REG - Royal Bk Scot.Grp. - Final Results <Origin Href="QuoteRef">RBS.L</Origin> - Part 3
26/02/2016 07:12
- Part 3: For the preceding part double click ID:nRSZ2357Qb
adjustments 1,500 200 (800)
Leverage exposure 702,500 846,500 939,500
Tier 1 capital 39,605 42,177 39,919
Leverage ratio % 5.6% 5.0% 4.2%
*Capital and leverage ratios have not been restated following the pension accounting policy change. Components within CET1
capital have however been re-presented to reflect revisions to accounting tangible equity, with corresponding adjustments
to other deductions above - refer to page 46 for further details.
Notes:
(1) Capital Requirements Regulation (CRR) as implemented by the Prudential Regulation Authority in the UK, with effect from 1 January 2014. All regulatory adjustments and deductions to CET1 have been applied in full for both bases with the exception of unrealised gains on AFS securities which has been included from 2015 under the PRA transitional basis.
(2) Based on end-point CRR Tier 1 capital and leverage exposure under the CRR Delegated Act.
Analysis of results
Key points
31 December 2015 compared with 31 December 2014
· The CET1 ratio increased from 11.2% to 15.5% driven by the disposal of Citizens and continued de-risking of the balance sheet, primarily in Capital Resolution which accelerated its exit from several portfolios. The pension accounting policy change lowered the CET1 ratio by approximately 70 basis points at 2015 year end and by approximately 40 basis points on a pro forma basis at 31 December 2014.
· RWAs fell by £113 billion, from £356 billion to £243 billion, driven by the disposal of Citizens accounting for £63.3 billion and the continued progress of Capital Resolution (down £46 billion). There were further small reductions across most core businesses.
· The leverage ratio improved from 4.2% to 5.6%, primarily due to the successful issuance of £2 billion ($3.15 billion) AT1 capital notes and a reduction in leverage exposure as funded assets fell £145 billion to £553 billion, including the disposal of Citizens. The pension accounting policy change lowered the leverage ratio on a proforma basis by approximately 20 basis points both at 2015 year end and at 31 December 2014.
Q4 2015 compared with Q3 2015
· The CET1 ratio increased from 12.7% to 15.5% driven by RWA reduction of £73 billion following the disposal of Citizens (£67.3 billion) in Q3 2015 and further reduction in Capital Resolution (£11 billion), partially offset by the impact of the pension accounting policy change.
· The leverage ratio improved from 5.0% to 5.6% due to the disposal of Citizens, partially offset by the impact of the pension accounting policy change.
· RWAs were £73 billion lower due to the Citizens disposal and Capital Resolution disposals and run-off. The increase in market risk RWAs in Q4 2015 reflected US dollar proceeds from the Citizens disposal.
Segment performance
Year ended 31 December 2015
PBB CPB Central
Ulster Commercial Private RBS Capital Williams items & Total
UK PBB Bank RoI Banking Banking International CIB Resolution & Glyn other (1) RBS
£m £m £m £m £m £m £m £m £m £m
Income statement
Net interest income 4,152 365 1,997 436 303 87 365 658 404 8,767
Other non-interest income 1,048 185 1,257 208 64 1,320 37 175 (27) 4,267
Total income - adjusted (2) 5,200 550 3,254 644 367 1,407 402 833 377 13,034
Own credit adjustments - - - - - 120 175 - 14 309
Loss on redemption of own debt - - - - - - - - (263) (263)
Strategic disposals - - - - - - (38) - (119) (157)
Total income 5,200 550 3,254 644 367 1,527 539 833 9 12,923
Direct expenses - staff costs (801) (160) (483) (176) (42) (348) (296) (209) (2,381) (4,896)
- other costs (272) (85) (238) (35) (16) (122) (202) (52) (3,438) (4,460)
Indirect expenses (1,965) (182) (1,080) (307) (98) (997) (1,041) (98) 5,768 -
Operating expenses - adjusted (3) (3,038) (427) (1,801) (518) (156) (1,467) (1,539) (359) (51) (9,356)
Restructuring costs - direct (38) (12) (52) (7) - (44) (380) (28) (2,370) (2,931)
- indirect (129) (3) (17) (66) (4) (480) (927) - 1,626 -
Litigation and conduct costs (972) 13 (51) (12) - (378) (2,105) - (63) (3,568)
Write down of goodwill - - - (498) - - - - - (498)
Operating expenses (4,177) (429) (1,921) (1,101) (160) (2,369) (4,951) (387) (858) (16,353)
Profit/(loss) before impairment losses 1,023 121 1,333 (457) 207 (842) (4,412) 446 (849) (3,430)
Impairment releases/(losses) 7 141 (69) (13) - 5 725 (15) (54) 727
Operating profit/(loss) 1,030 262 1,264 (470) 207 (837) (3,687) 431 (903) (2,703)
Operating profit/(loss) - adjusted (2,3) 2,169 264 1,384 113 211 (55) (412) 459 272 4,405
Additional information
Return on equity (4) 11.7% 10.6% 9.8% (27.7%) 18.5% (11.1%) nm nm nm (4.7%)
Return on equity - adjusted (2,3,4) 26.2% 10.6% 10.9% 4.9% 18.9% (2.0%) nm nm nm 11.0%
Cost:income ratio 80% 78% 59% 171% 44% 155% nm 46% nm 127%
Cost:income ratio - adjusted (2,3) 58% 78% 55% 80% 43% 104% nm 43% nm 72%
Total assets (£bn) 143.9 21.3 133.5 17.0 23.1 215.3 201.5 24.1 35.7 815.4
Funded assets (£bn) 143.9 21.2 133.5 17.0 23.1 103.3 53.4 24.1 33.4 552.9
Net loans and advances to customers (£bn) 119.8 16.7 91.3 11.2 7.3 16.1 23.6 20.0 2.0 308.0
Risk elements in lending (£bn) 2.7 3.5 1.9 0.1 0.1 - 3.4 0.5 - 12.2
Impairment provisions (£bn) (1.8) (1.9) (0.7) - (0.1) - (2.3) (0.3) - (7.1)
Customer deposits (£bn) 137.8 13.1 88.9 23.1 21.3 5.7 26.0 24.1 6.0 346.0
Risk-weighted assets (RWAs) (£bn) 33.3 19.4 72.3 8.7 8.3 33.1 49.0 9.9 8.6 242.6
RWA equivalent (£bn) 35.5 20.4 77.6 8.7 8.3 33.4 50.3 10.4 8.8 253.4
Employee numbers (FTEs - thousands) 22.4 2.5 5.8 1.9 0.7 1.3 1.4 4.6 50.9 91.5
For the notes to this table refer to page 29. nm = not meaningful
Segment performance
Quarter ended 31 December 2015
PBB CPB Central
Ulster Commercial Private RBS Capital Williams items & Total
UK PBB Bank RoI Banking Banking International CIB Resolution & Glyn other (1) RBS
£m £m £m £m £m £m £m £m £m £m
Income statement
Net interest income 1,030 85 512 108 78 28 6 165 150 2,162
Other non-interest income 224 31 285 50 17 224 (239) 43 87 722
Total income adjusted (2) 1,254 116 797 158 95 252 (233) 208 237 2,884
Own credit adjustments - - - - - (66) (5) - (44) (115)
Loss on redemption of own debt - - - - - - - - (263) (263)
Strategic disposals - - - - - - (24) - 2 (22)
Total income 1,254 116 797 158 95 186 (262) 208 (68) 2,484
Direct expenses - staff costs (199) (40) (124) (43) (12) (63) (54) (58) (479) (1,072)
- other costs (82) (28) (80) (7) (5) (50) (54) (24) (1,123) (1,453)
Indirect expenses (596) (49) (380) (109) (24) (251) (286) (25) 1,720 -
Operating expenses - adjusted (3) (877) (117) (584) (159) (41) (364) (394) (107) 118 (2,525)
Restructuring costs - direct (31) 7 (40) (7) - - (21) (28) (494) (614)
- indirect (56) (1) (14) 12 1 (62) (83) - 203 -
Litigation and conduct costs (607) 4 8 (10) - (5) (1,498) - (16) (2,124)
Write down of goodwill - - - (498) - - - - - (498)
Operating expenses (1,571) (107) (630) (662) (40) (431) (1,996) (135) (189) (5,761)
(Loss)/profit before impairment losses (317) 9 167 (504) 55 (245) (2,258) 73 (257) (3,277)
Impairment releases/(losses) 27 10 (27) (12) - - 356 (20) (7) 327
Operating (loss)/profit (290) 19 140 (516) 55 (245) (1,902) 53 (264) (2,950)
Operating profit/(loss) - adjusted (2,3) 404 9 186 (13) 54 (112) (271) 81 348 686
Additional information
Return on equity (4) (16.8%) 3.0% 3.1% (118.9%) 19.1% (15.1%) nm nm nm (26.5%)
Return on equity - adjusted (2,3,4) 19.8% 1.4% 4.6% (4.4%) 18.7% (7.6%) nm nm nm 6.6%
Cost:income ratio 125% 92% 79% 419% 42% 232% nm 65% nm 232%
Cost:income ratio - adjusted (2,3) 70% 101% 73% 101% 43% 144% nm 51% nm 88%
Total assets (£bn) 143.9 21.3 133.5 17.0 23.1 215.3 201.5 24.1 35.7 815.4
Funded assets (£bn) 143.9 21.2 133.5 17.0 23.1 103.3 53.4 24.1 33.4 552.9
Net loans and advances to customers (£bn) 119.8 16.7 91.3 11.2 7.3 16.1 23.6 20.0 2.0 308.0
Risk elements in lending (£bn) 2.7 3.5 1.9 0.1 0.1 - 3.4 0.5 - 12.2
Impairment provisions (£bn) (1.8) (1.9) (0.7) - (0.1) - (2.3) (0.3) - (7.1)
Customer deposits (£bn) 137.8 13.1 88.9 23.1 21.3 5.7 26.0 24.1 6.0 346.0
Risk-weighted assets (RWAs) (£bn) 33.3 19.4 72.3 8.7 8.3 33.1 49.0 9.9 8.6 242.6
RWA equivalent (£bn) 35.5 20.4 77.6 8.7 8.3 33.4 50.3 10.4 8.8 253.4
Employee numbers (FTEs - thousands) 22.4 2.5 5.8 1.9 0.7 1.3 1.4 4.6 50.9 91.5
For the notes to this table refer to page 29. nm = not meaningful
Segment performance
Year ended 31 December 2014
PBB CPB Central
Ulster Commercial Private RBS Capital Williams items & Total
UK PBB Bank RoI Banking Banking International CIB Resolution & Glyn other (1) RBS
£m £m £m £m £m £m £m £m £m £m
Income statement
Net interest income 4,221 467 1,976 454 323 (11) 673 664 491 9,258
Other non-interest income 1,223 137 1,329 235 68 1,951 1,155 188 (459) 5,827
Total income - adjusted (2) 5,444 604 3,305 689 391 1,940 1,828 852 32 15,085
Own credit adjustments - - - - - (9) (36) - (101) (146)
Gain on redemption of own debt - - - - - - - - 20 20
Strategic disposals - - - - - - - - 191 191
Total income 5,444 604 3,305 689 391 1,931 1,792 852 142 15,150
Direct expenses - staff costs (824) (164) (495) (178) (44) (446) (444) (196) (2,585) (5,376)
- other costs (346) (83) (241) (37) (15) (190) (293) (36) (3,764) (5,005)
Indirect expenses (1,958) (180) (1,008) (289) (94) (1,080) (1,283) (98) 5,990 -
Operating expenses - adjusted (3) (3,128) (427) (1,744) (504) (153) (1,716) (2,020) (330) (359) (10,381)
Restructuring costs - direct (10) 8 (41) (1) (2) (13) (80) - (1,015) (1,154)
- indirect (101) (21) (67) - (5) (89) (105) - 388 -
Litigation and conduct costs (918) 19 (112) (90) - (832) (162) - (99) (2,194)
Write down of goodwill - - - - - - (130) - - (130)
Operating expenses (4,157) (421) (1,964) (595) (160) (2,650) (2,497) (330) (1,085) (13,859)
Profit/(loss) before impairment losses 1,287 183 1,341 94 231 (719) (705) 522 (943) 1,291
Impairment (losses)/releases (154) 306 (85) 5 7 9 1,307 (55) 12 1,352
Operating profit/(loss) 1,133 489 1,256 99 238 (710) 602 467 (931) 2,643
Operating profit/(loss) - adjusted (2,3) 2,162 483 1,476 190 245 233 1,115 467 (315) 6,056
Additional information *
Return on equity (4) 11.9% 18.6% 10.2% 4.1% 24.2% (7.9%) nm nm nm (8.2%)
Return on equity - adjusted (2,3,4) 23.7% 18.4% 12.2% 9.1% 24.9% 1.3% nm nm nm (1.5%)
Cost:income ratio 76% 70% 59% 86% 41% 137% nm 39% nm 91%
Cost:income ratio - adjusted (2,3) 57% 71% 53% 73% 39% 88% nm 39% nm 69%
Total assets (£bn) 137.8 22.5 127.9 17.7 23.4 276.2 327.3 23.6 94.6 1,051.0
Funded assets (£bn) 137.8 22.4 127.9 17.7 23.4 137.7 115.6 23.6 90.9 697.0
Net loans and advances to customers (£bn) 111.6 18.1 84.9 11.0 7.2 26.5 52.9 19.5 63.1 394.8
Risk elements in lending (£bn) 3.6 4.4 2.4 0.1 0.2 - 15.6 0.6 1.3 28.2
Impairment provisions (£bn) (2.5) (2.4) (0.9) - (0.1) - (11.1) (0.4) (0.6) (18.0)
Customer deposits (£bn) 132.6 14.7 84.9 22.3 20.8 11.8 36.4 22.0 69.4 414.9
Risk-weighted assets (RWAs) (£bn) 36.6 21.8 63.2 8.7 7.5 41.9 95.1 10.1 71.0 355.9
RWA equivalent (£bn) 39.2 20.0 70.1 8.7 7.5 42.6 101.3 10.8 71.4 371.6
Employee numbers (FTEs - thousands) 22.4 2.5 6.2 2.0 0.6 1.7 2.6 4.2 49.1 91.3
For the notes to this table refer to page 29. nm = not meaningful. *Restated - refer to page 46 for further details.
Segment performance
Quarter ended 30 September 2015*
PBB CPB Central
Ulster Commercial Private RBS Capital Williams items & Total
UK PBB Bank RoI Banking Banking International CIB Resolution & Glyn other (1) RBS
£m £m £m £m £m £m £m £m £m £m
Income statement
Net interest income 1,055 90 504 109 73 29 78 167 82 2,187
Other non-interest income 258 74 296 51 14 299 (27) 44 (149) 860
Total income - adjusted (2) 1,313 164 800 160 87 328 51 211 (67) 3,047
Own credit adjustments - - - - - 78 38 - 20 136
Total income 1,313 164 800 160 87 406 89 211 (47) 3,183
Direct expenses - staff costs (202) (40) (117) (43) (9) (97) (60) (55) (658) (1,281)
- other costs (68) (22) (54) (11) (3) (19) (41) (12) (789) (1,019)
Indirect expenses (464) (48) (238) (65) (24) (242) (245) (24) 1,350 -
Operating expenses - adjusted (3) (734) (110) (409) (119) (36) (358) (346) (91) (97) (2,300)
Restructuring costs - direct (5) (3) (1) 2 - (3) (190) - (647) (847)
- indirect (23) (2) 2 (1) (2) (148) (300) - 474 -
Litigation and conduct costs - - - - - (6) (101) - (22) (129)
Operating expenses (762) (115) (408) (118) (38) (515) (937) (91) (292) (3,276)
Profit/(loss) before impairment losses 551 49 392 42 49 (109) (848) 120 (339) (93)
Impairment (losses)/releases (2) 54 (16) (4) 1 - 50 (5) 1 79
Operating profit/(loss) 549 103 376 38 50 (109) (798) 115 (338) (14)
Operating profit/(loss) - adjusted (2,3) 577 108 375 37 52 (30) (245) 115 (163) 826
Additional information
Return on equity (4) 27.2% 16.7% 12.3% 7.4% 18.0% (6.4%) nm nm nm 9.0%
Return on equity - adjusted (2,3,4) 28.7% 17.5% 12.3% 7.1% 18.8% (2.7%) nm nm nm 16.3%
Cost:income ratio 58% 70% 51% 74% 44% 127% nm 43% nm 103%
Cost:income ratio - adjusted (2,3) 56% 67% 51% 74% 41% 109% nm 43% nm 75%
Total assets (£bn) 140.7 23.0 129.6 17.4 22.9 250.0 234.9 24.0 34.2 876.7
Funded assets (£bn) 140.7 22.9 129.6 17.4 22.9 125.9 66.0 24.0 31.3 580.7
Net loans and advances to customers (£bn) 116.3 16.8 89.1 11.1 7.0 19.8 30.8 20.0 2.8 313.7
Risk elements in lending (£bn) 2.9 3.6 2.1 0.1 0.1 - 5.3 0.5 - 14.6
Impairment provisions (£bn) (2.0) (2.0) (0.7) - (0.1) - (4.0) (0.3) (0.2) (9.3)
Customer deposits (£bn) 134.9 13.6 89.4 22.7 22.3 5.9 30.0 23.6 10.1 352.5
Risk-weighted assets (RWAs) (£bn) 33.3 19.6 64.2 8.4 8.1 38.8 59.7 10.1 73.8 316.0
RWA equivalent (£bn) 36.0 19.8 70.1 8.4 8.1 39.5 62.0 10.7 74.1 328.7
Employee numbers (FTEs - thousands) 22.9 2.4 5.6 2.0 0.6 1.4 1.7 4.5 51.3 92.4
For the notes to this table refer to page 29. nm = not meaningful. *Restated - refer to page 46 for further details.
Segment performance
Quarter ended 31 December 2014
PBB CPB Central
Ulster Commercial Private RBS Capital Williams items & Total
UK PBB Bank RoI Banking Banking International CIB Resolution & Glyn other (1) RBS
£m £m £m £m £m £m £m £m £m £m
Income statement
Net interest income 1,086 112 506 116 83 8 162 167 142 2,382
Other non-interest income 288 40 343 54 18 248 37 49 (350) 727
Total income - adjusted (2) 1,374 152 849 170 101 256 199 216 (208) 3,109
Own credit adjustments - - - - - (33) (50) - (61) (144)
Total income 1,374 152 849 170 101 223 149 216 (269) 2,965
Direct expenses - staff costs (205) (43) (115) (44) (11) (36) (66) (49) (623) (1,192)
- other costs (72) (23) (73) (12) (2) (47) (80) (10) (1,101) (1,420)
Indirect expenses (548) (53) (319) (90) (23) (293) (344) (25) 1,695 -
Operating expenses - adjusted (3) (825) (119) (507) (146) (36) (376) (490) (84) (29) (2,612)
Restructuring costs - direct (2) - (1) (1) - (3) (46) - (489) (542)
- indirect (14) 2 (16) - (2) (16) (22) - 68 -
Litigation and conduct costs (650) 19 (62) (90) - (370) (12) - 1 (1,164)
Operating expenses (1,491) (98) (586) (237) (38) (765) (570) (84) (449) (4,318)
(Loss)/profit before impairment losses (117) 54 263 (67) 63 (542) (421) 132 (718) (1,353)
Impairment releases/(losses) 2 70 (32) 1 (3) 6 634 (9) 1 670
Operating (loss)/profit (115) 124 231 (66) 60 (536) 213 123 (717) (683)
Operating profit/(loss) - adjusted (2,3) 551 103 310 25 62 (114) 343 123 (236) 1,167
Additional information*
Return on equity (4) (7.0%) 19.8% 7.0% (15.8%) 24.7% (23.3%) nm nm nm (51.1%)
Return on equity - adjusted (2,3,4) 25.5% 16.4% 9.9% 3.7% 25.6% (5.9%) nm nm nm (37.4%)
Cost:income ratio 109% 64% 69% 139% 38% 343% nm 39% nm 146%
Cost:income ratio - adjusted (2,3) 60% 78% 60% 86% 36% 147% nm 39% nm 84%
Total assets (£bn) 137.8 22.5 127.9 17.7 23.4 276.2 327.3 23.6 94.6 1,051.0
Funded assets (£bn) 137.8 22.4 127.9 17.7 23.4 137.7 115.6 23.6 90.9 697.0
Net loans and advances to customers (£bn) 111.6 18.1
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