REG - Royal Bk Scot.Grp. - Final Results - Part 1 <Origin Href="QuoteRef">RBS.L</Origin> - Part 10
26/02/2015 07:13
- Part 10: For the preceding part double click ID:nRSZ9135Fi
Year ended Quarter ended
31 December 31 December 31 December 30 September 31 December
2014 2013 2014 2014 2013
£m £m £m £m £m
Preference shareholders
Non-cumulative preference shares of US$0.01 213 226 43 65 41
Non-cumulative preference shares of E0.01 115 121 55 26 57
Non-cumulative preference shares of £1 2 2 1 - 1
330 349 99 91 99
Paid-in equity holders
Interest on securities classified as equity, net of tax 49 49 16 6 15
379 398 115 97 114
The Group has resumed payments on all discretionary non-equity capital instruments following the end of the European
Commission ban in 2012 for RBS and 2013 for RBS N.V. Future coupons and dividends on hybrid capital instruments will only
be paid subject to, and in accordance with, the terms of the relevant instruments.
In the context of macro-prudential policy discussions, the Board decided to partially neutralise any impact on CET1 capital
of coupon and dividend payments for 2013 and 2014. £300 million of new equity was issued during the course of 2014 and the
Board has decided a further £300 million of new equity will be issued during the course of 2015 to again partially
neutralise the CET1 impact of coupon and dividend payments.
Notes
10. Earnings per ordinary and equivalent B share
Following agreement between RBS and HM Treasury for the retirement of the Dividend Access Share (DAS), earnings per share
for periods ended after 25 June 2014 only reflect DAS dividends recognised before the end of a reporting period: £320
million was recognised in the quarter ended 30 June 2014. For periods ending on or before 31 March 2014 earnings are
allocated solely to the DAS and earnings per ordinary and equivalent B share for such periods are therefore nil. The DAS
does not share in losses. For periods prior to 25 June 2014, adjusted earnings per ordinary and equivalent B share
excludes the rights of the DAS.
Year ended Quarter ended
31 December 31 December 31 December 30 September 31 December
2014 2013 2014 2014 2013
Earnings
Profit/(loss) from continuing operations attributable
to ordinary and B shareholders (£m) 57 (9,516) (1,856) 790 (8,784)
(Loss)/profit from discontinued operations attributable to
ordinary and B shareholders (£m) (3,527) 521 (3,935) 106 82
(Loss)/profit attributable to ordinary and B
shareholders (£m) (3,470) (8,995) (5,791) 896 (8,702)
Ordinary shares outstanding during the period (millions) 6,256 6,096 6,322 6,284 6,156
Equivalent B shares in issue during the period (millions) 5,100 5,100 5,100 5,100 5,100
Weighted average number of ordinary
shares and equivalent B shares outstanding
during the period (millions) 11,356 11,196 11,422 11,384 11,256
Effect of dilutive share options and convertible
securities (millions) 91 115 87 108 110
Diluted weighted average number of ordinary
shares and equivalent B shares outstanding
during the period (millions) 11,447 11,311 11,509 11,492 11,366
Basic earnings/(loss) per ordinary and
equivalent B share (EPS)
Basic EPS from continuing operations 0.5p (85.0p) (16.2p) 6.9p (78.0p)
Basic EPS from discontinued operations (31.1p) 4.7p (34.5p) 1.0p 0.7p
Basic EPS from continuing and discontinued
operations (30.6p) (80.3p) (50.7p) 7.9p (77.3p)
Adjusted EPS from continuing operations
Basic EPS from continuing operations 0.5p (85.0p) (16.2p) 6.9p (78.0p)
Own credit adjustments 1.1p 1.0p 1.1p (0.4p) -
Gain on redemption of own debt (0.2p) (1.7p) - - 0.2p
Write down of goodwill 1.1p 9.4p - - 9.4p
Strategic disposals (1.7p) (1.4p) - - (1.5p)
Adjusted EPS from continuing operations 0.8p (77.7p) (15.1p) 6.5p (69.9p)
Note:
(1) Diluted EPS from continuing operations for the quarter ended 30 September 2014 was 0.1p lower than basic EPS. Diluted EPS from discontinued operations for the year ended 31 December 2013 was 0.1p lower than basic EPS. There was no dilutive impact in any other period.
Notes
11. Segmental analysis
In 2014, the previously reported operating divisions were reorganised into three franchises:
● Personal & Business Banking (PBB), comprising two reportable segments, UK Personal & Business Banking, including Williams & Glyn, (UK PBB) and Ulster Bank.
● Commercial & Private Banking (CPB), comprising two reportable segments, Commercial Banking and Private Banking.
● Corporate & Institutional Banking (CIB), a single reportable segment.
RBS Capital Resolution (RCR) was established with effect from 1 January 2014 by the transfer of capital intensive and
higher risk assets from existing divisions. Non-Core was dissolved on 31 December 2013. No business lines moved to RCR and
so comparative data have not been restated.
RBS will continue to manage and report RBS Capital Resolution (RCR) separately until disposal or wind-down. Although CFG
has been reclassified as a discontinued operation, it continues to be a reportable operating segment.
Reporting Changes
A number of previously reported reconciling items (PPI costs, Interest Rate Hedging Products redress and related costs,
regulatory and legal actions, restructuring costs, amortisation of purchased intangible assets and bank levy) have now been
allocated to the reportable segments.
As part of its internal reorganisation, RBS has also centralised all services and functions. The costs relating to Services
and Functions previously reported as direct expenses in the divisions are now reallocated to businesses using appropriate
drivers and reported as indirect expenses in the segmental income statements. In addition, the basis of allocation of
Treasury costs has been amended to align the recovery of funding and hedging costs across RBS and for the transfer of
certain assets and their associated costs out of Treasury.
Comparatives have been restated accordingly.
Notes
11. Segmental analysis (continued)
Analysis of operating profit
The following tables provide a segmental analysis of operating profit/(loss) by main income statement captions. The
segmental income statements on pages 29 to 67reflect certain presentational reallocations as described in the notes below
each table. These do not affect the overall operating profit.
Net Non- Impairment
interest interest Total Operating (losses)/ Operating
income income income expenses releases profit/(loss)
Year ended 31 December 2014 £m £m £m £m £m £m
UK Personal & Business Banking 4,683 1,354 6,037 (4,319) (268) 1,450
Ulster Bank 636 194 830 (589) 365 606
Personal & Business Banking 5,319 1,548 6,867 (4,908) 97 2,056
Commercial Banking 2,041 1,169 3,210 (1,844) (76) 1,290
Private Banking 691 391 1,082 (936) 4 150
Commercial & Private Banking 2,732 1,560 4,292 (2,780) (72) 1,440
Corporate & Institutional Banking 817 3,132 3,949 (4,850) 9 (892)
Central items 440 (477) (37) (825) 12 (850)
Citizens Financial Group 2,013 1,068 3,081 (2,123) (197) 761
RCR (1) (47) 92 45 (363) 1,306 988
Non-statutory basis 11,274 6,923 18,197 (15,849) 1,155 3,503
Reconciling items:
Own credit adjustments (2) - (146) (146) - - (146)
Gain on redemption of own debt - 20 20 - - 20
Write down of goodwill - - - (130) - (130)
Strategic disposals - 191 191 - - 191
Citizens discontinued operations (3) (2,013) (1,078) (3,091) 2,123 197 (771)
RFS Holdings minority interest (3) (18) (21) (3) - (24)
Statutory basis 9,258 5,892 15,150 (13,859) 1,352 2,643
Notes:
(1) Reallocation of £23 million between net interest income and non-interest income in respect of funding costs of rental assets.
(2) Comprises £40 million gain included in 'Income from trading activities' and £106 million gain included in 'Other operating income' on a statutory basis.
(3) Included within Citizens discontinued operations are the results of the reportable operating segment of Citizens Financial Group (CFG) and certain CFG related activities in Central items and related one-off and other items. Analysis provided in Note 12.
Notes
11. Segmental analysis (continued)
Analysis of operating profit (continued)
Net Non- Impairment
interest interest Total Operating (losses)/ Operating
income income income expenses releases profit/(loss)
Year ended 31 December 2013* £m £m £m £m £m £m
UK Personal & Business Banking 4,490 1,323 5,813 (4,493) (501) 819
Ulster Bank 619 240 859 (694) (1,774) (1,609)
Personal & Business Banking 5,109 1,563 6,672 (5,187) (2,275) (790)
Commercial Banking 1,962 1,195 3,157 (1,975) (652) 530
Private Banking 658 419 1,077 (1,109) (29) (61)
Commercial & Private Banking 2,620 1,614 4,234 (3,084) (681) 469
Corporate & Institutional Banking 684 4,324 5,008 (7,210) (680) (2,882)
Central items 783 126 909 (198) (64) 647
Citizens Financial Group 1,892 1,073 2,965 (2,204) (156) 605
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