REG - Royal Bk Scot.Grp. - Interim Management Statement <Origin Href="QuoteRef">RBS.L</Origin> - Part 4
29/04/2016 07:06
- Part 4: For the preceding part double click ID:nRSc7468Wc
FX Other
customer investigations/ regulatory Property
PPI IRHP redress (1) litigation provisions Litigation and other Total
£m £m £m £m £m £m £m £m
At 1 January 2016 996 149 672 306 41 3,944 1,258 7,366
Transfer from accruals and other liabilities - - - - - - 19 19
Transfer - - 21 (35) (21) 106 (71) -
Currency translation and other movements - - - 10 2 124 28 164
Charge to income statement (2) - - 11 - 1 33 79 124
Releases to income statement (2) - - (8) - - (1) (19) (28)
Provisions utilised (85) (41) (63) - - (24) (69) (282)
At 31 March 2016 911 108 633 281 23 4,182 1,225 7,363
Notes:
(1) Closing provision predominantly relates to investment advice and packaged accounts.
(2) Relates to continuing operations.
There are uncertainties as to the eventual cost of redress in relation to the provisions contained in the table above.
Assumptions relating to these are inherently uncertain and the ultimate financial impact may be different from the amount
provided.
5. Litigation, investigations and reviews
RBS's 2015 Annual Report & Accounts issued on 26 February 2016 included comprehensive disclosures about RBS's litigation,
investigations and reviews in Note 30. Set out below are the material developments in these matters since the 2015 Annual
Report & Accounts was published.
Litigation
Interest rate swaps antitrust litigation
On 18 April 2016, an antitrust complaint was filed in the United States District Court for the Southern District of New
York against RBS plc and other members of the Group, as well as a number of other interest rate swap dealers. The
plaintiff, TeraExchange, alleges that it would have successfully established exchange-like trading of interest rate swaps
if the defendant dealers had not unlawfully conspired to prevent that from happening through boycotts and other means, in
violation of the U.S. antitrust laws. The complaint contains allegations of collusion between the dealers similar to those
contained in the interest rate swap antitrust class actions that RBS has previously disclosed. RBS anticipates moving to
dismiss the claims asserted in these matters.
Weiss v. National Westminster Bank Plc (NatWest)
As previously disclosed, NatWest is defending a lawsuit filed by a number of US nationals (or their estates, survivors, or
heirs) who were victims of terrorist attacks in Israel. The plaintiffs allege that NatWest is liable for damages arising
from those attacks pursuant to the US Anti-terrorism Act because NatWest previously maintained bank accounts and
transferred funds for the Palestine Relief & Development Fund, an organisation which plaintiffs allege solicited funds for
Hamas, the alleged perpetrator of the attacks. On 28 March 2013, the trial court (the United States District Court for the
Eastern District of New York) granted summary judgment in favour of NatWest on the issue of scienter, but on 22 September
2014, that summary judgment ruling was vacated by the United States Court of Appeals for the Second Circuit. The appeals
court returned the case to the trial court for consideration of NatWest's other asserted grounds for summary judgment and,
if necessary, for trial. On 31 March 2016, the trial court denied a motion by NatWest to dismiss the case in which NatWest
had argued that the court lacked personal jurisdiction over NatWest. The schedule for the remainder of the matter,
including trial, has not been set, but NatWest intends to assert other grounds for summary judgment that the trial court
has not previously ruled upon.
Notes
5. Litigation, investigations and reviews
Investigations and reviews
Loan securitisation business investigations
As previously disclosed, ongoing matters include, among others, an active investigation by the attorney general of
Connecticut, on behalf of the Connecticut Department of Banking, relating primarily to due diligence on and disclosure
related to loans purchased for, or otherwise included in, securitisations and related disclosures. On 31 August 2015, the
Connecticut Department of Banking issued two letters to RBS Securities Inc., indicating that it is has concluded that RBS
Securities Inc. may have violated the Connecticut Uniform Securities Act when underwriting MBS, noting RBS plc's May 2015
FX-related guilty plea. Discussions relating to a possible resolution are ongoing.
Foreign exchange related investigations
As previously disclosed, in July 2014 the Serious Fraud Office in the UK (SFO) announced that it was launching a criminal
investigation into allegations of fraudulent conduct in the foreign exchange market, apparently involving multiple
financial institutions. On 15 March 2016, the SFO announced that it was closing its investigation, having concluded that,
based on the information and material obtained, there was insufficient evidence for a realistic prospect of conviction.
FCA review of RBS's treatment of SMEs
As previously disclosed, in January 2014, the FCA appointed a Skilled Person to review RBS's treatment of UK small and
medium sized business customers with credit exposures of up to £20 million whose relationship was managed within RBS's
Global Restructuring Group or within similar units within RBS's Corporate Banking Division that were focussed on customers
in financial difficulties. RBS is cooperating fully with the FCA in its review.
On 13 April 2016 the FCA announced that it had received the Skilled Person's draft final report, is carefully considering
the contents and will discuss the findings with the Skilled Person. RBS will have an opportunity to respond to the Skilled
Person's findings before any substantive announcement by the FCA, the timing of which has not been determined.
UK retail banking
As previously disclosed, in November 2014 the Competition & Markets Authority (CMA) made its final decision to proceed with
a market investigation reference (MIR) in respect of retail banking. In October 2015, the CMA published its summary of
provisional findings, concluding that there are a number of competition concerns in the provision of personal current
accounts (PCAs), business current accounts and SME lending. At the same time, the CMA published a notice of possible
remedies to address its concerns, including measures to make it easier for customers to compare products, and requiring
banks to help raise public awareness of, and confidence in, switching bank accounts.
On 7 March 2016, the CMA announced that it is extending the MIR by 3 months with a revised statutory deadline of 12 August
2016. The CMA also published a supplemental notice of possible remedies which sets out four additional remedies focussed on
PCA overdrafts, in addition to the remedies set out in the October 2015 notice of possible remedies. The provisional
decision on remedies is now expected to be published in May 2016.
Notes
5. Litigation, investigations and reviews
FCA wholesale sector competition review
As previously disclosed, on 9 July 2014, the FCA launched a review of competition in the wholesale sector to identify any
areas which may merit further investigation through an in-depth market study.
The initial review was an exploratory exercise and focused primarily on competition in wholesale securities and investment
markets, and related activities such as corporate banking. It commenced with a three month consultation exercise, including
a call for inputs from stakeholders. Following this consultation period, the FCA published its feedback statement on 19
February 2015 which announced that the FCA was to undertake a market study into investment and corporate banking and
potentially into asset management. The terms of reference for the investment and corporate banking market study were
published on 22 May 2015. On 13 April 2016, the FCA published its interim report on the investment and corporate banking
market study which sets out various proposed remedies, including the following: measures designed to improve clients'
ability to appoint banks that best suit their needs; measures to ensure that conflicts are properly managed; and
improvements to the Initial Public Offering (IPO) process. The FCA has indicated that it will publish its final report in
Summer 2016.
On 18 November 2015, the FCA also announced that a market study would be undertaken into asset management. The FCA has said
that it intends to publish an interim report in Summer 2016 with the final report expected in early 2017. At this stage, as
there remains considerable uncertainty around the outcome of these reviews it is not practicable reliably to estimate the
aggregate impact, if any, on RBS which may be material.
FCA request concerning Mossack Fonseca
In common with other banks, RBS received a letter from the FCA on 4 April 2016 requesting information about any
relationship RBS has with the Panama-based law firm Mossack Fonseca or any individuals named in recent media coverage in
connection with the same. RBS has responded to the FCA setting out details of the limited services provided to Mossack
Fonseca and its clients and is continuing its internal review, as well as monitoring all new information published.
Opening of enforcement proceedings by FINMA against Coutts & Co Ltd
The Swiss Financial Market Supervisory Authority (FINMA) has opened enforcement proceedings against Coutts & Co Ltd
(Coutts), a member of the RBS Group incorporated in Switzerland, with regard to certain client accounts held with Coutts.
Coutts is also cooperating with authorities in other jurisdictions in relation to connected accounts.
Review and investigation of treatment of tracker mortgage customers in Ulster Bank Ireland Limited
On 22 December 2015, the Central Bank of Ireland (CBI) announced that it had written to a number of lenders requiring them
to put in place a robust plan and framework to review the treatment of customers who have been sold mortgages with a
tracker interest rate or with a tracker interest rate entitlement. The CBI stated that the intended purpose of the review
was to identify any cases where customers' contractual rights under the terms of their mortgage agreements were not fully
honoured, or where lenders did not fully comply with various regulatory requirements and standards regarding disclosure and
transparency for customers. The CBI has required Ulster Bank Ireland Limited (UBIL), a member of the RBS Group,
incorporated in the Republic of Ireland, to participate in this review and UBIL is co-operating with the CBI in this
regard. Separately, on 15 April, the CBI notified UBIL that it was also commencing an investigation under its
Administrative Sanctions Procedure into suspected breaches of the Consumer Protection Code 2006 during the period 4 August
2006 to 30 June 2008 in relation to certain customers who switched from tracker mortgages to fixed rate mortgages.
Notes
6. Recent developments
Liability management exercise
In April 2016, RBS completed cash tenders of certain US dollar, sterling and euro senior debt securities totalling £2.3
billion (equivalent).
Issue of new ordinary shares
In April 2016, 37.6 million new ordinary shares were issued for £85 million for the purposes of partly neutralising the
impact of 2016 coupon payments on discretionary hybrid capital from a Common Equity Tier 1 capital perspective, as
explained in the Full Year 2015 results announcement.
March 2016 Budget
In the Budget on 16 March 2016, the UK Government announced its intention to further restrict the use of tax losses carried
forward by UK banks. If these measures are enacted, they would be taken into consideration in any future reviews of the
recoverability of the bank's deferred tax assets associated with UK tax losses. The Budget is likely to be enacted around
July 2016.
7. Post balance sheet events
Other than matters disclosed, there have been no further significant events between 31 March 2016 and the date of approval
of this announcement.
Forward-looking statements
Certain sections in this document contain 'forward-looking statements' as that term is defined in the United States Private
Securities Litigation Reform Act of 1995, such as statements that include the words 'expect', 'estimate', 'project',
'anticipate', 'believe', 'should', 'intend', 'plan', 'could', 'probability', 'risk', 'Value-at-Risk (VaR)', 'target',
'goal', 'objective', 'may', 'endeavour', 'outlook', 'optimistic', 'prospects' and similar expressions or variations on
these expressions.
In particular, this document includes forward-looking statements relating, but not limited to: The Royal Bank of Scotland
Group's (RBS) restructuring which includes the separation and divestment of Williams & Glyn, the proposed restructuring of
RBS's CIB business, the implementation of the UK ring-fencing regime, the implementation of a major development program to
update RBS's IT infrastructure and the continuation of its balance sheet reduction programme, as well as capital and
strategic plans, divestments, capitalisation, portfolios, net interest margin, capital and leverage ratios and requirements
liquidity, risk-weighted assets (RWAs), RWA equivalents (RWAe), Pillar 2A, return on equity (ROE), profitability,
cost:income ratios, loan:deposit ratios, AT1 and other funding plans, funding and credit risk profile; litigation,
government and regulatory investigations RBS's future financial performance; the level and extent of future impairments and
write-downs; including with respect to Goodwill; future pension contributions and RBS's exposure to political risks,
operational risk, conduct risk and credit rating risk and to various types of market risks, such as interest rate risk,
foreign exchange rate risk and commodity and equity price risk. These statements are based on current plans, estimates,
targets and projections, and are subject to inherent risks, uncertainties and other factors which could cause actual
results to differ materially from the future results expressed or implied by such forward-looking statements. For example,
certain market risk disclosures are dependent on choices relying on key model characteristics and assumptions and are
subject to various limitations. By their nature, certain of the market risk disclosures are only estimates and, as a
result, actual future gains and losses could differ materially from those that have been estimated.
Other factors that could adversely affect our results and the accuracy of forward-looking statements in this document
include the risk factors and other uncertainties discussed in the Annual Report and Accounts 2015. These include the
significant risks for RBS presented by the outcomes of the legal, regulatory and governmental actions and investigations
that RBS is subject to (including active civil and criminal investigations) and any resulting material adverse effect on
RBS of unfavourable outcomes (including where resolved by settlement); the uncertainty relating to the referendum on the
UK's membership of the European Union and the consequences of it; the separation and divestment of Williams & Glyn; RBS's
ability to successfully implement the various initiatives that are comprised in its restructuring plan, particularly the
proposed restructuring of its CIB business and the balance sheet reduction programme as well as the significant
restructuring required to be undertaken by RBS in order to implement the UK ring fencing regime; the significant changes,
complexity and costs relating to the implementation of its restructuring, the separation and divestment of Williams & Glyn
and the UK ring-fencing regime; whether RBS will emerge from its restructuring and the UK ring-fencing regime as a viable,
competitive, customer focused and profitable bank; RBS's ability to achieve its capital and leverage requirements or
targets which will depend on RBS's success in reducing the size of its business and future profitability; ineffective
management of capital or changes to regulatory requirements relating to capital adequacy and liquidity or failure to pass
mandatory stress tests; the ability to access sufficient sources of capital, liquidity and funding when required; changes
in the credit ratings of RBS or the UK government; declining revenues resulting from lower customer retention and revenue
generation in light of RBS's strategic refocus on the UK the impact of global economic and financial market conditions
(including low or negative interest rates) as well as increasing competition. In addition, there are other risks and
uncertainties. These include operational risks that are inherent to RBS's business and will increase as a result of RBS's
significant restructuring; the potential negative impact on RBS's business of actual or perceived global economic and
financial market conditions and other global risks; the impact of unanticipated turbulence in interest rates, yield curves,
foreign currency exchange rates, credit spreads, bond prices, commodity prices, equity prices; basis, volatility and
correlation risks; heightened regulatory and governmental scrutiny and the increasingly regulated environment in which RBS
operates; the risk of failure to realise the benefit of RBS's substantial investments in its information technology and
systems, the risk of failing to preventing a failure of RBS's IT systems or to protect itself and its customers against
cyber threats, reputational risks; risks relating to the failure to embed and maintain a robust conduct and risk culture
across the organisation or if its risk management framework is ineffective; risks relating to increased pension liabilities
and the impact of pension risk on RBS's capital position; increased competitive pressures resulting from new incumbents and
disruptive technologies; RBS's ability to attract and retain qualified personnel; HM Treasury exercising influence over the
operations of RBS; limitations on, or additional requirements imposed on, RBS's activities as a result of HM Treasury's
investment in RBS; the extent of future write-downs and impairment charges caused by depressed asset valuations;
deteriorations in borrower and counterparty credit quality; the value and effectiveness of any credit protection purchased
by RBS; risks relating to the reliance on valuation, capital and stress test models and any inaccuracies resulting
therefrom or failure to accurately reflect changes in the micro and macroeconomic environment in which RBS operates, risks
relating to changes in applicable accounting policies or rules which may impact the preparation of RBS's financial
statements; the impact of the recovery and resolution framework and other prudential rules to which RBS is subject the
recoverability of deferred tax assets by the Group; and the success of RBS in managing the risks involved in the
foregoing.
The forward-looking statements contained in this document speak only as at the date hereof, and RBS does not assume or
undertake any obligation or responsibility to update any forward-looking statement to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
The information, statements and opinions contained in this document do not constitute a public offer under any applicable
legislation or an offer to sell or solicit of any offer to buy any securities or financial instruments or any advice or
recommendation with respect to such securities or other financial instruments.
Appendix 1
Additional segment information
Appendix 1 UK Personal & Business Banking
Quarter ended
31 March 31 December 31 March
2016 2015 2015
Income statement £m £m £m
Net interest income 1,019 1,030 1,032
Net fees and commissions 255 220 267
Other non-interest income 1 4 15
Non-interest income 256 224 282
Total income 1,275 1,254 1,314
Direct expenses
- staff costs (181) (199) (200)
- other costs (63) (82) (64)
Indirect expenses (484) (596) (445)
Restructuring costs
- direct (13) (31) -
- indirect (9) (56) (30)
Litigation and conduct costs - (607) (354)
Operating expenses (750) (1,571) (1,093)
Operating profit/(loss) before impairment (losses)/releases 525 (317) 221
Impairment (losses)/releases (16) 27 (20)
Operating profit/(loss) 509 (290) 201
Operating expenses - adjusted (1) (728) (877) (709)
Operating profit - adjusted (1) 531 404 585
Analysis of income by product
Personal advances 204 177 199
Personal deposits 166 181 181
Mortgages 564 569 571
Cards 142 140 168
Business banking 175 180 180
Other 24 7 15
Total income 1,275 1,254 1,314
Analysis of impairments by sector
Personal advances 6 13 31
Mortgages 4 5 5
Business banking - (24) (40)
Cards 6 (1) 5
Other - (20) 19
Total impairment losses/(releases) 16 (27) 20
31 March 31 December 31 March
2016 2015 2015
Balance sheet £bn £bn £bn
Loans and advances to customers (gross)
- Personal advances 6.0 6.0 6.4
- Mortgages 108.0 104.8 96.0
- Business banking 5.5 5.3 5.9
- Cards 3.9 4.1 4.3
- Others - 1.4 1.5
Total loans and advances to customers (gross) 123.4 121.6 114.1
Notes:
(1) Excluding restructuring costs, litigation and conduct costs and write down of goodwill.
(2) Excluding own credit adjustments, gains/(losses) on redemption of own debt and strategic disposals.
(3) Does not reflect the cost base, funding, liquidity and capital profile of a standalone bank. Operating expenses include charges based on an attribution of support provided by RBS to Williams & Glyn.
(4) Asia-Pacific portfolio.
(5) European, the Middle East and Africa portfolio.
Appendix 1 Ulster Bank RoI
Quarter ended
31 March 31 December 31 March
2016 2015 2015
Income statement Em Em Em
Net interest income 136 118 128
Net fees and commissions 27 28 29
Other non-interest income 38 16 28
Own credit adjustment 4 - -
Non-interest income 69 44 57
Total income 205 162 185
Direct expenses
- staff costs (66) (55) (54)
- other costs (15) (37) (25)
Indirect expenses (55) (68) (57)
Restructuring costs
- direct (8) 9 -
- indirect - (1) 1
Litigation and conduct costs - 5 -
Operating expenses (144) (147) (135)
Operating profit before impairment releases 61 15 50
Impairment releases 17 14 33
Operating profit 78 29 83
Total income - adjusted (2) 201 162 185
Operating expenses - adjusted (1) (136) (160) (136)
Operating profit - adjusted (1,2) 82 16 82
Analysis of income by business
Corporate 73 53 50
Retail 130 105 103
Other 2 4 32
Total income 205 162 185
Analysis of impairments by sector
Mortgages 2 29 (25)
Commercial real estate
- investment (6) 4 1
- development (2) (2) -
Other corporate (12) (42) (9)
Other lending 1 (3) -
Total impairment releases (17) (14) (33)
31 March 31 December 31 March
2016 2015 2015
Balance sheet Ebn Ebn Ebn
Loans and advances to customers (gross)
- Mortgages 18.6 18.8 19.5
-Commercial real estate
- investment 1.2 0.9 1.4
- development 0.7 0.3 0.4
- Other corporate 5.0 4.8 4.2
- Other lending 0.5 0.5 0.6
Total loans and advances to customers (gross) 26.0 25.3 26.1
For the notes to this table refer to page 1.
Appendix 1 Commercial Banking
Quarter ended
31 March 31 December 31 March
2016 2015 2015
Income statement £m £m £m
Net interest income 536 512 482
Net fees and commissions 262 258 230
Other non-interest income 55 27 77
Non-interest income 317 285 307
Total income 853 797 789
Direct expenses
- staff costs (131) (124) (123)
- other costs (14) (44) (15)
- operating lease costs (35) (36) (36)
Indirect expenses (256) (380) (241)
Restructuring costs
- direct (1) (40) -
- indirect 1 (14) 1
Litigation and conduct costs (2) 8 -
Operating expenses (438) (630) (414)
Operating profit before impairment (losses)/releases 415 167 375
Impairment (losses)/releases (14) (27) 1
Operating profit 401 140 376
Operating expenses - adjusted (1) (436) (584) (415)
Operating profit - adjusted (1) 403 186 375
Analysis of income by business
Commercial lending 436 411 388
Deposits 125 125 111
Asset and invoice finance 177 168 178
Other 115 93 112
Total income 853 797 789
Analysis of impairments by sector
Commercial real estate (2) 8 (4)
Asset and invoice finance 3 8 1
Private sector services (education, health, etc) 1 4 3
Banks & financial institutions - (1) -
Wholesale and retail trade repairs 3 - (2)
Hotels and restaurants - (2) (3)
Manufacturing 1 - 1
Construction 1 1 -
Other 7 9 3
Total impairment losses/(releases) 14 27 (1)
31 March 31 December 31 March
2016 2015 2015
Balance sheet £bn £bn £bn
Loans and advances to customers (gross)
- Commercial real estate 17.5 16.7 16.7
- Asset and invoice finance 14.4 14.4 13.9
- Private sector services (education, health etc) 7.0 6.7 7.0
- Banks & financial institutions 7.4 7.1 5.3
- Wholesale and retail trade repairs 8.3 7.5 7.0
- Hotels and restaurants 3.5 3.3 3.3
- Manufacturing 6.4 5.3 4.2
- Construction 2.2 2.1 1.8
- Other 30.8 28.9 27.8
Total loans and advances to customers (gross) 97.5 92.0 87.0
For the notes to this table refer to page 1.
Appendix 1 Private Banking
Quarter ended
31 March 31 December 31 March
2016 2015 2015
Income statement £m £m £m
Net interest income 113 108 110
Net fees and commissions 46 44 50
Other non-interest income 6 6 5
Non-interest income 52 50 55
Total income 165 158 165
Direct expenses
- staff costs (40) (43) (46)
- other costs (14) (7) (9)
Indirect expenses (83) (109) (68)
Restructuring costs
- direct (1) (7) -
- indirect (15) 12 3
Litigation and conduct costs - (10) (2)
Write down of goodwill - (498) -
Operating expenses (153) (662) (122)
Operating profit/(loss) before impairment (losses)/releases 12 (504) 43
Impairment (losses)/releases (2) (12) 1
Operating profit/(loss) 10 (516) 44
Operating expenses - adjusted (1) (137) (159) (123)
Operating profit/(loss) - adjusted (1) 26 (13) 43
Analysis of income by business
Investments 28 21 24
Banking 137 137 141
Total income 165 158 165
31 March 31 December 31 March
2016 2015 2015
Balance sheet £bn £bn £bn
Loans and advances to customers (gross)
- Personal 2.6 2.7 2.7
- Mortgages 6.8 6.5 6.3
- Other 2.2 2.0 2.2
Total loans and advances to customers (gross) 11.6 11.2 11.2
For the notes to this table refer to page 1.
Appendix 1 RBS International
Quarter ended
31 March 31 December 31 March
2016 2015 2015
Income statement £m £m £m
Net interest income 75 78 76
Net fees and commissions 11 12 10
Other non-interest income 4 5 7
Non-interest income 15 17 17
Total income 90 95 93
Direct expenses
- staff costs (10) (12) (10)
- other costs (5) (5) (4)
Indirect expenses (20) (24) (24)
Restructuring costs
- indirect (1) 1 (2)
Operating expenses (36) (40) (40)
Operating profit before impairment losses 54 55 53
Impairment losses (2) - (2)
Operating profit 52 55 51
Operating expenses - adjusted (1) (35) (41) (38)
Operating profit - adjusted (1) 53 54 53
31 March 31 December 31 March
2016 2015 2015
Balance sheet £bn £bn £bn
Loans and advances to customers (gross)
- Corporate 5.4 4.5 4.6
- Mortgages 2.6 2.5 2.5
- Other - 0.4 0.2
Total loans and advances to customers (gross) 8.0 7.4 7.3
For the notes to this table refer to page 1.
Appendix 1 Corporate & Institutional Banking
Quarter ended
31 March 31 December 31 March
2016 2015 2015
Income statement £m £m £m
Net interest income from banking activities 19 28 14
Net fees and commissions 11 66 115
Income from trading activities 246 203 340
Other operating income 1 (45) 15
Own credit adjustments 64 (66) 46
Non-interest income 322 158 516
Total income 341 186 530
Direct expenses
- staff costs (67) (63) (109)
- other costs (14) (50) (26)
Indirect expenses (250) (251) (257)
Restructuring costs
- indirect (12) (62) (91)
Litigation and conduct costs (18) (5) (334)
Operating expenses (361) (431) (817)
Operating loss before impairment releases (20) (245) (287)
Impairment releases - - 8
Operating loss (20) (245) (279)
Total income - adjusted (2) 277 252 484
Operating expenses - adjusted (1) (331) (364) (392)
Operating (loss)/profit - adjusted (1,2) (54) (112) 100
Analysis of income by product
Rates 114 136 222
Currencies 144 95 90
Financing 49 23 155
Banking/Other (30) (2) (25)
Total excluding own credit adjustments 277 252 442
Own credit adjustments 64 (66) 46
Businesses transferred to Commercial Banking - - 42
Total income 341 186 530
31 March 31 December 31 March
2016 2015 2015
Balance sheet £bn £bn £bn
Loans and advances to customer (gross, excluding reverse repos) 18.6 16.1 31.6
Loans and advances to banks (excluding reverse repos) 5.2 5.7 2.5
Reverse repos 40.4 38.6 60.1
Securities 29.5 23.7 34.3
Cash and eligible bills 12.2 14.3 10.5
Other 10.1 4.9 13.0
Funded assets 116.0 103.3 152.1
For the notes to this table refer to page 1.
Appendix 1 Capital Resolution
Quarter ended
31 March 31 December 31 March
2016 2015 2015
Income statement £m £m £m
Net interest income 86 6 157
Net fees and commissions 30 5 89
Income from trading activities (74) (264) (26)
Other operating income 9 20 187
Own credit adjustments 108 (5) 65
Strategic disposals (6) (24) (14)
Non-interest income 67 (268) 301
Total income 153 (262) 458
Direct expenses
- staff costs (45) (54) (92)
- other costs (33) (54) (57)
Indirect expenses (154) (286) (260)
Restructuring costs
- direct (7) (21) (16)
- indirect (9) (83) (184)
Litigation and conduct costs (10) (1,498) (166)
Operating expenses (258) (1,996) (775)
Operating loss before impairment (losses)/releases (105) (2,258) (317)
Impairment (losses)/releases (196) 356 145
Operating loss (301) (1,902) (172)
Total income - adjusted (2) 51 (233) 407
Operating expenses - adjusted (1) (232) (394) (409)
Operating (loss)/profit - adjusted (1,2) (377) (271) 143
Analysis of income by portfolio
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