REG - Royal Bk Scot.Grp. - Restatement Document <Origin Href="QuoteRef">RBS.L</Origin> - Part 2
06/09/2014 18:36
- Part 2: For the preceding part double click ID:nRSU8278Ma
Fees and commissions receivable 1,291 - 1,291 - - 1,291
Fees and commissions payable (236) - (236) - - (236)
Income from trading activities 856 - 856 96 - 952
Gain on redemption of own debt - - - 20 - 20
Other operating income 444 - 444 247 - 691
Non-interest income 2,355 - 2,355 363 - 2,718
Total income 5,053 - 5,053 360 - 5,413
Staff costs (1,647) - (1,647) (1) (43) (1,691)
Premises and equipment (594) - (594) - (59) (653)
Other administrative expenses (687) - (687) 1 (25) (711)
Depreciation and amortisation (262) (7) (269) (1) (2) (272)
Write-down of other intangible assets - (82) (82) - - (82)
Restructuring costs - (129) (129) - 129 -
Operating expenses (3,190) (218) (3,408) (1) - (3,409)
Profit before impairment losses 1,863 (218) 1,645 359 - 2,004
Impairment losses (362) - (362) - - (362)
Operating profit 1,501 (218) 1,283 359 - 1,642
Own credit adjustments (2) 139 - 139 (139) - -
Restructuring costs (129) 129 - - - -
Gain on redemption of own debt 20 - 20 (20) - -
Write-down of goodwill and other intangible
assets (82) 82 - - - -
Amortisation of purchased intangible assets (7) 7 - - - -
Strategic disposals 191 - 191 (191) - -
RFS Holdings minority interest 9 - 9 (9) - -
Profit before tax 1,642 - 1,642 - - 1,642
Tax (362) - (362) - - (362)
Profit from continuing operations 1,280 - 1,280 - - 1,280
Profit from discontinued operations, net of tax 9 - 9 - - 9
Profit for the period 1,289 - 1,289 - - 1,289
Non-controlling interests (19) - (19) - - (19)
Preference share and other dividends (75) - (75) - - (75)
Profit attributable to ordinary and B
shareholders 1,195 - 1,195 - - 1,195
Notes:
(1) Reallocation of separately reported restructuring costs and litigation and conduct costs to the statutory operating expense lines.
(2) Reallocation of £95 million gain to income from trading activities and £44 million gain to other operating income.
Consolidated income statement reconciliation for the year ended 31 December 2013
Re-presentation Reallocation of
As previously of one-off and residual one-off Presentational
reported other items Restated and other items adjustments (1) Statutory
£m £m £m £m £m £m
Interest receivable 16,740 - 16,740 - - 16,740
Interest payable (5,748) - (5,748) (11) - (5,759)
Net interest income 10,992 - 10,992 (11) - 10,981
Fees and commissions receivable 5,460 - 5,460 - - 5,460
Fees and commissions payable (942) - (942) - - (942)
Income from trading activities 2,651 - 2,651 34 - 2,685
Gain on redemption of own debt - - - 175 - 175
Other operating income 1,281 - 1,281 117 - 1,398
Non-interest income 8,450 - 8,450 326 - 8,776
Total income 19,442 - 19,442 315 - 19,757
Staff costs (6,882) - (6,882) (1) (280) (7,163)
Premises and equipment (2,233) - (2,233) - (115) (2,348)
Other administrative expenses (2,947) (200) (3,147) 2 (4,099) (7,244)
Depreciation and amortisation (1,251) (153) (1,404) - (6) (1,410)
Write-down of goodwill and other intangible
assets - (344) (344) (1,059) - (1,403)
Restructuring costs - (656) (656) - 656 -
Litigation and conduct costs - (3,844) (3,844) - 3,844 -
Operating expenses (13,313) (5,197) (18,510) (1,058) - (19,568)
Profit before impairment losses 6,129 (5,197) 932 (743) - 189
Impairment losses (8,432) - (8,432) - - (8,432)
Operating loss (2,303) (5,197) (7,500) (743) - (8,243)
Own credit adjustments (2) (120) - (120) 120 - -
Payment Protection Insurance costs (900) 900 - - - -
Interest Rate Hedging Products redress and
related costs (550) 550 - - - -
Regulatory and legal actions (2,394) 2,394 - - - -
Restructuring costs (656) 656 - - - -
Gain on redemption of own debt 175 - 175 (175) - -
Write-down of goodwill and other intangible
assets (1,403) 344 (1,059) 1,059 - -
Amortisation of purchased intangible assets (153) 153 - - - -
Strategic disposals 161 - 161 (161) - -
Bank levy (200) 200 - - - -
RFS Holdings minority interest 100 - 100 (100) - -
Loss before tax (8,243) - (8,243) - - (8,243)
Tax (382) - (382) - - (382)
Loss from continuing operations (8,625) - (8,625) - - (8,625)
Profit from discontinued operations, net of tax 148 - 148 - - 148
Loss for the period (8,477) - (8,477) - - (8,477)
Non-controlling interests (120) - (120) - - (120)
Preference share and other dividends (398) - (398) - - (398)
Loss attributable to ordinary and B
shareholders (8,995) - (8,995) - - (8,995)
Notes:
(1) Reallocation of separately reported restructuring costs and litigation and conduct costs to the statutory operating expense lines.
(2) Reallocation of £35 million gain to income from trading activities and £155 million loss to other operating income.
Consolidated income statement reconciliation for the half year ended 30 June 2013
Re-presentation Reallocation of
As previously of one-off and residual one-off Presentational
reported other items Restated and other items adjustments (1) Statutory
£m £m £m £m £m £m
Interest receivable 8,560 - 8,560 - - 8,560
Interest payable (3,118) - (3,118) (5) - (3,123)
Net interest income 5,442 - 5,442 (5) - 5,437
Fees and commissions receivable 2,708 - 2,708 - - 2,708
Fees and commissions payable (460) - (460) - - (460)
Income from trading activities 1,890 - 1,890 174 - 2,064
Gain on redemption of own debt - - - 191 - 191
Other operating income 1,028 - 1,028 304 - 1,332
Non-interest income 5,166 - 5,166 669 - 5,835
Total income 10,608 - 10,608 664 - 11,272
Staff costs (3,585) - (3,585) - (142) (3,727)
Premises and equipment (1,079) - (1,079) - (25) (1,104)
Other administrative expenses (1,479) - (1,479) 2 (704) (2,181)
Depreciation and amortisation (637) (79) (716) - (20) (736)
Write-down of goodwill and other intangible assets
Restructuring costs - (271) (271) - 271 -
Litigation and conduct costs - (620) (620) - 620 -
Operating expenses (6,780) (970) (7,750) 2 - (7,748)
Profit before impairment losses 3,828 (970) 2,858 666 - 3,524
Impairment losses (2,150) - (2,150) - - (2,150)
Operating profit 1,678 (970) 708 666 - 1,374
Own credit adjustments (2) 376 - 376 (376) - -
Payment Protection Insurance costs (185) 185 - - - -
Interest Rate Hedging Products redress and
related costs (50) 50 - - - -
Regulatory and legal actions (385) 385 - - - -
Restructuring costs (271) 271 - - - -
Gain on redemption of own debt 191 - 191 (191) - -
Write-down of goodwill and other intangible assets
Amortisation of purchased intangible assets (79) 79 - - - -
Strategic disposals - - - - - -
RFS Holdings minority interest 99 - 99 (99) - -
Profit before tax 1,374 - 1,374 - - 1,374
Tax (678) - (678) - - (678)
Profit from continuing operations 696 - 696 - - 696
Profit from discontinued operations, net of tax 138 - 138 - - 138
Profit for the period 834 - 834 - - 834
Non-controlling interests (117) - (117) - - (117)
Preference share and other dividends (182) - (182) - - (182)
Profit attributable to ordinary and B
shareholders 535 - 535 - - 535
Notes:
(1) Reallocation of separately reported restructuring costs and litigation and conduct costs to the statutory operating expense lines.
(2) Reallocation of £175 million gain to income from trading activities and £201 million gain to other operating income.
Consolidated income statement reconciliation for the quarter ended 30 June 2013
Re-presentation Reallocation of
As previously of one-off and residual one-off Presentational
reported other items Restated and other items adjustments (1) Statutory
£m £m £m £m £m £m
Interest receivable 4,281 - 4,281 - - 4,281
Interest payable (1,511) - (1,511) (3) - (1,514)
Net interest income 2,770 - 2,770 (3) - 2,767
Fees and commissions receivable 1,392 - 1,392 - - 1,392
Fees and commissions payable (250) - (250) - - (250)
Income from trading activities 874 - 874 75 - 949
Gain on redemption of own debt - - - 242 - 242
Other operating income 661 - 661 59 - 720
Non-interest income 2,677 - 2,677 376 - 3,053
Total income 5,447 - 5,447 373 - 5,820
Staff costs (1,764) - (1,764) - (76) (1,840)
Premises and equipment (526) - (526) - (22) (548)
Other administrative expenses (801) - (801) 1 (618) (1,418)
Depreciation and amortisation (308) (38) (346) - (3) (349)
Restructuring costs - (149) (149) - 149 -
Litigation and conduct costs - (570) (570) - 570 -
Operating expenses (3,399) (757) (4,156) 1 - (4,155)
Profit before impairment losses 2,048 (757) 1,291 374 - 1,665
Impairment losses (1,117) - (1,117) - - (1,117)
Operating profit 931 (757) 174 374 - 548
Own credit adjustments (2) 127 - 127 (127) - -
Payment Protection Insurance costs (185) 185 - - - -
Regulatory and legal actions (385) 385 - - - -
Restructuring costs (149) 149 - - - -
Gain on redemption of own debt 242 - 242 (242) - -
Amortisation of purchased intangible assets (38) 38 - - - -
Strategic disposals 6 - 6 (6) - -
RFS Holdings minority interest (1) - (1) 1 - -
Profit before tax 548 - 548 - - 548
Tax (328) - (328) - - (328)
Profit from continuing operations 220 - 220 - - 220
Profit from discontinued operations, net of tax 9 - 9 - - 9
Profit for the period 229 - 229 - - 229
Non-controlling interests 14 - 14 - - 14
Preference share and other dividends (101) - (101) - - (101)
Profit attributable to ordinary and B
shareholders 142 - 142 - - 142
Notes:
(1) Reallocation of separately reported restructuring costs and litigation and conduct costs to the statutory operating expense lines.
(2) Reallocation of £76 million gain to income from trading activities and £51 million gain to other operating income.
Appendix 2
Components of customer franchises
Components of customer franchises
The tables in this appendix summarise the performance of each of the new franchises and show how the previously reported
divisions have been allocated to them.
Personal & Business Banking (PBB) includes the segments UK Personal & Business Banking (UK PBB) and Ulster Bank. UK PBB
includes the whole of UK Retail and Business Banking operations, which serves customers with a turnover of up to £2 million
which was previously included in UK Corporate division. Williams & Glyn is included in this segment.
Commercial & Private Banking (CPB) includes the segments Commercial Banking and Private Banking. Commercial Banking
comprises the commercial and mid-corporate elements of UK Corporate. It also includes a small number of large domestically
focused UK Corporates previously reported within International Banking.
Corporate & Institutional Banking (CIB) includes the majority of customers previously reported within the International
Banking and Markets businesses. CIB is reported as a single segment.
Components of customer franchises
Operating profit/(loss) by division
Allocated from
UK UK International Ulster
Retail Corporate Wealth Banking Bank CFG Markets Centre RCR Total
Quarter ended 31 March 2014 £m £m £m £m £m £m £m £m £m £m
UK PBB 451 59 - - - - - - - 510
Ulster Bank - - - - 9 - - - - 9
PBB 451 59 - - 9 - - - - 519
Commercial Banking - 314 - 3 - - - 4 - 321
Private Banking - - 75 - - - - - - 75
CPB - 314 75 3 - - - 4 - 396
Corporate & Institutional Banking - 31 - 75 - - 227 - - 333
Central items - - - - - - - 5 - 5
Citizens Financial Group - - - - - 144 - - - 144
RCR - - - - - - - - (114) (114)
Operating profit/(loss) 451 404 75 78 9 144 227 9 (114) 1,283
Allocated from
UK UK International Ulster Non-
Retail Corporate Wealth Banking Bank CFG Markets Centre Core Total
Year ended 31 December 2013 £m £m £m £m £m £m £m £m £m £m
UK PBB 692 127 - - - - - - - 819
Ulster Bank - - - - (1,609) - - - - (1,609)
PBB 692 127 - - (1,609) - - - - (790)
Commercial Banking - 503 - 15 - - - 12 - 530
Private Banking - - (61) - - - - - - (61)
CPB - 503 (61) 15 - - - 12 - 469
Corporate & Institutional Banking - (244) - 66 - - (2,704) - - (2,882)
Central items - - - - - - - 647 - 647
Citizens Financial Group - - - - - 605 - - - 605
Non-Core - - - - - - - - (5,549) (5,549)
Operating profit/(loss) 692 386 (61) 81 (1,609) 605 (2,704) 659 (5,549) (7,500)
Components of customer franchises
Business allocated from
UK UK International Ulster Non-
Retail Corporate Wealth Banking Bank CFG Markets Centre Core Total
Half year ended 30 June 2013 £m £m £m £m £m £m £m £m £m £m
UK PBB 603 85 - - - - - - - 688
Ulster Bank - - - - (381) - - - - (381)
PBB 603 85 - - (381) - - - - 307
Commercial Banking - 400 - 8 - - - 5 - 413
Private Banking - - 88 - - - - - - 88
CPB - 400 88 8 - - - 5 - 501
Corporate & Institutional Banking - 45 - 62 - - (304) - - (197)
Central items - - - - - - - 553 - 553
Citizens Financial Group - - - - - 353 - - - 353
Non-Core - - - - - - - - (809) (809)
Operating profit/(loss) 603 530 88 70 (381) 353 (304) 558 (809) 708
Quarter ended 30 June 2013
UK PBB 212 56 - - - - - - - 268
Ulster Bank - - - - (210) - - - - (210)
PBB 212 56 - - (210) - - - - 58
Commercial Banking - 222 - 4 - - - 3 - 229
Private Banking - - 47 - - - - - - 47
CPB - 222 47 4 - - - 3 - 276
Corporate & Institutional Banking - 26 - 7 - - (428) - - (395)
Central items - - - - - - - 352 - 352
Citizens Financial Group - - - - - 167 - - - 167
Non-Core - - - - - - - - (284) (284)
Operating profit/(loss) 212 304 47 11 (210) 167 (428) 355 (284) 174
Personal & Business Banking
Quarter ended 31 March 2014
Allocated from Total
UK Retail UK Corporate UK PBB Ulster Bank PBB
Income statement £m £m £m £m £m
Net interest income 972 152 1,124 154 1,278
Non-interest income 246 93 339 47 386
Total income 1,218 245 1,463 201 1,664
Direct expenses
- staff (162) (63) (225) (63) (288)
- other (120) (10) (130) (17) (147)
Indirect expenses (437) (83) (520) (63) (583)
Restructuring costs
- indirect 11 (1) 10 (2) 8
Total expenses (708) (157) (865) (145) (1,010)
Operating profit before impairment losses 510 88 598 56 654
Impairment losses (59) (29) (88) (47) (135)
Operating profit 451 59 510 9 519
Memo: operating profit - adjusted (1) 440 60 500 11 511
Key metrics
Return on equity (2) 30.3% 12.4% 26.0% 0.9% 16.7%
Return on equity - adjusted (1,2) 29.6% 12.6% 25.5% 1.1% 16.4%
Net interest margin 3.51% 4.34% 3.61% 2.29% 3.37%
Cost:income ratio 58% 64% 59% 72% 61%
Cost:income ratio - adjusted (1) 59% 64% 60% 71% 61%
Loan impairment charge as % of gross customer
loans and advances 0.2% 0.8% 0.3% 0.7% 0.3%
31 March 2014
Allocated from Total
UK Retail UK Corporate UK PBB Ulster Bank PBB
Capital and balance sheet £bn £bn £bn £bn £bn
Loans and advances to customers (gross) 113.8 14.6 128.4 26.6 155.0
Loan impairment provisions (1.9) (1.0) (2.9) (3.4) (6.3)
Net loans and advances to customers 111.9 13.6 125.5 23.2 148.7
Total funded assets 118.4 14.4 132.8 26.0 158.8
Risk elements in lending 3.3 1.2 4.5 4.7 9.2
Customer deposits (excluding repos) 114.8 29.8 144.6 21.1 165.7
Loan:deposit ratio (excluding repos) 98% 46% 87% 110% 90%
Provision coverage (3) 58% 85% 65% 72% 68%
Risk-weighted assets 36.8 11.7 48.5 28.7 77.2
Notes:
(1) Excluding restructuring costs.
(2) Return on equity is based on divisional operating profit after tax divided by average notional equity (based on 12% of the monthly average of divisional RWAs; previously - 10% of RWAe).
(3) Provision coverage represents loan impairment provisions as a percentage of risk elements in lending.
Personal & Business Banking
Year ended 31 December 2013
Allocated from Total
UK Retail UK Corporate UK PBB Ulster Bank PBB
Income statement £m £m £m £m £m
Net interest income 3,883 607 4,490 619 5,109
Non-interest income 958 365 1,323 240 1,563
Total income 4,841 972 5,813 859 6,672
Direct expenses
- staff (674) (259) (933) (239) (1,172)
- other (442) (82) (524) (63) (587)
Indirect expenses (1,637) (312) (1,949) (263) (2,212)
Restructuring costs
- direct (118) - (118) (27) (145)
- indirect (94) (15) (109) (12) (121)
Litigation and conduct costs (860) - (860) (90) (950)
Total expenses (3,825) (668) (4,493) (694) (5,187)
Operating profit before impairment losses 1,016 304 1,320 165 1,485
Impairment losses (324) (177) (501) (1,774) (2,275)
Operating profit/(loss) 692 127 819 (1,609) (790)
Memo: operating profit/(loss) - adjusted (1) 1,764 142 1,906 (1,480) 426
Impairments pertaining to the creation of RCR - (2) (2) (892) (894)
Key metrics
Return on equity (2) 11.4% 5.6% 9.8% (33.2%) (5.7%)
Return on equity - adjusted (1,2) 29.0% 6.3% 22.8% (30.6%) 3.1%
Net interest margin 3.48% 4.14% 3.56% 1.88% 3.21%
Cost:income ratio 79% 69% 77% 81% 78%
Cost:income ratio - adjusted (1) 57% 67% 59% 66% 60%
Loan impairment charge as a % of gross customer
loans and advances 0.3% 1.2% 0.4% 5.6% 1.4%
31 December 2013
Allocated from Total
UK Retail UK Corporate UK PBB Ulster Bank PBB
Capital and balance sheet £bn £bn £bn £bn £bn
Loans and advances to customers (gross) 113.2 14.6 127.8 31.4 159.2
Loan impairment provisions (2.1) (0.9) (3.0) (5.4) (8.4)
Net loans and advances to customers 111.1 13.7 124.8 26.0 150.8
Total funded assets 117.6 14.6 132.2 28.0 160.2
Risk elements in lending 3.6 1.1 4.7 8.5 13.2
Customer deposits (excluding repos) 114.9 30.0 144.9 21.7 166.6
Loan:deposit ratio (excluding repos) 97% 46% 86% 120% 91%
Provision coverage (3) 59% 76% 63% 64% 63%
Risk-weighted assets 37.4 13.8 51.2 30.7 81.9
Notes:
(1) Excluding restructuring costs and litigation and conduct costs.
(2) Return on equity is based on divisional operating profit after tax divided by average notional equity (based on 12% of the monthly average of divisional RWAs; previously - 10% of RWAe).
(3) Provision coverage represents loan impairment provisions as a percentage of risk elements in lending.
Personal & Business Banking
Half year ended 30 June 2013
Allocated from Total
UK Retail UK Corporate UK PBB Ulster Bank PBB
Income statement £m £m £m £m £m
Net interest income 1,897 303 2,200 302 2,502
Non-interest income 451 178 629 142 771
Total income 2,348 481 2,829 444 3,273
Direct expenses
- staff (339) (130) (469) (124) (593)
- other (171) (29) (200) (27) (227)
Indirect expenses (802) (145) (947) (125) (1,072)
Restructuring costs
- direct (70) - (70) (15) (85)
- indirect (34) (5) (39) (6) (45)
Litigation and conduct cost (160) - (160) (25) (185)
Total expenses (1,576)
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