Interim Results 2010 - Part 4 | Company Announcement

*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:

Obtains access to the information in a personal capacity;
Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;
Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.

Please note, this site uses cookies. Some of the cookies are essential for parts of the site to operate and have already been set. You may delete and block all cookies from this site, but if you do, parts of the site may not work. To find out more about the cookies used on Investegate and how you can manage them, see our Privacy and Cookie Policy

To continue using Investegate, please confirm that you are a private investor as well as agreeing to our Privacy and Cookie Policy & Terms.

	30 June 2010	31 March 2010	31 December 2009
	£m	£m	£m

Assets
Cash and balances at central banks	29,591	42,008	51,548
Net loans and advances to banks	54,471	56,508	48,777
Reverse repurchase agreements and stock borrowing	47,663	43,019	35,097
Loans and advances to banks	102,134	99,527	83,874
Net loans and advances to customers	539,340	553,872	554,654
Reverse repurchase agreements and stock borrowing	39,396	52,906	41,040
Loans and advances to customers	578,736	606,778	595,694
Debt securities	236,260	252,116	249,095
Equity shares	17,326	21,054	15,960
Settlement balances	20,718	24,369	12,024
Derivatives	522,871	462,272	438,199
Intangible assets	14,482	14,683	14,786
Property, plant and equipment	17,608	18,248	17,773
Deferred taxation	5,841	6,540	6,492
Prepayments, accrued income and other assets	13,630	13,909	18,604
Assets of disposal groups	21,656	21,394	18,432

Total assets	1,580,853	1,582,898	1,522,481

Liabilities
Bank deposits	96,614	100,168	115,642
Repurchase agreements and stock lending	44,165	48,083	38,006
Deposits by banks	140,779	148,251	153,648
Customer deposits	420,890	425,102	414,251
Repurchase agreements and stock lending	70,655	81,144	68,353
Customer accounts	491,545	506,246	482,604
Debt securities in issue	217,317	239,212	246,329
Settlement balances and short positions	62,724	70,632	50,875
Derivatives	508,966	444,223	421,534
Accruals, deferred income and other liabilities	24,842	28,247	24,624
Retirement benefit liabilities	2,600	2,670	2,715
Deferred taxation	2,126	2,226	2,161
Insurance liabilities	6,521	7,711	7,633
Subordinated liabilities	27,523	31,936	31,538
Liabilities of disposal groups	16,999	20,563	18,857

Total liabilities	1,501,942	1,501,917	1,442,518

Equity
Minority interests	2,109	2,305	2,227
Owners' equity*	76,802	78,676	77,736

Total equity	78,911	80,981	79,963

Total liabilities and equity	1,580,853	1,582,898	1,522,481


* Owners' equity attributable to:
Ordinary and B shareholders	72,058	70,830	69,890
Other equity owners	4,744	7,846	7,846

	76,802	78,676	77,736

	First half 2010	First half 2009	Full year 2009
	£m	£m	£m

Called-up share capital
At beginning of period	14,630	9,898	9,898
Ordinary shares issued in respect of placing and open offers	-	4,227	4,227
B shares issued	-	-	510
Other shares issued during the period	401	-	-
Preference shares redeemed during the period	(2)	(5)	(5)

At end of period	15,029	14,120	14,630

Paid-in equity
At beginning of period	565	1,073	1,073
Securities redeemed during the period	(132)	(308)	(308)
Transfer to retained earnings	(2)	(200)	(200)

At end of period	431	565	565

Share premium account
At beginning of period	23,523	27,471	27,471
Ordinary shares issued in respect of placing and open offer, net of £95 million expenses	-	1,047	1,047
Other shares issued during the period	217	-	-
Preference shares redeemed during the period	-	(4,995)	(4,995)
Redemption of preference shares classified as debt	118	-	-

At end of period	23,858	23,523	23,523

Merger reserve
At beginning of period	25,522	10,881	10,881
Issue of B shares, net of £399 million expenses	-	-	24,591
Transfer to retained earnings	(12,250)	-	(9,950)

At end of period	13,272	10,881	25,522

Available-for-sale reserves
At beginning of period	(1,755)	(3,561)	(3,561)
Unrealised gains/(losses) in the period	647	(1,494)	1,202
Realised (gains)/losses in the period	(127)	197	981
Taxation	(208)	592	(377)
Recycled to profit or loss on disposal of businesses, net of £6 million tax	(16)	-	-

At end of period	(1,459)	(4,266)	(1,755)

Cash flow hedging reserve
At beginning of period	(252)	(876)	(876)
Amount recognised in equity during the period	(58)	415	380
Amount transferred from equity to earnings in the period	17	106	513
Taxation	-	(138)	(269)
Recycled to profit or loss on disposal of businesses, net of £20 million tax	58	-	-

At end of period	(235)	(493)	(252)

	First half 2010	First half 2009	Full year 2009
	£m	£m	£m

Foreign exchange reserve
At beginning of period	4,528	6,385	6,385
Retranslation of net assets	1,775	(2,724)	(2,322)
Foreign currency (losses)/gains on hedges of net assets	(609)	442	456
Taxation	72	(46)	9
Recycled to profit or loss on disposal of businesses	(11)	-	-

At end of period	5,755	4,057	4,528

Capital redemption reserve
At beginning of period	170	170	170
Preference shares redeemed during the period	2	-	-

At end of period	172	170	170

Contingent capital reserve
At beginning of period	(1,208)	-	-
Contingent capital agreement - consideration payable	-	-	(1,208)

At end of period	(1,208)	-	(1,208)

Retained earnings
At beginning of period	12,134	7,542	7,542
Profit/(loss) attributable to ordinary shareholders and other equity owners
- continuing operations	163	(438)	(2,600)
- discontinued operations	(30)	(58)	(72)
Equity preference dividends paid	(105)	(510)	(878)
Paid-in equity dividends paid, net of tax	(19)	(36)	(57)
Transfer from paid-in equity
- gross	2	200	200
- taxation	(1)	-	-
Equity owners gain on withdrawal of minority interest
- gross	40	629	629
- taxation	(11)	(176)	(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	12,250	-	9,950
Actuarial losses recognised in retirement benefit schemes
- gross	-	-	(3,756)
- taxation	-	-	1,043
Net cost of shares bought and used to satisfy share-based payments	(9)	(13)	(16)
Share-based payments
- gross	61	60	325
- taxation	5		-

At end of period	22,003	7,200	12,134

Own shares held
At beginning of period	(121)	(104)	(104)
Shares purchased during the period	(704)	-	(33)
Shares issued under employee share schemes	9	13	16

At end of period	(816)	(91)	(121)

Owners' equity at end of period	76,802	55,666	77,736

	First half 2010	First half 2009	Full year 2009
	£m	£m	£m

Minority interests
At beginning of period	2,227	5,436	5,436
Currency translation adjustments and other movements	91	(165)	(152)
Profit attributable to minority interests	42	554	648
Dividends paid	(143)	(310)	(313)
Movements in available-for-sale securities
- unrealised gains in the period	-	23	23
- realised gains in the period	-	(359)	(359)
Equity raised	-	9	9
Equity withdrawn and disposals	(68)	(2,436)	(2,436)
Transfer to retained earnings	(40)	(629)	(629)

At end of period	2,109	2,123	2,227

Total equity at end of period	78,911	57,789	79,963

Total comprehensive income recognised in the statement of changes in equity is attributable as follows:
Minority interests	133	53	160
Preference shareholders	105	510	878
Paid-in equity holders	19	36	57
Ordinary and B shareholders	1,549	(3,692)	(5,747)

	1,806	(3,093)	(4,652)

·	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;

·	write-down of goodwill and other intangible assets; and

·	other Consortium Members' interest in shared assets.

Interim Results 2010 - Part 4

Non-interest income (excluding insurance net premium income)

Operating expenses

Companies

UK 100

Latest directors dealings

	Quarter ended			Half year ended
	30 June 2010	31 March 2010	30 June 2009	30 June 2010	30 June 2009
	£m	£m	£m	£m	£m

Loans and advances to customers	4,749	4,702	6,011	9,451	11,927
Loans and advances to banks	132	139	253	271	480
Debt securities	1,003	855	944	1,858	2,242

Interest receivable	5,884	5,696	7,208	11,580	14,649

Customer accounts	954	880	1,337	1,834	2,730
Deposits by banks	418	297	717	715	1,771
Debt securities in issue	847	854	1,674	1,701	2,987
Subordinated liabilities	37	200	304	237	732
Internal funding of trading businesses	(56)	(69)	(146)	(125)	(431)

Interest payable	2,200	2,162	3,886	4,362	7,789

Net interest income	3,684	3,534	3,322	7,218	6,860

Fees and commissions receivable	2,046	2,051	2,190	4,097	4,466
Fees and commissions payable
- banking	(541)	(466)	(529)	(1,007)	(1,091)
- insurance related	(38)	(106)	(131)	(144)	(260)

Net fees and commissions	1,467	1,479	1,530	2,946	3,115

Foreign exchange	375	452	807	827	1,659
Interest rate	202	960	1,137	1,162	2,857
Credit	702	506	(1,973)	1,208	(3,419)
Other	327	348	413	675	947

Income from trading activities	1,606	2,266	384	3,872	2,044

Operating lease and other rental income	344	343	325	687	662
Changes in the fair value of own debt	515	(210)	(801)	305	(60)
Changes in the fair value of securities and other financial assets and liabilities	(165)	14	326	(151)	(57)
Changes in the fair value of investment properties	(105)	(3)	(143)	(108)	(147)
Profit/(loss) on sale of securities	5	147	(59)	152	(173)
Profit on sale of property, plant and equipment	3	9	11	12	25
Loss on sale of subsidiaries and associates	-	-	(20)	-	(11)
Life business (losses)/profits	(23)	35	48	12	24
Dividend income	21	20	24	41	38
Share of profits less losses of associated entities	17	14	(47)	31	(54)
Other income	135	17	(80)	152	(132)

Other operating income	747	386	(416)	1,133	115

Non-interest income (excluding insurance net premium income)	3,820	4,131	1,498	7,951	5,274

Insurance net premium income	1,278	1,289	1,301	2,567	2,657

Total non-interest income	5,098	5,420	2,799	10,518	7,931

Total income	8,782	8,954	6,121	17,736	14,791

	First half 2010
	Core	Non-Core	Total	Full year 2009
	£m	£m	£m	£m

At beginning of period	6,921	8,252	15,173	9,451
Transfers to disposal groups	-	(67)	(67)	(321)
Currency translation and other adjustments	(279)	119	(160)	(428)
Disposals	-	(17)	(17)	(65)
Amounts written-off	(1,063)	(2,718)	(3,781)	(6,478)
Recoveries of amounts previously written-off	104	46	150	325
Charge to income statement	2,046	3,035	5,081	13,090
Unwind of discount	(96)	(117)	(213)	(401)

At end of period	7,633	8,533	16,166	15,173

	Net interest income	Non- interest income	Total income	Operating expenses	Insurance net claims	Impairment losses	Operating profit/(loss)
	£m	£m	£m	£m	£m	£m	£m

Half year ended 30 June 2010
UK Retail (1)	1,934	638	2,572	(1,465)	(4)	(687)	416
UK Corporate	1,257	669	1,926	(834)	-	(384)	708
Wealth	293	228	521	(367)	-	(11)	143
Global Banking & Markets (2)	693	4,377	5,070	(2,327)	-	(196)	2,547
Global Transaction Services	454	801	1,255	(740)	-	(3)	512
Ulster Bank	382	106	488	(303)	-	(499)	(314)
US Retail & Commercial	970	527	1,497	(1,041)	-	(287)	169
RBS Insurance (3)	179	2,025	2,204	(351)	(2,106)	-	(253)
Central items	85	311	396	143	(1)	(1)	537

Core	6,247	9,682	15,929	(7,285)	(2,111)	(2,068)	4,465
Non-Core (4)	971	836	1,807	(1,248)	(348)	(3,094)	(2,883)
Amortisation of purchased intangible assets	-	-	-	(150)	-	-	(150)
Integration and restructuring costs	-	-	-	(422)	-	-	(422)
Gain on redemption of own debt	-	553	553	-	-	-	553
Strategic disposals	-	(358)	(358)	-	-	-	(358)
Bonus tax	-	-	-	(69)	-	-	(69)

	7,218	10,713	17,931	(9,174)	(2,459)	(5,162)	1,136
RFS Holdings minority interest	-	29	29	4	-	-	33

Total statutory	7,218	10,742	17,960	(9,170)	(2,459)	(5,162)	1,169

(1)	Reallocation of netting of bancassurance claims of £4 million from non-interest income.
(2)	Reallocation of £21 million between net interest income and non-interest income in respect of funding costs of rental assets, £18 million, and to record interest in financial assets and liabilities designated as fair value through profit or loss, £3 million.
(3)	Total income includes £125 million investment income of which £109 million is included in net interest income and £16 million in non-interest income. Further, instalment income of £70 million has been reallocated between non-interest income and net interest income.
(4)	Reallocation of £131 million between net interest income and non-interest income in respect of funding costs of rental assets, £147 million, and to record interest in financial assets and liabilities designated as fair value through profit or loss, £16 million.

(1)	Reallocation of netting of bancassurance claims of £26 million from non-interest income.
(2)	Reallocation of £24 million between net interest income and non-interest income in respect of funding costs of rental assets, £27 million, and to record interest on financial assets and liabilities designated as fair value through profit or loss, £51 million.
(3)	Total income includes £132 million investment income of which £115 million is included in net interest income and £17 million in non-interest income. Further, instalment income of £67 million has been reallocated between non-interest income and net interest income.
(4)	Reallocation of £158 million between net interest income and non-interest income in respect of funding costs of rental assets, £136 million, and to record interest on financial assets and liabilities designated as fair value through profit or loss, £22 million.

(1)	Reallocation of netting of bancassurance claims of £25 million from non-interest income.
(2)	Reallocation of £15 million between net interest income and non-interest income in respect of funding costs of rental assets, £9 million, and to record interest in financial assets and liabilities designated as fair value through profit or loss, £6 million.
(3)	Total income includes £74 million investment income of which £55 million is included in net interest income and £19 million in non-interest income. Further, instalment income of £35 million between non-interest income and net interest income.
(4)	Reallocation of £62 million between net interest income and non-interest income in respect of funding costs of rental assets, £78 million, and to record interest in financial assets and liabilities designated as fair value through profit or loss, £16 million.

	Quarter ended			Half year ended
	30 June 2010	31 March 2010	30 June 2009	30 June 2010	30 June 2009
	£m	£m	£m	£m	£m

Staff costs
- wages, salaries and other staff costs	1,929	2,195	1,846	4,124	4,029
- social security costs	159	192	132	351	292
- pension costs	90	166	172	256	339
Premises and equipment	516	528	587	1,044	1,231
Other	974	935	915	1,909	1,961

Administrative expenses	3,668	4,016	3,652	7,684	7,852
Depreciation and amortisation	435	414	414	849	881

Operating expenses	4,103	4,430	4,066	8,533	8,733

General insurance	1,348	1,107	895	2,455	1,865
Bancassurance	(25)	29	30	4	26

Insurance net claims	1,323	1,136	925	2,459	1,891


Loan impairment losses	2,479	2,602	4,520	5,081	6,796
Securities impairment losses	8	73	143	81	725

Impairment losses	2,487	2,675	4,663	5,162	7,521

	Quarter ended			Half year ended
	30 June 2010	31 March 2010	30 June 2009	30 June 2010	30 June 2009
	£m	£m	£m	£m	£m

Profit/(loss) before tax	1,157	(21)	59	1,136	15

Expected tax charge/(credit) at 28%	324	(6)	16	318	4
Other non-deductible items	146	83	(35)	229	89
Non-taxable items:
- gain on redemption of own debt	(12)	-	(692)	(12)	(692)
- other	(62)	(2)	(93)	(64)	(176)
Taxable foreign exchange movements	(7)	-	(23)	(7)	(23)
Foreign profits taxed at other rates	210	128	(18)	338	47
Losses in period not recognised	280	83	181	363	184
Losses brought forward and utilised	(3)	(8)	(25)	(11)	(23)
Adjustments in respect of prior periods	(51)	(172)	49	(223)	178

Actual tax charge/(credit)	825	106	(640)	931	(412)

	Net interest income	Non- interest income	Total income	Operating expenses	Insurance net claims	Impairment losses	Operating profit/(loss)
	£m	£m	£m	£m	£m	£m	£m

Half year ended 30 June 2009
UK Retail (1)	1,665	806	2,471	(1,584)	(26)	(824)	37
UK Corporate	1,059	639	1,698	(742)	-	(550)	406
Wealth	334	222	556	(322)	-	(22)	212
Global Banking & Markets (2)	1,496	5,699	7,195	(2,440)	-	(238)	4,517
Global Transaction Services	445	783	1,228	(719)	-	(13)	496
Ulster Bank	410	108	518	(369)	-	(157)	(8)
US Retail & Commercial	942	504	1,446	(1,128)	-	(369)	(51)
RBS Insurance (3)	182	1,983	2,165	(391)	(1,551)	(6)	217
Central items	(184)	161	(23)	198	-	2	177

Core	6,349	10,905	17,254	(7,497)	(1,577)	(2,177)	6,003
Non-Core (4)	511	(2,974)	(2,463)	(1,236)	(314)	(5,344)	(9,357)
Amortisation of purchased intangible assets	-	-	-	(140)	-	-	(140)
Write-down of goodwill and other intangible assets	-	-	-	(311)	-	-	(311)
Integration and restructuring costs	-	-	-	(734)	-	-	(734)
Gain on redemption of own debt	-	3,790	3,790	-	-	-	3,790
Strategic disposals	-	453	453	-	-	-	453

	6,860	12,174	19,034	(9,918)	(1,891)	(7,521)	(296)
RFS Holdings minority interest	(11)	(2)	(13)	(42)	-	-	(55)

Total statutory	6,849	12,172	19,021	(9,960)	(1,891)	(7,521)	(351)