REG - Royal Bk Scot.Grp. - Final Results - Part 2 <Origin Href="QuoteRef">RBS.L</Origin> - Part 5
26/02/2015 07:14
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Appendix 1 Capital and risk management
Key loan portfolios
Commercial real estate
The commercial real estate sector comprises exposures to entities involved in the development of, or investment in,
commercial and residential properties (including house builders). The analysis of lending utilisations below is gross of
impairment provisions and excludes rate risk management and contingent obligations.
31 December 2014 31 December 2013
Investment Development Total Investment Development Total
By segment £m £m £m £m £m £m
UK PBB 3,757 501 4,258 3,931 510 4,441
Ulster Bank 952 336 1,288 3,419 718 4,137
Personal & Business Banking 4,709 837 5,546 7,350 1,228 8,578
Commercial Banking 15,145 2,775 17,920 16,616 2,957 19,573
Private Banking 1,051 244 1,295 n/a n/a n/a
Commercial & Private Banking 16,196 3,019 19,215 16,616 2,957 19,573
Corporate & Institutional Banking 721 255 976 898 183 1,081
Citizens Financial Group 5,017 - 5,017 4,018 - 4,018
RCR 6,169 6,394 12,563 n/a n/a n/a
Non-Core n/a n/a n/a 11,624 7,704 19,328
32,812 10,505 43,317 40,506 12,072 52,578
Investment Development
Commercial Residential Total Commercial Residential Total Total
By geography (1) £m £m £m £m £m £m £m
31 December 2014
UK (excluding NI (2)) 17,327 4,757 22,084 600 3,446 4,046 26,130
Ireland (ROI and NI (2)) 2,864 740 3,604 1,499 4,469 5,968 9,572
Western Europe (other) 1,222 53 1,275 189 24 213 1,488
US 4,063 1,358 5,421 - 59 59 5,480
RoW (2) 406 22 428 34 185 219 647
25,882 6,930 32,812 2,322 8,183 10,505 43,317
31 December 2013
UK (excluding NI (2)) 20,861 5,008 25,869 678 3,733 4,411 30,280
Ireland (ROI and NI (2)) 4,405 1,028 5,433 1,919 5,532 7,451 12,884
Western Europe (other) 4,068 183 4,251 22 17 39 4,290
US 3,563 1,076 4,639 - 8 8 4,647
RoW (2) 314 - 314 30 133 163 477
33,211 7,295 40,506 2,649 9,423 12,072 52,578
For the notes to these tables refer to the following page.
Appendix 1 Capital and risk management
Key loan portfolios: Commercial real estate (continued)
Ireland Western
UK (ROI and Europe
(excl NI (2)) NI (2)) (other) US RoW (2) Total
By sub-sector (1) £m £m £m £m £m £m
31 December 2014
Residential 8,203 5,209 78 1,417 206 15,113
Office 3,297 504 609 81 137 4,628
Retail 4,909 809 173 157 91 6,139
Industrial 2,588 367 32 2 29 3,018
Mixed/other 7,133 2,683 596 3,823 184 14,419
26,130 9,572 1,488 5,480 647 43,317
31 December 2013
Residential 8,740 6,560 200 1,085 133 16,718
Office 4,557 813 1,439 32 121 6,962
Retail 6,979 1,501 967 84 73 9,604
Industrial 3,078 454 43 30 13 3,618
Mixed/other 6,926 3,556 1,641 3,416 137 15,676
30,280 12,884 4,290 4,647 477 52,578
Notes:
(1) Data at 31 December 2014 includes CRE lending from Private Banking in CPB of £1.3 billion that was excluded from the tables showing 2013 data. At 31 December 2013 CRE lending in Private Banking totalled £1.4 billion.
(2) ROI: Republic of Ireland; NI: Northern Ireland; RoW: Rest of World.
Key points
· The overall gross lending exposure to CRE fell by £9.3 billion (18%) to £43.3 billion. Most of the decrease occurred in RCR exposure originated by Ulster Bank, CPB and CIB and was due to repayments, asset sales and write-offs.
· The RCR portfolio of £12.6 billion represented 29% of the RBS CRE portfolio. Geographically, 67% of the RCR portfolio was held in Ireland, 22% in the UK, 10% in Western Europe and 1% in the US and the rest of world.
· The increase in US exposure was predominantly driven by improved economic conditions, which contributed to increased business volumes in CFG, in line with risk appetite and business strategy.
· The average LTV for the performing book improved from 65% to 57% over the past year. The LTV for the performing portfolio in the UK was 56%. The reductions in the higher LTV bands occurred mainly in the RCR book originated by Ulster Bank and CIB, reflecting reductions through repayments, asset sales and write-offs.
· Interest on performing investment property secured loans was covered 1.6x and 2.9x within RCR and RBS excluding RCR, respectively. Performing loans include general corporate loans, typically unsecured, to CRE companies (including real estate investments trusts), and major UK house builders, in addition to facilities supported by guarantees. The credit quality of these exposures was consistent with that of the performing portfolio overall. Non-performing loans are subject to standard provisioning policies.
Appendix 1 Capital and risk management
Key loan portfolios: Commercial real estate (continued)
RCR Rest of RBS Total
LTV ratio by value Non- Non- Non-
Performing performing Total Performing performing Total Performing performing Total
£m £m £m £m £m £m £m £m £m
31 December 2014
<= 50% 300 45 345 9,833 220 10,053 10,133 265 10,398
> 50% and <= 70% 602 173 775 8,750 301 9,051 9,352 474 9,826
> 70% and <= 90% 220 554 774 2,285 409 2,694 2,505 963 3,468
> 90% and <= 100% 41 116 157 343 134 477 384 250 634
> 100% and <= 110% 56 211 267 168 148 316 224 359 583
> 110% and <= 130% 49 438 487 326 201 527 375 639 1,014
> 130% and <= 150% 6 404 410 135 128 263 141 532 673
> 150% 65 4,160 4,225 305 495 800 370 4,655 5,025
Total with LTVs 1,339 6,101 7,440 22,145 2,036 24,181 23,484 8,137 31,621
Minimal security (1) - 3,168 3,168 33 38 71 33 3,206 3,239
Other 34 1,921 1,955 5,956 546 6,502 5,990 2,467 8,457
Total 1,373 11,190 12,563 28,134 2,620 30,754 29,507 13,810 43,317
Total portfolio
average LTV (2) 75% 338% 291% 56% 133% 62% 57% 287% 116%
Non-Core Rest of RBS Total
Non- Non- Non-
Performing performing Total Performing performing Total Performing performing Total
31 December 2013 £m £m £m £m £m £m £m £m £m
<= 50% 419 142 561 7,589 143 7,732 8,008 285 8,293
> 50% and <= 70% 867 299 1,166 9,366 338 9,704 10,233 637 10,870
> 70% and <= 90% 1,349 956 2,305 2,632 405 3,037 3,981 1,361 5,342
> 90% and <= 100% 155 227 382 796 295 1,091 951 522 1,473
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