REG - Royal Bk Scot.Grp. - Interim Management Statement <Origin Href="QuoteRef">RBS.L</Origin> - Part 2
28/10/2016 07:06
- Part 2: For the preceding part double click ID:nRSb6780Na
2.18% 2.12% 2.17% 2.21% 2.09%
- UK Personal & Business Banking (5) 3.03% 3.23% 2.96% 3.12% 3.19%
- Ulster Bank RoI (5) 1.64% 1.61% 1.62% 1.54% 1.52%
- Commercial Banking (5) 1.79% 1.90% 1.72% 1.78% 1.89%
- Private Banking (5) 2.72% 2.78% 2.62% 2.73% 2.72%
- RBS International (5) 1.37% 1.47% 1.28% 1.40% 1.43%
- Corporate & Institutional Banking 0.85% 0.42% 1.06% 0.81% 0.62%
- Capital Resolution 0.95% 0.71% 0.48% 1.13% 0.60%
- Williams & Glyn 2.71% 2.89% 2.65% 2.70% 2.88%
Third party customer rates (6)
Third party customer asset rate
- UK Personal & Business Banking 3.90% 4.18% 3.79% 3.96% 4.15%
- Ulster Bank RoI (7) 2.19% 2.29% 2.17% 2.07% 2.26%
- Commercial Banking 2.81% 2.96% 2.74% 2.82% 2.93%
- Private Banking 2.95% 3.18% 2.86% 2.97% 3.12%
- RBS International 3.08% 3.10% 2.95% 3.02% 3.11%
Third party customer funding rate
- UK Personal & Business Banking (0.50%) (0.68%) (0.44%) (0.46%) (0.65%)
- Ulster Bank RoI (7) (0.53%) (0.92%) (0.46%) (0.53%) (0.82%)
- Commercial Banking (0.35%) (0.38%) (0.32%) (0.36%) (0.36%)
- Private Banking (0.20%) (0.26%) (0.18%) (0.20%) (0.25%)
- RBS International (0.15%) (0.33%) (0.10%) (0.13%) (0.25%)
For the notes to this table refer to the next page.
Analysis of results
Notes:
(1) For the purpose of net interest margin (NIM) calculations, no decrease for the nine months ended 2016 (nine months ended 2015 - £12 million) and no decrease for Q3 2016 (Q2 2016 - nil; Q3 2015 - £4 million) was made in respect of interest on financial assets and liabilities designated as at fair value through profit or loss. Related average interest-earning assets and average interest-bearing liabilities have also been adjusted.
(2) Gross yield is the interest earned on average interest-earning assets as a percentage of average interest-earning assets.
(3) Interest spread is the difference between the gross yield and interest paid on average interest-bearing liabilities as a percentage of average interest-bearing liabilities.
(4) Net interest margin is net interest income as a percentage of average interest-earning assets.
(5) PBB NIM was 2.82% (nine months ended 2015 - 2.98%; Q3 2016 - 2.76%; Q2 2016 - 2.89%; Q3 2015 - 2.93%). CPB NIM was 1.83% (nine months ended 2015 - 1.93%; Q3 2016 - 1.75%; Q2 2016 - 1.83%; Q3 2015 - 1.92%).
(6) Net interest margin includes Treasury allocations and interest on intercompany borrowings, which are excluded from third party customer rates.
(7) Ulster Bank Ireland DAC manages its funding and liquidity requirements locally. Its liquid asset portfolios and non-customer related funding sources are included within its net interest margin, but excluded from its third party asset and liability rates.
Key points
· Net interest income of £2,167 million decreased by £20 million, or 1%, compared with Q3 2015 principally driven by a £51 million reduction in Capital Resolution in line with the planned shrinkage of the balance sheet. Across our PBB and CPB franchises, net interest income increased by £81 million, or 4%, reflecting increased lending.
· NIM was 2.17% for Q3 2016, 8 basis points higher than Q3 2015 as the benefit associated with reductions in the low yielding 'non-core' assets has been partially offset by modest asset margin pressure and mix impacts across PBB and CPB.
· NIM decreased by 4 basis points compared with Q2 2016 reflecting asset and liability margin pressure across PBB and CPB and a release of previously suspended credit card interest in Q2 2016.
· NIM across the combined PBB and CPB franchises was 2.27% in Q3 2016 compared with 2.45% in Q3 2015 and 2.37% in Q2 2016.
· UK PBB, NIM decreased by 23 basis points to 2.96% reflecting the change in mix of our asset base towards mortgage lending from unsecured lending, mortgage customers switching from standard variable rate (SVR) and lower returns on current account structural hedges. SVR mortgages represented 12% of the mortgage book compared with 15% a year earlier. Compared with Q2 2016, UK PBB NIM reduced by 16 basis points reflecting a £22 million reduction in suspended interest releases, 6 basis points, and asset and
liability margin pressure.
· Commercial Banking NIM decreased by 17 basis points to 1.72%, compared with Q3 2015, principally reflecting asset margin pressure.
· Structural hedges of £122 billion as at 30 September 2016 generated a benefit of £0.9 billion through net interest income for the year to date. Around 72% of these hedges are part of a five year rolling hedge programme that will progressively roll-off over the coming years.
Analysis of results
Nine months ended Quarter ended
30 September 30 September 30 September 30 June 30 September
2016 2015* 2016 2016 2015*
Operating expenses £m £m £m £m £m
Staff costs 3,457 3,824 1,128 1,127 1,281
Premises and equipment 951 1,061 321 315 352
Other administrative expenses 1,018 1,338 393 179 477
Restructuring costs (see below) 1,099 2,317 469 392 847
Litigation and conduct costs 1,740 1,444 425 1,284 129
Administrative expenses 8,265 9,984 2,736 3,297 3,086
Depreciation and amortisation 527 608 175 174 190
Write down of intangible assets 48 - - 38 -
Operating expenses 8,840 10,592 2,911 3,509 3,276
Adjusted operating expenses (1) 6,001 6,831 2,017 1,833 2,300
Restructuring costs comprise:
- staff expenses 525 625 159 245 281
- premises, equipment, depreciation and amortisation 57 705 33 15 375
- other 517 987 277 132 191
1,099 2,317 469 392 847
Of which: Williams & Glyn 646 449 301 187 190
Staff costs as a % of total income 37% 37% 34% 38% 40%
Cost:income ratio 94% 101% 88% 117% 103%
Cost:income ratio - adjusted (2) 66% 67% 58% 67% 75%
Employee numbers (FTE - thousands) 82.5 92.4 82.5 89.2 92.4
*Restated - refer to page 31 for further details.
Notes:
(1) Excluding restructuring costs and litigation and conduct costs.
(2) Excluding own credit adjustments, (loss)/gain on redemption of own debt, strategic disposals, restructuring costs and litigation and conduct costs.
Key points
· Operating expenses of £2,911 million were £365 million, or 11%, lower than Q3 2015 reflecting a £378 million reduction in restructuring costs and a £283 million reduction in adjusted operating expenses, partially offset by a £296 million increase in litigation and conduct expenses.
· Adjusted operating expenses reduced by £283 million, or 12%, compared with Q3 2015 to £2,017 million. Excluding expenses associated with Williams & Glyn, write down of intangible assets (£48 million) and a £227 million VAT recovery, adjusted expenses reduced by £695 million for the year to date, and we remain on target to achieve an £800 million reduction for the year.
· Staff costs of £1,128 million were down £153 million, or 12%, compared with Q3 2015, reflecting a 9,900 reduction in FTEs.
· Restructuring costs of £469 million compared with £847 million in Q3 2015. Williams & Glyn restructuring costs of £301 million include £127 million of termination costs associated with the decision to discontinue the programme to create a cloned banking system.
· Litigation and conduct costs of £425 million include an additional charge in respect of the recent settlement with the National Credit Union Administration Board to resolve two outstanding lawsuits in the United States relating to residential mortgage backed securities.
Analysis of results
Nine months ended Quarter ended
30 September 30 September 30 September 30 June 30 September
2016 2015 2016 2016 2015
Impairment losses/(releases) £m £m £m £m £m
Loan impairment losses/(releases)
- individually assessed 575 (135) 217 172 (15)
- collectively assessed 219 (8) 176 27 (13)
- latent (191) (380) (202) (10) (64)
Customer loans 603 (523) 191 189 (92)
Bank loans - (4) - - (4)
Total loan impairment losses/(releases) 603 (527) 191 189 (96)
Securities (50) 127 (47) (3) 17
Total impairment losses/(releases) 553 (400) 144 186 (79)
30 September 30 June 31 December
Credit metrics (1) 2016 2016 2015
Gross customer loans £332,917m £333,017m £315,111m
Loan impairment provisions £6,181m £6,456m £7,139m
Risk elements in lending (REIL) £12,625m £11,789m £12,157m
Provisions as a % of REIL 49% 55% 59%
REIL as a % of gross customer loans 3.8% 3.5% 3.9%
Note:
(1) Includes disposal groups and excludes reverse repos.
Key points
· A net impairment loss of £144 million was reported in Q3 2016 compared with a release of £79 million in Q3 2015 and a loss of £186 million in Q2 2016.
· Capital Resolution reported a net impairment loss of £120 million in Q3 2016 compared with a release of £50 million in Q3 2015. The loss for the quarter included a £190 million charge (year to date - £454 million) in respect of the shipping portfolio reflecting difficult conditions in some parts of the sector.
· Commercial Banking reported an impairment loss of £20 million for Q3 2016 compared with £16 million in Q3 2015 and £89 million in Q2 2016. Q2 2016 included a single name charge taken in respect of the oil and gas portfolio.
· Ulster Bank RoI reported a net impairment release of E48 million in Q3 2016 compared with E75 million in Q3 2015. The Q3 2016 impairment release included a write back associated with the sale of a portfolio of loans partially offset by additional provisions in respect of mortgages. On completion in Q4 2016, the portfolio sale is expected to reduce gross customer loans in Ulster Bank RoI by E1.8 billion and reduce REIL as a percentage of gross customer loans by around 6 percentage points.
· REIL increased by £836 million in the quarter to £12,625 million, principally relating to the shipping portfolio along with the implementation of a revised mortgage methodology in Ulster Bank RoI and foreign exchange movements. REIL represented 3.8% of gross customer loans compared with 3.5% at 30 June 2016 and 3.9% at 31 December 2015. Provision coverage was 49% compared with 55% at 30 June 2016 and 59% at 31 December 2015.
Analysis of results
Selected credit risk portfolios
30 September 2016 30 June 2016 31 December 2015
CE (1) PE (1) EAD (2) CE (1) PE (1) EAD (2) CE (1) PE (1) EAD (2)
Natural resources £m £m £m £m £m £m £m £m £m
Oil and gas 2,989 6,000 4,739 3,298 6,356 5,039 3,544 6,798 5,606
Mining and metals 652 1,782 1,375 816 1,941 1,608 729 1,823 1,555
Electricity 3,256 8,466 5,782 3,374 8,583 5,940 2,851 7,683 5,205
Water and waste 5,875 8,772 7,381 5,347 8,665 6,679 4,657 8,261 5,873
12,772 25,020 19,277 12,835 25,545 19,266 11,781 24,565 18,239
Shipping 5,514 6,043 6,154 6,765 7,246 7,496 6,776 7,301 7,509
Notes:
(1) Current exposure (CE) and potential exposure (PE) are both net of impairment provisions and credit valuation adjustments and after the effect of risk transfer. For a full description of what is included and excluded from current and potential exposure refer to page 16 of Appendix 1 of the Interim Results 2016.
(2) Exposure at default (EAD) reflects an estimate of the extent to which a bank will be exposed under a specific facility on the default of a customer or counterparty.Uncommitted undrawn facilities are excluded from current exposure but included within EAD; therefore EAD can exceed current exposure.
Key points
· Oil and gas - Exposure to the sector remained stable and there was no material change in the credit quality of the portfolio during the quarter. Provisions increased by £10 million to £167 million. AQ10 potential exposure, net of provisions, was £178
million (30 June 2016 - £207 million). Exposures classified as risk of credit loss were minimal.
· Mining and metals - The sector continued to be affected by a slowdown in demand and the oversupply of key metal commodities. RBS's strategic focus in this sector is on investment grade customers and there was no material change in the credit quality during
the quarter. Provisions also remained stable. AQ10 potential exposure, net of provisions was £56 million (30 June 2016 - £82 million). Exposures classified as risk of credit loss were minimal.
· Shipping - The reduction in exposure was due to disposals and loan amortisation. Challenging market conditions continued to affect vessel values in the bulk and container sectors, where values remain severely depressed and close to historic lows, and also
in the tanker sector, where values have reduced from recent highs. Portfolio credit quality deteriorated during the quarter as a result of the difficult market conditions. Impairment charges of £190 million partially offset by write offs of £58 million in
Q3 2016 increased provisions by £126 million to £571 million (30 June 2016 - £445 million; 31 December 2015 - £181 million). AQ10 current exposure, net of provisions, was £1,031 million (30 June 2016 - £579 million). In addition £775 million of current
exposure was classified as at risk of credit loss (30 June 2016 - £78 million).
Analysis of results
Capital and leverage ratios
End-point CRR basis (1) PRA transitional basis
30 September 30 June 31 December 30 September 30 June 31 December
2016 2016 2015 2016 2016 2015
Risk asset ratios % % % % % %
CET1 15.0 14.5 15.5 15.0 14.5 15.5
Tier 1 16.7 15.4 16.3 19.1 17.7 19.1
Total 20.6 19.0 19.6 24.1 23.0 24.7
Capital £m £m £m £m £m £m
Tangible equity 39,822 40,541 40,943 39,822 40,541 40,943
Expected loss less impairment provisions (862) (831) (1,035) (862) (831) (1,035)
Prudential valuation adjustment (734) (603) (381) (734) (603) (381)
Deferred tax assets (838) (1,040) (1,110) (838) (1,040) (1,110)
Own credit adjustments (435) (587) (104) (435) (587) (104)
Pension fund assets (209) (209) (161) (209) (209) (161)
Cash flow hedging reserve (1,565) (1,603) (458) (1,565) (1,603) (458)
Other deductions (9) (14) (86) (9) (14) (64)
Total deductions (4,652) (4,887) (3,335) (4,652) (4,887) (3,313)
CET1 capital 35,170 35,654 37,608 35,170 35,654 37,630
AT1 capital 4,041 1,997 1,997 9,662 7,756 8,716
Tier 1 capital 39,211 37,651 39,605 44,832 43,410 46,346
Tier 2 capital 9,181 9,028 8,002 11,773 13,043 13,619
Total regulatory capital 48,392 46,679 47,607 56,605 56,453 59,965
Risk-weighted assets
Credit risk
- non-counterparty 166,600 172,500 166,400
- counterparty 25,100 26,100 23,400
Market risk 17,800 20,900 21,200
Operational risk 25,700 25,700 31,600
Total RWAs 235,200 245,200 242,600
Leverage (2)
Derivatives 283,000 326,000 262,500
Loans and advances 346,500 348,500 327,000
Reverse repos 46,000 45,800 39,900
Other assets 176,900 181,300 186,000
Total assets 852,400 901,600 815,400
Derivatives
- netting and variation margin (281,700) (328,400) (258,600)
- potential future exposures 64,100 75,500 75,600
Securities financing transactions gross up 2,200 3,200 5,100
Undrawn commitments 62,100 63,200 63,500
Regulatory deductions and other
adjustments 4,100 5,600 1,500
Leverage exposure 703,200 720,700 702,500
Tier 1 capital 39,211 37,651 39,605
Leverage ratio % 5.6 5.2 5.6
Average leverage exposure (3) 717,056 717,167
Average Tier 1 capital (3) 38,919 38,561
Average leverage ratio % (3) 5.4 5.4
Notes:
(1) CRR as implemented by the PRA 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 available-for-sale securities which have 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.
(3) Based on averages of the last four quarter end positions.
Analysis of results
Key points
· CET1 ratio decreased by 50 basis points in the nine months to 30 September 2016 to 15.0% primarily reflecting management actions
to normalise the ownership structure and improve the long-term resilience of RBS. These actions included the final Dividend
Access Share payment of £1.2 billion and the accelerated payment of £4.2 billion relating to the deficit on the Main Scheme of
The Royal Bank of Scotland Group Pension Fund, both in March 2016. Litigation and conduct charges contributed to a £2.0 billion
reduction in CET1 capital.
· Tier 1 capital benefitted from the successful issuance of £2 billion of AT1 capital notes in August 2016. Total end-point CRR
compliant AT1 capital now stands at £4.0 billion.
· RWAs decreased by £7.4 billion to £235.2 billion during the nine months to 30 September 2016.
○ Credit risk RWAs have remained relatively flat as lending growth in UK PBB and Commercial Banking and the adverse impact of foreign exchange movements following the EU referendum were offset by reductions due to disposals and run-off in Capital Resolution.
○ The impact of market volatility throughout 2016 and implementation of new risk metric models in CIB and Capital Resolution led to an increase of £1.7 billion in counterparty credit risk RWAs.
○ Market risk RWAs reduced by £3.4 billion driven by disposals of securitisations and lower US dollar position in Treasury.
○ Operational risk RWAs decreased by £5.9 billion as a result of the annual recalculation and the removal of the element relating to Citizens following regulatory approval.
· There was a 50 basis points increase in the CET1 ratio in Q3 2016 driven primarily by a £10.0 billion reduction in RWAs. RWA
reduction reflected disposals and run-off in Capital Resolution, the unwind of mortgage model recalibrations booked by UK PBB in
H1 2016 and lower non-modelled market risk.
· Leverage ratio increased by 40 basis points in the period to 5.6% driven by the issuance of AT1 instruments in August 2016.
· The proforma leverage ratio reflecting the post EU referendum measures announced by the Bank of England in Q3 2016 was estimated
at 6.1%.
· RBS's PRA minimum leverage ratio requirement of 3% has been supplemented with an additional GSII leverage ratio buffer of
0.13125%, equivalent to £923 million of CET1 capital at 30 September 2016.
Segment performance
Nine months ended 30 September 2016
PBB CPB Central
Ulster Commercial Private RBS Capital Williams items & Total
UK PBB BankRoI Banking Banking International CIB Resolution & Glyn (1) other (2) RBS
£m £m £m £m £m £m £m £m £m £m
Income statement
Net interest income 3,194 304 1,601 338 226 75 195 488 79 6,500
Other non-interest income 757 132 947 158 52 1,132 (325) 132 (442) 2,543
Total income - adjusted (3) 3,951 436 2,548 496 278 1,207 (130) 620 (363) 9,043
Own credit adjustments - 3 - - - 82 142 - 67 294
Loss on redemption of own debt - - - - - - - - (127) (127)
Strategic disposals - - - - - - (81) - 245 164
Total income 3,951 439 2,548 496 278 1,289 (69) 620 (178) 9,374
Direct expenses - staff costs (529) (150) (392) (115) (33) (192) (79) (190) (1,777) (3,457)
- other costs (221) (32) (166) (32) (13) (28) (81) (46) (1,925) (2,544)
Indirect expenses (1,478) (130) (822) (218) (62) (762) (428) (60) 3,960 -
Operating expenses - adjusted (4) (2,228) (312) (1,380) (365) (108) (982) (588) (296) 258 (6,001)
Restructuring costs - direct (50) (32) (13) (1) (1) (16) (35) (57) (894) (1,099)
- indirect (86) (4) (49) (22) (2) (50) (35) - 248 -
Litigation and conduct costs (420) (95) (16) (2) 1 (62) (257) - (889) (1,740)
Operating expenses (2,784) (443) (1,458) (390) (110) (1,110) (915) (353) (1,277) (8,840)
Profit/(loss) before impairment (losses)/releases 1,167 (4) 1,090 106 168 179 (984) 267 (1,455) 534
Impairment (losses)/releases (67) 66 (123) (5) (11) - (383) (31) 1 (553)
Operating profit/(loss) 1,100 62 967 101 157 179 (1,367) 236 (1,454) (19)
Operating profit/(loss) - adjusted (3,4) 1,656 190 1,045 126 159 225 (1,101) 293 (104) 2,489
Additional information
Return on equity (5) 17.0% 3.1% 8.5% 7.0% 15.4% 1.6% nm nm nm (8.5%)
Return on equity - adjusted (3,4,5) 26.4% 9.5% 9.4% 8.9% 15.6% 2.4% nm nm nm (0.6%)
Cost:income ratio 70% 101% 57% 79% 40% 86% nm 57% nm 94%
Cost:income ratio - adjusted (3,4) 56% 72% 54% 74% 39% 81% nm 48% 71% 66%
Total assets (£bn) 155.4 25.3 152.6 18.2 26.9 249.7 176.7 25.7 21.9 852.4
Funded assets (£bn) (6) 155.4 25.2 152.6 18.1 26.9 112.5 34.9 25.7 18.0 569.3
Net loans and advances to customers (£bn) 129.6 19.5 99.8 11.8 8.7 19.9 16.7 20.6 0.1 326.7
Risk elements in lending (£bn) 2.1 4.8 2.1 0.1 0.1 - 2.9 0.4 0.1 12.6
Impairment provisions (£bn) (1.4) (2.3) (1.0) - - - (1.2) (0.2) - (6.1)
Customer deposits (£bn) 143.7 15.1 98.1 25.3 25.5 9.7 16.8 24.0 0.6 358.8
Risk-weighted assets (RWAs) (£bn) 31.9 21.4 77.6 8.2 9.6 36.6 38.6 9.7 1.6 235.2
RWA equivalent (£bn) (5) 35.4 22.8 82.3 8.2 9.6 37.2 39.8 10.2 1.9 247.4
Employee numbers (FTEs - thousands) 18.7 3.2 5.8 1.8 0.8 1.3 0.7 5.0 45.2 82.5
For the notes to this table refer to page 19. nm = not meaningful
Segment performance
Quarter ended 30 September 2016
PBB CPB Central
Ulster Commercial Private RBS Capital Williams items & Total
UK PBB BankRoI Banking Banking International CIB Resolution & Glyn (1) other (2) RBS
£m £m £m £m £m £m £m £m £m £m
Income statement
Net interest income 1,085 106 534 112 75 32 27 164 32 2,167
Other non-interest income 251 40 315 53 18 494 148 45 (37) 1,327
Total income adjusted (3) 1,336 146 849 165 93 526 175 209 (5) 3,494
Own credit adjustments - - - - - (55) (42) - (59) (156)
Gain on redemption of own debt - - - - - - - - 3 3
Strategic disposals - - - - - - (30) - (1) (31)
Total income 1,336 146 849 165 93 471 103 209 (62) 3,310
Direct expenses - staff costs (168) (53) (127) (38) (11) (61) (17) (65) (588) (1,128)
- other costs (59) (19) (55) (9) (5) (7) (17) (13) (705) (889)
Indirect expenses (491) (45) (265) (62) (24) (274) (139) (21) 1,321 -
Operating expenses - adjusted (4) (718) (117) (447) (109) (40) (342) (173) (99) 28 (2,017)
Restructuring costs - direct 1 (8) (12) - - (6) (23) (12) (409) (469)
- indirect (26) (3) (9) (3) - (27) (10) - 78 -
Litigation and conduct costs 1 (3) (6) - 1 (6) (231) - (181) (425)
Operating expenses (742) (131) (474) (112) (39) (381) (437) (111) (484) (2,911)
Profit/(loss) before impairment (losses)/releases 594 15 375 53 54 90 (334) 98 (546) 399
Impairment (losses)/releases (27) 39 (20) (3) - - (120) (14) 1 (144)
Operating profit/(loss) 567 54 355 50 54 90 (454) 84 (545) 255
Operating profit/(loss) - adjusted (3,4) 591 68 382 53 53 184 (118) 96 24 1,333
Additional information
Return on equity (5) 27.1% 7.8% 9.5% 11.1% 15.4% 3.1% nm nm nm (4.8%)
Return on equity - adjusted (3,4,5) 28.3% 9.9% 10.4% 11.8% 15.1% 8.0% nm nm nm 4.6%
Cost:income ratio 56% 90% 56% 68% 42% 81% nm 53% nm 88%
Cost:income ratio - adjusted (3,4) 54% 80% 53% 66% 43% 65% 99% 47% nm 58%
Total assets (£bn) 155.4 25.3 152.6 18.2 26.9 249.7 176.7 25.7 21.9 852.4
Funded assets (£bn) (6) 155.4 25.2 152.6 18.1 26.9 112.5 34.9 25.7 18.0 569.3
Net loans and advances to customers (£bn) 129.6 19.5 99.8 11.8 8.7 19.9 16.7 20.6 0.1 326.7
Risk elements in lending (£bn) 2.1 4.8 2.1 0.1 0.1 - 2.9 0.4 0.1 12.6
Impairment provisions (£bn) (1.4) (2.3) (1.0) - - - (1.2) (0.2) - (6.1)
Customer deposits (£bn) 143.7 15.1 98.1 25.3 25.5 9.7 16.8 24.0 0.6 358.8
Risk-weighted assets (RWAs) (£bn) 31.9 21.4 77.6 8.2 9.6 36.6 38.6 9.7 1.6 235.2
RWA equivalent (£bn) (5) 35.4 22.8 82.3 8.2 9.6 37.2 39.8 10.2 1.9 247.4
Employee numbers (FTEs - thousands) 18.7 3.2 5.8 1.8 0.8 1.3 0.7 5.0 45.2 82.5
Notes:
(1) Williams & Glyn refers to the business formerly intended to be divested as a separate legal entity and comprises RBS England and Wales branch-based businesses, along with certain small and medium enterprises and corporate activities across the UK.
(2) Central items include unallocated transactions which principally comprise volatile items under IFRS.
(3) Excluding own credit adjustments, (loss)/gain on redemption of own debt and strategic disposals.
(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 notional
equity allocated at different rates of 11% (Commercial Banking and Ulster Bank RoI), 12% (RBS International) and 15%
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