REG - Royal Bk Scot.Grp. - Interim Management Statement <Origin Href="QuoteRef">RBS.L</Origin> - Part 5
30/10/2015 07:01
- Part 5: For the preceding part double click ID:nRSd9427Dd
2 2
Private sector services (education, health, etc) 5 (8) 2 - 2
Banks & financial institutions 1 - - 1 (1)
Wholesale and retail trade repairs 3 16 3 2 2
Hotels and restaurants - 1 1 2 2
Manufacturing 1 9 1 (1) 2
Construction 5 8 3 2 4
Other 13 20 2 8 -
Total impairment losses 42 43 15 26 12
30 September 30 June 31 December
2015 2015 2014
Balance sheet £bn £bn £bn
Loans and advances to customers (gross)
- Commercial real estate 18.2 17.9 18.3
- Asset and invoice finance 14.3 14.1 14.2
- Private sector services (education, health etc) 7.1 7.0 6.9
- Banks & financial institutions 7.8 7.2 7.0
- Wholesale and retail trade repairs 6.7 6.6 6.0
- Hotels and restaurants 3.2 3.2 3.4
- Manufacturing 4.4 4.6 3.7
- Construction 1.8 1.8 1.9
- Other 28.9 28.6 24.7
Total loans and advances to customers (gross) 92.4 91.0 86.1
For the notes to this table refer to page 1.
Appendix 1 Private Banking
Nine months ended Quarter ended
30 September 30 September 30 September 30 June 30 September
2015 2014 2015 2015 2014
Income statement £m £m £m £m £m
Net interest income 377 516 123 126 172
Non-interest income 248 299 81 81 98
Total income 625 815 204 207 270
Operating expenses (659) (610) (185) (287) (210)
(Loss)/profit before impairment losses (34) 205 19 (80) 60
Impairment (losses)/releases (1) 4 (4) 2 4
Operating (loss)/profit (35) 209 15 (78) 64
Operating profit - adjusted (1) 77 219 16 32 71
Analysis of income by business
Investments 108 134 34 35 44
Banking 517 681 170 172 226
Total income 625 815 204 207 270
International private banking activities (4)
Total income 147 171 47 48 53
Operating expenses (226) (197) (69) (89) (68)
Operating loss (79) (26) (22) (41) (15)
30 September 30 June 31 December
2015 2015 2014
Capital and balance sheet £bn £bn £bn
Loans and advances to customers (gross)
- Personal 4.7 4.8 5.4
- Mortgages 6.7 6.6 8.9
- Other 2.2 2.1 2.3
Total loans and advances to customers (gross) 13.6 13.5 16.6
International private banking activities (4) £bn £bn £bn
Total assets 7.9 8.2 8.9
Net loans and advances to customers 2.5 2.7 3.1
Assets under management 12.2 13.6 14.6
Customer deposits 6.5 6.8 7.4
Risk-weighted assets (2) 1.7 1.9 2.1
For the notes to this table refer to page 1.
Appendix 1 Corporate & Institutional Banking
Nine months ended Quarter ended
30 September 30 September 30 September 30 June 30 September
2015 2014 2015 2015 2014
Income statement £m £m £m £m £m
Net interest income from banking activities 518 595 142 174 230
Non-interest income 1,243 2,663 295 346 601
Total income 1,761 3,258 437 520 831
Operating expenses (4,883) (3,558) (1,453) (1,841) (1,400)
Loss before impairment losses (3,122) (300) (1,016) (1,321) (569)
Impairment releases/(losses) 35 51 4 (13) 12
Operating loss (3,087) (249) (1,012) (1,334) (557)
Operating (loss)/profit - adjusted (1) (445) 570 (268) (227) 21
Analysis of income by product
Rates 544 723 172 164 200
Currencies 291 385 96 107 138
Credit 277 494 35 86 110
Banking/Other (72) (111) 3 (48) (25)
Total CIB (Go-forward) 1,040 1,491 306 309 423
Transfers to other areas (5) 316 401 88 103 127
CIB Capital Resolution excluding disposal losses 623 1,366 120 221 281
Disposal losses (218) - (77) (113) -
Total CIB Capital Resolution (6) 405 1,366 43 108 281
Total income 1,761 3,258 437 520 831
30 September 30 June 31 December
2015 2015 2014
Capital and balance sheet £bn £bn £bn
Loans and advances to customer (gross, excluding reverse repos) 50.9 57.9 73.0
Loan impairment provisions (0.1) (0.1) (0.2)
Net loans and advances to customers (excluding reverse repos) 50.8 57.8 72.8
Loans and advances to banks (excluding reverse repos) 14.8 13.6 16.9
Reverse repos 49.7 63.0 61.6
Securities 33.8 40.8 57.0
Cash and eligible bills 15.2 22.4 23.2
Other 13.1 13.5 9.6
Funded assets 177.4 211.1 241.1
CIB Capital Resolution (6)
Funded assets 50.5 60.7 92.9
Risk-weighted assets (2) 38.7 45.4 64.1
For the notes to this table refer to page 1.
Appendix 1 RBS Capital Resolution
RCR is managed and analysed in four asset management groups - Ulster Bank (RCR Ireland), Real Estate Finance, Corporate and
Markets. Real Estate Finance excludes commercial real estate lending in Ulster Bank.
Nine months ended Quarter ended
30 September 30 September 30 September 30 June 30 September
2015 2014 2015 2015 2014
Income statement £m £m £m £m £m
Net interest income (36) (7) (16) (12) (18)
Non-interest income (1) 181 237 (4) 57 140
Total income 145 230 (20) 45 122
Operating expenses (143) (265) (42) (53) (89)
Profit/(loss) before impairment losses 2 (35) (62) (8) 33
Impairment releases (1) 339 625 46 184 605
Operating profit/(loss) 341 590 (16) 176 638
Operating profit/(loss) - adjusted (2) 345 594 (12) 176 642
Total income
Ulster Bank (15) (28) 17 (15) (29)
Real Estate Finance 102 163 42 35 67
Corporate (26) 58 (101) (16) 72
Markets 84 37 22 41 12
Total income 145 230 (20) 45 122
Impairment (releases)/losses
Ulster Bank (271) (394) (99) (33) (379)
Real Estate Finance (91) (193) (19) (44) (159)
Corporate (56) (31) 51 (117) (70)
Markets 79 (7) 21 10 3
Total impairment releases (339) (625) (46) (184) (605)
Loan impairment charge as % of gross loans
and advances (3)
Ulster Bank (11.0%) (4.2%) (12.0%) (2.8%) (12.0%)
Real Estate Finance (6.1%) (4.7%) (3.8%) (6.8%) (11.6%)
Corporate (3.1%) (0.6%) 8.5% (15.1%) (4.0%)
Markets (1.1%) (1.9%) - (0.7%) (0.6%)
Total (6.9%) (3.3%) (3.3%) (7.1%) (9.5%)
Notes:
(1) Asset disposals contributed £349 million in the nine months ended 30 September 2015 and £66 million in Q3 2015 (nine months ended 30 September 2014 - £614 million; Q2 2015 - £164 million; Q3 2014 - £332 million) to RCR's operating profit: impairment
provision releases of £306 million in the nine months ended 30 September 2015 and £75 million in Q3 2015 (nine months ended 30 September 2014 - £552 million; Q2 2015 - £167 million; Q3 2014 - £232 million); loss in income from trading activities of £36
million in the nine months ended 30 September 2015 and £11 million loss in Q3 2015 (nine months ended 30 September 2014 - £99 million gain; Q2 2015 - £6 million loss; Q3 2014 - £97 million gain) and gain in other operating income of £79 million in the nine
months ended 30 September 2015 and £2 million gain in Q3 2015 (nine months ended 30 September 2014 - £37 million loss; Q2 2015 - £3 million gain; Q3 2014 - £3 million gain).
(2) Excluding restructuring costs.
(3) Includes disposal groups.
Appendix 1 RBS Capital Resolution
30 September 30 June 31 December
2015 2015 2014
Capital and balance sheet £bn £bn £bn
Loans and advances to customers (gross) (1) 8.2 11.0 21.9
Loan impairment provisions (3.9) (5.1) (10.9)
Net loans and advances to customers 4.3 5.9 11.0
Debt securities 0.6 0.6 1.0
Total assets 12.9 16.5 29.0
Funded assets 6.5 8.4 14.9
Risk elements in lending (1) 5.1 7.4 15.4
Provision coverage (2) 76% 69% 71%
Risk-weighted assets
- Credit risk
- non-counterparty 6.0 7.8 13.6
- counterparty 2.8 3.0 4.0
- Market risk 4.0 4.0 4.4
- Operational risk (0.4) (0.4) -
Total risk-weighted assets 12.4 14.4 22.0
Total RWA equivalent (3) 13.9 17.9 27.3
Gross loans and advances to customers (1)
Ulster Bank 3.3 4.7 11.0
Real Estate Finance 2.0 2.6 4.1
Corporate 2.4 3.1 6.2
Markets 0.5 0.6 0.6
8.2 11.0 21.9
Funded assets - Ulster Bank
Commercial real estate - investment 0.2 0.6 1.2
Commercial real estate - development 0.1 0.2 0.7
Other corporate 0.2 0.2 0.7
0.5 1.0 2.6
Funded assets - Real Estate Finance (4)
UK 1.2 1.7 2.5
Germany 0.1 0.2 0.4
Spain 0.3 0.3 0.5
Other 0.2 0.3 0.8
1.8 2.5 4.2
Funded assets - Corporate
Structured finance 0.5 0.6 1.7
Shipping 0.8 1.1 1.8
Other 1.2 1.5 2.3
2.5 3.2 5.8
Funded assets - Markets
Securitised products 1.3 1.3 1.8
Emerging markets 0.4 0.4 0.5
1.7 1.7 2.3
Notes:
(1) Includes disposal groups.
(2) Provision coverage represents loan impairment provisions as a percentage of risk elements in lending.
(3) RWA equivalent (RWAe) is an internal metric that measures the equity capital employed in segments. RWAe converts both performing and non-performing exposures into a consistent capital measure, being the sum of the regulatory RWAs and the regulatory capital deductions, the latter converted to RWAe by applying a multiplier. RBS applies a CET1 ratio of 10% for RCR; this results in an end point CRR RWAe conversion multiplier of 10.
(4) Includes investment properties.
Appendix 1 - RBS Capital Resolution
Funded assets
1 January 30 September
2014 Repayments Disposals (1) Impairments Other 2015
Life to date £bn £bn £bn £bn £bn £bn
Ulster Bank 4.8 (0.2) (5.2) 1.4 (0.3) 0.5
Real Estate Finance 9.5 (2.9) (4.7) 0.1 (0.2) 1.8
Corporate 9.8 (3.4) (4.2) - 0.3 2.5
Markets 4.8 (1.4) (1.8) - 0.1 1.7
Total 28.9 (7.9) (15.9) 1.5 (0.1) 6.5
Risk-weighted assets
1 January Risk Other (3) 30 September
2014 Repayments Disposals (1) parameters (2) Impairments 2015
Life to date £bn £bn £bn £bn £bn £bn £bn
Ulster Bank 3.3 (0.5) (1.0) (1.3) - (0.1) 0.4
Real Estate Finance 13.5 (2.8) (2.5) (6.5) - (0.1) 1.6
Corporate 16.4 (2.9) (5.3) (4.9) (0.4) 0.6 3.5
Markets 13.5 (3.5) (3.2) - (0.2) 0.3 6.9
Total 46.7 (9.7) (12.0) (12.7) (0.6) 0.7 12.4
Capital deductions
1 January Risk Impairments Other (3) 30 September
2014 Repayments Disposals (1) parameters (2) 2015
Life to date £m £m £m £m £m £m £m
Ulster Bank 559 (31) (439) (154) 183 (29) 89
Real Estate Finance 505 (446) (872) 776 68 (31) -
Corporate 477 (250) (179) 110 (138) 16 36
Markets 291 (30) (86) (146) 1 (6) 24
Total 1,832 (757) (1,576) 586 114 (50) 149
RWA equivalent (4)
1 January Risk Impairments Other (3) 30 September
2014 Repayments Disposals (1) parameters (2) 2015
Life to date £bn £bn £bn £bn £bn £bn £bn
Ulster Bank 8.9 (0.8) (5.4) (2.8) 1.8 (0.4) 1.3
Real Estate Finance 18.6 (7.3) (11.3) 1.3 0.7 (0.4) 1.6
Corporate 21.1 (5.4) (7.1) (3.8) (1.8) 0.8 3.8
Markets 16.4 (3.7) (4.1) (1.4) (0.2) 0.2 7.2
Total 65.0 (17.2) (27.9) (6.7) 0.5 0.2 13.9
Notes:
(1) Includes all effects relating to disposals, including associated removal of deductions from regulatory capital.
(2) Principally reflects credit migration and other technical adjustments.
(3) Includes fair value adjustments and foreign exchange movements.
(4) RWA equivalent (RWAe) is an internal metric that measures the equity capital employed in segments. RWAe converts both performing and non-performing exposures into a consistent capital measure, being the sum of the regulatory RWAs and the regulatory capital deductions, the latter converted to RWAe by applying a multiplier. RBS applies a CET1 ratio of 10% for RCR; this results in an end point CRR RWAe conversion multiplier of 10.
Appendix 1 RBS Capital Resolution
Gross loans and advances, REIL and impairments
Credit metrics Year-to-date
REIL as a Provisions Provisions Impairment
Gross % of gross as a % as a % of (releases)/ Amounts
loans REIL Provisions loans of REIL gross loans losses (2) written-off
30 September 2015 (1) £bn £bn £bn % % % £m £m
By sector:
Commercial real estate
- investment 2.4 1.7 1.1 71 65 46 (152) 1,649
- development 2.2 2.1 1.9 95 90 86 (69) 2,959
Asset finance 0.9 0.3 0.1 33 33 11 8 273
Other corporate 2.7 1.0 0.8 37 80 30 (123) 1,265
Total 8.2 5.1 3.9 62 76 48 (336) 6,146
By donating segment
and sector
Ulster Bank
Commercial real estate
- investment 0.7 0.7 0.6 100 86 86 (35) 1,320
- development 2.0 2.0 1.9 100 95 95 (121) 2,847
Other corporate 0.6 0.5 0.4 83 80 67 (115) 861
Total Ulster Bank 3.3 3.2 2.9 97 91 88 (271) 5,028
Commercial Banking
Commercial real estate
- investment 0.6 0.3 0.1 50 33 17 (26) 164
- development 0.1 0.1 - 100 - - (7) 79
Other corporate 0.4 0.2 0.1 50 50 25 (60) 114
Total Commercial Banking 1.1 0.6 0.2 55 33 18 (93) 357
CIB
Commercial real estate
- investment 1.1 0.7 0.4 64 57 36 (91) 165
- development 0.1 - - - - - 59 33
Asset finance 0.9 0.3 0.1 33 33 11 8 273
Other corporate 1.7 0.3 0.3 18 100 18 52 290
Total CIB 3.8 1.3 0.8 34 62 21 28 761
Total 8.2 5.1 3.9 62 76 48 (336) 6,146
Of which:
UK 4.5 2.4 1.4 53 58 31 (71) 2,605
Europe 3.5 2.6 2.4 74 92 69 (323) 3,431
US 0.1 - - - - - 68 1
RoW 0.1 0.1 0.1 100 100 100 (10) 109
Customers 8.2 5.1 3.9 62 76 48 (336) 6,146
Banks 0.5 - - - - - (3) 33
Total 8.7 5.1 3.9 59 76 45 (339) 6,179
Notes:
(1) Includes disposal groups.
(2) Impairment (releases)/losses include those relating to AFS securities; sector analyses above include allocation of latent impairment charges.
Impairment (releases)/losses include those relating to AFS securities; sector analyses above include allocation of latent
impairment charges.
Appendix 2
Go-forward Bank profile
Appendix 2 Go-forward Bank profile
RBS is committed to becoming a leaner, less volatile business based around its core franchises of PBB and CPB. To achieve
this goal a number of initiatives have been announced which include, but are not limited to, the restructuring of CIB into
CIB Go-forward and CIB Capital Resolution, the divestment of the remaining stake in Citizens, the sale of the international
private banking business, the exit of Williams & Glyn and the continued run down of RCR. Significant progress towards these
exits is expected by the end of 2015. The following table illustrates the impact on certain key performance measures of
these initiatives by showing the 'Go-forward' profile of the bank and the segments, businesses and portfolios which it
intends to exit. This information is presented to illustrate the strategy and its impact on the business and is on a
non-statutory basis and should be read in conjunction with the notes below as well as the section titled Forward-looking
statements.
Go-forward Bank profile Exit Bank
UK Private CIB Go- Other Go- Total - CIB Capital Williams International Other Total Exit Total
Quarter ended PBB (1) UlsterBank CommercialBanking Banking (2) forward (3) forward (4) Go forward Resolution (3) & Glyn (5) private banking RCR investments (6) Bank RBS
30 September 2015 £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn
Total income 1.2 0.2 0.8 0.2 0.4 (0.1) 2.7 - 0.3 - - 0.1 0.4 3.1
Operating expenses
- adjusted (7) (0.7) (0.1) (0.4) (0.2) (0.4) - (1.8) (0.3) (0.1) - (0.1) - (0.5) (2.3)
Impairment (losses)/releases - 0.1 - - - (0.1) - - - - 0.1 - 0.1 0.1
Operating profit/(loss)
- adjusted (7) 0.5 0.2 0.4 - - (0.2) 0.9 (0.3) 0.2 - - 0.1 - 0.9
Return on equity
- adjusted (7,8,9) 36% 15% 12% 8% nm nm 10% nm nm nm nm nm nm 5%
Nine months ended
30 September 2015
Total income 3.7 0.6 2.5 0.5 1.4 - 8.7 0.4 0.7 0.1 0.2 0.1 1.5 10.2
Operating expenses
- adjusted (7) (2.0) (0.4) (1.2) (0.4) (1.2) 0.1 (5.1) (1.0) (0.3) (0.2) (0.2) - (1.7) (6.8)
Impairment (losses)/releases - 0.1 - - - (0.1) - - - - 0.4 - 0.4 0.4
Operating profit/(loss)
- adjusted (7) 1.7 0.3 1.3 0.1 0.2 - 3.6 (0.6) 0.4 (0.1) 0.4 0.1 0.2 3.8
Return on equity
- adjusted (7,8,9) 36% 11% 12% 10% nm nm 13% nm nm nm nm nm nm 8%
As at 30 September 2015
Funded assets 119 28 96 12 127 114 496 50 20 5 7 2 84 580
Net loans and advances to
customers 112 21 92 11 24 - 260 27 20 3 4 - 54 314
Customer deposits 129 19 99 23 19 4 293 29 24 6 1 - 60 353
Risk-weighted assets (10) 29 22 67 8 39 10 175 39 10 2 12 78 141 316
Appendix 2 Go-forward Bank profile
Notes:
(1) Excluding Williams & Glyn.
(2) Excluding international private banking business reclassified to disposal groups.
(3) The CIB segment is being restructured into CIB Go-forward and CIB Capital Resolution elements. The split is subject to further refinement. In Q4 2015 the Western European loan portfolio and the UK Transaction Services business will transfer to Commercial Banking.
(4) Other Go-forward is primarily Centre, which includes the liquidity portfolio.
(5) Does not reflect the cost base, funding and capital profile of a standalone bank. Operating expenses include charges based on an attribution of support provided by RBS to Williams & Glyn. Expenses incurred by Williams & Glyn were £96 million in Q3 2015 (nine months ended 30 September 2015 - £267 million).
(6) Includes Citizens RWAs of £72 billion which remain consolidated for regulatory reporting purposes and the interest in associate in relation to Citizens funded assets.
(7) Excluding restructuring costs and litigation and conduct costs.
(8) ROE isbased on operating profit after tax on a non-statutory basis adjusted for preference share dividends divided by average notional equity (based on 13% of the monthly average of segmental RWAe).
(9) PBB adjusted ROE Q3 2015 - 27% (nine months ended 30 September 2015 - 26%). CPB adjusted ROE Q3 2015 - 11% (nine months ended 30 September 2015 - 12%). Excluding IFRS volatility loss of Q3 2015 - £126 million (nine months ended 30 September 2015 - loss £44 million), the Go-forward Bank's adjusted return on equity was Q3 2015 - 13% (nine months ended 30 September 2015 - 13%).
(10) CIB RWAs of £39 billion includes £8 billion of RWAs related to businesses that will transfer out of CIB in Q4 2015, comprising the Western European loan portfolio and the UK Transaction Services business.
30 September 2015 31 December 2014
Funded assets RWAs Funded assets RWAs
CIB Capital Resolution by product £bn £bn £bn £bn
APAC portfolio (1) 3.2
- More to follow, for following part double click ID:nRSd9427DfRecent news on Natwest
See all newsREG - NatWest Group plc - Transaction in Own Shares
AnnouncementREG - Natwest Markets PLC - Publication of Final Terms
AnnouncementREG - NatWest Group plc - Transaction in Own Shares
AnnouncementREG - NatWest Group plc - Holdings in Company - MFS
AnnouncementREG - NatWest Group plc - Transaction in Own Shares
Announcement