REG - Royal Bk Scot.Grp. - Final Results <Origin Href="QuoteRef">RBS.L</Origin> - Part 2
23/02/2018 07:05
- Part 2: For the preceding part double click ID:nRSW7507Fa
(2,106) (531) (244) (1,007)
Adjusted operating expenses 7,551 8,220 2,111 1,774 2,219
Notable items within adjusted operating expenses
VAT recovery in Central items 86 227 6 29 -
Notable items within restructuring costs
Property exit costs (303) - (100) 14 -
Employee numbers (FTE-thousands) 71.2 77.8 71.2 73.6 77.8
Year ended
31 December 31 December
2017 2016
UK Bank levy segmental allocations £m £m
UK Personal & Business Banking 33 34
Ulster Bank RoI 1 3
Commercial Banking 91 90
Private Banking 18 19
RBS International 14 19
NatWest Markets 28 35
Central items 30 (10)
Total UK Bank levy 215 190
Analysis of results
2017 compared with 2016
● Total operating expenses of £10,401 million were £5,793 million, or 35.8%,
lower than 2016 reflecting a £4,583 million reduction in litigation and
conduct costs, a £669 million, or 8.1%, reduction in adjusted operating
expenses and a £541 million reduction in restructuring costs.
● Excluding VAT recoveries, adjusted operating expenses have reduced by £810
million for the year, ahead of our £750 million targeted reduction, with
approximately 45% of the cost reduction delivered across PBB, CPB, RBSI and
the NatWest Markets core business, adjusting for transfers.
● Staff costs of £3,923 million were £559 million, or 12.5%, lower than 2016
underpinned by a 6,600, or 8.5%, reduction in FTEs.
● Restructuring costs of £1,565 million included: a £303 million charge
relating to the reduction in our property portfolio; a £319 million charge in
NatWest Markets principally relating to the run-down and closure of the legacy
business; £221 million relating to the business previously described as
Williams & Glyn; £194 million in respect of implementing ring-fencing
requirements; and a £73 million net settlement relating to the RBS
Netherlands pension scheme.
● Litigation and conduct costs of £1,285 million included: additional charges
in respect of settlement with Federal Housing Finance Agency (FHFA) and the
California State Attorney General and additional RMBS related provisions in
the US; a further provision in relation to settling the 2008 rights issue
shareholder litigation; an additional £175 million PPI provision; and a £169
million provision in Ulster Bank RoI for customer remediation and project
costs relating to tracker mortgages and other legacy business issues.
Q4 2017 compared with Q3 2017
● Total operating expenses of £3,406 million were £1,263 million higher than
Q3 2017 reflecting a £639 million increase in litigation and conduct costs, a
£337 million increase in adjusted operating expenses and a £287 million
increase in restructuring costs.
● Adjusted operating expenses of £2,111 million were £337 million higher than
Q3 2017 reflecting the UK bank levy charge of £215 million, the non-repeat of
£55 million of VAT and other releases in Q3 2016 and the timing of innovation
and marketing spend in the quarter.
● Restructuring costs of £531 million included: a £97 million charge relating
to the reduction in our property portfolio; a £129 million charge in NatWest
Markets including costs relating to the run-down and closure of the legacy
business and back office restructuring activity in the core business; £147
million relating to the business previously described as Williams & Glyn;
and £59 million in respect of implementing ring-fencing requirements.
● Litigation and conduct costs of £764 million included: £442 million of
additional US RMBS related provisions; an additional £175 million PPI
provision and a £135 million provision in Ulster Bank RoI for customer
remediation and project costs relating to tracker mortgages and other legacy
business issues.
Q4 2017 compared with Q4 2016
● Total operating expenses of £3,406 million were £3,948 million lower than Q4
2016 reflecting a £3,364 million reduction in litigation and conduct costs, a
£476 million reduction in restructuring costs and a £108 million reduction
in adjusted operating expenses.
● Adjusted operating expenses of £2,111 million were £108 million, or 4.9%,
lower than Q4 2016 reflecting cost efficiencies and reduced headcount.
Analysis of results
Year ended Quarter ended
31 December 31 December 31 December 30 September 31 December
2017 2016 2017 2017 2016
Impairment (releases)/losses £m £m £m £m £m
Impairment losses 493 478 234 143 (75)
Notable items within impairment losses
Ulster Bank RoI impairment losses/(releases) 60 (113) 81 (10) (47)
Commercial Banking impairment losses 362 206 117 151 83
NatWest Markets impairment (releases)/losses (174) 253 (26) (71) (130)
31 December 30 September 31 December
Credit metrics 2017 2017 2016
Gross customer loans £326,998m £328,504m £327,478m
Loan impairment provisions £3,814m £3,854m £4,455m
Risk elements in lending (REIL) £8,904m £9,019m £10,310m
Provisions as a % of REIL 43% 43% 43%
REIL as a % of gross customer loans 2.7% 2.7% 3.1%
Provisions as a % of gross customer loans 1.2% 1.2% 1.4%
2017 compared with 2016
● A net impairment loss of £493 million, 15 basis points of gross customer
loans, compared with £478 million in 2016.
● UK PBB reported a net impairment charge of £235 million, or 14 basis points
of gross customer loans, reflecting continued benign credit conditions.
● Ulster Bank RoI reported a net impairment loss of €68 million compared with
a €138 million release in 2016. The charge for the year included a provision
relating to a change in the non performing loan strategy to allow for further
portfolio sales whilst 2016 included gains arising from the impact of asset
disposals.
● Commercial Banking net impairment losses of £362 million were £156 million
higher than 2016, reflecting a small number of single name impairments.
● NatWest Markets net impairment release of £174 million compared with a net
impairment loss of £253 million in 2016 and mainly comprised releases
relating to the legacy business.
● REIL reduced by £1,406 million during 2017 to £8,904 million principally
reflecting reductions in NatWest Markets, as legacy portfolios are run-down,
and reductions across UK PBB and Ulster Bank RoI. REIL represented 2.7% of
gross customer loans, compared with 3.1% in 2016.
Q4 2017 compared with Q3 2017
● A net impairment loss of £234 million, or 29 basis points of gross customer
loans, compared with £143 million in Q3 2017.
● Ulster Bank RoI reported a net impairment charge of €92 million, compared
with a release of €11 million in Q3 2017, which included a provision
relating to a change in the non performing loan strategy to allow for further
portfolio sales.
● Commercial Banking net impairment losses of £117 million were £34 million
lower than Q3 2017.
Q4 2017 compared with Q4 2016
● A net impairment loss of £234 million, compared with a net impairment release
of £75 million in Q4 2016.
Analysis of results
End-point CRR basis
31 December 30 September 31 December
2017 2017 2016
Risk asset ratios % % %
CET1 15.9 15.5 13.4
Tier 1 17.9 17.4 15.2
Total 21.3 20.6 19.2
Capital
Tangible equity 35,164 35,621 34,982
Expected loss less impairment provisions (1,286) (1,197) (1,371)
Prudential valuation adjustment (496) (459) (532)
Deferred tax assets (849) (865) (906)
Own credit adjustments (90) (110) (304)
Pension fund assets (287) (185) (208)
Cash flow hedging reserve (227) (298) (1,030)
Other adjustments for regulatory purposes 28 51 (8)
Total deductions (3,207) (3,063) (4,359)
CET1 capital 31,957 32,558 30,623
AT1 capital 4,041 4,041 4,041
Tier 1 capital 35,998 36,599 34,664
Tier 2 capital 6,765 6,841 9,161
Total regulatory capital 42,763 43,440 43,825
Risk-weighted assets
Credit risk
- non-counterparty 144,700 154,400 162,200
- counterparty 15,400 16,000 22,900
Market risk 17,000 16,400 17,400
Operational risk 23,800 23,800 25,700
Total RWAs 200,900 210,600 228,200
Leverage (1)
Cash and balances at central banks 98,300 88,200 74,200
Derivatives 160,800 171,700 247,000
Loans and advances 339,400 341,500 340,300
Reverse repos 40,700 36,700 41,800
Other assets 98,900 113,700 95,400
Total assets 738,100 751,800 798,700
Derivatives
- netting and variation margin (161,700) 169,500 (241,700)
- potential future exposures 49,400 54,100 65,300
Securities financing transactions gross up 2,300 2,300 2,300
Undrawn commitments 53,100 52,600 58,600
Regulatory deductions and other adjustments (2,100) 200 100
CRR Leverage exposure 679,100 691,500 683,300
CRR leverage ratio% 5.3 5.3 5.1
UK leverage exposure (2) 587,100 609,400 614,600
UK leverage ratio% (2) 6.1 6.0 5.6
Notes:
(1) Based on end-point CRR Tier 1 capital and leverage exposure under the CRR
Delegated Act.
(2) Based on end-point CRR Tier 1 capital and UK leverage exposures reflecting the
post EU referendum measures announced by the Bank of England in the third
quarter of 2016.
Segment performance
Year ended 31 December 2017
PBB CPB Central
Ulster Commercial Private RBS NatWest items & Total
UK PBB Bank RoI Banking Banking International Markets other RBS
£m £m £m £m £m £m £m £m
Income statement
Net interest income 5,130 421 2,286 464 325 203 158 8,987
Other non-interest income 1,347 186 1,198 214 64 887 (21) 3,875
Total income - adjusted (2) 6,477 607 3,484 678 389 1,090 137 12,862
Own credit adjustments - (3) - - - (66) - (69)
Loss on redemption of own debt - - - - - - (7) (7)
Strategic disposals - - - - - 26 321 347
Total income 6,477 604 3,484 678 389 1,050 451 13,133
Direct expenses - staff costs (773) (191) (467) (145) (61) (677) (1,609) (3,923)
- other costs (259) (66) (232) (32) (25) (287) (2,727) (3,628)
Indirect expenses (2,126) (194) (1,115) (268) (116) (564) 4,383 -
Operating expenses - adjusted (4) (3,158) (451) (1,814) (445) (202) (1,528) 47 (7,551)
Restructuring costs - direct (79) (27) (48) (20) (5) (319) (1,067) (1,565)
- indirect (382) (29) (119) (25) (4) (117) 676 -
Litigation and conduct costs (210) (169) (33) (39) (8) (237) (589) (1,285)
Operating expenses (3,829) (676) (2,014) (529) (219) (2,201) (933) (10,401)
Operating profit/(loss) before impairment (losses)/releases 2,648 (72) 1,470 149 170 (1,151) (482) 2,732
Impairment (losses)/releases (235) (60) (362) (6) (3) 174 (1) (493)
Operating profit/(loss) 2,413 (132) 1,108 143 167 (977) (483) 2,239
Operating profit/(loss) - adjusted (2,4) 3,084 96 1,308 227 184 (264) 183 4,818
Additional information
Return on equity (5) 23.7% (5.0%) 6.6% 6.4% 11.2% (9.0%) nm 2.2%
Return on equity - adjusted (2,4,5) 30.7% 3.6% 8.2% 11.3% 12.6% (3.7%) nm 8.8%
Cost:income ratio (3) 59.1% 111.9% 56.0% 78.0% 56.3% nm nm 79.0%
Cost:income ratio - adjusted (2,3,4) 48.8% 74.3% 50.0% 65.6% 51.9% 140.2% nm 58.2%
Total assets (£bn) 190.6 24.6 149.5 20.3 25.9 277.9 49.3 738.1
Funded assets (£bn) (6) 190.6 24.5 149.5 20.3 25.9 118.7 47.7 577.2
Net loans and advances to customers (£bn) 161.7 19.5 97.0 13.5 8.7 22.7 0.1 323.2
Risk elements in lending (£bn) 2.0 3.3 3.2 0.1 0.1 0.3 (0.1) 8.9
Impairment provisions (£bn) (1.3) (1.1) (1.2) - - (0.2) - (3.8)
Customer deposits (£bn) 180.6 17.5 98.0 26.9 29.0 14.8 0.2 367.0
Risk-weighted assets (RWAs) (£bn) 43.0 18.0 71.8 9.1 5.1 52.9 1.0 200.9
RWA equivalent (£bn) (5) 46.7 18.9 76.8 9.1 5.2 56.4 1.1 214.2
Employee numbers (FTEs - thousands) (7) 19.8 2.7 4.6 1.5 1.6 5.7 35.3 71.2
For the notes to this table refer to page 23. nm = not meaningful
Segment performance
Quarter ended 31 December 2017
PBB CPB Central
Ulster Commercial Private RBS NatWest items & Total
UK PBB Bank RoI Banking Banking International Markets other RBS
£m £m £m £m £m £m £m £m
Income statement
Net interest income 1,272 111 575 122 81 38 12 2,211
Other non-interest income 276 50 231 69 16 127 (123) 646
Total income adjusted (2) 1,548 161 806 191 97 165 (111) 2,857
Own credit adjustments - - - - - 9 - 9
Strategic disposals - - - - - 26 165 191
Total income 1,548 161 806 191 97 200 54 3,057
Direct expenses - staff costs (189) (45) (109) (35) (25) (153) (372) (928)
- other costs (73) (25) (66) (14) (15) (83) (907) (1,183)
Indirect expenses (554) (45) (344) (78) (23) (154) 1,198 -
Operating expenses - adjusted (4) (816) (115) (519) (127) (63) (390) (81) (2,111)
Restructuring costs - direct (55) (2) (6) (19) (3) (129) (317) (531)
- indirect (198) (2) (23) (9) - (13) 245 -
Litigation and conduct costs (197) (135) (27) (39) - (51) (315) (764)
Operating expenses (1,266) (254) (575) (194) (66) (583) (468) (3,406)
Operating profit/(loss) before impairment (losses)/releases 282 (93) 231 (3) 31 (383) (414) (349)
Impairment (losses)/releases (60) (81) (117) (2) - 26 - (234)
Operating profit/(loss) 222 (174) 114 (5) 31 (357) (414) (583)
Operating profit/(loss) - adjusted (2,4) 672 (35) 170 62 34 (199) (192) 512
Additional information
Return on equity (5) 7.8% (26.5%) 1.3% (2.9%) 9.2% (14.0%) nm (6.7%)
Return on equity - adjusted (2,4,5) 26.2% (5.3%) 3.1% 12.1% 10.4% (8.7%) nm 4.0%
Cost:income ratio (6) 81.8% 157.8% 70.0% 101.6% 68.0% nm nm 111.5%
Cost:income ratio - adjusted (2,3,4) 52.7% 71.4% 62.8% 66.5% 64.9% nm nm 73.6%
Total assets (£bn) 190.6 24.6 149.5 20.3 25.9 277.9 49.3 738.1
Funded assets (£bn) (6) 190.6 24.5 149.5 20.3 25.9 118.7 47.7 577.2
Net loans and advances to customers (£bn) 161.7 19.5 97.0 13.5 8.7 22.7 0.1 323.2
Risk elements in lending (£bn) 2.0 3.3 3.2 0.1 0.1 0.3 (0.1) 8.9
Impairment provisions (£bn) (1.3) (1.1) (1.2) - - (0.2) - (3.8)
Customer deposits (£bn) 180.6 17.5 98.0 26.9 29.0 14.8 0.2 367.0
Risk-weighted assets (RWAs) (£bn) 43.0 18.0 71.8 9.1 5.1 52.9 1.0 200.9
RWA equivalent (£bn) (5) 46.7 18.9 76.8 9.1 5.2 56.4 1.1 214.2
Employee numbers (FTEs - thousands) (7) 19.8 2.7 4.6 1.5 1.6 5.7 35.3 71.2
For the notes to this table refer to page 23. nm = not meaningful.
Segment performance
Year ended 31 December 2016
PBB CPB Central
Ulster Commercial Private RBS NatWest items & Total
UK PBB Bank RoI Banking Banking International Markets other (1) RBS
£m £m £m £m £m £m £m £m
Income statement
Net interest income 4,945 409 2,143 449 303 343 116 8,708
Other non-interest income 1,182 164 1,272 208 71 763 4 3,664
Total income - adjusted (2) 6,127 573 3,415 657 374 1,106 120 12,372
Own credit adjustments - 3 - - - 187 (10) 180
Loss on redemption of own debt - - - - - - (126) (126)
Strategic disposals - - - - - (81) 245 164
Total income 6,127 576 3,415 657 374 1,212 229 12,590
Direct expenses - staff costs (832) (207) (522) (154) (45) (358) (2,364) (4,482)
- other costs (320) (55) (235) (44) (17) (119) (2,948) (3,738)
Indirect expenses (2,246) (195) (1,179) (313) (107) (1,607) 5,647 -
Operating expenses - adjusted (4) (3,398) (457) (1,936) (511) (169) (2,084) 335 (8,220)
Restructuring costs - direct (46) (38) (25) (7) (2) (75) (1,913) (2,106)
- indirect (198) (2) (83) (30) (3) (115) 431 -
Litigation and conduct costs (634) (172) (423) (1) - (550) (4,088) (5,868)
Operating expenses (4,276) (669) (2,467) (549) (174) (2,824) (5,235) (16,194)
Operating profit/(loss) before impairment (losses)/releases 1,851 (93) 948 108 200 (1,612) (5,006) (3,604)
Impairment (losses)/releases (125) 113 (206) 3 (10) (253) - (478)
Operating profit/(loss) 1,726 20 742 111 190 (1,865) (5,006) (4,082)
Operating profit/(loss) - adjusted (2,4) 2,604 229 1,273 149 195 (1,231) 455 3,674
Additional information
Return on equity (5) 16.2% 0.7% 4.1% 5.6% 13.8% (12.5%) nm (17.9%)
Return on equity - adjusted (2,4,5) 25.1% 8.4% 8.4% 7.8% 14.2% (8.7%) nm 1.6%
Cost:income ratio (3) 69.8% 116.1% 71.0% 83.6% 46.5% nm nm 129.0%
Cost:income ratio - adjusted (2,3,4) 55.5% 79.8% 54.8% 77.8% 45.2% 188.4% nm 66.0%
Total assets (£bn) 181.4 24.1 150.5 18.6 23.4 372.5 28.2 798.7
Funded assets (£bn) (6) 181.4 24.0 150.5 18.5 23.4 128.5 25.4 551.7
Net loans and advances to customers (£bn) 152.7 18.9 100.1 12.2 8.8 30.2 0.1 323.0
Risk elements in lending (£bn) 2.4 3.5 1.9 0.1 0.1 2.3 - 10.3
Impairment provisions (£bn) (1.5) (1.2) (0.8) - - (0.8) (0.2) (4.5)
Customer deposits (£bn) 170.0 16.1 97.9 26.6 25.2 17.9 0.2 353.9
Risk-weighted assets (RWAs) (£bn) 42.3 18.1 78.5 8.6 9.5 69.7 1.5 228.2
RWA equivalent (£bn) (5) 45.8 19.5 82.6 8.6 9.5 74.7 1.7 242.4
Employee numbers (FTEs - thousands) 21.6 3.1 5.5 1.7 0.8 1.6 43.5 77.8
For the notes to this table please refer to page 23. nm = not meaningful.
Segment performance
Quarter ended 30 September 2017
PBB CPB Central
Ulster Commercial Private RBS NatWest items & Total
UK PBB Bank RoI Banking Banking International Markets other RBS
£m £m £m £m £m £m £m £m
Income statement
Net interest income 1,294 104 570 116 83 99 38 2,304
Other non-interest income 463 46 358 50 14 (74) 1 858
Total income - adjusted (2) 1,757 150 928 166 97 25 39 3,162
Own credit adjustments - - - - - (5) - (5)
Total income 1,757 150 928 166 97 20 39 3,157
Direct expenses - staff costs (191) (50) (113) (36) (13) (163) (388) (954)
- other costs (55) (17) (55) (6) (3) (72) (612) (820)
Indirect expenses (525) (52) (252) (58) (33) (132) 1,052 -
Operating expenses - adjusted (4) (771) (119) (420) (100) (49) (367) 52 (1,774)
Restructuring costs - direct (1) (1) (2) (1) (2) (29) (208) (244)
- indirect (47) (8) (19) (2) - (28) 104 -
Litigation and conduct costs - (1) (2) - (8) (102) (12) (125)
Operating expenses (819) (129) (443) (103) (59) (526) (64) (2,143)
Operating profit/(loss) before impairment (losses)/releases 938 21 485 63 38 (506) (25) 1,014
Impairment (losses)/releases (78) 10 (151) 3 2 71 - (143)
Operating profit/(loss) 860 31 334 66 40 (435) (25) 871
Operating profit/(loss) - adjusted (2,4) 908 41 357 69 50 (271) 91 1,245
Additional information
Return on equity (5) 34.2% 4.6% 8.6% 13.2% 10.4% (15.4%) nm 4.5%
Return on equity - adjusted (2,4,5) 36.2% 6.1% 9.3% 13.8% 13.6% (10.3%) nm 8.2%
Cost:income ratio (3) 46.6% 86.0% 45.7% 62.0% 60.8% nm nm 67.5%
Cost:income ratio - adjusted (2,3,4) 43.9% 79.3% 43.1% 60.2% 50.5% nm nm 55.6%
Total assets (£bn) 190.1 25.1 147.3 19.9 24.3 305.0 40.1 751.8
Funded assets (£bn) (6) 190.1 25.1 147.3 19.9 24.3 134.9 38.4 580.0
Net loans and advances to customers (£bn) 160.8 19.5 96.6 13.3 9.3 25.1 0.1 324.7
Risk elements in lending (£bn) 2.0 3.4 1.7 0.1 0.1 1.6 0.1 9.0
Impairment provisions (£bn) (1.3) (1.1) (0.8) - - (0.5) (0.2) (3.9)
Customer deposits (£bn) 178.6 17.3 98.2 27.0 24.9 13.7 0.2 359.9
Risk-weighted assets (RWAs) (£bn) 43.3 17.9 74.6 9.2 9.6 54.9 1.1 210.6
RWA equivalent (£bn) (5) 47.0 18.9 77.4 9.2 9.6 59.1 1.3 222.5
Employee numbers (FTEs - thousands) (7) 20.5 2.8 4.9 1.6 0.8 6.0 37.0 73.6
For the notes to this table refer to page 23. nm = not meaningful.
Segment performance
Quarter ended 31 December 2016
PBB CPB Central
Ulster Commercial Private RBS NatWest items & Total
UK PBB Bank RoI Banking Banking International Markets other RBS
£m £m £m £m £m £m £m £m
Income statement
Net interest income 1,263 105 542 111 77 73 37 2,208
Other non-interest income 293 32 325 50 19 (44) 446 1,121
Total income - adjusted (2) 1,556 137 867 161 96 29 483 3,329
Own credit adjustments - - - - - (37) (77) (114)
Gain on redemption of own debt - - - - - - 1 1
Total income 1,556 137 867 161 96 (8) 407 3,216
Direct expenses - staff costs (196) (57) (130) (39) (12) (87) (504) (1,025)
- other costs (76) (23) (69) (12) (4) (10) (1,000) (1,194)
Indirect expenses (602) (65) (357) (95) (45) (417) 1,581 -
Operating expenses - adjusted (4) (874) (145) (556) (146) (61) (514) 77 (2,219)
Restructuring costs - direct (1) (6) (12) (6) (1) (24) (957) (1,007)
- indirect (50) 2 (34) (8) (1) (30) 121 -
Litigation and conduct costs (214) (77) (407) 1 (1) (581) (2,849) (4,128)
Operating expenses (1,139) (226) (1,009) (159) (64) (1,149) (3,608) (7,354)
Operating profit/(loss) before impairment (losses)/releases 417 (89) (142) 2 32 (1,157) (3,201) (4,138)
Impairment (losses)/releases (27) 47 (83) 8 1 130 (1) 75
Operating profit/(loss) 390 (42) (225) 10 33 (1,027) (3,202) (4,063)
Operating profit/(loss) - adjusted (2,4) 655 39 228 23 36 (355) 559 1,185
Additional information
Return on equity (5) 15.1% (5.8%) (9.1%) 1.6% 8.8% (27.0%) nm (48.2%)
Return on equity - adjusted (2,4,5) 26.2% 5.4% 5.3% 4.5% 9.8% (10.3%) nm 8.6%
Cost:income ratio (3) 73.2% 165.0% 117.1% 98.8% 66.7% nm nm 230.2%
Cost:income ratio - adjusted (2,3,4) 56.2% 105.8% 62.6% 90.7% 63.5% nm nm 66.3%
Total assets (£bn) 181.4 24.1 150.5 18.6 23.4 372.5 28.2 798.7
Funded assets (£bn) (6) 181.4 24.0 150.5 18.5 23.4 128.5 25.4 551.7
Net loans and advances to customers (£bn) 152.7 18.9 100.1 12.2 8.8 30.2 0.1 323.0
Risk elements in lending (£bn) 2.4 3.5 1.9 0.1 0.1 2.3 - 10.3
Impairment provisions (£bn) (1.5) (1.2) (0.8) - - (0.8) (0.2) (4.5)
Customer deposits (£bn) 170.0 16.1 97.9 26.6 25.2 17.9 0.2 353.9
Risk-weighted assets (RWAs) (£bn) 42.3 18.1 78.5 8.6 9.5 69.7 1.5 228.2
RWA equivalent (£bn) (5) 45.8 19.5 82.6 8.6 9.5 74.7 1.7 242.4
Employee numbers (FTEs - thousands) 21.6 3.1 5.5 1.7 0.8 1.6 43.5 77.8
Notes:
(1) Central items include unallocated transactions which principally comprise
volatile items under IFRS and balances in relation to international private
banking for Q1 2016.
(2) Excluding own credit adjustments, (loss)/gain on redemption of own debt and
strategic disposals.
(3) Operating lease depreciation included in income (year ended December 2017 -
£142 million; Q4 2017 - £35 million; year ended 31 December 2016 - £152
million, Q3 2017 - £35 million and Q4 2016 - £37 million).
(4) Excluding restructuring costs and litigation and conduct costs.
(5) RBS's CET 1 target is 13% but for the purposes of computing segmental return
on equity (ROE), to better reflect the differential drivers of capital usage,
segmental operating profit after tax and adjusted for preference dividends is
divided by average notional equity allocated at different rates of 14% (Ulster
Bank RoI - 11% prior to Q1 2017), 11% (Commercial Banking), 14% (Private
Banking - 15% prior to Q1 2017), 16% (RBS International - 12% prior to
November 2017) and 15% for all other segments, of the monthly average of
segmental risk-weighted assets incorporating the effect of capital deductions
(RWAes). RBS's Return on equity is calculated using profit/(loss) for the
period attributable to ordinary shareholders.
(6) Funded assets exclude derivative assets.
(7) On 1 January 2017 4.5 thousand employees on a FTE basis were transferred from
Central items to NatWest Markets in preparation for ring-fencing. On 1 October
2017 0.8 thousand employees on a FTE basis were transferred from Central Items
to RBS International, also in preparation for ring-fencing.
Segment performance
Year ended Quarter ended
31 December 31 December 31 December 30 September 31 December
2017 2016 2017 2017 2016
Total income by segment £m £m £m £m £m
UK PBB
Personal advances 998 1,010 247 251 260
Personal deposits 841 732 198 207 184
Mortgages 2,641 2,560 657 674 658
Cards 743 653 145 310 159
Business banking 781 737 197 198 185
Commercial (1) 417 415 108 103 104
Other 56 20 (4) 14 6
Total 6,477 6,127 1,548 1,757 1,556
Ulster Bank RoI
Corporate 187 176 54 45 34
Retail 415 392 107 104 101
Other 2 8 - 1 2
Total 604 576 161 150 137
Commercial Banking
Commercial lending 1,880 1,875 404 515 503
Deposits 508 474 133 127 109
Asset and invoice finance 662 712 158 169 175
Other 434 354 111 117 80
Total 3,484 3,415 806 928 867
Private Banking
Investments 119 97 39 29 23
Banking 559 560 152 137 138
Total 678 657 191 166 161
RBS International 389 374 97 97 96
NatWest Markets
Rates 985 837 144 236 125
Currencies 470 551 102 112 157
Financing 456 344 99 119 89
Revenue share paid to other segments (246) (211) (61) (66) (57)
Core income excluding OCA 1,665 1,521 284 401 314
Legacy (575) (415) (119) (376) (285)
Total income - adjusted 1,090 1,106 165 25 29
Own credit adjustments (66) 187 9 (5) (37)
Strategic disposals 26 (81) 26 - -
Total income 1,050 1,212 200 20 (8)
Central items & other 451 229 54 39 407
Total RBS 13,133 12,590 3,057 3,157 3,216
Notes:
(1) Commercial income relating to business previously described as Williams &
Glyn.
Segment performance
Year ended Quarter ended
31 December 31 December 31 December 30 September 31 December
Impairment losses/(releases) by 2017 2016 2017 2017 2016
segment £m £m £m £m £m
UK PBB
Personal advances 167 105 40 47 46
Mortgages (42) (20) (8) (1) (41)
Cards 82 36 23 26 21
Business banking 4 (11) (6) 3 (3)
Commercial 24 15 11 3 4
Total 235 125 60 78 27
Ulster Bank RoI
Mortgages 72 29 83 (12) (30)
Commercial real estate
Investment (6) (24) (6) (2) (1)
Development (3) (20) - 3 (1)
Other lending (3) (98) 4 1 (15)
Total 60 (113) 81 (10) (47)
Commercial Banking
Commercial real estate 29 4 29 1 8
Asset and invoice finance 57 35 19 10 21
Private sector services (education,
health etc) 22 8 8 - 7
Banks & financial institutions - 2 - (1) -
Wholesale and retail trade repairs 59 15 48 - 6
Hotels and restaurants 1 27 (1) - 7
Manufacturing 5 3 - 1 1
Construction 187 18 35 152 13
Other 2 94 (21) (12) 20
Total 362 206 117 151 83
Private Banking 6 (3) 2 (3) (8)
RBS International 3 10 - (2) (1)
NatWest Markets (174) 253 (26) (71) (130)
Central items & other 1 - - - 1
Total RBS 493 478 234 143 (75)
Segment Performance
31 December 30 September 31 December
2017 2017 2016
Loans and advances to customers (gross) by segment £bn £bn £bn
UK PBB
Personal advances 7.1 7.0 6.9
Mortgages 136.8 135.7 128.0
Cards 4.0 3.9 4.2
Business banking 6.8 6.9 6.3
Commercial 8.3 8.6 8.8
Total 163.0 162.1 154.2
Ulster Bank RoI
Mortgages 15.4 15.4 15.3
Commercial real estate
Investment 0.9 0.9 0.7
Development 0.1 0.1 0.2
Other lending 4.2 4.2 3.9
Total 20.6 20.6 20.1
Commercial Banking
Commercial real estate 15.4 15.7 16.9
Asset and invoice finance 16.1 15.0 14.1
Private sector services (education, health etc) 6.9 7.0 6.9
Banks & financial institutions 7.1 8.3 8.9
Wholesale and retail trade repairs 7.8 7.9 8.4
Hotels and restaurants 3.5 3.6 3.7
Manufacturing 5.6 5.8 6.6
Construction 2.0 2.1 2.1
Other 33.8 32.0 33.3
Total 98.2 97.4 100.9
Private Banking
Personal advances 2.3 2.2 2.3
Mortgages 8.2 8.0 7.0
Other 3.0 3.1 2.9
Total 13.5 13.3 12.2
RBS International
Corporate 5.7 6.6 6.2
Mortgages 2.7 2.7 2.6
Other 0.3 - -
Total 8.7 9.3 8.8
NatWest Markets 22.9 25.6 31.0
Central items & other 0.1 0.3 0.3
31 December 30 September 31 December
2017 2017 2016
Analysis of NatWest Markets RWAs £bn £bn £bn
Total risk-weighted assets 52.9 54.9
- More to follow, for following part double click ID:nRSW7507Fc mpetitive market and low rate environment, partially offset by higher funding benefits on deposits following the Q4 2017 base rate increase.
● RBSI NIM remained stable at 1.36% as active re-pricing of deposits has been offset by the low rate environment.
● Structural hedges of £129 billion generated a benefit of £1.3 billion through net interest income for the year.
Q4 2017 compared with Q3 2017
● Net interest income of £2,211 million decreased by £93 million compared with Q3 2017 principally driven by one-off income releases in Q3 2017 relating to NatWest Markets.
● NIM for Q4 2017 was 2.04%, 8 basis points lower than Q3 2017 driven by one-off income releases in Q3 2017 and a Q4 2017 charge in UK PBB associated with an annual review of mortgage customer repayment behaviour. Excluding the impact of one-off adjustments, NIM was broadly stable.
Q4 2017 compared with Q4 2016
● Net interest income of £2,211 million remained broadly stable compared with Q4 2016 as higher volumes and re-pricing benefits have been offset by planned balance sheet reductions in NatWest Markets.
● NIM was 2.04% for Q4 2017, 15 basis points lower than Q4 2016 reflecting increased liquidity, mix impacts and competitive pressures on margin.
● Average interest earning assets increased by £29,354 million, or 7.3%, compared with Q4 2016 reflecting increased asset volumes in UK PBB, 5.6% higher, and a £21,863 million increase in Central items associated with a build-up in liquidity.
Analysis of results
Year ended Quarter ended
31 December 31 December 31 December 30 September 31 December
2017 2016 2017 2017 2016
Operating expenses £m £m £m £m £m
Statutory operating expenses 10,401 16,194 3,406 2,143 7,354
Adjusted for
Litigation and conduct costs (1,285) (5,868) (764) (125) (4,128)
Restructuring costs (1,565) (2,106) (531) (244) (1,007)
Adjusted operating expenses 7,551 8,220 2,111 1,774 2,219
Notable items within adjusted operating expenses
VAT recovery in Central items 86 227 6 29 -
Notable items within restructuring costs
Property exit costs (303) - (100) 14 -
Employee numbers (FTE-thousands) 71.2 77.8 71.2 73.6 77.8
Year ended
31 December 31 December
2017 2016
UK Bank levy segmental allocations £m £m
UK Personal & Business Banking 33 34
Ulster Bank RoI 1 3
Commercial Banking 91 90
Private Banking 18 19
RBS International 14 19
NatWest Markets 28 35
Central items 30 (10)
Total UK Bank levy 215 190
Analysis of results
2017 compared with 2016
● Total operating expenses of £10,401 million were £5,793 million, or 35.8%, lower than 2016 reflecting a £4,583 million reduction in litigation and conduct costs, a £669 million, or 8.1%, reduction in adjusted operating expenses and a £541 million reduction in restructuring costs.
● Excluding VAT recoveries, adjusted operating expenses have reduced by £810 million for the year, ahead of our £750 million targeted reduction, with approximately 45% of the cost reduction delivered across PBB, CPB, RBSI and the NatWest Markets core business, adjusting for transfers.
● Staff costs of £3,923 million were £559 million, or 12.5%, lower than 2016 underpinned by a 6,600, or 8.5%, reduction in FTEs.
● Restructuring costs of £1,565 million included: a £303 million charge relating to the reduction in our property portfolio; a £319 million charge in NatWest Markets principally relating to the run-down and closure of the legacy business; £221 million relating to the business previously described as Williams & Glyn; £194 million in respect of implementing ring-fencing requirements; and a £73 million net settlement relating to the RBS Netherlands pension scheme.
● Litigation and conduct costs of £1,285 million included: additional charges in respect of settlement with Federal Housing Finance Agency (FHFA) and the California State Attorney General and additional RMBS related provisions in the US; a further provision in relation to settling the 2008 rights issue shareholder litigation; an additional £175 million PPI provision; and a £169 million provision in Ulster Bank RoI for customer remediation and project costs relating to tracker
mortgages and other legacy business issues.
Q4 2017 compared with Q3 2017
● Total operating expenses of £3,406 million were £1,263 million higher than Q3 2017 reflecting a £639 million increase in litigation and conduct costs, a £337 million increase in adjusted operating expenses and a £287 million increase in restructuring costs.
● Adjusted operating expenses of £2,111 million were £337 million higher than Q3 2017 reflecting the UK bank levy charge of £215 million, the non-repeat of £55 million of VAT and other releases in Q3 2016 and the timing of innovation and marketing spend in the quarter.
● Restructuring costs of £531 million included: a £97 million charge relating to the reduction in our property portfolio; a £129 million charge in NatWest Markets including costs relating to the run-down and closure of the legacy business and back office restructuring activity in the core business; £147 million relating to the business previously described as Williams & Glyn; and £59 million in respect of implementing ring-fencing requirements.
● Litigation and conduct costs of £764 million included: £442 million of additional US RMBS related provisions; an additional £175 million PPI provision and a £135 million provision in Ulster Bank RoI for customer remediation and project costs relating to tracker mortgages and other legacy business issues.
Q4 2017 compared with Q4 2016
● Total operating expenses of £3,406 million were £3,948 million lower than Q4 2016 reflecting a £3,364 million reduction in litigation and conduct costs, a £476 million reduction in restructuring costs and a £108 million reduction in adjusted operating expenses.
● Adjusted operating expenses of £2,111 million were £108 million, or 4.9%, lower than Q4 2016 reflecting cost efficiencies and reduced headcount.
Analysis of results
Year ended Quarter ended
31 December 31 December 31 December 30 September 31 December
2017 2016 2017 2017 2016
Impairment (releases)/losses £m £m £m £m £m
Impairment losses 493 478 234 143 (75)
Notable items within impairment losses
Ulster Bank RoI impairment losses/(releases) 60 (113) 81 (10) (47)
Commercial Banking impairment losses 362 206 117 151 83
NatWest Markets impairment (releases)/losses (174) 253 (26) (71) (130)
31 December 30 September 31 December
Credit metrics 2017 2017 2016
Gross customer loans £326,998m £328,504m £327,478m
Loan impairment provisions £3,814m £3,854m £4,455m
Risk elements in lending (REIL) £8,904m £9,019m £10,310m
Provisions as a % of REIL 43% 43% 43%
REIL as a % of gross customer loans 2.7% 2.7% 3.1%
Provisions as a % of gross customer loans 1.2% 1.2% 1.4%
2017 compared with 2016
● A net impairment loss of £493 million, 15 basis points of gross customer loans, compared with £478 million in 2016.
● UK PBB reported a net impairment charge of £235 million, or 14 basis points of gross customer loans, reflecting continued benign credit conditions.
● Ulster Bank RoI reported a net impairment loss of E68 million compared with a E138 million release in 2016. The charge for the year included a provision relating to a change in the non performing loan strategy to allow for further portfolio sales whilst 2016 included gains arising from the impact of asset disposals.
● Commercial Banking net impairment losses of £362 million were £156 million higher than 2016, reflecting a small number of single name impairments.
● NatWest Markets net impairment release of £174 million compared with a net impairment loss of £253 million in 2016 and mainly comprised releases relating to the legacy business.
● REIL reduced by £1,406 million during 2017 to £8,904 million principally reflecting reductions in NatWest Markets, as legacy portfolios are run-down, and reductions across UK PBB and Ulster Bank RoI. REIL represented 2.7% of gross customer loans, compared with 3.1% in 2016.
Q4 2017 compared with Q3 2017
● A net impairment loss of £234 million, or 29 basis points of gross customer loans, compared with £143 million in Q3 2017.
● Ulster Bank RoI reported a net impairment charge of E92 million, compared with a release of E11 million in Q3 2017, which included a provisionrelating to a change in the non performing loan strategy to allow for further portfolio sales.
● Commercial Banking net impairment losses of £117 million were £34 million lower than Q3 2017.
Q4 2017 compared with Q4 2016
● A net impairment loss of £234 million, compared with a net impairment release of £75 million in Q4 2016.
Analysis of results
End-point CRR basis
31 December 30 September 31 December
2017 2017 2016
Risk asset ratios % % %
CET1 15.9 15.5 13.4
Tier 1 17.9 17.4 15.2
Total 21.3 20.6 19.2
Capital
Tangible equity 35,164 35,621 34,982
Expected loss less impairment provisions (1,286) (1,197) (1,371)
Prudential valuation adjustment (496) (459) (532)
Deferred tax assets (849) (865) (906)
Own credit adjustments (90) (110) (304)
Pension fund assets (287) (185) (208)
Cash flow hedging reserve (227) (298) (1,030)
Other adjustments for regulatory purposes 28 51 (8)
Total deductions (3,207) (3,063) (4,359)
CET1 capital 31,957 32,558 30,623
AT1 capital 4,041 4,041 4,041
Tier 1 capital 35,998 36,599 34,664
Tier 2 capital 6,765 6,841 9,161
Total regulatory capital 42,763 43,440 43,825
Risk-weighted assets
Credit risk
- non-counterparty 144,700 154,400 162,200
- counterparty 15,400 16,000 22,900
Market risk 17,000 16,400 17,400
Operational risk 23,800 23,800 25,700
Total RWAs 200,900 210,600 228,200
Leverage (1)
Cash and balances at central banks 98,300 88,200 74,200
Derivatives 160,800 171,700 247,000
Loans and advances 339,400 341,500 340,300
Reverse repos 40,700 36,700 41,800
Other assets 98,900 113,700 95,400
Total assets 738,100 751,800 798,700
Derivatives
- netting and variation margin (161,700) 169,500 (241,700)
- potential future exposures 49,400 54,100 65,300
Securities financing transactions gross up 2,300 2,300 2,300
Undrawn commitments 53,100 52,600 58,600
Regulatory deductions and other adjustments (2,100) 200 100
CRR Leverage exposure 679,100 691,500 683,300
CRR leverage ratio% 5.3 5.3 5.1
UK leverage exposure (2) 587,100 609,400 614,600
UK leverage ratio% (2) 6.1 6.0 5.6
Notes:
(1) Based on end-point CRR Tier 1 capital and leverage exposure under the CRR Delegated Act.
(2) Based on end-point CRR Tier 1 capital and UK leverage exposures reflecting the post EU referendum measures announced by the Bank of England in the third quarter of 2016.
Segment performance
Year ended 31 December 2017
PBB CPB Central
Ulster Commercial Private RBS NatWest items & Total
UK PBB Bank RoI Banking Banking International Markets other RBS
£m £m £m £m £m £m £m £m
Income statement
Net interest income 5,130 421 2,286 464 325 203 158 8,987
Other non-interest income 1,347 186 1,198 214 64 887 (21) 3,875
Total income - adjusted (2) 6,477 607 3,484 678 389 1,090 137 12,862
Own credit adjustments - (3) - - - (66) - (69)
Loss on redemption of own debt - - - - - - (7) (7)
Strategic disposals - - - - - 26 321 347
Total income 6,477 604 3,484 678 389 1,050 451 13,133
Direct expenses - staff costs (773) (191) (467) (145) (61) (677) (1,609) (3,923)
- other costs (259) (66) (232) (32) (25) (287) (2,727) (3,628)
Indirect expenses (2,126) (194) (1,115) (268) (116) (564) 4,383 -
Operating expenses - adjusted (4) (3,158) (451) (1,814) (445) (202) (1,528) 47 (7,551)
Restructuring costs - direct (79) (27) (48) (20) (5) (319) (1,067) (1,565)
- indirect (382) (29) (119) (25) (4) (117) 676 -
Litigation and conduct costs (210) (169) (33) (39) (8) (237) (589) (1,285)
Operating expenses (3,829) (676) (2,014) (529) (219) (2,201) (933) (10,401)
Operating profit/(loss) before impairment (losses)/releases 2,648 (72) 1,470 149 170 (1,151) (482) 2,732
Impairment (losses)/releases (235) (60) (362) (6) (3) 174 (1) (493)
Operating profit/(loss) 2,413 (132) 1,108 143 167 (977) (483) 2,239
Operating profit/(loss) - adjusted (2,4) 3,084 96 1,308 227 184 (264) 183 4,818
Additional information
Return on equity (5) 23.7% (5.0%) 6.6% 6.4% 11.2% (9.0%) nm 2.2%
Return on equity - adjusted (2,4,5) 30.7% 3.6% 8.2% 11.3% 12.6% (3.7%) nm 8.8%
Cost:income ratio (3) 59.1% 111.9% 56.0% 78.0% 56.3% nm nm 79.0%
Cost:income ratio - adjusted (2,3,4) 48.8% 74.3% 50.0% 65.6% 51.9% 140.2% nm 58.2%
Total assets (£bn) 190.6 24.6 149.5 20.3 25.9 277.9 49.3 738.1
Funded assets (£bn) (6) 190.6 24.5 149.5 20.3 25.9 118.7 47.7 577.2
Net loans and advances to customers (£bn) 161.7 19.5 97.0 13.5 8.7 22.7 0.1 323.2
Risk elements in lending (£bn) 2.0 3.3 3.2 0.1 0.1 0.3 (0.1) 8.9
Impairment provisions (£bn) (1.3) (1.1) (1.2) - - (0.2) - (3.8)
Customer deposits (£bn) 180.6 17.5 98.0 26.9 29.0 14.8 0.2 367.0
Risk-weighted assets (RWAs) (£bn) 43.0 18.0 71.8 9.1 5.1 52.9 1.0 200.9
RWA equivalent (£bn) (5) 46.7 18.9 76.8 9.1 5.2 56.4 1.1 214.2
Employee numbers (FTEs - thousands) (7) 19.8 2.7 4.6 1.5 1.6 5.7 35.3 71.2
For the notes to this table refer to page 23. nm = not meaningful
Segment performance
Quarter ended 31 December 2017
PBB CPB Central
Ulster Commercial Private RBS NatWest items & Total
UK PBB Bank RoI Banking Banking International Markets other RBS
£m £m £m £m £m £m £m £m
Income statement
Net interest income 1,272 111 575 122 81 38 12 2,211
Other non-interest income 276 50 231 69 16 127 (123) 646
Total income adjusted (2) 1,548 161 806 191 97 165 (111) 2,857
Own credit adjustments - - - - - 9 - 9
Strategic disposals - - - - - 26 165 191
Total income 1,548 161 806 191 97 200 54 3,057
Direct expenses - staff costs (189) (45) (109) (35) (25) (153) (372) (928)
- other costs (73) (25) (66) (14) (15) (83) (907) (1,183)
Indirect expenses (554) (45) (344) (78) (23) (154) 1,198 -
Operating expenses - adjusted (4) (816) (115) (519) (127) (63) (390) (81) (2,111)
Restructuring costs - direct (55) (2) (6) (19) (3) (129) (317) (531)
- indirect (198) (2) (23) (9) - (13) 245 -
Litigation and conduct costs (197) (135) (27) (39) - (51) (315) (764)
Operating expenses (1,266) (254) (575) (194) (66) (583) (468) (3,406)
Operating profit/(loss) before impairment (losses)/releases 282 (93) 231 (3) 31 (383) (414) (349)
Impairment (losses)/releases (60) (81) (117) (2) - 26 - (234)
Operating profit/(loss) 222 (174) 114 (5) 31 (357) (414) (583)
Operating profit/(loss) - adjusted (2,4) 672 (35) 170 62 34 (199) (192) 512
Additional information
Return on equity (5) 7.8% (26.5%) 1.3% (2.9%) 9.2% (14.0%) nm (6.7%)
Return on equity - adjusted (2,4,5) 26.2% (5.3%) 3.1% 12.1% 10.4% (8.7%) nm 4.0%
Cost:income ratio (6) 81.8% 157.8% 70.0% 101.6% 68.0% nm nm 111.5%
Cost:income ratio - adjusted (2,3,4) 52.7% 71.4% 62.8% 66.5% 64.9% nm nm 73.6%
Total assets (£bn) 190.6 24.6 149.5 20.3 25.9 277.9 49.3 738.1
Funded assets (£bn) (6) 190.6 24.5 149.5 20.3 25.9 118.7 47.7 577.2
Net loans and advances to customers (£bn) 161.7 19.5 97.0 13.5 8.7 22.7 0.1 323.2
Risk elements in lending (£bn) 2.0 3.3 3.2 0.1 0.1 0.3 (0.1) 8.9
Impairment provisions (£bn) (1.3) (1.1) (1.2) - - (0.2) - (3.8)
Customer deposits (£bn) 180.6 17.5 98.0 26.9 29.0 14.8 0.2 367.0
Risk-weighted assets (RWAs) (£bn) 43.0 18.0 71.8 9.1 5.1 52.9 1.0 200.9
RWA equivalent (£bn) (5) 46.7 18.9 76.8 9.1 5.2 56.4 1.1 214.2
Employee numbers (FTEs - thousands) (7) 19.8 2.7 4.6 1.5 1.6 5.7 35.3 71.2
For the notes to this table refer to page 23. nm = not meaningful.
Segment performance
Year ended 31 December 2016
PBB CPB Central
Ulster Commercial Private RBS NatWest items & Total
UK PBB Bank RoI Banking Banking International Markets other (1) RBS
£m £m £m £m £m £m £m £m
Income statement
Net interest income 4,945 409 2,143 449 303 343 116 8,708
Other non-interest income 1,182 164 1,272 208 71 763 4 3,664
Total income - adjusted (2) 6,127 573 3,415 657 374 1,106 120 12,372
Own credit adjustments - 3 - - - 187 (10) 180
Loss on redemption of own debt - - - - - - (126) (126)
Strategic disposals - - - - - (81) 245 164
Total income 6,127 576 3,415 657 374 1,212 229 12,590
Direct expenses - staff costs (832) (207) (522) (154) (45) (358) (2,364) (4,482)
- other costs (320) (55) (235) (44) (17) (119) (2,948) (3,738)
Indirect expenses (2,246) (195) (1,179) (313) (107) (1,607) 5,647 -
Operating expenses - adjusted (4) (3,398) (457) (1,936) (511) (169) (2,084) 335 (8,220)
Restructuring costs - direct (46) (38) (25) (7) (2) (75) (1,913) (2,106)
- indirect (198) (2) (83) (30) (3) (115) 431 -
Litigation and conduct costs (634) (172) (423) (1) - (550) (4,088) (5,868)
Operating expenses (4,276) (669) (2,467) (549) (174) (2,824) (5,235) (16,194)
Operating profit/(loss) before impairment (losses)/releases 1,851 (93) 948 108 200 (1,612) (5,006) (3,604)
Impairment (losses)/releases (125) 113 (206) 3 (10) (253) - (478)
Operating profit/(loss) 1,726 20 742 111 190 (1,865) (5,006) (4,082)
Operating profit/(loss) - adjusted (2,4) 2,604 229 1,273 149 195 (1,231) 455 3,674
Additional information
Return on equity (5) 16.2% 0.7% 4.1% 5.6% 13.8% (12.5%) nm (17.9%)
Return on equity - adjusted (2,4,5) 25.1% 8.4% 8.4% 7.8% 14.2% (8.7%) nm 1.6%
Cost:income ratio (3) 69.8% 116.1% 71.0% 83.6% 46.5% nm nm 129.0%
Cost:income ratio - adjusted (2,3,4) 55.5% 79.8% 54.8% 77.8% 45.2% 188.4% nm 66.0%
Total assets (£bn) 181.4 24.1 150.5 18.6 23.4 372.5 28.2 798.7
Funded assets (£bn) (6) 181.4 24.0 150.5 18.5 23.4 128.5 25.4 551.7
Net loans and advances to customers (£bn) 152.7 18.9 100.1 12.2 8.8 30.2 0.1 323.0
Risk elements in lending (£bn) 2.4 3.5 1.9 0.1 0.1 2.3 - 10.3
Impairment provisions (£bn) (1.5) (1.2) (0.8) - - (0.8) (0.2) (4.5)
Customer deposits (£bn) 170.0 16.1 97.9 26.6 25.2 17.9 0.2 353.9
Risk-weighted assets (RWAs) (£bn) 42.3 18.1 78.5 8.6 9.5 69.7 1.5 228.2
RWA equivalent (£bn) (5) 45.8 19.5 82.6 8.6 9.5 74.7 1.7 242.4
Employee numbers (FTEs - thousands) 21.6 3.1 5.5 1.7 0.8 1.6 43.5 77.8
For the notes to this table please refer to page 23. nm = not meaningful.
Segment performance
Quarter ended 30 September 2017
PBB CPB Central
Ulster Commercial Private RBS NatWest items & Total
UK PBB Bank RoI Banking Banking International Markets other RBS
£m £m £m £m £m £m £m £m
Income statement
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