares held of £0.7 billion and higher losses in available-for-sale reserves, £0.3 billion. Offsetting these reductions were the issue of £0.8 billion ordinary shares on conversion of the US dollar and Sterling denominated non-cumulative preference shares classified as debt and exchange rate and other movements, £1.2 billion.
Average balance sheet - pro forma
|
|
Quarter ended |
|
Year ended |
||
|
|
31 December 2010 |
30 September 2010 |
|
31 December 2010 |
31 December 2009 |
|
|
% |
% |
|
% |
% |
|
|
|
|
|
|
|
|
Average yields, spreads and margins of the banking business |
|
|
|
|
|
|
Gross yield on interest-earning assets of banking business |
3.37 |
3.32 |
|
3.29 |
3.50 |
|
Cost of interest-bearing liabilities of banking business |
(1.58) |
(1.45) |
|
(1.48) |
(1.95) |
|
|
|
|
|
|
|
|
Interest spread of banking business |
1.79 |
1.87 |
|
1.81 |
1.55 |
|
Benefit from interest-free funds |
0.25 |
0.18 |
|
0.20 |
0.21 |
|
|
|
|
|
|
|
|
Net interest margin of banking business |
2.04 |
2.05 |
|
2.01 |
1.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average interest rates |
|
|
|
|
|
|
The Group's base rate |
0.50 |
0.50 |
|
0.50 |
0.64 |
|
|
|
|
|
|
|
|
London inter-bank three month offered rates |
|
|
|
|
|
|
- Sterling |
0.74 |
0.73 |
|
0.70 |
1.21 |
|
- Eurodollar |
0.29 |
0.39 |
|
0.34 |
0.69 |
|
- Euro |
0.96 |
0.81 |
|
0.75 |
1.21 |
|
|
Quarter ended |
Quarter ended |
||||
|
|
31 December 2010 |
30 September 2010 |
||||
|
|
Average |
|
|
Average |
|
|
|
|
balance |
Interest |
Rate |
balance |
Interest |
Rate |
|
|
£m |
£m |
% |
£m |
£m |
% |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Loans and advances to banks |
61,826 |
167 |
1.08 |
54,714 |
153 |
1.12 |
|
Loans and advances to customers |
481,973 |
4,757 |
3.95 |
504,263 |
4,721 |
3.74 |
|
Debt securities |
117,581 |
654 |
2.22 |
117,313 |
743 |
2.53 |
|
|
|
|
|
|
|
|
|
Interest-earning assets - banking business |
661,380 |
5,578 |
3.37 |
676,290 |
5,617 |
3.32 |
|
|
|
|
|
|
|
|
|
Trading business |
276,306 |
|
|
271,960 |
|
|
|
Non-interest earning assets |
645,350 |
|
|
692,930 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
1,583,036 |
|
|
1,641,180 |
|
|
|
Memo: Funded assets |
1,071,413 |
|
|
1,090,189 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Deposits by banks |
70,567 |
287 |
1.63 |
74,487 |
328 |
1.76 |
|
Customer accounts |
333,895 |
928 |
1.11 |
340,515 |
961 |
1.13 |
|
Debt securities in issue |
189,751 |
825 |
1.74 |
188,807 |
736 |
1.56 |
|
Subordinated liabilities |
27,756 |
203 |
2.93 |
27,312 |
159 |
2.33 |
|
Internal funding of trading business |
(63,213) |
(30) |
0.19 |
(34,829) |
(26) |
0.30 |
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities - banking business |
558,756 |
2,213 |
1.58 |
596,292 |
2,158 |
1.45 |
|
|
|
|
|
|
|
|
|
Trading business |
288,431 |
|
|
283,909 |
|
|
|
Non-interest-bearing liabilities |
|
|
|
|
|
|
|
- demand deposits |
67,707 |
|
|
50,483 |
|
|
|
- other liabilities |
592,768 |
|
|
634,662 |
|
|
|
Owners equity |
75,374 |
|
|
75,834 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and owners equity |
1,583,036 |
|
|
1,641,180 |
|
|
Average balance sheet - pro forma
|
|
Year ended |
Year ended |
||||
|
|
31 December 2010 |
31 December 2009 |
||||
|
|
Average |
|
|
Average |
|
|
|
|
balance |
Interest |
Rate |
balance |
Interest |
Rate |
|
|
£m |
£m |
% |
£m |
£m |
% |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Loans and advances to banks |
52,721 |
592 |
1.12 |
51,757 |
831 |
1.61 |
|
Loans and advances to customers |
508,400 |
18,843 |
3.71 |
575,473 |
21,357 |
3.71 |
|
Debt securities |
128,837 |
3,258 |
2.53 |
125,806 |
4,202 |
3.34 |
|
|
|
|
|
|
|
|
|
Interest-earning assets - banking business |
689,958 |
22,693 |
3.29 |
753,036 |
26,390 |
3.50 |
|
|
|
|
|
|
|
|
|
Trading business |
276,330 |
|
|
291,092 |
|
|
|
Non-interest earning assets |
657,095 |
|
|
815,468 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
1,623,383 |
|
|
1,859,596 |
|
|
|
|
|
|
|
|
|
|
|
Memo: Funded assets |
1,117,490 |
|
|
1,187,513 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Deposits by banks |
81,358 |
1,330 |
1.63 |
131,190 |
2,852 |
2.17 |
|
Customer accounts |
341,641 |
3,723 |
1.09 |
354,963 |
4,637 |
1.31 |
|
Debt securities in issue |
195,976 |
3,251 |
1.66 |
226,077 |
4,816 |
2.13 |
|
Subordinated liabilities |
29,334 |
732 |
2.50 |
35,348 |
1,310 |
3.71 |
|
Internal funding of trading business |
(48,315) |
(181) |
0.37 |
(75,129) |
(508) |
0.68 |
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities - banking business |
599,994 |
8,855 |
1.48 |
672,449 |
13,107 |
1.95 |
|
|
|
|
|
|
|
|
|
Trading business |
293,993 |
|
|
331,380 |
|
|
|
Non-interest-bearing liabilities |
|
|
|
|
|
|
|
- demand deposits |
53,016 |
|
|
36,489 |
|
|
|
- other liabilities |
599,474 |
|
|
761,975 |
|
|
|
Shareholders' equity |
76,906 |
|
|
57,303 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
1,623,383 |
|
|
1,859,596 |
|
|
Notes:
|
(1) |
Interest receivable and interest payable on trading assets and liabilities are included in income from trading activities. |
|
(2) |
Interest-earning assets and interest-bearing liabilities exclude the Retail bancassurance long-term assets and liabilities, attributable to policyholders, in view of their distinct nature. As a result, net interest income has been increased by £2 million for Q4 2010 and £6 million for the year ended 31 December 2010 (Q3 2010 - £1 million; full year 2009 - £20 million). |
|
(3) |
Changes in the fair value of interest-bearing financial instruments designated as at fair value through profit or loss are recorded in other operating income in the consolidated income statement. In the average balance sheet above, interest includes decreased interest income related to these instruments of £35 million for Q4 2010 and increased interest income of £11 million for the year ended 31 December 2010 (Q3 2010 - increased by £41 million; full year 2009 - increased by £46 million), and decreased interest expense of £45 million for Q4 2010 and increased interest expense of £30 million for the year ended 31 December 2010 (Q3 2010 - increased by £3 million; full year 2009 - increased by £350 million). Average balances have been adjusted accordingly. |
|
(4) |
Interest payable has been increased by £225 million for Q4 2010 and increased by £319 million for full year 2010 in respect of non-recurring adjustments (Q3 2010 - decreased by £16 million; full year 2009 - nil). |
|
(5) |
Interest receivable has been decreased by £90 million for full year 2010 in respect of a non-recurring receivable (Q4 2010 - nil; Q3 2010 - nil; full year 2009 - nil). |
Condensed consolidated statement of changes in equity
for the year ended 31 December 2010 - pro forma
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
Called-up share capital |
|
|
|
|
|
|
|
At beginning of period |
15,030 |
15,029 |
14,120 |
|
14,630 |
9,898 |
|
Ordinary shares issued |
121 |
1 |
- |
|
523 |
- |
|
Ordinary shares issued in respect of placing and open offers |
- |
- |
- |
|
- |
4,227 |
|
B shares issued |
- |
- |
510 |
|
- |
510 |
|
Preference shares redeemed |
1 |
- |
- |
|
(1) |
(5) |
|
Cancellation of non-voting deferred shares |
(27) |
- |
- |
|
(27) |
- |
|
|
|
|
|
|
|
|
|
At end of period |
15,125 |
15,030 |
14,630 |
|
15,125 |
14,630 |
|
|
|
|
|
|
|
|
|
Paid-in equity |
|
|
|
|
|
|
|
At beginning of period |
431 |
431 |
565 |
|
565 |
1,073 |
|
Securities redeemed |
- |
- |
- |
|
(132) |
(308) |
|
Transfer to retained earnings |
- |
- |
- |
|
(2) |
(200) |
|
|
|
|
|
|
|
|
|
At end of period |
431 |
431 |
565 |
|
431 |
565 |
|
|
|
|
|
|
|
|
|
Share premium account |
|
|
|
|
|
|
|
At beginning of period |
23,858 |
23,858 |
23,523 |
|
23,523 |
27,471 |
|
Ordinary shares issued |
64 |
- |
- |
|
281 |
- |
|
Ordinary shares issued in respect of |
- |
- |
- |
|
- |
1,047 |
|
Redemption of preference shares classified as debt |
- |
- |
- |
|
118 |
- |
|
Preference shares redeemed |
- |
- |
- |
|
- |
(4,995) |
|
|
|
|
|
|
|
|
|
At end of period |
23,922 |
23,858 |
23,523 |
|
23,922 |
23,523 |
|
|
|
|
|
|
|
|
|
Merger reserve |
|
|
|
|
|
|
|
At beginning of period |
13,272 |
13,272 |
10,881 |
|
25,522 |
10,881 |
|
Issue of B shares, net of £399 million expenses |
- |
- |
24,591 |
|
- |
24,591 |
|
Transfer to retained earnings |
- |
- |
(9,950) |
|
(12,250) |
(9,950) |
|
|
|
|
|
|
|
|
|
At end of period |
13,272 |
13,272 |
25,522 |
|
13,272 |
25,522 |
|
|
|
|
|
|
|
|
|
Available-for-sale reserve |
|
|
|
|
|
|
|
At beginning of period |
(1,242) |
(1,459) |
(2,199) |
|
(1,755) |
(3,561) |
|
Unrealised (losses)/gains |
(1,148) |
680 |
504 |
|
179 |
1,202 |
|
Realised losses/(gains) |
16 |
(408) |
115 |
|
(519) |
981 |
|
Tax |
337 |
(55) |
(175) |
|
74 |
(377) |
|
Recycled to profit or loss on disposal of businesses (1) |
- |
- |
- |
|
(16) |
- |
|
|
|
|
|
|
|
|
|
At end of period |
(2,037) |
(1,242) |
(1,755) |
|
(2,037) |
(1,755) |
|
|
|
|
|
|
|
|
|
Cash flow hedging reserve |
|
|
|
|
|
|
|
At beginning of period |
119 |
(235) |
(389) |
|
(252) |
(876) |
|
Amount recognised in equity |
(149) |
387 |
(57) |
|
180 |
380 |
|
Amount transferred from equity to earnings |
(197) |
121 |
274 |
|
(59) |
513 |
|
Tax |
87 |
(154) |
(80) |
|
(67) |
(269) |
|
Recycled to profit or loss on disposal of businesses (2) |
- |
- |
- |
|
58 |
- |
|
|
|
|
|
|
|
|
|
At end of period |
(140) |
119 |
(252) |
|
(140) |
(252) |
Notes:
|
(1) |
Net of tax - quarter ended 31 December 2010 - £1 million charge; year ended 31 December 2010 - £5 million credit. |
|
(2) |
Net of tax - quarter ended 31 December 2010 - £1 million credit; year ended 31 December 2010 - £19 million charge. |
Condensed consolidated statement of changes in equity
for the year ended 31 December 2010 - pro forma (continued)
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
Foreign exchange reserve |
|
|
|
|
|
|
|
At beginning of period |
5,085 |
5,755 |
4,684 |
|
4,528 |
6,385 |
|
Retranslation of net assets |
- |
(778) |
(281) |
|
997 |
(2,322) |
|
Foreign currency (losses)/gains on hedges of net assets |
(6) |
157 |
69 |
|
(458) |
456 |
|
Tax |
34 |
(43) |
56 |
|
63 |
9 |
|
Recycled to profit or loss on disposal of businesses |
25 |
(6) |
- |
|
8 |
- |
|
|
|
|
|
|
|
|
|
At end of period |
5,138 |
5,085 |
4,528 |
|
5,138 |
4,528 |
|
|
|
|
|
|
|
|
|
Capital redemption reserve |
|
|
|
|
|
|
|
At beginning of period |
172 |
172 |
170 |
|
170 |
170 |
|
Preference shares redeemed |
(1) |
- |
- |
|
1 |
- |
|
Cancellation of non-voting deferred shares |
27 |
- |
- |
|
27 |
- |
|
|
|
|
|
|
|
|
|
At end of period |
198 |
172 |
170 |
|
198 |
170 |
|
|
|
|
|
|
|
|
|
Contingent capital reserve |
|
|
|
|
|
|
|
At beginning of period |
(1,208) |
(1,208) |
- |
|
(1,208) |
- |
|
Contingent capital agreement - consideration payable |
- |
- |
(1,208) |
|
- |
(1,208) |
|
|
|
|
|
|
|
|
|
At end of period |
(1,208) |
(1,208) |
(1,208) |
|
(1,208) |
(1,208) |
|
|
|
|
|
|
|
|
|
Retained earnings |
|
|
|
|
|
|
|
At beginning of period |
20,904 |
22,003 |
5,433 |
|
12,134 |
7,542 |
|
Profit/(loss) attributable to ordinary and B shareholders and other equity owners |
|
|
|
|
|
|
|
- continuing operations |
12 |
(1,148) |
(614) |
|
(973) |
(2,600) |
|
- discontinued operations |
- |
2 |
(7) |
|
(28) |
(72) |
|
Equity preference dividends paid |
- |
- |
(126) |
|
(105) |
(878) |
|
Paid-in equity dividends paid, net of tax |
- |
- |
(18) |
|
(19) |
(57) |
|
Transfer from paid-in equity |
|
|
|
|
|
|
|
- gross |
- |
- |
- |
|
2 |
200 |
|
- tax |
- |
- |
- |
|
(1) |
- |
|
Equity owners gain on withdrawal of non- controlling interests |
|
|
|
|
|
|
|
- gross |
- |
- |
- |
|
40 |
629 |
|
- tax |
- |
- |
- |
|
(11) |
(176) |
|
Redemption of equity preference shares |
- |
- |
- |
|
(2,968) |
- |
|
Gain on redemption of equity preference shares |
- |
- |
- |
|
609 |
- |
|
Redemption of preference shares classified as debt |
- |
- |
- |
|
(118) |
- |
|
Transfer from merger reserve |
- |
- |
9,950 |
|
12,250 |
9,950 |
|
Actuarial gains/(losses) recognised in retirement benefit schemes |
|
|
|
|
|
|
|
- gross |
158 |
- |
(3,756) |
|
158 |
(3,756) |
|
- tax |
(71) |
- |
1,043 |
|
(71) |
1,043 |
|
Purchase of non-controlling interests |
(38) |
- |
- |
|
(38) |
- |
|
Net cost of shares bought and used to satisfy share-based payments |
(2) |
(2) |
(1) |
|
(13) |
(16) |
|
Share-based payments |
|
|
|
|
|
|
|
- gross |
282 |
42 |
230 |
|
385 |
325 |
|
- tax |
(6) |
7 |
- |
|
6 |
- |
|
|
|
|
|
|
|
|
|
At end of period |
21,239 |
20,904 |
12,134 |
|
21,239 |
12,134 |
Condensed consolidated statement of changes in equity
for the year ended 31 December 2010 - pro forma (continued)
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
Own shares held |
|
|
|
|
|
|
|
At beginning of period |
(821) |
(816) |
(122) |
|
(121) |
(104) |
|
Shares purchased |
11 |
(7) |
- |
|
(700) |
(33) |
|
Shares issued under employee share schemes |
2 |
2 |
1 |
|
13 |
16 |
|
|
|
|
|
|
|
|
|
At end of period |
(808) |
(821) |
(121) |
|
(808) |
(121) |
|
|
|
|
|
|
|
|
|
Equity owners at end of period |
75,132 |
75,600 |
77,736 |
|
75,132 |
77,736 |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
|
|
|
At beginning of period |
1,542 |
2,109 |
2,185 |
|
2,227 |
5,436 |
|
Currency translation adjustments and other movements |
6 |
(34) |
(18) |
|
63 |
(152) |
|
(Loss)/profit attributable to non-controlling interests |
(11) |
30 |
47 |
|
61 |
648 |
|
Dividends paid |
- |
(29) |
13 |
|
(172) |
(313) |
|
Movements in available-for-sale securities |
|
|
|
|
|
|
|
- unrealised gains |
- |
- |
- |
|
- |
23 |
|
- realised gains |
- |
- |
- |
|
- |
(359) |
|
Equity raised |
58 |
- |
- |
|
58 |
9 |
|
Equity withdrawn and disposals |
(171) |
(534) |
- |
|
(773) |
(2,436) |
|
Transfer to retained earnings |
- |
- |
- |
|
(40) |
(629) |
|
|
|
|
|
|
|
|
|
At end of period |
1,424 |
1,542 |
2,227 |
|
1,424 |
2,227 |
|
|
|
|
|
|
|
|
|
Total equity at end of period |
76,556 |
77,142 |
79,963 |
|
76,556 |
79,963 |
|
|
|
|
|
|
|
|
|
Total comprehensive loss recognised in the statement of changes in equity is attributable as follows: |
|
|
|
|
|
|
|
Non-controlling interests |
(5) |
(4) |
29 |
|
124 |
160 |
|
Preference shareholders |
- |
- |
126 |
|
105 |
878 |
|
Paid-in equity holders |
- |
- |
18 |
|
19 |
57 |
|
Ordinary and B shareholders |
(902) |
(1,245) |
(3,053) |
|
(598) |
(5,747) |
|
|
|
|
|
|
|
|
|
|
(907) |
(1,249) |
(2,880) |
|
(350) |
(4,652) |
Notes on pro forma results
1. Basis of preparation
Pro forma results
The pro forma financial information, prepared using the Group's accounting policies, shows the underlying performance of the Group including the results of the ABN AMRO businesses retained by the Group. This information is provided to give a better understanding of the results of the Group's operations. Group operating profit on a pro forma basis excludes:
|
· |
amortisation of purchased intangible assets; |
|
|
|
|
· |
integration and restructuring costs; |
|
|
|
|
· |
gain on redemption of own debt; |
|
|
|
|
· |
strategic disposals; |
|
|
|
|
· |
bonus tax; |
|
|
|
|
· |
Asset Protection Scheme credit default swap - fair value changes; |
|
|
|
|
· |
gains on pensions curtailment; |
|
|
|
|
· |
write-down of goodwill and other intangible assets; and |
|
|
|
|
· |
other Consortium Members' interest in shared assets. |
From 1 April 2010, other than these differences in presentation, the Group's pro forma and statutory results are substantially the same.
Acquisition and separation of ABN AMRO
On 17 October 2007, RFS Holdings B.V., completed the acquisition of ABN AMRO Holding N.V. which was renamed RBS Holdings N.V. on 1 April 2010 when the shares in ABN AMRO Bank N.V. were transferred to ABN AMRO Group N.V., a holding company for the interests of the Dutch State. This marked the substantial completion of the restructuring of the activities of ABN AMRO Holding N.V. in accordance with the agreement between the RBSG, the Dutch State and Banco Santander, SA. RBS Holdings N.V. has one direct subsidiary, The Royal Bank of Scotland N.V., a fully operational bank within the Group, which is independently rated and regulated by the Dutch Central Bank.
Notes on pro forma results (continued)
2. Analysis of income, expenses and impairment losses
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
Loans and advances to customers |
4,754 |
4,720 |
4,790 |
|
18,925 |
21,345 |
|
Loans and advances to banks |
167 |
153 |
154 |
|
591 |
830 |
|
Debt securities |
690 |
702 |
1,034 |
|
3,250 |
4,149 |
|
|
|
|
|
|
|
|
|
Interest receivable |
5,611 |
5,575 |
5,978 |
|
22,766 |
26,324 |
|
|
|
|
|
|
|
|
|
Customer accounts |
928 |
961 |
945 |
|
3,723 |
4,637 |
|
Deposits by banks |
287 |
328 |
507 |
|
1,330 |
2,852 |
|
Debt securities in issue |
866 |
733 |
712 |
|
3,277 |
4,484 |
|
Subordinated liabilities |
(18) |
175 |
297 |
|
417 |
1,292 |
|
Internal funding of trading businesses |
(30) |
(26) |
71 |
|
(181) |
(508) |
|
|
|
|
|
|
|
|
|
Interest payable |
2,033 |
2,171 |
2,532 |
|
8,566 |
12,757 |
|
|
|
|
|
|
|
|
|
Net interest income |
3,578 |
3,404 |
3,446 |
|
14,200 |
13,567 |
|
|
|
|
|
|
|
|
|
Fees and commissions receivable |
2,053 |
2,044 |
2,353 |
|
8,194 |
8,738 |
|
Fees and commissions payable |
|
|
|
|
|
|
|
- banking |
(392) |
(493) |
(810) |
|
(1,892) |
(2,351) |
|
- insurance related |
(57) |
(118) |
(84) |
|
(319) |
(439) |
|
|
|
|
|
|
|
|
|
Net fees and commissions |
1,604 |
1,433 |
1,459 |
|
5,983 |
5,948 |
|
|
|
|
|
|
|
|
|
Foreign exchange |
217 |
442 |
572 |
|
1,486 |
2,339 |
|
Interest rate |
(165) |
866 |
(386) |
|
1,863 |
3,931 |
|
Credit |
698 |
(95) |
188 |
|
1,666 |
(3,954) |
|
Other |
229 |
219 |
416 |
|
1,123 |
1,683 |
|
|
|
|
|
|
|
|
|
Income from trading activities |
979 |
1,432 |
790 |
|
6,138 |
3,999 |
|
|
|
|
|
|
|
|
|
Operating lease and other rental income |
369 |
338 |
341 |
|
1,394 |
1,323 |
|
Changes in the fair value of securities and other financial assets and liabilities |
(83) |
22 |
54 |
|
(212) |
42 |
|
Changes in the fair value of investment properties |
(293) |
(4) |
36 |
|
(405) |
(117) |
|
(Loss)/profit on sale of securities |
(9) |
390 |
92 |
|
533 |
(55) |
|
Profit on sale of property, plant and equipment |
29 |
9 |
13 |
|
50 |
40 |
|
Profit/(loss) on sale of subsidiaries and associates |
5 |
(111) |
(38) |
|
(106) |
(57) |
|
Life business profits |
29 |
49 |
24 |
|
90 |
156 |
|
Dividend income |
11 |
17 |
17 |
|
69 |
73 |
|
Share of profits less losses of associated entities |
10 |
- |
(83) |
|
41 |
(150) |
|
Other income |
(42) |
(351) |
(189) |
|
(241) |
(468) |
|
|
|
|
|
|
|
|
|
Other operating income |
26 |
359 |
267 |
|
1,213 |
787 |
|
|
|
|
|
|
|
|
Non-interest income (excluding insurance net premium income) |
2,609 |
3,224 |
2,516 |
|
13,334 |
10,734 |
|
|
|
|
|
|
|
|
|
Insurance net premium income |
1,272 |
1,289 |
1,308 |
|
5,128 |
5,266 |
|
|
|
|
|
|
|
|
|
Total non-interest income |
3,881 |
4,513 |
3,824 |
|
18,462 |
16,000 |
|
|
|
|
|
|
|
|
|
Total income |
7,459 |
7,917 |
7,270 |
|
32,662 |
29,567 |
Notes on pro forma results (continued)
2. Analysis of income, expenses and impairment losses (continued)
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
Staff costs |
|
|
|
|
|
|
|
- wages, salaries and other staff costs |
1,742 |
1,860 |
1,957 |
|
7,726 |
7,826 |
|
- social security costs |
165 |
153 |
179 |
|
669 |
602 |
|
- pension costs |
152 |
153 |
110 |
|
561 |
653 |
|
|
2,059 |
2,166 |
2,246 |
|
8,956 |
9,081 |
|
Premises and equipment |
636 |
596 |
618 |
|
2,276 |
2,468 |
|
Other |
938 |
869 |
1,075 |
|
3,716 |
3,979 |
|
|
|
|
|
|
|
|
|
Administrative expenses |
3,633 |
3,631 |
3,939 |
|
14,948 |
15,528 |
|
Depreciation and amortisation |
448 |
465 |
534 |
|
1,762 |
1,873 |
|
|
|
|
|
|
|
|
Operating expenses |
4,081 |
4,096 |
4,473 |
|
16,710 |
17,401 |
|
|
|
|
|
|
|
|
|
General insurance |
1,151 |
1,092 |
1,304 |
|
4,698 |
4,223 |
|
Bancassurance |
31 |
50 |
17 |
|
85 |
134 |
|
|
|
|
|
|
|
|
|
Insurance net claims |
1,182 |
1,142 |
1,321 |
|
4,783 |
4,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment losses |
2,155 |
1,908 |
3,032 |
|
9,144 |
13,090 |
|
Securities impairment losses |
(14) |
45 |
67 |
|
112 |
809 |
|
|
|
|
|
|
|
|
|
Impairment losses |
2,141 |
1,953 |
3,099 |
|
9,256 |
13,899 |
Note:
|
The data above excludes movement in the fair value of own debt, amortisation of purchased intangible assets, integration and restructuring costs, gain on redemption of own debt, strategic disposals, bonus tax, Asset Protection Scheme credit default swap - fair value changes, gains on pensions curtailment and write-down of goodwill and other intangible assets. |
Notes on pro forma results (continued)
3. Loan impairment provisions
Operating profit/(loss) is stated after charging loan impairment losses of £9,144 million (nine months ended 30 September 2010 - £6,989 million; year ended 31 December 2009 - £13,090 million). The balance sheet loan impairment provisions increased in the quarter ended 31 December 2010 from £17,670 million to £18,182 million and the movements thereon were:
|
|
Quarter ended 31 December 2010 |
Nine months ended 30 September 2010 |
Year ended 31 December 2010 |
Year ended 31 December 2009 |
||
|
Core |
Non-Core |
Total |
||||
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
|
|
|
|
|
|
|
|
At beginning of period |
7,791 |
9,879 |
17,670 |
15,173 |
15,173 |
9,451 |
|
Transfers to disposal groups |
- |
(5) |
(5) |
(67) |
(72) |
(321) |
|
Intra-group transfers |
(217) |
217 |
- |
- |
- |
- |
|
Currency translation and other adjustments |
147 |
(235) |
(88) |
131 |
43 |
(428) |
|
Disposals |
- |
(3) |
(3) |
(17) |
(20) |
(65) |
|
Amounts written-off |
(745) |
(771) |
(1,516) |
(4,526) |
(6,042) |
(6,478) |
|
Recoveries of amounts previously written-off |
29 |
67 |
96 |
315 |
411 |
325 |
|
Charge to income statement |
912 |
1,243 |
2,155 |
6,989 |
9,144 |
13,090 |
|
Unwind of discount |
(51) |
(76) |
(127) |
(328) |
(455) |
(401) |
|
|
|
|
|
|
|
|
|
At end of period |
7,866 |
10,316 |
18,182 |
17,670 |
18,182 |
15,173 |
Provisions at 31 December 2010 include £127 million (30 September 2010 - £127 million; 31 December 2009 -£157 million) in respect of loans and advances to banks.
The table above excludes impairment charges relating to securities.
4. Strategic disposals
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
Gain/(loss) on sale and provision for loss on disposal of investments in: |
|
|
|
|
|
|
|
- RBS Asset Management's investment strategies business |
- |
- |
- |
|
80 |
- |
|
- Asian branches and businesses |
(19) |
5 |
(9) |
|
(16) |
(159) |
|
- Latin American businesses |
14 |
4 |
(159) |
|
(146) |
(159) |
|
- Global Merchant Services |
837 |
- |
- |
|
837 |
- |
|
- Life assurance business |
4 |
- |
- |
|
(231) |
- |
|
- Non-Core project finance assets |
(221) |
- |
- |
|
(221) |
- |
|
- Bank of China (1) |
- |
- |
- |
|
- |
236 |
|
- Linea Directa |
- |
- |
2 |
|
- |
214 |
|
- Other |
(113) |
18 |
- |
|
(132) |
- |
|
|
|
|
|
|
|
|
|
|
502 |
27 |
(166) |
|
171 |
132 |
Note:
|
(1) |
Including £359 million attributable to non-controlling interests. |
Notes on pro forma results (continued)
5. Pensions
Pension costs for the year ended 31 December 2010 amounted to £561 million (2009 - £653 million excluding curtailment gains), net of a £78 million gain in US Retail & Commercial associated with changes to its defined benefit pension plan. Defined benefit schemes charges are based on the actuarially determined pension cost rates at 31 December 2009.
Curtailment gains of £2,148 million were recognised in 2009 arising from changes to pension benefits in the main UK scheme and certain other subsidiaries schemes due to the capping of future salary increases that will count for pension purposes to the lower of 2% or the rate of inflation in any year.
The most recent funding valuation of the main UK scheme was 31 March 2007. A funding valuation of the Main UK scheme at 31 March 2010 is currently in progress. The scheme trustees and the Group are in discussion on this valuation and the level of contributions to be paid by the Group and expect to reach agreement by 30 June 2011. The Group expects that in addition to estimated contributions of £300 - £350 million for future accrual of benefits, it will make additional contributions, as yet unquantified, in 2011 and subsequent years to improve the funding position of the scheme.
Refer to analysis in Note 4 on the statutory results on page 156.
6. Bank levy
In his 22 June 2010 budget statement, the Chancellor announced that the UK Government will introduce an annual bank levy. The Finance Bill 2011 contains details of how the levy will be calculated and collected. The levy will be collected through the existing quarterly Corporation Tax collection mechanism starting with payment dates on or after the date the Finance Bill 2011 receives Royal Assent.
The levy will be based upon the total chargeable equity and liabilities as reported in the balance sheet at the end of a chargeable period. In determining the chargeable equity and liabilities the following amounts are excluded: adjusted Tier 1 capital; certain "protected deposits" (for example those protected under the Financial Services Compensation Scheme); liabilities that arise from certain insurance business within banking groups; liabilities in respect of currency notes in circulation; Financial Services Compensation Scheme liabilities; liabilities representing segregated client money; and deferred tax liabilities, current tax liabilities, liabilities in respect of the levy, revaluation of property liabilities, liabilities representing the revaluation of business premises and defined benefit retirement liabilities. It will also be permitted in specified circumstances to reduce certain liabilities: by netting them against certain assets; offsetting assets on the relevant balance sheets that would qualify as high quality liquid assets (in accordance with the FSA definition); and repo liabilities secured against sovereign and supranational debt.
The levy will be set at a rate of 0.075 per cent from 2011. Three different rates apply during 2011, these average to 0.075 per cent. Certain liabilities will be subject to only a half rate, namely any deposits not otherwise excluded, (except for those from financial institutions and financial traders) and liabilities with a maturity greater than one year at the balance sheet date. The levy will not be charged on the first £20 billion of chargeable liabilities.
If the levy had been applied to the balance sheet at 31 December 2010, the cost of the levy to RBS would be in the region of £350 to £400 million in 2011.
Notes on pro forma results (continued)
7. Tax
The credit/(charge) for tax differs from the tax (charge)/credit computed by applying the standard UK corporation tax rate of 28% as follows:
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax |
4 |
(1,379) |
134 |
|
(239) |
(1,928) |
|
|
|
|
|
|
|
|
|
Expected tax (charge)/credit |
(1) |
386 |
(38) |
|
67 |
540 |
|
Unrecognised timing differences |
11 |
- |
67 |
|
11 |
274 |
|
Items not allowed for tax |
|
|
|
|
|
|
|
- losses on strategic disposals and write downs |
(133) |
(21) |
(123) |
|
(299) |
(152) |
|
- other |
(188) |
(56) |
(277) |
|
(328) |
(356) |
|
Non-taxable items |
|
|
|
|
|
|
|
- gain on sale of Global Merchant Services |
221 |
|
|
|
221 |
|
|
- gain on redemption of own debt |
(1) |
- |
- |
|
11 |
693 |
|
- other |
240 |
37 |
208 |
|
341 |
410 |
|
Taxable foreign exchange movements |
2 |
(5) |
(13) |
|
4 |
1 |
|
Foreign profits taxed at other rates |
(122) |
(56) |
(159) |
|
(516) |
(332) |
|
UK tax rate change - deferred tax impact |
8 |
(90) |
- |
|
(82) |
- |
|
Losses in period where no deferred tax asset recognised |
(96) |
9 |
(448) |
|
(450) |
(715) |
|
Losses brought forward and utilised |
(8) |
(1) |
65 |
|
2 |
94 |
|
Adjustments in respect of prior periods |
74 |
58 |
69 |
|
355 |
(118) |
|
|
|
|
|
|
|
|
|
Actual tax credit/(charge) |
7 |
261 |
(649) |
|
(663) |
339 |
|
|
|
|
|
|
|
|
|
Effective tax rate |
nm |
18.9% |
nm |
|
nm |
17.6% |
The high tax charge in 2010 reflects profits in high tax regimes and losses in low tax regimes, together with £450 million relating to losses in overseas subsidiaries for which a deferred tax asset has not been recognised, and £299 million in respect of losses on disposal of businesses and write-downs for which no tax relief is available. This was offset in part by non-taxable items including the gain on the disposal of the Global Merchant Services business.
The Group has recognised a deferred tax asset at 31 December 2010 of £6,373 million (30 September 2010 - £5,907 million; 31 December 2009 - £6,492 million), of which £3,849 million (30 September 2010 - £3,741 million; 31 December 2009 - £4,803 million) relates to carried forward trading losses in the UK. Under UK tax legislation, these UK losses can be carried forward indefinitely to be utilised against profits arising in the future. The Group has considered the carrying value of this asset as at 31 December 2010 and concluded that it is recoverable based on future profit projections. Deferred tax assets of £2,008 million (31 December 2009 - £2,163 million)have not been recognised in respect of tax losses carried forward of £9,689 million (31 December 2009 - £7,759 million).
Notes on pro forma results (continued)
8. (Loss)/profit attributable to non-controlling interests
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
Trust preferred securities |
- |
- |
(8) |
|
10 |
39 |
|
Investment in Bank of China |
- |
- |
- |
|
- |
359 |
|
RBS Sempra Commodities JV |
(11) |
26 |
55 |
|
35 |
234 |
|
ABN AMRO |
(1) |
(2) |
- |
|
(2) |
4 |
|
RBS Life Holdings Ltd |
9 |
6 |
2 |
|
26 |
26 |
|
Other |
(8) |
- |
(2) |
|
(8) |
(14) |
|
|
|
|
|
|
|
|
|
(Loss)/profit attributable to non-controlling interests |
(11) |
30 |
47 |
|
61 |
648 |
9. Profit attributable to preference shareholders and paid-in equity holders
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
Preference shareholders |
|
|
|
|
|
|
|
Non-cumulative preference shares of US$0.01 |
- |
- |
63 |
|
105 |
342 |
|
Non-cumulative preference shares of €0.01 |
- |
- |
63 |
|
- |
201 |
|
Non-cumulative preference shares of £1 |
|
|
|
|
|
|
|
- issued to UK Financial Investments Limited (1) |
- |
- |
- |
|
- |
274 |
|
- other |
- |
- |
- |
|
- |
61 |
|
|
|
|
|
|
|
|
|
Paid-in equity holders |
|
|
|
|
|
|
|
Interest on securities classified as equity, net of tax |
- |
- |
18 |
|
19 |
57 |
|
|
|
|
|
|
|
|
|
|
- |
- |
144 |
|
124 |
935 |
Note:
|
(1) |
Includes £50 million redemption premium on repayment of preference shares. |
Notes on pro forma results (continued)
10. Earnings per ordinary and B share
Earnings per ordinary and B share have been calculated based on the following:
|
|
Quarter ended |
|
Year ended |
|||
|
|
31 December 2010 |
30 September 2010 |
31 December 2009 |
|
31 December 2010 |
31 December 2009 |
|
|
£m |
£m |
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
Earnings |
|
|
|
|
|
|
|
Profit/(loss) from continuing operations attributable to ordinary and B shareholders |
12 |
(1,148) |
(758) |
|
(1,097) |
(3,535) |
|
Gain on redemption of preference shares and paid-in equity |
- |
- |
- |
|
610 |
200 |
|
|
|
|
|
|
|
|
|
Adjusted profit/(loss) from continuing operations attributable to ordinary and B shareholders |
12 |
(1,148) |
(758) |
|
(487) |
(3,335) |
|
|
|
|
|
|
|
|
|
Profit/(loss) from discontinued operations attributable to ordinary and B shareholders |
- |
2 |
(7) |
|
(28) |
(72) |
|
|
|
|
|
|
|
|
|
Ordinary shares in issue during the period (millions) |
56,166 |
56,164 |
56,227 |
|
56,245 |
51,494 |
|
B shares in issue during the period (millions) |
51,000 |
51,000 |
5,543 |
|
51,000 |
1,397 |
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary and B shares in issue during the period (millions) |
107,166 |
107,164 |
61,770 |
|
107,245 |
52,891 |
|
|
|
|
|
|
|
|
|
Basic loss per ordinary and B share from continuing operations |
- |
(1.1p) |
(1.2p) |
|
(0.5p) |
(6.3p) |
|
Amortisation of purchased intangible assets |
0.1p |
0.1p |
0.1p |
|
0.2p |
0.4p |
|
Integration and restructuring costs |
0.3p |
0.2p |
0.3p |
|
0.8p |
1.6p |
|
Gain on redemption of own debt (1) |
- |
- |
- |
|
(1.0p) |
(6.8p) |
|
Strategic disposals |
(0.5p) |
- |
0.3p |
|
(0.1p) |
(0.2p) |
|
Bonus tax |
- |
- |
0.3p |
|
0.1p |
0.4p |
|
Asset Protection Scheme credit default swap - fair value changes |
0.5p |
0.6p |
- |
|
1.1p |
- |
|
Gains on pensions curtailments |
- |
- |
(2.6p) |
|
- |
(3.0p) |
|
Write-down of goodwill and other intangible assets |
- |
- |
0.1p |
|
- |
0.7p |
|
|
|
|
|
|
|
|
|
Adjusted earnings/(loss) per ordinary and B share from continuing operations |
0.4p |
(0.2p) |
(2.7p) |
|
0.6p |
(13.2p) |
|
Loss from Non-Core attributable to ordinary and B shareholders |
0.9p |
- |
4.9p |
|
2.1p |
24.9p |
|
|
|
|
|
|
|
|
|
Core adjusted earnings/(loss) per ordinary and B share from continuing operations |
1.3p |
(0.2p) |
2.2p |
|
2.7p |
11.7p |
|
Core impairment losses |
0.6p |
- |
2.2p |
|
1.3p |
7.7p |
|
|
|
|
|
|
|
|
|
Pre-impairment Core adjusted earnings/(loss) per ordinary and B share |
1.9p |
(0.2p) |
4.4p |
|
4.0p |
19.4p |
|
|
|
|
|
|
|
|
|
Basic loss per ordinary and B share from discontinued operations |
- |
- |
- |
|
- |
(0.1p) |
|
|
|
|
|
|
|
|
|
Memo: Core adjusted earnings per ordinary and B share from continuing operations assuming normalised tax rate of 28% |
1.5p |
0.6p |
1.2p |
|
5.0p |
9.5p |
Note:
|
(1) |
Gain on redemption of own debt includes gains on redemption of instruments classified as equity which are included in basic earnings. |
Notes on pro forma results (continued)
11. Segmental analysis
Analysis of divisional operating profit/(loss)
The following tables provide an analysis of the divisional profit/(loss) for the quarters ended 31 December 2010, 30 September 2010 and for the year ended 31 December 2010, by main income statement captions. The pro forma divisional income statements on pages 23 to 65 reflect certain presentational reallocations as described in the notes below. These do not affect the overall operating profit/(loss).
|
|
Net interest income |
Non- interest income |
Total income |
Operating expenses |
Insurance net claims |
Impairment losses |
Operating profit/(loss) |
|
Quarter ended 31 December 2010 |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
|
|
|
|
|
|
|
|
|
UK Retail (1) |
1,088 |
398 |
1,486 |
(675) |
(31) |
(222) |
558 |
|
UK Corporate |
653 |
330 |
983 |
(431) |
- |
(219) |
333 |
|
Wealth |
160 |
111 |
271 |
(178) |
- |
(6) |
87 |
|
Global Transaction Services |
263 |
375 |
638 |
(368) |
- |
(3) |
267 |
|
Ulster Bank |
187 |
56 |
243 |
(138) |
- |
(376) |
(271) |
|
US Retail & Commercial |
467 |
231 |
698 |
(529) |
- |
(105) |
64 |
|
Global Banking & Markets (2) |
214 |
1,373 |
1,587 |
(1,065) |
- |
5 |
527 |
|
RBS Insurance (3) |
95 |
979 |
1,074 |
(177) |
(906) |
- |
(9) |
|
Central items |
93 |
48 |
141 |
(22) |
- |
(4) |
115 |
|
|
|
|
|
|
|
|
|
|
Core (before fair value of own debt) |
3,220 |
3,901 |
7,121 |
(3,583) |
(937) |
(930) |
1,671 |
|
Fair value of own debt (4) |
- |
582 |
582 |
- |
- |
- |
582 |
|
|
|
|
|
|
|
|
|
|
Core |
3,220 |
4,483 |
7,703 |
(3,583) |
(937) |
(930) |
2,253 |
|
Non-Core (5) |
358 |
(20) |
338 |
(498) |
(245) |
(1,211) |
(1,616) |
|
|
|
|
|
|
|
|
|
|
|
3,578 |
4,463 |
8,041 |
(4,081) |
(1,182) |
(2,141) |
637 |
|
Amortisation of purchased intangible assets |
- |
- |
- |
(96) |
- |
- |
(96) |
|
Integration and restructuring costs |
- |
- |
- |
(299) |
- |
- |
(299) |
|
Strategic disposals |
- |
502 |
502 |
- |
- |
- |
502 |
|
Bonus tax |
- |
- |
- |
(15) |
- |
- |
(15) |
|
Asset Protection Scheme credit default swap - fair value changes |
- |
(725) |
(725) |
- |
- |
- |
(725) |
|
Write-down of goodwill and intangible assets |
- |
- |
- |
(10) |
- |
- |
(10) |
|
|
|
|
|
|
|
|
|
|
|
3,578 |
4,240 |
7,818 |
(4,501) |
(1,182) |
(2,141) |
(6) |
|
RFS Holdings minority interest |
2 |
2 |
4 |
(6) |
- |
- |
(2) |
|
|
|
|
|
|
|
|
|
|
Total statutory |
3,580 |
4,242 |
7,822 |
(4,507) |
(1,182) |
(2,141) |
(8) |
Notes:
|
(1) |
Reallocation of bancassurance claims of £31 million from non-interest income. |
|
(2) |
Reallocation of £31 million between net interest income and non-interest income in respect of funding costs of rental assets, £11 million and to record interest on financial assets and liabilities designed as at fair value profit or loss, £20 million. |
|
(3) |
Total income includes £77 million investment income, £58 million included in net interest income and £19 million in non-interest income. Reallocation of £37 million between non-interest income and net interest income in respect of instalment income. |
|
(4) |
Comprises £438 million in relation to Global Banking & Markets and £144 million in relation to Group Centre. |
|
(5) |
Reallocation of £61 million between net interest income and non-interest income in respect of funding costs of rental assets, £57 million, and to record interest on financial assets and liabilities designated as at fair value through profit or loss, £4 million. |
Notes on pro forma results (continued)
11. Segmental analysis (continued)
Analysis of divisional operating profit/(loss) (continued)
|
|
Net interest income |
Non- interest income |
Total income |
Operating expenses |
Insurance net claims |
Impairment losses |
Operating profit/(loss) |
|
Quarter ended 30 September 2010 |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
|
|
|
|
|
|
|
|
|
UK Retail (1) |
1,056 |
376 |
1,432 |
(733) |
(50) |
(251) |
398 |
|
UK Corporate |
662 |
324 |
986 |
(406) |
- |
(158) |
422 |
|
Wealth |
156 |
108 |
264 |
(189) |
- |
(1) |
74 |
|
Global Transaction Services |
257 |
411 |
668 |
(356) |
- |
(3) |
309 |
|
Ulster Bank |
192 |
52 |
244 |
(134) |
- |
(286) |
(176) |
|
US Retail & Commercial |
480 |
271 |
751 |
(553) |
- |
(125) |
73 |
|
Global Banking & Markets (2) |
309 |
1,245 |
1,554 |
(1,005) |
- |
40 |
589 |
|
RBS Insurance (3) |
92 |
999 |
1,091 |
(175) |
(949) |
- |
(33) |
|
Central items |
(154) |
193 |
39 |
34 |
1 |
2 |
76 |
|
|
|
|
|
|
|
|
|
|
Core (before fair value of own debt) |
3,050 |
3,979 |
7,029 |
(3,517) |
(998) |
(782) |
1,732 |
|
Fair value of own debt (4) |
- |
(858) |
(858) |
- |
- |
- |
(858) |
|
|
|
|
|
|
|
|
|
|
Core |
3,050 |
3,121 |
6,171 |
(3,517) |
(998) |
(782) |
874 |
|
Non-Core (5) |
354 |
534 |
888 |
(579) |
(144) |
(1,171) |
(1,006) |
|
|
|
|
|
|
|
|
|
|
|
3,404 |
3,655 |
7,059 |
(4,096) |
(1,142) |
(1,953) |
(132) |
|
Amortisation of purchased intangible assets |
- |
- |
- |
(123) |
- |
- |
(123) |
|
Integration and restructuring costs |
- |
- |
- |
(311) |
- |
- |
(311) |
|
Strategic disposals |
- |
27 |
27 |
- |
- |
- |
27 |
|
Bonus tax |
- |
- |
- |
(15) |
- |
- |
(15) |
|
Asset Protection Scheme credit default swap - fair value changes |
- |
(825) |
(825) |
- |
- |
- |
(825) |
|
|
|
|
|
|
|
|
|
|
|
3,404 |
2,857 |
6,261 |
(4,545) |
(1,142) |
(1,953) |
(1,379) |
|
RFS Holdings minority interest |
7 |
(182) |
(175) |
(6) |
- |
- |
(181) |
|
|
|
|
|
|
|
|
|
|
Total statutory |
3,411 |
2,675 |
6,086 |
(4,551) |
(1,142) |
(1,953) |
(1,560) |
Notes:
|
(1) |
Reallocation of bancassurance claims of £50 million from non-interest income. |
|
(2) |
Reallocation of £8 million between net interest income and non-interest income in respect of funding costs of rental assets. |
|
(3) |
Total income includes £75 million investment income of which £55 million is included in net interest income and £20 million in non-interest income. Reallocation of £37 million between non-interest income and net interest income in respect of instalment income. |
|
(4) |
Comprises £598 million in relation to Global Banking & Markets and £260 million in relation to Group Centre. |
|
(5) |
Reallocation of £84 million between net interest income and non-interest income in respect of funding costs of rental assets, £79 million, and to record interest on financial assets and liabilities designated as at fair value through profit or loss, £5 million. |
Notes on pro forma results (continued)
11. Segmental analysis (continued)
Analysis of divisional operating profit/(loss) (continued)
|
|
Net interest income |
Non- interest income |
Total income |
Operating expenses |
Insurance net claims |
Impairment losses |
Operating profit/(loss) |
|
Year ended 31 December 2010 |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
|
|
|
|
|
|
|
|
|
UK Retail (1) |
4,078 |
1,412 |
5,490 |
(2,873) |
(85) |
(1,160) |
1,372 |
|
UK Corporate |
2,572 |
1,323 |
3,895 |
(1,671) |
- |
(761) |
1,463 |
|
Wealth |
609 |
447 |
1,056 |
(734) |
- |
(18) |
304 |
|
Global Transaction Services |
974 |
1,587 |
2,561 |
(1,464) |
- |
(9) |
1,088 |
|
Ulster Bank |
761 |
214 |
975 |
(575) |
- |
(1,161) |
(761) |
|
US Retail & Commercial |
1,917 |
1,029 |
2,946 |
(2,123) |
- |
(517) |
306 |
|
Global Banking & Markets (2) |
1,215 |
6,697 |
7,912 |
(4,397) |
- |
(151) |
3,364 |
|
RBS Insurance (3) |
366 |
4,003 |
4,369 |
(703) |
(3,961) |
- |
(295) |
|
Central items |
25 |
400 |
425 |
155 |
- |
(3) |
577 |
|
|
|
|
|
|
|
|
|
|
Core (before fair value of own debt) |
12,517 |
17,112 |
29,629 |
(14,385) |
(4,046) |
(3,780) |
7,418 |
|
Fair value of own debt (4) |
- |
174 |
174 |
- |
- |
- |
174 |
|
|
|
|
|
|
|
|
|
|
Core |
12,517 |
17,286 |
29,803 |
(14,385) |
(4,046) |
(3,780) |
7,592 |
|
Non-Core (5) |
1,683 |
1,350 |
3,033 |
(2,325) |
(737) |
(5,476) |
(5,505) |
|
|
|
|
|
|
|
|
|
|
|
14,200 |
18,636 |
32,836 |
(16,710) |
(4,783) |
(9,256) |
2,087 |
|
Amortisation of purchased intangible assets |
- |
- |
- |
(369) |
- |
- |
(369) |
|
Integration and restructuring costs |
- |
- |
- |
(1,032) |
- |
- |
(1,032) |
|
Gain on redemption of own debt |
- |
553 |
553 |
- |
- |
- |
553 |
|
Strategic disposals |
- |
171 |
171 |
- |
- |
- |
171 |
|
Bonus tax |
- |
- |
- |
(99) |
- |
- |
(99) |
|
Asset Protection Scheme credit default swap - fair value changes |
- |
(1,550) |
(1,550) |
- |
- |
- |
(1,550) |
|
Write-down of goodwill and intangible assets |
- |
- |
- |
(10) |
- |
- |
(10) |
|
|
|
|
|
|
|
|
|
|
|
14,200 |
17,810 |
32,010 |
(18,220) |
(4,783) |
(9,256) |
(249) |
|
RFS Holdings minority interest |
9 |
(151) |
(142) |
(8) |
- |
- |
(150) |
|
|
|
|
|
|
|
|
|
|
Total statutory |
14,209 |
17,659 |
31,868 |
(18,228) |
(4,783) |
(9,256) |
(399) |
Notes:
|
(1) |
Reallocation of bancassurance claims of £85 million from non-interest income. |
|
(2) |
Reallocation of £61 million between net interest income and non-interest income in respect of funding costs of rental assets, £37 million, and to record interest on financial assets and liabilities designated as at fair value through profit or loss, £24 million. |
|
(3) |
Total income includes £277 million investment income, £222 million in net interest income and £55 million in non-interest income. Reallocation of £144 million between non-interest income and net interest income in respect of instalment income. |
|
(4) |
Comprises £139 million in relation to Global Banking & Markets and £35 million in relation to Group Centre. |
|
(5) |
Reallocation of £276 million between net interest income and non-interest income in respect of funding costs of rental assets, £283 million and to record interest on financial assets and liabilities designated as at fair value through profit or loss, £7 million. |
Notes on pro forma results (continued)
12. Contingent liabilities and commitments
|
|
31 December 2010 |
|
30 September 2010 |
31 December 2009 |
||||
|
|
Core |
Non-Core |
Total |
|
Core |
Non-Core |
Total |
|
|
|
£m |
£m |
£m |
|
£m |
£m |
£m |
£m |
|
|
|
|
|
|
|
|
|
|
|
Contingent liabilities |
|
|
|
|
|
|
|
|
|
Guarantees and assets pledged as collateral security |
28,828 |
2,242 |
31,070 |
|
35,334 |
2,616 |
37,950 |
36,579 |
|
Other contingent liabilities |
11,832 |
421 |
12,253 |
|
12,606 |
376 |
12,982 |
13,410 |
|
|
|
|
|
|
|
|
|
|
|
|
40,660 |
2,663 |
43,323 |
|
47,940 |
2,992 |
50,932 |
49,989 |
|
|
|
|
|
|
|
|
|
|
|
Commitments |
|
|
|
|
|
|
|
|
|
Undrawn formal standby facilities, credit lines and other commitments to lend |
245,425 |
21,397 |
266,822 |
|
240,560 |
26,126 |
266,686 |
289,135 |
|
Other commitments |
1,560 |
2,594 |
4,154 |
|
867 |
2,637 |
3,504 |
3,483 |
|
|
|
|
|
|
|
|
|
|
|
|
246,985 |
23,991 |
270,976 |
|
241,427 |
28,763 |
270,190 |
292,618 |
|
|
|
|
|
|
|
|
|
|
|
Total contingent liabilities and commitments |
287,645 |
26,654 |
314,299 |
|
289,367 |
31,755 |
321,122 |
342,607 |
Additional contingent liabilities arise in the normal course of the Group's business. It is not anticipated that any material loss will arise from these transactions.
This information is provided by RNS