REG - Royal Bk Scot.Grp. - RBS February 2016 Restatement <Origin Href="QuoteRef">RBS.L</Origin> - Part 2
04/02/2016 16:10
- Part 2: For the preceding part double click ID:nRSD1397Oa
- 940
Note:
(1) Reallocation of separately reported one-off items to the statutory income and operating expense lines.
Consolidated income statement reconciliation for the quarter ended 31 December 2014
Re-presentation
As previously of one-off and Non- Presentational
reported other items statutory adjustments (1) Statutory
£m £m £m £m £m
Interest receivable 3,238 - 3,238 - 3,238
Interest payable (856) - (856) - (856)
Net interest income 2,382 - 2,382 - 2,382
Fees and commissions receivable 1,055 - 1,055 - 1,055
Fees and commissions payable (204) - (204) - (204)
Income from trading activities (319) - (319) (84) (403)
Own credit adjustments - (144) (144) 144 -
Other operating income 182 13 195 (60) 135
Non-interest income 714 (131) 583 - 583
Total income 3,096 (131) 2,965 - 2,965
Staff costs (1,192) - (1,192) (133) (1,325)
Premises and equipment (452) - (452) (28) (480)
Other administrative expenses (699) (2) (701) (1,298) (1,999)
Depreciation and amortisation (203) - (203) - (203)
Restructuring costs (542) - (542) 542 -
Litigation and conduct costs (1,164) - (1,164) 1,164 -
Write-down of goodwill and other intangible assets - - - (311) (311)
Write-down of other intangible assets (64) - (64) 64 -
Operating expenses (4,316) (2) (4,318) - (4,318)
Loss before impairment releases (1,220) (133) (1,353) - (1,353)
Impairment releases 670 - 670 - 670
Operating loss (550) (133) (683) - (683)
Own credit adjustments (144) 144 - - -
RFS MI 11 (11) - - -
Loss before tax (683) - (683) - (683)
Tax charge (1,040) - (1,040) - (1,040)
Loss from continuing operations (1,723) - (1,723) - (1,723)
Loss from discontinued operations, net of tax (3,882) - (3,882) - (3,882)
Loss for the period (5,605) - (5,605) - (5,605)
Non-controlling interests (71) - (71) - (71)
Preference share and other dividends (115) - (115) - (115)
Loss attributable to ordinary shareholders (5,791) - (5,791) - (5,791)
Note:
(1) Reallocation of separately reported one-off items to the statutory income and operating expense lines.
Consolidated income statement reconciliation for the year ended 31 December 2014
Re-presentation
As previously of one-off and Non- Presentational
reported other items statutory adjustments (1) Statutory
£m £m £m £m £m
Interest receivable 13,079 - 13,079 - 13,079
Interest payable (3,818) (3) (3,821) - (3,821)
Net interest income 9,261 (3) 9,258 - 9,258
Fees and commissions receivable 4,414 - 4,414 - 4,414
Fees and commissions payable (875) - (875) - (875)
Income from trading activities 1,325 - 1,325 (40) 1,285
Own credit adjustments - (146) (146) 146 -
Gain on redemption of own debt - 20 20 - 20
Strategic disposals - 191 191 (191) -
Other operating income 981 (18) 963 85 1,048
Non-interest income 5,845 47 5,892 - 5,892
Total income 15,106 44 15,150 - 15,150
Staff costs (5,376) - (5,376) (381) (5,757)
Premises and equipment (1,812) - (1,812) (269) (2,081)
Other administrative expenses (2,117) (3) (2,120) (2,448) (4,568)
Depreciation and amortisation (927) - (927) (3) (930)
Restructuring costs (1,154) - (1,154) 1,154 -
Litigation and conduct costs (2,194) - (2,194) 2,194 -
Write-down of goodwill and other intangible assets - - - (523) (523)
Write-down of other intangible assets (146) - (146) 146 -
Write-down of goodwill - (130) (130) 130 -
Operating expenses (13,726) (133) (13,859) - (13,859)
Profit before impairment releases 1,380 (89) 1,291 - 1,291
Impairment releases 1,352 - 1,352 - 1,352
Operating profit 2,732 (89) 2,643 - 2,643
Own credit adjustments (146) 146 - - -
Gain on redemption of own debt 20 (20) - - -
Strategic disposals 191 (191) - - -
Write-down of goodwill (130) 130 - - -
RFS MI (24) 24 - - -
Profit before tax 2,643 - 2,643 - 2,643
Tax charge (1,909) - (1,909) - (1,909)
Profit from continuing operations 734 - 734 - 734
Loss from discontinued operations, net of tax (3,445) - (3,445) - (3,445)
Loss for the period (2,711) - (2,711) - (2,711)
Non-controlling interests (60) - (60) - (60)
Preference share and other dividends (699) - (699) - (699)
Loss attributable to ordinary shareholders (3,470) - (3,470) - (3,470)
Note:
(1) Reallocation of separately reported one-off items to the statutory income and operating expense lines.
Consolidated statement of comprehensive income
As Pension
previously accounting
reported policy impact Restated
Consolidated statement of comprehensive income £m £m £m
Quarter ended 30 September 2015
Profit for the period 1,094 (12) 1,082
Gain resulting from changes in additional liability due to minimum funding requirements (1)
- gross - 3 3
- tax - (1) (1)
Total comprehensive income for the period 810 (10) 800
Nine months ended 30 September 2015
Profit for the period 1,452 (38) 1,414
Gain resulting from changes in additional liability due to minimum funding requirements (1)
- gross - 20 20
- tax - (4) (4)
Total comprehensive loss for the period (16) (22) (38)
Quarter ended 30 June 2015
Profit for the period 814 (13) 801
Gain resulting from changes in additional liability due to minimum funding requirements (1)
- gross - 14 14
- tax - (3) (3)
Total comprehensive loss for the period (605) (2) (607)
Half year ended 30 June 2015
Profit for the period 358 (26) 332
Gain resulting from changes in additional liability due to minimum funding requirements (1)
- gross - 17 17
- tax - (3) (3)
Total comprehensive loss for the period (826) (12) (838)
Quarter ended 31 December 2014
Loss resulting from changes in additional liability due to minimum funding requirements (1)
- gross - (78) (78)
- tax - 16 16
Total comprehensive loss for the period (4,432) (62) (4,494)
Year ended 31 December 2014
Loss resulting from changes in additional liability due to minimum funding requirements (1)
- gross - (1,749) (1,749)
- tax - 350 350
Total comprehensive loss for the year (783) (1,399) (2,182)
Note:
(1) Included in items that do not qualify for reclassification.
Consolidated balance sheet and capital reconciliation
Statutory
As Pension
previously accounting
reported policy impact Restated
Balance sheet £m £m £m
As at 30 September 2015
Deferred tax assets 1,434 377 1,811
Prepayments, accrued income and other assets 4,928 (119) 4,809
Retirement benefit liabilities 1,955 1,763 3,718
Owners' equity 51,593 (1,505) 50,088
Tangible net asset value per ordinary share (1) 384p (13p) 371p
As at 30 June 2015
Deferred tax assets 1,479 374 1,853
Prepayments, accrued income and other assets 4,829 (119) 4,710
Retirement benefit liabilities 1,869 1,750 3,619
Owners' equity 51,117 (1,495) 49,622
Tangible net asset value per ordinary share (1) 380p (13p) 367p
As at 31 December 2014
Deferred tax assets 1,540 371 1,911
Prepayments, accrued income and other assets 5,878 (115) 5,763
Retirement benefit liabilities 2,579 1,739 4,318
Owners' equity 52,149 (1,483) 50,666
Tangible net asset value per ordinary share (1) 387p (13p) 374p
Capital (2) £bn £bn £bn
As at 30 September 2015
PRA transitional basis - Common Equity Tier 1 capital 40.2 (1.4) 38.8
- Risk-weighted assets 316.0 1.0 317.0
- Common Equity Tier 1 ratio 12.7% (50bp) 12.2%
End-point CRR basis - Common Equity Tier 1 capital 40.2 (1.4) 38.8
- Risk-weighted assets 316.0 1.0 317.0
- Common Equity Tier 1 ratio 12.7% (50bp) 12.2%
As at 30 June 2015
PRA transitional basis - Common Equity Tier 1 capital 40.1 (1.4) 38.7
- Risk-weighted assets 326.0 1.0 327.0
- Common Equity Tier 1 ratio 12.3% (50bp) 11.8%
End-point CRR basis - Common Equity Tier 1 capital 40.1 (1.4) 38.7
- Risk-weighted assets 326.0 1.0 327.0
- Common Equity Tier 1 ratio 12.3% (50bp) 11.8%
As at 31 December 2014
PRA transitional basis - Common Equity Tier 1 capital 39.6 (1.4) 38.2
- Risk-weighted assets 356.0 1.0 357.0
- Common Equity Tier 1 ratio 11.1% (40bp) 10.7%
End-point CRR basis - Common Equity Tier 1 capital 39.9 (1.4) 38.5
- Risk-weighted assets 356.0 1.0 357.0
- Common Equity Tier 1 ratio 11.2% (40bp) 10.8%
Notes:
(1) Tangible net asset value per ordinary share represents tangible equity divided by the number of ordinary shares in issue.
(2) Provided to illustrate the impact of the pension accounting policy change on future capital balances and ratios, these metrics are not being restated.
Appendix 2
Components of customer Segments
Components of customer segments
Operating profit/(loss) by segment
Allocated from
Adjustment for
UK Ulster Commercial Private reconciling
PBB Bank Banking Banking CIB Centre RCR items (1) Total
Quarter ended 30 September 2015 £m £m £m £m £m £m £m £m £m
UK PBB 538 11 - - - - - - 549
Ulster Bank RoI - 103 - - - - - - 103
Commercial Banking - - 341 - 35 - - - 376
Private Banking - - - 38 - - - - 38
RBS International - - 50 - - - - - 50
CIB - - - - (109) - - - (109)
Capital Resolution - - - - (808) 26 (16) - (798)
Williams & Glyn 115 - - - - - - - 115
Central items & other - - - (21) - (317) - - (338)
Reconciling items (1) (15) - 21 (2) (130) (10) - 136 -
Operating profit/(loss) 638 114 412 15 (1,012) (301) (16) 136 (14)
Quarter ended 31 December 2014
UK PBB (160) 45 - - - - - - (115)
Ulster Bank RoI - 124 - - - - - - 124
Commercial Banking - - 209 - 22 - - - 231
Private Banking - - - (66) - - - - (66)
RBS International - - 39 21 - - - - 60
CIB - - - - (536) - - - (536)
Capital Resolution - - - - (212) 27 398 - 213
Williams & Glyn 123 - - - - - - - 123
Central items & other - - - (14) - (703) - - (717)
Reconciling items (1) (6) - - - 83 56 - (133) -
Operating (loss)/profit (43) 169 248 (59) (643) (620) 398 (133) (683)
Year ended 31 December 2014
UK PBB 1,016 117 - - - - - - 1,133
Ulster Bank RoI - 489 - - - - - - 489
Commercial Banking - - 1,130 - 126 - - - 1,256
Private Banking - - - 99 - - - - 99
RBS International - - 160 78 - - - - 238
CIB - - - - (710) - - - (710)
Capital Resolution - - - - (461) 97 966 - 602
Williams & Glyn 467 - - - - - - - 467
Central items & other - - - (27) - (904) - - (931)
Reconciling items (1) (33) - - - 153 (53) 22 (89) -
Operating profit/(loss) 1,450 606 1,290 150 (892) (860) 988 (89) 2,643
Note:
(1) Re-presentation of one-off and other items, refer to page 2 for further details.
UK PBB
Quarter ended 30 September 2015
Allocated from Total
UK PBB Ulster Bank UK PBB
Income statement £m £m £m
Net interest income 1,018 37 1,055
Non-interest income 245 13 258
Total income 1,263 50 1,313
Direct expenses
- staff (183) (19) (202)
- other (69) 1 (68)
Indirect expenses (442) (22) (464)
Restructuring costs
- direct (5) - (5)
- indirect (22) (1) (23)
Litigation and conduct costs 2 (2) -
Operating expenses (719) (43) (762)
Operating profit before impairment (losses)/releases 544 7 551
Impairment (losses)/releases (6) 4 (2)
Operating profit 538 11 549
Memo:
Operating expenses - adjusted (1) (694) (40) (734)
Operating profit - adjusted (1) 563 14 577
Key metrics
Return on equity (2) 28.8% 7.6% 27.2%
Return on equity - adjusted (1,2) 30.2% 9.7% 28.7%
Net interest margin 3.19% 3.18% 3.19%
Net interest margin excluding central IEAs 3.61% 3.36% 3.60%
Cost:income ratio 57% 86% 58%
Cost:income ratio - adjusted (1) 55% 80% 56%
Loan impairment charge as % of gross customer loans and advances - (0.4%) -
30 September 2015
Allocated from Total
UK PBB Ulster Bank UK PBB
Capital and balance sheet £bn £bn £bn
Loans and advances to customers (gross) 114.2 4.1 118.3
Loan impairment provisions (1.7) (0.3) (2.0)
Net loans and advances to customers 112.5 3.8 116.3
Funded assets 135.5 5.2 140.7
Risk elements in lending 2.5 0.4 2.9
Customer deposits (excluding repos) 129.3 5.6 134.9
Loan:deposit ratio (excluding repos) 87% 68% 86%
Provision coverage (3) 68% 88% 67%
Risk-weighted assets 30.5 2.8 33.3
Notes:
(1) Excluding restructuring costs and litigation and conduct costs.
(2) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 15% (previously 13%) of the monthly average of segmental RWAes, assuming 28% tax rate; previously 25%.
(3) Provision coverage represents loan impairment provisions as a percentage of risk elements in lending.
UK PBB
Quarter ended 31 December 2014
Allocated from Total
UK PBB Ulster Bank UK PBB
Income statement £m £m £m
Net interest income 1,048 38 1,086
Non-interest income 274 14 288
Total income 1,322 52 1,374
Direct expenses
- staff (183) (22) (205)
- other (76) 4 (72)
Indirect expenses (523) (25) (548)
Restructuring costs
- direct (2) - (2)
- indirect (16) 2 (14)
Litigation and conduct costs (650) - (650)
Operating expenses (1,450) (41) (1,491)
Operating (loss)/profit before impairment (losses)/releases (128) 11 (117)
Impairment (losses)/releases (32) 34 2
Operating (loss)/profit (160) 45 (115)
Memo:
Operating expenses - adjusted (1) (782) (43) (825)
Operating profit - adjusted (1) 508 43 551
Key metrics
Return on equity (2) (10.0%) 29.3% (7.0%)
Return on equity - adjusted (1,2) 25.3% 28.0% 25.5%
Net interest margin 3.38% 3.11% 3.37%
Net interest margin excluding central IEAs 3.82% 3.38% 3.80%
Cost:income ratio 110% 79% 109%
Cost:income ratio - adjusted (1) 59% 83% 60%
Loan impairment charge as % of gross customer loans and advances 0.1% (3.2%) -
31 December 2014
Allocated from Total
UK PBB Ulster Bank UK PBB
Capital and balance sheet £bn £bn £bn
Loans and advances to customers (gross) 109.9 4.2 114.1
Loan impairment provisions (2.2) (0.3) (2.5)
Net loans and advances to customers 107.7 3.9 111.6
Funded assets 132.3 5.5 137.8
Risk elements in lending 3.2 0.4 3.6
Customer deposits (excluding repos) 126.7 5.9 132.6
Loan:deposit ratio (excluding repos) 85% 66% 84%
Provision coverage (3) 70% 80% 69%
Risk-weighted assets 33.7 2.9 36.6
Notes:
(1) Excluding restructuring costs and litigation and conduct costs.
(2) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 15% (previously 13%) of the monthly average of segmental RWAes, assuming 28% tax rate; previously 25%.
(3) Provision coverage represents loan impairment provisions as a percentage of risk elements in lending.
UK PBB
Year ended 31 December 2014
Allocated from Total
UK PBB Ulster Bank UK PBB
Income statement £m £m £m
Net interest income 4,052 169 4,221
Non-interest income 1,166 57 1,223
Total income 5,218 226 5,444
Direct expenses
- staff (741) (83) (824)
- other (355) 9 (346)
Indirect expenses (1,873) (85) (1,958)
Restructuring costs
- direct (10) - (10)
- indirect (92) (9) (101)
Litigation and conduct costs (918) - (918)
Operating expenses (3,989) (168) (4,157)
Operating profit before impairment (losses)/releases 1,229 58 1,287
Impairment (losses)/releases (213) 59 (154)
Operating profit 1,016 117 1,133
Memo:
Operating expenses - adjusted (1) (2,969) (159) (3,128)
Operating profit - adjusted (1) 2,036 126 2,162
Key metrics
Return on equity (2) 11.4% 17.8% 11.9%
Return on equity - adjusted (1,2) 24.1% 19.2% 23.7%
Net interest margin 3.32% 3.45% 3.32%
Net interest margin excluding central IEAs 3.75% 3.75% 3.75%
Cost:income ratio 76% 74% 76%
Cost:income ratio - adjusted (1) 57% 70% 57%
Loan impairment charge as % of gross customer loans and advances 0.2% (1.4%) 0.1%
31 December 2014
Allocated from Total
UK PBB Ulster Bank UK PBB
Capital and balance sheet £bn £bn £bn
Loans and advances to customers (gross) 109.9 4.2 114.1
Loan impairment provisions (2.2) (0.3) (2.5)
Net loans and advances to customers 107.7 3.9 111.6
Funded assets 132.3 5.5 137.8
Risk elements in lending 3.2 0.4 3.6
Customer deposits (excluding repos) 126.7 5.9 132.6
Loan:deposit ratio (excluding repos) 85% 66% 84%
Provision coverage (3) 70% 80% 69%
Risk-weighted assets 33.7 2.9 36.6
Notes:
(1) Excluding restructuring costs and litigation and conduct costs.
(2) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 15% (previously 13%) of the monthly average of segmental RWAes, assuming 28% tax rate; previously 25%.
(3) Provision coverage represents loan impairment provisions as a percentage of risk elements in lending.
Ulster Bank RoI
Quarter ended
30 September 2015
All allocated from Ulster Bank
Income statement £m
Net interest income 90
Non-interest income 74
Total income 164
Direct expenses (1)
- staff (40)
- other (22)
Indirect expenses (48)
Restructuring costs
- direct (3)
- indirect (2)
Operating expenses (115)
Operating profit before impairment releases 49
Impairment releases 54
Operating profit 103
Memo:
Operating expenses - adjusted (2) (110)
Operating profit - adjusted (2) 108
Key metrics
Return on equity (3) 16.7%
Return on equity - adjusted (2,3) 17.5%
Net interest margin 1.52%
Net interest margin excluding central IEAs (4) 1.52%
Cost:income ratio 70%
Cost:income ratio - adjusted (2) 67%
Loan impairment charge as % of gross customer loans and advances (1.2%)
30 September 2015
All allocated from Ulster Bank
Capital and balance sheet £bn
Loans and advances to customers (gross) 18.8
Loan impairment provisions (2.0)
Net loans and advances to customers 16.8
Funded assets 22.9
Risk elements in lending 3.6
Customer deposits (excluding repos) 13.6
Loan:deposit ratio (excluding repos) 123%
Provision coverage (5) 54%
Risk-weighted assets 19.6
Notes:
(1) Staff expenses include costs relating to employees of Ulster Bank Ireland Limited only. Recharges for services provided by or to Ulster Bank Limited are reflected through a management fee within other expenses.
(2) Excluding restructuring costs and litigation and conduct costs.
(3) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 11% (previously 13%) of the monthly average of segmental RWAes, assuming 15% tax rate.
(4) Ulster Bank Ireland Limited manages its regulatory liquidity requirements locally and consequently maintains a low yielding liquid asset portfolio. Excluding the impact of liquid asset balances, net interest margin for Q3 2015 would increase to 1.93%.
(5) Provision coverage represents loan impairment provisions as a percentage of risk elements in lending.
Ulster Bank RoI
Quarter ended
31 December 2014
All allocated from Ulster Bank
Income statement £m
Net interest income 112
Non-interest income 40
Total income 152
Direct expenses (1)
- staff (43)
- other (23)
Indirect expenses
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