REG - Royal Bk Scot.Grp. - Half Yearly Report - Part 2 <Origin Href="QuoteRef">RBS.L</Origin> - Part 2
29/10/2014 09:17
- Part 2: For the preceding part double click ID:nRSA9699Na
Fees and commissions receivable
- payment services 647 688 325 322 355
- credit and debit card fees 500 529 245 255 275
- lending (credit facilities) 703 698 371 332 345
- brokerage 207 252 102 105 143
- investment management 206 210 100 106 97
- trade finance 138 153 71 67 75
- other 204 178 100 104 102
2,605 2,708 1,314 1,291 1,392
Fees and commissions payable (487) (460) (251) (236) (250)
Net fees and commissions 2,118 2,248 1,063 1,055 1,142
Foreign exchange 420 450 202 218 255
Interest rate 672 402 424 248 203
Credit 397 880 41 356 328
Own credit adjustments 11 175 (84) 95 76
Other (7) 157 (42) 35 87
Income from trading activities 1,493 2,064 541 952 949
Gain on redemption of own debt 20 191 - 20 242
Operating lease and other rental income 178 256 87 91 118
Own credit adjustments (62) 201 (106) 44 51
Other changes in the fair value of financial assets
and liabilities designated as at fair value through
profit or loss and related derivatives 29 29 9 20 17
Changes in fair value of investment properties (43) (16) (31) (12) (7)
Profit on sale of:
- securities 343 572 132 211 419
- property, plant and equipment 40 23 16 24 5
- subsidiaries, networks and associates 363 18 171 192 24
Dividend income 30 35 17 13 21
Share of results of associates 55 204 28 27 27
Other income 103 10 22 81 45
Other operating income 1,036 1,332 345 691 720
Notes
3. Analysis of income, expenses and impairment losses(continued)
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2014 2013 2014 2014 2013
£m £m £m £m £m
Total non-interest income 4,667 5,835 1,949 2,718 3,053
Total income 10,160 11,272 4,747 5,413 5,820
Staff costs (3,536) (3,727) (1,845) (1,691) (1,840)
Premises and equipment (1,275) (1,104) (622) (653) (548)
Other (1) (1,662) (2,181) (951) (711) (1,418)
Administrative expenses (6,473) (7,012) (3,418) (3,055) (3,806)
Depreciation and amortisation (554) (736) (282) (272) (349)
Write down of goodwill (130) - (130) - -
Write down of other intangible assets (82) - - (82) -
Operating expenses (7,239) (7,748) (3,830) (3,409) (4,155)
Loan impairment losses/(recoveries) 271 2,161 (89) 360 1,125
Securities (2) (11) (4) 2 (8)
Impairment losses/(recoveries) 269 2,150 (93) 362 1,117
Note:
(1) Includes Payment Protection Insurance costs, Interest Rate Hedging Products redress and related costs and regulatory and legal actions costs - see below for further details.
Payment Protection Insurance (PPI)
An additional charge of £150 million has been recognised for PPI in Q2 2014 (Q1 2014 - nil; Q2 2013 - £185 million) as a
result of higher customer response rates and higher average redress costs. The cumulative charge in respect of PPI is £3.2
billion, of which £2.6 billion (82%) in redress and expenses had been utilised by 30 June 2014. Of the £3.2 billion
cumulative charge, £2.9 billion relates to redress and £0.3 billion to administrative expenses.
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2014 2013 2014 2014 2013
£m £m £m £m £m
At beginning of period 926 895 708 926 705
Charge to income statement 150 185 150 - 185
Utilisations (490) (376) (272) (218) (186)
At end of period 586 704 586 708 704
The remaining provision provides coverage for approximately seven months for redress and administrative expenses, based on
the current average monthly utilisation.
Notes
3. Analysis of income, expenses and impairment losses (continued)
The table below shows the sensitivity of the provision to changes in the principal assumptions (all other assumptions
remaining the same).
Sensitivity
Actual to date Current assumption Change in assumption Consequential change in provision
Assumption % £m
Past business review take up rate 47% 52% +/-5 +/-56
Uphold rate (1) 89% 88% +/-5 +/-17
Average redress £1,741 £1,722 +/-5 +/-15
Note:
(1) Uphold rate excludes claims where no PPI policy was held.
Interest that will be payable on successful complaints has been included in the provision as has the estimated cost to the
Group of administering the redress process. The Group expects the majority of the cash outflows associated with this
provision to have occurred by the end of 2014. There are uncertainties as to the eventual cost of redress which will depend
on actual complaint volumes, take up and uphold rates and average redress costs. Assumptions relating to these are
inherently uncertain and the ultimate financial impact may be different than the amount provided. The Group will continue
to monitor the position closely and refresh its assumptions.
Interest Rate Hedging Products (IRHP) redress and related costs
Following an industry-wide review conducted in conjunction with the Financial Services Authority (now being dealt with by
the Financial Conduct Authority (FCA)), the Group agreed to provide redress to customers in relation to certain interest
rate hedging products sold to small and medium-sized businesses classified as retail clients under FSA rules. An additional
charge of £100 million has been recognised in Q2 2014 (Q1 2014 and Q2 2013 - nil), principally reflecting the marginal
increase in our redress experience compared to expectations. We have now agreed outcomes with the independent reviewer
relating to over 95% of cases. A cumulative charge of £1.4 billion has been recognised, of which £1.1 billion relates to
redress and £0.3 billion relates to administrative expenses.
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2014 2013 2014 2014 2013
£m £m £m £m £m
At beginning of period 1,077 676 878 1,077 702
Charge to income statement 100 50 100 - -
Utilisations (417) (56) (218) (199) (32)
At end of period 760 670 760 878 670
Notes
3. Analysis of income, expenses and impairment losses (continued)
The Group is progressing with its review of sales of IRHP and providing basic redress to all customers who are entitled to
it. Customers may also be entitled to be compensated for any consequential losses they may have suffered. The Group is not
able to measure reliably any liability it may have and has accordingly not made any provision. Customers will receive
redress monies without having to wait for the assessment of any additional consequential loss claims which are outside the
allowance for such claims included in the 8% interest on redress due.
The Group continues to monitor the level of provision given the uncertainties over the number of transactions that will
qualify for redress and the nature and cost of that redress.
Regulatory and legal actions
The Group is party to certain legal proceedings and regulatory investigations and continues to co-operate with a number of
regulators. All such matters are periodically reassessed with the assistance of external professional advisers, where
appropriate, to determine the likelihood of the Group incurring a liability and to evaluate the extent to which a reliable
estimate of any liability can be made. No additional charge has been booked in 2014 (Q2 2013 - £385 million). A charge of
£1,910 million in Q4 2013 was primarily in respect of matters related to mortgage-backed securities and securities related
litigation following recent third party litigation settlements and regulatory decisions.
4. Pensions
Pension costs for the half year ended 30 June 2014 amounted to £281 million (H1 2013 - £297 million; Q2 2014 - £138
million; Q1 2014 - £143 million and Q2 2013 - £149 million). Defined benefit schemes' charges are based on the actuarially
determined pension cost rates at 31 December 2013.
In May 2014, the triennial funding valuation of The Royal Bank of Scotland Group Pension Fund was agreed which showed that
the value of the liabilities exceeded the value of assets by £5.6 billion at 31 March 2013, a ratio of 82%. To eliminate
this deficit, RBS will pay annual contributions of £650 million from 2014 to 2016 and £450 million (indexed in line with
inflation) from 2017 to 2023. These contributions are in addition to regular annual contributions of approximately £270
million in respect of the ongoing accrual of benefits as well as contributions to meet the expenses of running the scheme.
Notes
5. Loan impairment provisions and REIL
Loan impairments
Operating profit is stated after charging loan impairment losses of £271 million (H1 2013 - £2,161 million). The balance
sheet loan impairment provisions decreased in the half year ended 30 June 2014 from £25,216 million to £22,446 million and
the movements thereon were:
Half year ended
30 June 2014 30 June 2013
RBS RBS excl.
excl. RCR RCR Total Non-Core Non-Core Total
£m £m £m £m £m £m
At beginning of period (1) 8,716 16,500 25,216 10,062 11,188 21,250
Currency translation and other adjustments (118) (395) (513) 207 341 548
Amounts written-off (868) (1,619) (2,487) (1,155) (968) (2,123)
Recoveries of amounts previously written-off 84 14 98 90 31 121
Charge to income statement
- continuing operations 290 (19) 271 1,258 903 2,161
Unwind of discount (recognised in interest income) (63) (76) (139) (104) (100) (204)
At end of period 8,041 14,405 22,446 10,358 11,395 21,753
Quarter ended
30 June 2014 31 March 2014 30 June 2013
RBS RBS RBS excl. Non-
excl. RCR RCR Total excl. RCR RCR Total Non-Core Core Total
£m £m £m £m £m £m £m £m £m
At beginning of period (1) 8,516 15,719 24,235 8,716 16,500 25,216 10,266 11,228 21,494
Currency translation and other
adjustments (75) (333) (408) (43) (62) (105) 71 75 146
Amounts written-off (447) (827) (1,274) (421) (792) (1,213) (626) (341) (967)
Recoveries of amounts previously
written-off 43 3 46 41 11 52 41 15 56
Charge to income statement
- continuing operations 36 (125) (89) 254 106 360 659 466 1,125
Unwind of discount
(recognised in interest income) (32) (32) (64) (31) (44) (75) (53) (48) (101)
At end of period 8,041 14,405 22,446 8,516 15,719 24,235 10,358 11,395 21,753
Note:
(1) As a result of the creation of RCR on 1 January 2014, £855 million of provisions were transferred from Non-Core to the original donating divisions and £16,500 million of provisions were transferred to RCR, £12,984 million from Non-Core and £3,516 million from other divisions.
Provisions at 30 June 2014 include £50 million in respect of loans and advances to banks (31 March 2014 - £62 million; 31
December 2013 - £63 million; 30 June 2013 - £83 million).
Notes
5. Loan impairment provisions and REIL (continued)
Risk elements in lending
Risk elements in lending (REIL) comprises impaired loans and accruing loans past due 90 days or more as to principal or
interest. Impaired loans are all loans (including loans subject to forbearance) for which an impairment provision has been
established; for collectively assessed loans, impairment loss provisions are not allocated to individual loans and the
entire portfolio is included in impaired loans. Accruing loans past due 90 days or more comprise loans past due 90 days
where no impairment loss is expected and those awaiting individual assessment. A latent provision is established for the
latter.
REIL decreased by £5,311 million in the half year ended 30 June 2014 to £34,081 million and the movements thereon were:
Half year ended
30 June 2014 30 June 2013
RBS RBS excl.
excl. RCR RCR Total Non-Core Non-Core Total
£m £m £m £m £m £m
At beginning of period (1) 15,276 24,116 39,392 19,766 21,374 41,140
Currency translation and other adjustments (167) (658) (825) 458 642 1,100
Additions 2,273 1,887 4,160 4,878 1,978 6,856
Transfers (2) (121) 52 (69) 292 (4) 288
Transfer to performing book (111) (74) (185) (55) (25) (80)
Repayments and disposals (2,629) (3,276) (5,905) (2,858) (2,140) (4,998)
Amounts written-off (868) (1,619) (2,487) (1,155) (968) (2,123)
At end of period 13,653 20,428 34,081 21,326 20,857 42,183
Quarter ended
30 June 2014 31 March 2014 30 June 2013
RBS RBS RBS excl.
excl. RCR RCR Total excl. RCR RCR Total Non-Core Non-Core Total
£m £m £m £m £m £m £m £m £m
At beginning of period (1) 14,351 23,002 37,353 15,276 24,116 39,392 20,286 20,756 41,042
Currency translation and
other adjustments (102) (560) (662) (65) (98) (163) 82 114 196
Additions 810 564 1,374 1,463 1,323 2,786 2,781 1,039 3,820
Transfers (2) (65) 36 (29) (56) 16 (40) 203 (35) 168
Transfer to performing book (8) (71) (79) (103) (3) (106) (14) 8 (6)
Repayments and disposals (886) (1,716) (2,602) (1,743) (1,560) (3,303) (1,386) (684) (2,070)
Amounts written-off (447) (827) (1,274) (421) (792) (1,213) (626) (341) (967)
At end of period 13,653 20,428 34,081 14,351 23,002 37,353 21,326 20,857 42,183
Notes:
(1) As a result of the creation of RCR on 1 January 2014, £1,328 million of REIL were transferred from Non-Core to the original donating divisions and £24,116 million of REIL were transferred to RCR, £17,686 million from Non-Core and £6,430 million from other divisions.
(2) Represents transfers between REIL and potential problem loans.
Provision coverage of REIL was 66% at 30 June 2014 (31 March 2014 - 65%; 31 December 2013 - 64%; 30 June 2013 - 52%).
Refer to Appendix 1 for analyses of loan impairments and REIL by segment, sector and geographical region.
Notes
6. Tax
The actual tax charge differs from the expected tax charge computed by applying the standard UK corporation tax rate of
21.5% (2013 - 23.25%).
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2014 2013 2014 2014 2013
£m £m £m £m £m
Profit before tax 2,652 1,374 1,010 1,642 548
Expected tax charge (570) (319) (217) (353) (127)
Losses in year where no deferred tax
asset recognised (22) (116) (9) (13) (44)
Foreign profits taxed at other rates (87) (120) (30) (57) (32)
Unrecognised timing differences 13 (12) 9 4 (15)
Non-deductible goodwill impairment (28) - (28) - -
Items not allowed for tax
- losses on disposals and write-downs (5) - (5) - -
- UK bank levy (30) (29) (11) (19) (9)
- regulatory and legal actions - (90) - - (90)
- employee share schemes (5) (14) (2) (3) (7)
- other disallowable items (64) (82) (39) (25) (45)
Non-taxable items
- gain on sale of Direct Line Insurance Group 41 - - 41 -
- other non-taxable items 13 86 (1) 14 31
Taxable foreign exchange movements 4 (2) 3 1 (4)
Losses brought forward and utilised 45 27 9 36 22
Reduction in carrying value of deferred tax asset
in respect of losses in US (76) - (76) - -
Adjustments in respect of prior periods 38 (7) 26 12 (8)
Actual tax charge (733) (678) (371) (362) (328)
At 30 June 2014, the Group has recognised a deferred tax asset of £3,107 million (31 March 2014 - £3,289 million; 31
December 2013 - £3,478 million) and a deferred tax liability of £605 million (31 March 2014 - £583 million; 31 December
2013 - £507 million). These include amounts recognised in respect of UK trading losses of £2,135 million (31 March 2014 -
£2,240 million; 31 December 2013 - £2,411 million). Under UK tax legislation, these UK losses can be carried forward
indefinitely to be utilised against profits arising in the future. The Group has considered the carrying value of this
asset as at 30 June 2014 and concluded that it is recoverable based on future profit projections.
Notes
7. Profit/(loss) attributable to non-controlling interests
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2014 2013 2014 2014 2013
£m £m £m £m £m
RBS Sempra Commodities JV - (2) - - -
RFS Holdings BV Consortium Members 38 113 21 17 -
Direct Line Group - 19 - - -
Other 4 (13) 2 2 (14)
Profit/(loss) attributable to non-controlling interests 42 117 23 19 (14)
8. Dividends
Dividends paid to preference shareholders and paid-in equity holders, and the dividend on the Dividend Access Share are as
follows:
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2014 2013 2014 2014 2013
£m £m £m £m £m
Preference shareholders
Non-cumulative preference shares of US$0.01 105 116 40 65 45
Non-cumulative preference shares of E0.01 34 35 34 - 35
Non-cumulative preference shares of £1 1 1 1 - 1
Paid-in equity holders
Interest on securities classified as equity, net of tax 27 30 17 10 20
Dividend Access Share dividend 320 - 320 - -
487 182 412 75 101
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.
The Board has decided to continue partially neutralising the Common Equity Tier 1 impact of Group hybrid capital
instruments. It is expected that £300 million of new equity will be issued during the course of 2014 to achieve this aim,
of which £100 million was issued in May 2014 and a further £51 million in July 2014.
Following approval of the DAS Retirement Agreement by independent shareholders at a General Meeting in June 2014, provision
has been made for the DAS retirement initial dividend of £320 million.
Notes
9. Earnings per ordinary and equivalent B share
At a General Meeting on 25 June 2014, the Company's independent shareholders approved an agreement between RBS and Her
Majesty's Treasury for the retirement of the Dividend Access Share (the DAS retirement agreement).
Prior to the DAS retirement agreement, the DAS was entitled to a dividend amounting to the greater of 7% of the aggregate
issue price of B shares and 250% of the ordinary dividend rate multiplied by the number of B shares issued, less any
dividends paid on the B shares and on ordinary shares issued on their conversion. When calculating earnings per share, IFRS
requires profit or loss to be allocated to participating equity instruments as if all of the profit or loss for the period
had been distributed. Consequently, earnings for all periods presented ending on or before 31 March 2014 are allocated
solely to the dividend access share and earnings per ordinary and equivalent B share are nil for all periods. Adjusted
earnings per ordinary and equivalent B share excludes the rights of the dividend access share for periods prior to 25 June
2014 and has been calculated on the basis tabulated on the following page.
After the DAS retirement agreement came into effect, once RBS has paid dividends on the DAS totalling £1.5 billion (subject
to increases after 1 January 2016), the DAS will lose its preferential dividend rights and will become a single B share.
The dividends are payable at the discretion of the directors. The first DAS dividend of £320 million payable within 45
business days of approval of the agreement, has been recognised as a liability at 30 June 2014. Unpaid DAS dividends will
be subject to an increase of 5% per annum from 1 January 2016 and an increase of 10% per annum from 1 January 2021.
These changes to the DAS agreement have re-characterised the DAS such that it is no longer a participating share; it is
only entitled to total dividends of £1.5 billion, subject to increases after 1 January 2016. Consequently earnings per
share for periods ended after 25 June 2014 only reflect DAS dividends recognised before the end of a reporting period; this
amounted to £320 million in respect of the half year and quarter ended 30 June 2014. Dividends can be paid on ordinary and
B shares only once the total remaining amount of retirement dividend of £1,180 million, subject to increases as above, has
been paid.
Notes
9. Earnings per ordinary and equivalent B share (continued)
Half year ended Quarter ended
30 June 30 June 30 June 31 March 30 June
2014 2013* 2014 2014 2013*
Earnings
Profit from continuing operations attributable
to ordinary and B shareholders (£m) 1,408 425 215 1,193 140
Profit from discontinued operations attributable to
ordinary and B shareholders (£m) 17 110 15 2 2
Profit attributable to ordinary and B shareholders (£m) 1,425 535 230 1,195 142
Ordinary shares outstanding during the period (millions) 6,208 6,052 6,235 6,181 6,073
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) 11,308 11,152 11,335 11,281 11,173
Effect of dilutive share options and convertible
securities (millions) 97 114 89 110 114
Diluted weighted average number of ordinary
shares and equivalent B shares outstanding
during the period (millions) 11,405 11,266 11,424 11,391 11,287
Basic and diluted earnings/(loss) per ordinary and
equivalent B share (EPS)
Basic EPS from continuing operations 12.5p - 1.9p - -
Earnings allocated to DAS - 3.8p - 10.6p 1.2p
Own credit adjustments 0.4p (2.6p) 1.3p (0.9p) (0.8p)
Gain on redemption of own debt (0.2p) (1.7p) - (0.2p) (2.1p)
Write-down of goodwill 1.1p - 1.1p - -
Strategic disposals (1.7p) - - (1.7p) (0.1p)
Adjusted EPS from continuing operations 12.1p (0.5p) 4.3p 7.8p (1.8p)
Basic EPS from discontinued operations 0.2p - 0.1p - -
Earnings allocated to DAS - 1.0p - - -
Adjusted EPS from discontinued operations 0.2p 1.0p 0.1p - -
* Basic EPS for the half year and quarter ended 30 June 2013 have been restated to reflect the terms of the DAS.
Notes:
(1) Diluted EPS from continuing operations in the half year ended 30 June 2014 and the quarter ended 30 June 2014 were 0.1p lower than basic EPS.
(2) Adjusted EPS has been restated to reflect the change in presentation of one-off and other items set out on page 10.
Notes
10. Segmental analysis
On 27 February 2014, RBS announced the reorganisation of the previously reported operating divisions 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 has not been restated.
RBS will continue to manage and report Citizens Financial Group (CFG) and RBS Capital Resolution (RCR) separately until
disposal or wind-down. Residual unallocated costs will continue to be reported within central items.
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, a number of previously reported reconciling items (Payment Protection Insurance 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.
Refer to 'Presentation of information' on pages 9 and 10 for further details. Comparatives have been restated accordingly.
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 24 to 68reflect certain presentational reallocations as described in the notes below.
These do not affect the overall operating profit.
Notes
10. Segmental analysis (continued)
Analysis of operating profit(continued)
Net Non- Impairment
interest interest Total Operating (losses)/ Operating
income income income expenses recoveries profit/(loss)
Half year ended 30 June 2014 £m £m £m £m £m £m
UK Personal & Business Banking 2,276 686 2,962 (1,820) (148) 994
Ulster Bank 323 89 412 (300) (57) 55
Personal & Business Banking 2,599 775 3,374 (2,120) (205) 1,049
Commercial Banking 999 569 1,568 (902) (31) 635
Private Banking 344 201 545 (400) - 145
Commercial & Private Banking 1,343 770 2,113 (1,302) (31) 780
Corporate & Institutional Banking 365 2,062 2,427 (2,158) 39 308
Central items 203 146 349 (270) 12 91
Citizens Financial Group 987 620 1,607 (1,082) (104) 421
RCR (1) (1) 109 108 (176) 20 (48)
Non-statutory basis 5,496 4,482 9,978 (7,108) (269) 2,601
Reconciling items:
Own credit adjustments (2) - (51) (51) - - (51)
Gain on redemption of own debt - 20 20 - - 20
Write down of goodwill - - - (130) - (130)
Strategic disposals - 191 191 - - 191
RFS Holdings minority interest (3) 25 22 (1) - 21
Statutory basis 5,493 4,667 10,160 (7,239) (269) 2,652
Notes:
(1) Reallocation of £12 million between net interest income and non-interest income in respect of funding costs of rental assets.
(2) Comprises £11 million gain included in 'Income from trading activities' and £62 million loss included in 'Other operating income' on a statutory basis.
Notes
10. Segmental analysis (continued)
Analysis of operating profit(continued)
Net Non- Impairment
interest interest Total Operating (losses)/ Operating
income income income expenses recoveries profit/(loss)
Half year ended 30 June 2013* £m £m £m £m £m £m
UK Personal & Business Banking 2,200 629 2,829 (1,885) (256) 688
Ulster Bank 302 142 444 (322) (503) (381)
Personal & Business Banking 2,502 771 3,273 (2,207) (759) 307
Commercial Banking 936 613 1,549 (854) (282) 413
Private Banking 317 214 531 (436) (7) 88
Commercial & Private Banking 1,253 827 2,080 (1,290) (289) 501
Corporate & Institutional Banking (1) 313 2,395 2,708 (2,682) (223) (197)
Central items 453 219 672 (122) 3 553
Citizens Financial Group 939 570 1,509 (1,105) (51) 353
Non-Core (2) (18) 384 366 (344) (831) (809)
Non-statutory basis 5,442 5,166 10,608 (7,750) (2,150) 708
Reconciling items:
Own credit adjustments (3) - 376 376 - - 376
Gain on redemption of own debt - 191 191 - - 191
RFS Holdings minority interest (5) 102 97 2 - 99
Statutory basis 5,437 5,835 11,272 (7,748) (2,150) 1,374
*Restated
Notes:
(1) Reallocation of £1 million between net interest income and non-interest income to record interest on financial assets and liabilities designated as at fair value through profit or loss.
(2) Reallocation of £20 million between net interest income and non-interest income in respect of funding costs of rental assets, £19 million, and to record interest on financial assets and liabilities designated as at fair value through profit or loss, £1 million.
(3) Comprises £175 million gain included in 'Income from trading activities' and £201 million gain included in 'Other operating income' on a statutory basis.
Notes
10. Segmental analysis (continued)
Analysis of operating profit(continued)
Net Non- Impairment
interest interest Total Operating (losses)/ Operating
income income income expenses recoveries profit/(loss)
Quarter ended 30 June 2014 £m £m £m £m £m £m
UK Personal & Business Banking 1,152 347 1,499 (955) (60) 484
Ulster Bank 169 42 211 (155) (10) 46
Personal & Business Banking 1,321 389 1,710 (1,110) (70) 530
Commercial Banking 511 287 798 (493) 9 314
Private Banking 174 98 272 (201) (1) 70
Commercial & Private Banking 685 385 1,070 (694) 8 384
Corporate & Institutional Banking 186 890 1,076 (1,146) 45 (25)
Central items 100 44 144 (71) 13 86
Citizens Financial Group 499 391 890 (582) (31) 277
RCR (1) 7 28 35 (97) 128 66
Non-statutory basis 2,798 2,127 4,925 (3,700) 93 1,318
Reconciling items:
Own credit adjustments (2) - (190) (190) - - (190)
Write down of goodwill - - - (130) - (130)
RFS Holdings minority interest - 12 12 - - 12
Statutory basis 2,798 1,949 4,747 (3,830) 93 1,010
Notes:
(1) Reallocation of £9 million between net interest income and non-interest income in respect of funding costs of rental assets.
(2) Comprises £84 million loss included in 'Income from trading activities' and £106 million loss included in 'Other operating income' on a statutory basis.
Notes
10. Segmental analysis (continued)
Analysis of operating profit(continued)
Net Non- Impairment
interest interest Total Operating (losses)/ Operating
income income income expenses recoveries profit/(loss)
Quarter ended 31 March 2014* £m £m £m £m £m £m
UK Personal & Business Banking 1,124 339 1,463 (865) (88) 510
Ulster Bank 154 47 201 (145) (47) 9
Personal & Business Banking 1,278 386 1,664 (1,010) (135) 519
Commercial Banking 488 282 770 (409) (40) 321
Private Banking 170 103 273 (199) 1 75
Commercial & Private Banking 658 385 1,043 (608) (39) 396
Corporate & Institutional Banking 179 1,172 1,351 (1,012) (6) 333
Central items 103 102 205 (199) (1) 5
Citizens Financial Group 488 229 717 (500) (73) 144
RCR (1) (8) 81 73 (79) (108) (114)
Non-statutory basis 2,698 2,355 5,053 (3,408) (362) 1,283
Reconciling items:
Own credit adjustments (2) - 139 139 - - 139
Gain on redemption of own debt - 20 20 - - 20
Strategic disposals - 191 191 - - 191
RFS Holdings minority interest (3) 13 10 (1) - 9
Statutory basis 2,695 2,718 5,413 (3,409) (362) 1,642
*Restated
Notes:
(1) Reallocation of £3 million between net interest income and non-interest income in respect of funding costs of rental assets.
(2) Comprises £95 million gain included in Income from trading activities and £44 million gain included in Other operating income on a statutory basis.
Notes
10. Segmental analysis (continued)
Analysis of operating profit(continued)
Net Non- Impairment
interest interest Total Operating (losses)/ Operating
income income income expenses recoveries profit/(loss)
Quarter ended 30 June 2013* £m £m £m £m £m
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