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Form 20-F X
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Form 40-F ___
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Yes
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No X
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Contents
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Page
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Introduction
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1
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Highlights
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3
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Analysis of results
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9
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Segment performance
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19
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Selected statutory financial statements
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27
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Notes
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32
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Forward-looking statements
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37
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Appendix 1 – Additional segment information
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Appendix 2 – Additional capital resources, RWA and leverage information
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●
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revised reportable segments;
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a change to the treatment of one-off and other items;
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allocation of central balance sheet items;
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revised treasury allocations; and
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●
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revised segmental return on equity.
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Date:
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Friday 29 April 2016
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Time:
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9:00 am UK time
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Conference ID
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89104610
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Webcast:
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www.rbs.com/results
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Dial in details:
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International – +44 (0) 1452 568 172
UK Free Call – 0800 694 8082
US Toll Free – 1 866 966 8024
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For analyst enquiries:
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Richard O’Connor
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Head of Investor Relations
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+44 (0) 20 7672 1758
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For media enquiries:
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RBS Press Office
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+44 (0) 131 523 4205
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●
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An attributable loss(2) of £968 million in Q1 2016 compared with £459 million in Q1 2015. Excluding the final DAS dividend of £1,193 million, the Bank made an attributable profit(2) of £225 million notwithstanding IFRS volatility(3) losses of £356 million, restructuring costs of £238 million and an impairment charge of £223 million largely related to its shipping portfolio. An own credit adjustment gain of £256 million was recorded in Q1 2016.
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Operating profit was £421 million in Q1 2016 compared with £37 million in Q1 2015. Adjusted operating profit(4) of £440 million in Q1 2016 was down from £1,355 million in Q1 2015 primarily due to Capital Resolution and the IFRS volatility charge.
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○
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UK Personal & Business Banking (UK PBB) adjusted operating profit(5) of £531 million was £54 million, or 9%, lower than in Q1 2015. Adjusting for the impact of business transfers(6), net loans and advances increased by £11.2 billion compared with Q1 2015 primarily driven by strong mortgage growth. Total income fell by 3% compared with Q1 2015 reflecting margin pressure and reduced fee income, but was 2% higher than Q4 2015 as margins stabilised.
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○
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Commercial Banking adjusted operating profit(5) of £403 million was 7% up on Q1 2015. Excluding the impact of transfers(7), net loans and advances increased by £4.0 billion helping to drive an 8% increase in income.
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○
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Ulster Bank RoI adjusted operating profit(5) was stable at £64 million compared with Q1 2015.
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○
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Private Banking adjusted operating profit(5) was 40% lower at £26 million, as the business continues to invest in its infrastructure, whilst RBS International adjusted operating profit(5) was stable compared with Q1 2015 at £53 million, with return on equity remaining strong at 16%.
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○
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CIB recorded income of £341 million in Q1 2016. Adjusted income of £277 million was £165 million lower than Q1 2015, excluding a £42 million transfer of portfolios to Commercial Banking, reflecting difficult market conditions and the reduced scale of the business. An adjusted operating loss(5) of £54 million compared with a £100 million profit in Q1 2015. Adjusted expenses reduced by 16% as CIB moves towards a sustainable cost base.
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○
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Capital Resolution reported an adjusted operating loss(5) of £377 million, compared with an operating profit of £143 million in Q1 2015. A net impairment charge of £196 million was recognised in Q1 2016, principally in relation to the shipping portfolio. RWAs reduced by £36.7 billion from Q1 2015 to £47.6 billion.
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●
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Net interest margin (NIM) was stable compared with Q1 2015 at 2.15% as the benefit from reductions in the low yielding non-core assets has been largely offset by modest asset margin pressure and mix impacts across the core franchises.
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Adjusted operating expenses(5) were down by £157 million compared with Q1 2015. Excluding expenses associated with Williams & Glyn and write down of intangible assets, adjusted operating expenses were down £189 million.
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Restructuring costs were £238 million in the quarter, down £209 million, or 47%, compared with Q1 2015. Litigation and conduct costs of £31 million compared with £856 million in Q1 2015 and £2,124 million in Q4 2015, which included additional provisions for mortgage-backed securities and foreign exchange litigation in the US, additional PPI provisions and other customer redress.
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Further to the announcement on 27 January 2016, RBS made a payment of £4.2 billion during March to The Royal Bank of Scotland Group Pension Fund, being an accelerated payment of existing committed future contributions. The impact of the £4.2 billion accelerated payment was largely reflected in the year end financial statements; the incremental impact of the accelerated payment being made during March was to reduce the CET1 ratio by around 30 basis points.
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Tangible net asset value (TNAV) was 351p per ordinary share at 31 March 2016, broadly stable in the quarter. A 14p reduction due to the payment of the final Dividend Access Share dividend and the accelerated pension payment was offset by gains recognised in foreign exchange reserves (5p) reflecting the strengthening of the US dollar and the euro, and cash flow hedging reserves (8p) as swap rates decreased.
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Strategy goal
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2016 target
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Q1 2016 Progress
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Strength and sustainability
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Maintain Bank CET1 ratio of 13%
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CET1 ratio of 14.6%
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£2 billion AT1 issuance
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Continue to plan to issue in 2016, subject to market conditions
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Capital Resolution RWAs around £30 billion
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RWAs down £1.4 billion to £47.6 billion despite adverse exchange rate and interest rate movements
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Customer experience
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Narrow the gap to No.1 in NPS in every primary UK brand
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Year on year Ulster Bank Personal (NI) has narrowed the gap, and our NatWest and Royal Bank brands show improvements in NPS
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Simplifying the bank
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Reduce operating expenses by £800 million
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Operating expenses down £189 million(8); on track
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Supporting growth
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Net 4% growth in PBB and CPB customer loans
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Net lending in PBB and CPB up 15% on an annualised basis in the quarter
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Employee engagement
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Raise employee engagement to within two points of the GFS norm
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Reviewed annually during Q3
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(1)
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Excluding restructuring costs, litigation and conduct costs, write down of goodwill, own credit adjustments, loss on redemption of own debt and strategic disposals.
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(2)
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Attributable to ordinary shareholders.
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(3)
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IFRS volatility relates to loans which are economically hedged but for which hedge accounting is not permitted under IFRS.
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(4)
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Operating profit/(loss) before tax, own credit adjustments, loss on redemption of own debt, strategic disposals and excluding restructuring costs, litigation and conduct costs and write down of goodwill.
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(5)
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For unadjusted operating profit and expenses see segment performance on pages 19 to 21.
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(6)
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The transfer of Ulster Bank Northern Ireland commercial activities to Commercial Banking on 1 January 2016 represented £1.1 billion of net loans and advances.
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(7)
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The portfolio transfers included net loans and advances to customers of £7.3 billion (£6.2 billion at point of transfer)
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(8)
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Excluding litigation and conduct costs, restructuring costs, write down of goodwill and other intangible assets and the operating costs of Williams & Glyn.
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●
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RBS remains on track with its plan to build a strong, simple, fair bank for customers and shareholders.
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CET1 ratio remains ahead of our 13% target. The 90 basis points reduction in the CET1 ratio during the quarter was largely due to the payment of the final Dividend Access Share dividend, 50 basis points, and the accelerated pension payment, 30 basis points, actions that have been taken to normalise the ownership structure and increase the long-term resilience of the Bank.
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RWAs increased by £6.9 billion during the quarter to £249.5 billion driven by strong loan growth alongside market volatility and exchange rate movements as sterling weakened over the quarter. Although market conditions have been difficult in Q1 2016, we remain on track to reduce RWAs by £19 billion in Capital Resolution to around £30 billion by the end of 2016.
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●
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RBS’s leverage ratio reduced from 5.6% to 5.3% principally due to the attributable loss in the quarter. RBS continues to plan to issue £2 billion AT1 capital notes in 2016, subject to market conditions, which will provide further balance sheet resilience.
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●
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RBS successfully completed two senior unsecured debt issuances: €1.5 billion seven year 2.5% notes and $1.5 billion ten year 4.8% notes. The debt will be eligible to meet RBS’s Minimum Requirement for Own Funds and Eligible Liabilities (MREL) and forms a significant part of our targeted £3-5 billion senior debt issuance for 2016.
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●
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On 8 April 2016, RBS successfully completed the cash tender of £2.3 billion of certain US dollar, sterling and euro senior debt securities. The tender offers were part of the on-going transition to a holding company capital and term funding model in line with regulatory requirements and included securities that RBS considers non-compliant for MREL purposes. RBS will recognise a loss of c.£66 million in its Q2 2016 results in relation to the tender offer. Over the last six months to the end of April, RBS has reduced term funding by £11.7 billion.
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On 11 April 2016, we completed the successful transfer of the Coutts International businesses in Asia and the Middle East to Union Bancaire Privée, the final milestone in the sale of our International Private Bank. We also completed the sale of our Russian subsidiary in early April.
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RBS continued to deliver strong support for both household and business customers. Within UK PBB, gross new mortgage lending almost doubled from a subdued Q1 2015 performance to £7.0 billion. Our flow market share in Q1 2016 was approximately 11.4% compared with stock share of 8.3%. Buy-to-let new mortgage lending was £1.5 billion compared with £0.8 billion in Q1 2015 and £1.3 billion in Q4 2015. We now have nearly 1,000 mortgage advisors supporting our customers, an increase of over 20% since the beginning of 2015. Net new lending in Commercial Banking totalled £6.5 billion. Q1 2016 represents the fifth successive quarter of net lending growth in Commercial Banking.
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The Reward account continues to show positive momentum and now has 539,000 fee-paying customers compared with 202,000 at 31 December 2015.
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We continue to make better use of our digital channels to make it simpler to serve our customers and for them to do business with us. Online mortgage renewals more than doubled to £3.0 billion compared with Q1 2015, and NatWest customers can now apply for personal loans or credit cards via the mobile app. Active users of our mobile app increased by 20% over the last year, with over 200,000 new users in Q1 2016.
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Q1 2015
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Q4 2015
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Q1 2016
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Year end 2016 target
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||
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Personal Banking
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NatWest (England & Wales)(1)
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5
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9
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13
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15
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Royal Bank of Scotland (Scotland)(1)
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-18
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-9
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-6
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-5
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Ulster Bank (Northern Ireland)(2)
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-18
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-9
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-14
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-3
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Ulster Bank (Republic of Ireland)(2)
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-16
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-14
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-12
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-10
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Business Banking
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NatWest (England & Wales)(3)
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-6
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9
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9
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13
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Royal Bank of Scotland (Scotland)(3)
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-17
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-7
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-7
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2
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Ulster Bank Corporate
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Ulster Bank (Northern Ireland) (4)
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n/a
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-19
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-10
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-4
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Ulster Bank (Republic of Ireland) (5)
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n/a
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-21
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n/a
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-15
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Commercial Banking(6)
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12
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9
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15
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17
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Q1 2015
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Q4 2015
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Q1 2016
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Year end 2016 target
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||
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Customer trust(7)
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NatWest (England & Wales)
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44%
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48%
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48%
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51%
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Royal Bank of Scotland (Scotland)
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10%
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14%
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21%
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26%
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(1)
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Source: GfK FRS 6 month rolling data. Latest base sizes: NatWest (England & Wales) (3464) Royal Bank of Scotland (Scotland) (607). Based on the question: "How likely is it that you would recommend (brand) to a relative, friend or colleague in the next 12 months for current account banking?“
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(2)
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Source: Coyne Research 12 month rolling data. Latest base sizes: Ulster Bank NI (359) Ulster Bank RoI (344) Question: “Please indicate to what extent you would be likely to recommend (brand) to your friends or family using a scale of 0 to 10 where 0 is not at all likely and 10 is extremely likely”.
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(3)
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Source: Charterhouse Research Business Banking Survey (GB), based on interviews with businesses with an annual turnover up to £2 million. Quarterly rolling data. Latest base sizes: NatWest England & Wales (1347), RBS Scotland (425). Weighted by region and turnover to be representative of businesses in England & Wales/Scotland, 4 quarter rolling data.
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(4)
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Source: Charterhouse Research Business Banking Survey (NI). Latest base size: Ulster (383) Weighted by turnover and industry sector to be representative of businesses in Northern Ireland, 4 quarter rolling data.
In 2016 we switched the source of advocacy measurement for Ulster Bank Corporate NI to the Charterhouse Business Banking Study. Charterhouse is a recognised, independent syndicate study that provides more frequent reporting of NPS as well as additional diagnostic customer feedback to help us improve the customer experience. The Q4 2015 figure has been restated to reflect this.
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(5)
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Source: PWC Republic of Ireland Business Banking Tracker. Data collected annually. Latest base sizes: Ulster Bank RoI (222). Weighted by turnover to be representative of businesses in the Republic of Ireland.
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(6)
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Source: Charterhouse Research Business Banking Survey (GB), based on interviews with businesses with annual turnover between £2 million and £1 billion. Latest base size: RBSG Great Britain (888). Weighted by region and turnover to be representative of businesses in Great Britain, 4 quarter rolling data.
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(7)
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Source: Populus. Latest quarter’s data. Measured as a net of those that trust RBS/NatWest to do the right thing, less those that do not. Latest base sizes: NatWest, England & Wales (920), RBS Scotland (199).
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●
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We expect PBB and CPB income to be broadly stable in 2016 compared with 2015 as strong planned balance sheet growth, particularly in mortgages but also in core commercial lending, is balanced by headwinds from low interest rates and the uncertain macroeconomic environment. In Q1 2016 income was broadly stable across the combined PBB and CPB business. Compared with 2015, we expect to see modest income erosion in CIB following a difficult Q1 2016, albeit performance improved towards the end of the quarter.
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●
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RBS remains on track to achieve an £800 million cost reduction in 2016 after achieving a £189 million reduction in the first quarter. We retain our expectation that cost reduction will exceed any income erosion across our combined core businesses. We will incur a charge of approximately £50 million in respect of the Financial Services Compensation Scheme (FSCS) levy in our Q2 2016 results.
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●
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We anticipate a modest net impairment charge for the year in our core franchises. The impairment charge taken in the quarter largely related to the shipping portfolio and we continue to anticipate additional net impairments in the Capital Resolution business. We also recognise the increased risk of large single name events across our portfolios given the uncertain macroeconomic environment.
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●
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Restructuring costs are expected to remain high in 2016, totalling over £1 billion.
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●
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We expect Capital Resolution disposal losses of approximately £1.5 billion over the period 2015-19, and we anticipate that we will incur most of the remaining losses in 2016 (2015 - £367 million). Losses in Q1 2016 almost entirely comprise the £226 million impairment relating to the shipping portfolio. Although market conditions have been difficult in Q1 2016, Capital Resolution remains on track to reduce RWAs to around £30 billion by the end of 2016 following a £1.4 billion reduction in Q1 2016.
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●
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We continue to deal with a range of uncertainties in the external environment, not least those caused by the forthcoming referendum on the UK’s continuing membership of the European Union. We will also have to manage conduct-related investigations and litigation, including US RMBS, throughout 2016, and substantial related incremental provisions may be recognised during the year.
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●
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RBS announced an update on its plans to divest Williams & Glyn on 28 April 2016. Since the last update provided with the 2015 Annual Results, we have undertaken further extensive analysis on the separation and divestment of Williams & Glyn. As a result of this analysis, we have concluded that there is a significant risk that the separation and divestment to which we are committed will not be achieved by 31 December 2017. Due to the complexities of Williams & Glyn's customer and product mix, the programme to create a cloned banking platform continues to be very challenging and the timetable to achieve separation is uncertain. RBS is exploring alternative means to achieve separation and divestment. The overall financial impact on RBS is now likely to be significantly greater than previously estimated.
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Quarter ended
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31 March
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31 December
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31 March
|
|
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2016
|
2015
|
2015*
|
|
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£m
|
£m
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£m
|
|
Net interest income
|
2,156
|
2,162
|
2,203
|
|
|
|
|
|
|
Own credit adjustments
|
256
|
(115)
|
120
|
|
Loss on redemption of own debt
|
-
|
(263)
|
-
|
|
Strategic disposals
|
(6)
|
(22)
|
(135)
|
|
Other operating income
|
658
|
722
|
1,331
|
|
|
|
|
|
|
Non-interest income
|
908
|
322
|
1,316
|
|
|
|
|
|
|
Total income
|
3,064
|
2,484
|
3,519
|
|
|
|
|
|
|
Litigation and conduct costs
|
(31)
|
(2,124)
|
(856)
|
|
Restructuring costs
|
(238)
|
(614)
|
(447)
|
|
Write down of goodwill
|
-
|
(498)
|
-
|
|
Other costs
|
(2,151)
|
(2,525)
|
(2,308)
|
|
|
|
|
|
|
Operating expenses
|
(2,420)
|
(5,761)
|
(3,611)
|
|
|
|
|
|
|
Profit/(loss) before impairment (losses)/releases
|
644
|
(3,277)
|
(92)
|
|
Impairment (losses)/releases
|
(223)
|
327
|
129
|
|
|
|
|
|
|
Operating profit/(loss) before tax
|
421
|
(2,950)
|
37
|
|
Tax (charge)/credit
|
(80)
|
261
|
(190)
|
|
|
|
|
|
|
Profit/(loss) from continuing operations
|
341
|
(2,689)
|
(153)
|
|
Profit/(loss) from discontinued operations, net of tax
|
-
|
90
|
(316)
|
|
|
|
|
|
|
Profit/(loss) for the period
|
341
|
(2,599)
|
(469)
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
Non-controlling interests
|
22
|
20
|
(84)
|
|
Other owners
|
94
|
121
|
74
|
|
Dividend access share
|
1,193
|
-
|
-
|
|
Loss attributable to ordinary shareholders
|
(968)
|
(2,740)
|
(459)
|
|
|
|
|
|
|
|
|
|
|
|
Memo:
|
|
|
|
|
|
|
|
|
|
Total income - adjusted (1)
|
2,814
|
2,884
|
3,534
|
|
Operating expenses - adjusted (2)
|
(2,151)
|
(2,525)
|
(2,308)
|
|
Operating profit - adjusted (1,2)
|
440
|
686
|
1,355
|
|
|
|
|
|
|
*Restated, refer to Note 1 on page 32 for further details.
|
|
|
|
|
|
|
|
|
|
Key metrics and ratios
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
2.15%
|
2.10%
|
2.15%
|
|
Cost:income ratio
|
79%
|
232%
|
103%
|
|
Cost:income ratio - adjusted (1,2)
|
76%
|
88%
|
65%
|
|
(Loss)/earnings per ordinary share from continuing operations
|
|
|
|
|
- basic
|
(8.3p)
|
(24.5p)
|
(2.2p)
|
|
- adjusted (1,2)
|
(8.1p)
|
5.1p
|
8.6p
|
|
Return on tangible equity (3)
|
(9.6%)
|
(26.5%)
|
(4.3%)
|
|
Return on tangible equity - adjusted (1,2,3)
|
(9.4%)
|
6.6%
|
7.4%
|
|
Average tangible equity (3)
|
£40,383m
|
£41,319m
|
£42,392m
|
|
Average number of ordinary shares outstanding during the period (millions)
|
11,606
|
11,554
|
11,451
|
|
(1)
|
Excluding own credit adjustments, loss on redemption of own debt and strategic disposals.
|
|
(2)
|
Excluding restructuring costs, litigation and conduct costs and write down of goodwill.
|
|
(3)
|
Tangible equity is equity attributable to ordinary shareholders less intangible assets.
|
|
31 March
|
31 December
|
|
|
|
2016
|
2015
|
|
|
£m
|
£m
|
|
|
|
|
|
Cash and balances at central banks
|
72,083
|
79,404
|
|
Net loans and advances to banks (1)
|
19,295
|
18,361
|
|
Net loans and advances to customers (1)
|
317,088
|
306,334
|
|
Reverse repurchase agreements and stock borrowing
|
42,356
|
39,843
|
|
Debt securities and equity shares
|
88,877
|
83,458
|
|
Assets of disposal groups (2)
|
3,405
|
3,486
|
|
Other assets
|
27,609
|
22,008
|
|
|
|
|
|
Funded assets
|
570,713
|
552,894
|
|
Derivatives
|
312,217
|
262,514
|
|
|
|
|
|
Total assets
|
882,930
|
815,408
|
|
|
|
|
|
Bank deposits (3)
|
31,774
|
28,030
|
|
Customer deposits (3)
|
352,344
|
343,186
|
|
Repurchase agreements and stock lending
|
39,030
|
37,378
|
|
Debt securities in issue
|
29,576
|
31,150
|
|
Subordinated liabilities
|
20,870
|
19,847
|
|
Derivatives
|
304,789
|
254,705
|
|
Liabilities of disposal groups (2)
|
2,816
|
2,980
|
|
Other liabilities
|
47,566
|
43,985
|
|
|
|
|
|
Total liabilities
|
828,765
|
761,261
|
|
Non-controlling interests
|
788
|
716
|
|
Owners’ equity
|
53,377
|
53,431
|
|
|
|
|
|
Total liabilities and equity
|
882,930
|
815,408
|
|
|
|
|
|
Contingent liabilities and commitments
|
150,729
|
153,752
|
|
Balance sheet related key metrics and ratios
|
|
|
|
|
|
|
|
Tangible net asset value per ordinary share (4)
|
351p
|
352p
|
|
Loan:deposit ratio (3,5)
|
90%
|
89%
|
|
Short-term wholesale funding (3,6)
|
£16.6bn
|
£17.2bn
|
|
Wholesale funding (3,6)
|
£58.9bn
|
£58.7bn
|
|
Liquidity portfolio
|
£157bn
|
£156bn
|
|
Liquidity coverage ratio (LCR) (7)
|
121%
|
136%
|
|
Net stable funding ratio (NSFR) (8)
|
119%
|
121%
|
|
Tangible equity (9)
|
£40,892m
|
£40,943m
|
|
Number of ordinary shares in issue (millions) (10)
|
11,661
|
11,625
|
|
Common Equity Tier 1 ratio
|
14.6%
|
15.5%
|
|
Risk-weighted assets
|
£249.5bn
|
£242.6bn
|
|
Leverage ratio (11)
|
5.3%
|
5.6%
|
|
(1)
|
Excludes reverse repurchase agreements and stock borrowing.
|
|
(2)
|
Primarily international private banking business.
|
|
(3)
|
Excludes repurchase agreements and stock lending.
|
|
(4)
|
Tangible net asset value per ordinary share represents tangible equity divided by the number of ordinary shares in issue.
|
|
(5)
|
Includes disposal groups.
|
|
(6)
|
Excludes derivative collateral.
|
|
(7)
|
On 1 October 2015 the LCR became the PRA’s primary regulatory liquidity standard; UK banks are required to meet a minimum standard of 80% initially, rising to 100% by 1 January 2018. The published LCR excludes Pillar 2 add-ons. RBS calculates the LCR using its own interpretation of the EU LCR Delegated Act, which may change over time and may not be fully comparable with that of other institutions.
|
|
(8)
|
NSFR for all periods have been calculated using RBS’s current interpretations of the revised BCBS guidance on NSFR issued in late 2014. Therefore, reported NSFR will change over time with regulatory developments. Due to differences in interpretation, RBS’s ratio may not be comparable with those of other financial institutions.
|
|
(9)
|
Tangible equity is equity attributable to ordinary shareholders less intangible assets.
|
|
(10)
|
Includes 36 million Treasury shares (31 December 2015 - 26 million).
|
|
(11)
|
Based on end-point CRR Tier 1 capital and leverage exposure under the CRR Delegated Act.
|
|
|
Quarter ended
|
||
|
|
31 March
|
31 December
|
31 March
|
|
2016
|
2015
|
2015
|
|
|
Net interest income
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Net interest income (1)
|
|
|
|
|
RBS
|
2,156
|
2,162
|
2,203
|
|
|
|
|
|
|
- UK Personal & Business Banking
|
1,019
|
1,030
|
1,032
|
|
- Ulster Bank RoI
|
105
|
85
|
95
|
|
- Commercial Banking
|
536
|
512
|
482
|
|
- Private Banking
|
113
|
108
|
110
|
|
- RBS International
|
75
|
78
|
76
|
|
- Corporate & Institutional Banking
|
19
|
28
|
14
|
|
- Capital Resolution
|
86
|
6
|
157
|
|
- Williams & Glyn
|
162
|
165
|
163
|
|
- Central items & other
|
41
|
150
|
74
|
|
|
|
|
|
|
Average interest-earning assets (IEA)
|
|
|
|
|
RBS
|
403,384
|
407,061
|
415,380
|
|
|
|
|
|
|
- UK Personal & Business Banking
|
135,793
|
134,687
|
127,973
|
|
- Ulster Bank RoI
|
24,178
|
23,195
|
23,244
|
|
- Commercial Banking
|
114,855
|
111,600
|
103,479
|
|
- Private Banking
|
16,259
|
16,025
|
15,575
|
|
- RBS International
|
21,075
|
20,773
|
20,639
|
|
- Corporate & Institutional Banking
|
11,568
|
10,190
|
14,227
|
|
- Capital Resolution
|
30,767
|
39,875
|
82,990
|
|
- Williams & Glyn
|
23,356
|
23,327
|
22,636
|
|
- Central items & other
|
25,533
|
27,389
|
4,617
|
|
|
|
|
|
|
|
|
|
|
|
Yields, spreads and margins of the banking business
|
|
|
|
|
|
|
|
|
|
Gross yield on interest-earning assets of the banking business (2)
|
2.82%
|
2.78%
|
3.00%
|
|
Cost of interest-bearing liabilities of banking business
|
(1.01%)
|
(1.00%)
|
(1.22%)
|
|
|
|
|
|
|
Interest spread of banking business (3)
|
1.81%
|
1.78%
|
1.78%
|
|
Benefit from interest-free funds
|
0.34%
|
0.32%
|
0.37%
|
|
|
|
|
|
|
Net interest margin (1,4)
|
|
|
|
|
RBS
|
2.15%
|
2.10%
|
2.15%
|
|
|
|
|
|
|
- UK Personal & Business Banking (5)
|
3.02%
|
3.03%
|
3.27%
|
|
- Ulster Bank RoI (5)
|
1.75%
|
1.45%
|
1.66%
|
|
- Commercial Banking (5)
|
1.88%
|
1.82%
|
1.89%
|
|
- Private Banking (5)
|
2.80%
|
2.67%
|
2.86%
|
|
- RBS International (5)
|
1.43%
|
1.49%
|
1.49%
|
|
- Corporate & Institutional Banking
|
0.66%
|
1.09%
|
0.40%
|
|
- Capital Resolution
|
1.12%
|
0.06%
|
0.77%
|
|
- Williams & Glyn
|
2.79%
|
2.81%
|
2.92%
|
|
Third party customer rates (6)
|
|
|
|
|
Third party customer asset rate
|
|
|
|
|
- UK Personal & Business Banking
|
3.95%
|
4.00%
|
4.21%
|
|
- Ulster Bank RoI (7)
|
2.33%
|
2.19%
|
2.28%
|
|
- Commercial Banking
|
2.87%
|
2.84%
|
2.98%
|
|
- Private Banking
|
3.01%
|
3.06%
|
3.19%
|
|
- RBS International
|
3.29%
|
3.09%
|
3.15%
|
|
Third party customer funding rate
|
|
|
|
|
- UK Personal & Business Banking
|
(0.62%)
|
(0.63%)
|
(0.71%)
|
|
- Ulster Bank RoI (7)
|
(0.59%)
|
(0.74%)
|
(1.05%)
|
|
- Commercial Banking
|
(0.35%)
|
(0.36%)
|
(0.39%)
|
|
- Private Banking
|
(0.23%)
|
(0.25%)
|
(0.28%)
|
|
- RBS International
|
(0.24%)
|
(0.24%)
|
(0.45%)
|
|
·
|
Net interest income of £2,156 million was down £47 million, or 2%, compared with £2,203 million in Q1 2015 principally driven by a 45% reduction in Capital Resolution to £86 million in line with the planned shrinkage of the balance sheet. Partially offsetting, Commercial Banking net interest income increased £54 million, or 11%, to £536 million reflecting increased asset volumes. Q1 2016 net interest income benefits from one additional day compared with Q1 2015, £24 million, and is impacted by one fewer day compared with Q4 2015, £24 million.
|
|
·
|
NIM for RBS of 2.15% was stable compared with Q1 2015 as the benefit associated with reductions in the low yielding ‘non-core’ assets has been offset by modest asset margin pressure and mix impacts across the core franchises. NIM was 5 basis points higher than Q4 2015 principally reflecting rundown of the low yielding ‘non-core’ assets.
|
|
·
|
NIM for our combined core PBB and CPB franchises was 2.38% in Q1 2016 compared with 2.50% in Q1 2015 and 2.35% in Q4 2015.
|
|
·
|
In UK PBB, NIM declined by 25 basis points to 3.02% compared with Q1 2015 reflecting lower current account hedge income, the impact of the overall portfolio mix being increasingly weighted towards secured lending and mortgage customers switching from standard variable rate (SVR) to lower rate products. SVR balances represented 16% of the mortgage book at 31 March 2016 compared with 20% a year earlier and 17% at the end of Q4 2015. NIM was broadly stable compared with Q4 2015.
|
|
·
|
Commercial Banking NIM was broadly stable compared with Q1 2015.
|
|
(1)
|
For the purpose of net interest margin (NIM) calculations, no decrease (Q4 2015 - £3 million; Q1 2015 - £5 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 2.83% (Q4 2015 - 2.80%; Q1 2015 - 3.02%); CPB NIM was 1.91% (Q4 2015 - 1.87%; Q1 2015 - 1.94%).
|
|
(6)
|
Net interest margin includes Treasury allocations and interest on intercompany borrowings, which are excluded from third party customer rates.
|
|
(7)
|
Ulster Bank Ireland Limited 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.
|
|
|
Quarter ended
|
||
|
|
31 March
|
31 December
|
31 March
|
|
2016
|
2015
|
2015
|
|
|
Non-interest income
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Net fees and commissions
|
654
|
653
|
812
|
|
Income from trading activities
|
(110)
|
59
|
235
|
|
Own credit adjustments
|
256
|
(115)
|
120
|
|
Loss on redemption of own debt
|
-
|
(263)
|
-
|
|
Strategic disposals
|
(6)
|
(22)
|
(135)
|
|
Other operating income
|
114
|
10
|
284
|
|
|
|
|
|
|
Total non-interest income
|
908
|
322
|
1,316
|
|
|
|
|
|
|
Memo:
|
|
|
|
|
IFRS volatility in Treasury
|
(356)
|
59
|
(123)
|
|
(1)
|
IFRS volatility relates to loans which are economically hedged but for which hedge accounting is not permitted under IFRS.
|
|
·
|
Non-interest income was £908 million, a reduction of £408 million, or 31%, compared with £1,316 million in Q1 2015. The reduction principally reflects a £234 million fall in Capital Resolution due to planned asset disposals, a £233 million increase in the charge for volatile items under IFRS (£356 million in Q1 2016 compared with £123 million in Q1 2015) and a £194 million reduction in CIB, reflecting a challenging market and the reduced scale of the business. Partially offsetting, strategic disposal losses were £135 million in Q1 2015, largely in respect of International Private Banking.
|
|
·
|
Compared with Q4 2015, non-interest income was £586 million higher principally reflecting an own credit adjustment gain of £256 million compared with a charge of £115 million in Q4 2015, a £263 million loss on redemption of own debt in Q4 2015 and a reduction in Capital Resolution losses. Partially offsetting, a £356 million charge for volatile items under IFRS was reported in the quarter compared with a gain of £59 million in Q4 2015.
|
|
·
|
Net fees and commissions fell by £158 million, or 19%, compared with Q1 2015 to £654 million reflecting the planned Capital Resolution asset run-down, £59 million, lower CIB income, down £104 million, and lower interchange fees in UK PBB, down £25 million.
|
|
·
|
Losses from trading activities totalled £110 million in Q1 2016 compared with income of £235 million in Q1 2015, reflecting an increased charge for volatile items under IFRS as well as income reductions across CIB and Capital Resolution.
|
|
·
|
Other operating income of £114 million was £170 million lower than Q1 2015 principally reflecting planned Capital Resolution run-down.
|
|
|
|
|
|
|
|
Quarter ended
|
||
|
|
31 March
|
31 December
|
31 March
|
|
2016
|
2015
|
2015*
|
|
|
Operating expenses
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Staff costs
|
1,202
|
1,072
|
1,285
|
|
Premises and equipment
|
315
|
422
|
411
|
|
Other administrative expenses
|
446
|
786
|
380
|
|
Restructuring costs (see below)
|
238
|
614
|
447
|
|
Litigation and conduct costs
|
31
|
2,124
|
856
|
|
|
|
|
|
|
Administrative expenses
|
2,232
|
5,018
|
3,379
|
|
Depreciation and amortisation
|
178
|
170
|
232
|
|
Write down of goodwill
|
-
|
498
|
-
|
|
Write down of other intangible assets
|
10
|
75
|
-
|
|
|
|
|
|
|
Operating expenses
|
2,420
|
5,761
|
3,611
|
|
|
|
|
|
|
Adjusted operating expenses (1)
|
2,151
|
2,525
|
2,308
|
|
|
|
|
|
|
Restructuring costs comprise:
|
|
|
|
|
- staff expenses
|
121
|
205
|
56
|
|
- premises, equipment, depreciation and amortisation
|
9
|
41
|
288
|
|
- other
|
108
|
368
|
103
|
|
|
|
|
|
|
|
238
|
614
|
447
|
|
|
|
|
|
|
Staff costs as a % of total income
|
39%
|
43%
|
37%
|
|
Cost:income ratio
|
79%
|
232%
|
103%
|
|
Cost:income ratio - adjusted (2)
|
76%
|
88%
|
65%
|
|
Employee numbers (FTE - thousands)
|
92.4
|
91.5
|
91.7
|
|
(1)
|
Excluding restructuring costs, litigation and conduct costs, and write down of goodwill.
|
|
(2)
|
Excluding restructuring costs, litigation and conduct costs, write down of goodwill, own credit adjustments, loss on redemption of own debt and strategic disposals.
|
|
·
|
Total operating expenses of £2,420 million were £1,191 million, or 33%, lower than Q1 2015 principally reflecting lower litigation and conduct costs of £31 million (Q1 2015 - £856 million) and lower restructuring costs of £238 million (Q1 2015 - £447 million).
|
|
·
|
Adjusted operating expenses fell by £157 million, or 7%, from Q1 2015 to £2,151 million. Excluding expenses associated with Williams & Glyn and the write down of intangible assets, adjusted operating expenses reduced by £189 million and remain on target to achieve an £800 million reduction for the year.
|
|
·
|
Staff costs of £1,202 million were down £83 million, or 6%, on Q1 2015 reflecting reduced headcount in CIB and Capital Resolution.
|
|
·
|
Restructuring costs of £238 million in the quarter principally related to the Williams & Glyn separation, £158 million.
|
|
·
|
Litigation and conduct costs of £31 million were significantly lower than recorded in previous quarters which included additional provisions for mortgage-backed securities and foreign exchange litigation in the US, additional PPI provisions and other customer redress.
|
|
|
Quarter ended
|
||
|
|
31 March
|
31 December
|
31 March
|
|
2016
|
2015
|
2015
|
|
|
Impairment losses/(releases)
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Loan impairment losses/(releases)
|
|
|
|
|
- individually assessed
|
186
|
(271)
|
(15)
|
|
- collectively assessed
|
16
|
(27)
|
12
|
|
- latent
|
21
|
(28)
|
(225)
|
|
|
|
|
|
|
Total loan impairment losses/(releases)
|
223
|
(326)
|
(228)
|
|
Securities
|
-
|
(1)
|
99
|
|
|
|
|
|
|
Total impairment losses/(releases)
|
223
|
(327)
|
(129)
|
|
|
31 March
|
31 December
|
31 March
|
|
Credit metrics (1)
|
2016
|
2015
|
2015
|
|
|
|
|
|
|
Gross customer loans
|
£325,339m
|
£315,111m
|
£413,900m
|
|
Loan impairment provisions
|
£6,701m
|
£7,139m
|
£13,785m
|
|
Risk elements in lending (REIL)
|
£11,867m
|
£12,157m
|
£22,278m
|
|
Provisions as a % of REIL
|
57%
|
59%
|
62%
|
|
REIL as a % of gross customer loans
|
3.6%
|
3.9%
|
5.4%
|
|
(1)
|
Includes disposal groups and excludes reverse repos.
|
|
·
|
A net impairment loss of £223 million was reported in Q1 2016 compared with a release of £129 million in Q1 2015 and a release of £327 million in Q4 2015.
|
|
·
|
Capital Resolution reported an impairment loss of £196 million compared with a release of £145 million in Q1 2015. The charge for the quarter included £226 million (Q4 2015 - £83 million; Q1 2015 - £59 million) in relation to exposures in the shipping portfolio reflecting difficult conditions in some parts of the sector.
|
|
·
|
Provision coverage decreased from 59% at 31 December 2015 to 57% at 31 March 2016.
|
|
|
|
|
|
|
|
|
|
|
Selected credit risk portfolios
|
|
|
|
|
|
||
|
|
31 March 2016
|
|
31 December 2015
|
||||
|
|
CRA (1)
|
TCE (2)
|
EAD (3)
|
|
CRA (1)
|
TCE (2)
|
EAD (3)
|
|
Natural Resources
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
3,518
|
6,735
|
5,225
|
|
3,533
|
6,609
|
5,606
|
|
Mining & Metals
|
1,050
|
1,998
|
1,465
|
|
1,134
|
2,105
|
1,555
|
|
Electricity
|
3,606
|
8,344
|
6,055
|
|
2,848
|
7,454
|
5,205
|
|
Water & Waste
|
5,125
|
6,290
|
6,242
|
|
4,835
|
5,948
|
5,873
|
|
|
|
|
|
|
|
|
|
|
|
13,299
|
23,367
|
18,987
|
|
12,350
|
22,116
|
18,239
|
|
|
|
|
|
|
|
|
|
|
Commodity Traders (4)
|
668
|
1,187
|
1,215
|
|
749
|
1,117
|
1,350
|
|
Of which: Natural Resources
|
506
|
889
|
796
|
|
548
|
772
|
776
|
|
|
|
|
|
|
|
|
|
|
Shipping
|
6,894
|
7,380
|
7,140
|
|
7,140
|
7,688
|
7,509
|
|
(1)
|
Credit risk assets (CRA) consist of lending gross of impairment provisions and derivative exposures after netting and contingent obligations.
|
|
(2)
|
Total committed exposure (TCE) comprises CRA, securities financing transactions after netting, banking book debt securities and committed undrawn facilities.
|
|
(3)
|
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 TCE but included within EAD; therefore EAD can exceed TCE.
|
|
(4)
|
Commodity Traders represent customers in a number of industry sectors, predominantly Natural Resources above.
|
|
·
|
Oil & Gas - The portfolio remained broadly unchanged. Non-performing loans increased to £182 million (31 December 2015 - £138 million) reflecting the continued challenging market environment.
|
|
·
|
Mining & Metals - Exposure continued to reduce in Q1 2016 predominantly due to proactive credit management. The sector remains under stress and continues to be subject to heightened monitoring. Non-performing loans increased to £101 million (31 December 2015 - £48 million).
|
|
·
|
Commodity Traders - Exposure is mainly to the largest independent physical commodity traders, funding is predominantly short-dated and used for working capital.
|
|
·
|
Shipping - Following deterioration in market values and charter rates to historic lows in the dry bulk sector, provisions increased from £181 million to £374 million in Q1 2016. Non-performing loans increased to £827 million (31 December 2015 - £434 million).
|
|
|
31 March 2016
|
|
31 December 2015
|
||
|
|
Balance
|
Total
|
|
Balance
|
Total
|
|
|
sheet
|
exposure
|
|
sheet
|
exposure
|
|
Emerging markets (1)
|
£m
|
£m
|
|
£m
|
£m
|
|
|
|
|
|
|
|
|
India
|
1,412
|
1,646
|
|
1,563
|
1,879
|
|
China
|
1,004
|
1,028
|
|
1,054
|
1,094
|
|
(1)
|
Balance sheet and total exposures include banking and trading book debt securities and are net of impairment provisions in respect of lending - refer to the Capital and
Risk management section of the 2015 Annual Report and Accounts for detailed definitions and additional disclosures.
|
|
·
|
Exposure to most emerging markets decreased in Q1 2016 in line with the RBS strategy to focus on home markets in the UK and the Republic of Ireland.
|
|
·
|
Exposure in China was stable in Q1 2016. The drop in exposure to India mainly reflected reductions in corporate lending.
|
|
Capital and leverage ratios
|
|
|
|
|
|
|
End-point CRR basis (1)
|
|
PRA transitional basis
|
|||
|
|
31 March
|
31 December
|
|
31 March
|
31 December
|
|
|
2016
|
2015
|
|
2016
|
2015
|
|
Risk asset ratios
|
%
|
%
|
|
%
|
%
|
|
|
|
|
|
|
|
|
CET1
|
14.6
|
15.5
|
|
14.6
|
15.5
|
|
Tier 1
|
15.4
|
16.3
|
|
17.7
|
19.1
|
|
Total
|
18.8
|
19.6
|
|
22.9
|
24.7
|
|
|
|
|
|
|
|
|
Capital
|
£m
|
£m
|
|
£m
|
£m
|
|
|
|
|
|
|
|
|
Tangible equity
|
40,892
|
40,943
|
|
40,892
|
40,943
|
|
|
|
|
|
|
|
|
Expected loss less impairment provisions
|
(936)
|
(1,035)
|
|
(936)
|
(1,035)
|
|
Prudential valuation adjustment
|
(408)
|
(381)
|
|
(408)
|
(381)
|
|
Deferred tax assets
|
(1,075)
|
(1,110)
|
|
(1,075)
|
(1,110)
|
|
Own credit adjustments
|
(371)
|
(104)
|
|
(371)
|
(104)
|
|
Pension fund adjustment
|
(458)
|
(161)
|
|
(458)
|
(161)
|
|
Other deductions
|
(1,214)
|
(544)
|
|
(1,214)
|
(522)
|
|
|
|
|
|
|
|
|
Total deductions
|
(4,462)
|
(3,335)
|
|
(4,462)
|
(3,313)
|
|
|
|
|
|
|
|
|
CET1 capital
|
36,430
|
37,608
|
|
36,430
|
37,630
|
|
AT1 capital
|
1,997
|
1,997
|
|
7,756
|
8,716
|
|
Tier 1 capital
|
38,427
|
39,605
|
|
44,186
|
46,346
|
|
Tier 2 capital
|
8,422
|
8,002
|
|
13,028
|
13,619
|
|
|
|
|
|
|
|
|
Total regulatory capital
|
46,849
|
47,607
|
|
57,214
|
59,965
|
|
|
|
|
|
|
|
|
Risk-weighted assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit risk
|
|
|
|
|
|
|
- non-counterparty
|
171,600
|
166,400
|
|
|
|
|
- counterparty
|
27,100
|
23,400
|
|
|
|
|
Market risk
|
21,200
|
21,200
|
|
|
|
|
Operational risk
|
29,600
|
31,600
|
|
|
|
|
|
|
|
|
|
|
|
Total RWAs
|
249,500
|
242,600
|
|
|
|
|
|
|
|
|
|
|
|
Leverage (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
|
312,200
|
262,500
|
|
|
|
|
Loans and advances
|
338,600
|
327,000
|
|
|
|
|
Reverse repos
|
42,500
|
39,900
|
|
|
|
|
Other assets
|
189,600
|
186,000
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
882,900
|
815,400
|
|
|
|
|
Derivatives
|
|
|
|
|
|
|
- netting
|
(303,500)
|
(258,600)
|
|
|
|
|
- potential future exposures
|
75,900
|
75,600
|
|
|
|
|
Securities financing transactions gross up
|
7,100
|
5,100
|
|
|
|
|
Undrawn commitments
|
62,300
|
63,500
|
|
|
|
|
Regulatory deductions and other adjustments
|
3,600
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
Leverage exposure
|
728,300
|
702,500
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital
|
38,427
|
39,605
|
|
|
|
|
|
|
|
|
|
|
|
Leverage ratio %
|
5.3
|
5.6
|
|
|
|
|
(1)
|
Capital Requirements Regulation (CRR) as implemented by the Prudential Regulation Authority 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 AFS 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.
|
|
●
|
CET1 ratio of 14.6% fell by 90 basis points in the quarter reflecting lower CET1 capital as well as higher RWAs.
|
|
|
●
|
CET1 capital decreased by £1.2 billion due to the payment of the final DAS dividend (50 basis points impact on CET1 ratio) and the accelerated pension payment (30 basis points).
|
|
|
●
|
RWAs have increased by £6.9 billion in the quarter to £249.5 billion reflecting loan growth in the core franchises alongside market volatility and exchange rate movements as sterling weakened (£3.3 billion).
|
|
|
●
|
Increases in non-counterparty credit risk RWAs (£5.2 billion) and counterparty risk RWAs (£3.7 billion) were partly offset by a £2.0 billion reduction associated with the annual recalculation of operational risk RWAs.
|
|
|
●
|
The increase in credit risk RWAs was principally across Commercial Banking (£3.9 billion), UK PBB (£1.5 billion) and RBSI (£0.8 billion). Partially offsetting, Capital Resolution reduced by £1.8 billion in line with planned run-down.
|
|
|
○
|
Commercial Banking and RBSI credit risk RWAs increased as a result of asset growth and the impact of foreign exchange movements.
|
|
|
○
|
UK PBB credit risk RWAs increased due to mortgage lending growth and a recalibration of mortgage risk parameter models.
|
|
|
●
|
Counterparty risk RWAs increased in the quarter in CIB and Capital Resolution driven by market volatility and the implementation of new risk parameter models.
|
|
|
●
|
Leverage ratio decreased in the quarter from 5.6% to 5.3% due to lower Tier 1 capital (as discussed above) and an increase in funded assets reflecting loan growth.
|
|
|
|
Quarter ended 31 March 2016
|
|||||||||||
|
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
|
Capital
|
Williams
|
items &
|
Total
|
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
CIB
|
Resolution
|
& Glyn
|
other (1)
|
RBS
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
1,019
|
105
|
|
536
|
113
|
75
|
|
19
|
86
|
162
|
41
|
2,156
|
|
Other non-interest income
|
256
|
50
|
|
317
|
52
|
15
|
|
258
|
(35)
|
43
|
(298)
|
658
|
|
Total income - adjusted (2)
|
1,275
|
155
|
|
853
|
165
|
90
|
|
277
|
51
|
205
|
(257)
|
2,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Own credit adjustments
|
-
|
3
|
|
-
|
-
|
-
|
|
64
|
108
|
-
|
81
|
256
|
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(6)
|
-
|
-
|
(6)
|
|
Total income
|
1,275
|
158
|
|
853
|
165
|
90
|
|
341
|
153
|
205
|
(176)
|
3,064
|
|
Direct expenses - staff costs
|
(181)
|
(51)
|
|
(131)
|
(40)
|
(10)
|
|
(67)
|
(45)
|
(62)
|
(615)
|
(1,202)
|
|
- other costs
|
(63)
|
(11)
|
|
(49)
|
(14)
|
(5)
|
|
(14)
|
(33)
|
(15)
|
(745)
|
(949)
|
|
Indirect expenses
|
(484)
|
(42)
|
|
(256)
|
(83)
|
(20)
|
|
(250)
|
(154)
|
(21)
|
1,310
|
-
|
|
Operating expenses - adjusted (3)
|
(728)
|
(104)
|
|
(436)
|
(137)
|
(35)
|
|
(331)
|
(232)
|
(98)
|
(50)
|
(2,151)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs - direct
|
(13)
|
(6)
|
|
(1)
|
(1)
|
-
|
|
-
|
(7)
|
(20)
|
(190)
|
(238)
|
|
- indirect
|
(9)
|
-
|
|
1
|
(15)
|
(1)
|
|
(12)
|
(9)
|
-
|
45
|
-
|
|
Litigation and conduct costs
|
-
|
-
|
|
(2)
|
-
|
-
|
|
(18)
|
(10)
|
-
|
(1)
|
(31)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
(750)
|
(110)
|
|
(438)
|
(153)
|
(36)
|
|
(361)
|
(258)
|
(118)
|
(196)
|
(2,420)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before impairment losses
|
525
|
48
|
|
415
|
12
|
54
|
|
(20)
|
(105)
|
87
|
(372)
|
644
|
|
Impairment releases/(losses)
|
(16)
|
13
|
|
(14)
|
(2)
|
(2)
|
|
-
|
(196)
|
(6)
|
-
|
(223)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
509
|
61
|
|
401
|
10
|
52
|
|
(20)
|
(301)
|
81
|
(372)
|
421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - adjusted (2,3)
|
531
|
64
|
|
403
|
26
|
53
|
|
(54)
|
(377)
|
101
|
(307)
|
440
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (4)
|
26.1%
|
8.8%
|
|
11.1%
|
1.5%
|
16.0%
|
|
(2.6%)
|
nm
|
nm
|
nm
|
(9.6%)
|
|
Return on equity - adjusted (2,3,4)
|
27.3%
|
9.2%
|
|
11.2%
|
5.1%
|
16.3%
|
|
(4.4%)
|
nm
|
nm
|
nm
|
(9.4%)
|
|
Cost:income ratio
|
59%
|
70%
|
|
51%
|
93%
|
40%
|
|
106%
|
nm
|
58%
|
nm
|
79%
|
|
Cost:income ratio - adjusted (2,3)
|
57%
|
67%
|
|
51%
|
83%
|
39%
|
|
119%
|
nm
|
48%
|
nm
|
76%
|
|
Total assets (£bn)
|
146.3
|
22.7
|
|
139.4
|
17.4
|
23.7
|
|
255.9
|
218.8
|
24.2
|
34.5
|
882.9
|
|
Funded assets (£bn)
|
146.3
|
22.6
|
|
139.4
|
17.3
|
23.7
|
|
116.0
|
50.2
|
24.2
|
31.0
|
570.7
|
|
Net loans and advances to customers (£bn)
|
121.8
|
17.9
|
|
96.4
|
11.6
|
8.0
|
|
18.6
|
22.4
|
20.1
|
1.8
|
318.6
|
|
Risk elements in lending (£bn)
|
2.4
|
4.5
|
|
2.2
|
0.1
|
0.1
|
|
-
|
2.2
|
0.4
|
-
|
11.9
|
|
Impairment provisions (£bn)
|
(1.6)
|
(2.7)
|
|
(1.1)
|
-
|
-
|
|
-
|
(1.0)
|
(0.3)
|
-
|
(6.7)
|
|
Customer deposits (£bn)
|
136.9
|
13.7
|
|
97.1
|
23.2
|
21.6
|
|
6.7
|
24.9
|
24.3
|
6.6
|
355.0
|
|
Risk-weighted assets (RWAs) (£bn)
|
34.7
|
20.4
|
|
75.7
|
8.6
|
9.1
|
|
36.1
|
47.6
|
9.7
|
7.6
|
249.5
|
|
RWA equivalent (£bn)
|
37.5
|
21.7
|
|
79.7
|
8.6
|
9.1
|
|
36.7
|
48.4
|
10.1
|
7.8
|
259.6
|
|
Employee numbers (FTEs - thousands)
|
21.4
|
3.2
|
|
6.0
|
1.8
|
0.7
|
|
1.3
|
1.0
|
5.5
|
51.5
|
92.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to this table refer to page 21. nm = not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended 31 December 2015
|
|||||||||||
|
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
|
Capital
|
Williams
|
items &
|
Total
|
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
CIB
|
Resolution
|
& Glyn
|
other (1)
|
RBS
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
1,030
|
85
|
|
512
|
108
|
78
|
|
28
|
6
|
165
|
150
|
2,162
|
|
Other non-interest income
|
224
|
31
|
|
285
|
50
|
17
|
|
224
|
(239)
|
43
|
87
|
722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income adjusted (2)
|
1,254
|
116
|
|
797
|
158
|
95
|
|
252
|
(233)
|
208
|
237
|
2,884
|
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
(66)
|
(5)
|
-
|
(44)
|
(115)
|
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(263)
|
(263)
|
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(24)
|
-
|
2
|
(22)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
1,254
|
116
|
|
797
|
158
|
95
|
|
186
|
(262)
|
208
|
(68)
|
2,484
|
|
Direct expenses - staff costs
|
(199)
|
(40)
|
|
(124)
|
(43)
|
(12)
|
|
(63)
|
(54)
|
(61)
|
(476)
|
(1,072)
|
|
- other costs
|
(82)
|
(28)
|
|
(80)
|
(7)
|
(5)
|
|
(50)
|
(54)
|
(24)
|
(1,123)
|
(1,453)
|
|
Indirect expenses
|
(596)
|
(49)
|
|
(380)
|
(109)
|
(24)
|
|
(251)
|
(286)
|
(22)
|
1,717
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - adjusted (3)
|
(877)
|
(117)
|
|
(584)
|
(159)
|
(41)
|
|
(364)
|
(394)
|
(107)
|
118
|
(2,525)
|
|
Restructuring costs - direct
|
(31)
|
7
|
|
(40)
|
(7)
|
-
|
|
-
|
(21)
|
(28)
|
(494)
|
(614)
|
|
- indirect
|
(56)
|
(1)
|
|
(14)
|
12
|
1
|
|
(62)
|
(83)
|
-
|
203
|
-
|
|
Litigation and conduct costs
|
(607)
|
4
|
|
8
|
(10)
|
-
|
|
(5)
|
(1,498)
|
-
|
(16)
|
(2,124)
|
|
Write down of goodwill
|
-
|
-
|
|
-
|
(498)
|
-
|
|
-
|
-
|
-
|
-
|
(498)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
(1,571)
|
(107)
|
|
(630)
|
(662)
|
(40)
|
|
(431)
|
(1,996)
|
(135)
|
(189)
|
(5,761)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit before impairment losses
|
(317)
|
9
|
|
167
|
(504)
|
55
|
|
(245)
|
(2,258)
|
73
|
(257)
|
(3,277)
|
|
Impairment releases/(losses)
|
27
|
10
|
|
(27)
|
(12)
|
-
|
|
-
|
356
|
(20)
|
(7)
|
327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)/profit
|
(290)
|
19
|
|
140
|
(516)
|
55
|
|
(245)
|
(1,902)
|
53
|
(264)
|
(2,950)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - adjusted (2,3)
|
404
|
9
|
|
186
|
(13)
|
54
|
|
(112)
|
(271)
|
81
|
348
|
686
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (4)
|
(16.8%)
|
3.0%
|
|
3.1%
|
(118.9%)
|
19.1%
|
|
(15.1%)
|
nm
|
nm
|
nm
|
(26.5%)
|
|
Return on equity - adjusted (2,3,4)
|
19.8%
|
1.4%
|
|
4.6%
|
(4.4%)
|
18.7%
|
|
(7.6%)
|
nm
|
nm
|
nm
|
6.6%
|
|
Cost:income ratio
|
125%
|
92%
|
|
79%
|
419%
|
42%
|
|
232%
|
nm
|
65%
|
nm
|
232%
|
|
Cost:income ratio - adjusted (2,3)
|
70%
|
101%
|
|
73%
|
101%
|
43%
|
|
144%
|
nm
|
51%
|
nm
|
88%
|
|
Total assets (£bn)
|
143.9
|
21.3
|
|
133.5
|
17.0
|
23.1
|
|
215.3
|
201.5
|
24.1
|
35.7
|
815.4
|
|
Funded assets (£bn)
|
143.9
|
21.2
|
|
133.5
|
17.0
|
23.1
|
|
103.3
|
53.4
|
24.1
|
33.4
|
552.9
|
|
Net loans and advances to customers (£bn)
|
119.8
|
16.7
|
|
91.3
|
11.2
|
7.3
|
|
16.1
|
23.6
|
20.0
|
2.0
|
308.0
|
|
Risk elements in lending (£bn)
|
2.7
|
3.5
|
|
1.9
|
0.1
|
0.1
|
|
-
|
3.4
|
0.5
|
-
|
12.2
|
|
Impairment provisions (£bn)
|
(1.8)
|
(1.9)
|
|
(0.7)
|
-
|
(0.1)
|
|
-
|
(2.3)
|
(0.3)
|
-
|
(7.1)
|
|
Customer deposits (£bn)
|
137.8
|
13.1
|
|
88.9
|
23.1
|
21.3
|
|
5.7
|
26.0
|
24.1
|
6.0
|
346.0
|
|
Risk-weighted assets (RWAs) (£bn)
|
33.3
|
19.4
|
|
72.3
|
8.7
|
8.3
|
|
33.1
|
49.0
|
9.9
|
8.6
|
242.6
|
|
RWA equivalent (£bn)
|
35.5
|
20.4
|
|
77.6
|
8.7
|
8.3
|
|
33.4
|
50.3
|
10.4
|
8.8
|
253.4
|
|
Employee numbers (FTEs - thousands)
|
22.4
|
2.5
|
|
5.8
|
1.9
|
0.7
|
|
1.3
|
1.4
|
5.1
|
50.4
|
91.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to this table refer to page 21. nm = not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended 31 March 2015
|
|||||||||||
|
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
|
Capital
|
Williams
|
items &
|
Total
|
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
CIB
|
Resolution
|
& Glyn
|
other (1)
|
RBS
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
1,032
|
95
|
|
482
|
110
|
76
|
|
14
|
157
|
163
|
74
|
2,203
|
|
Other non-interest income
|
282
|
43
|
|
307
|
55
|
17
|
|
470
|
250
|
41
|
(134)
|
1,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income - adjusted (2)
|
1,314
|
138
|
|
789
|
165
|
93
|
|
484
|
407
|
204
|
(60)
|
3,534
|
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
46
|
65
|
-
|
9
|
120
|
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(14)
|
-
|
(121)
|
(135)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
1,314
|
138
|
|
789
|
165
|
93
|
|
530
|
458
|
204
|
(172)
|
3,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct expenses - staff costs
|
(200)
|
(40)
|
|
(123)
|
(46)
|
(10)
|
|
(109)
|
(92)
|
(45)
|
(620)
|
(1,285)
|
|
- other costs
|
(64)
|
(18)
|
|
(51)
|
(9)
|
(4)
|
|
(26)
|
(57)
|
(6)
|
(788)
|
(1,023)
|
|
Indirect expenses
|
(445)
|
(43)
|
|
(241)
|
(68)
|
(24)
|
|
(257)
|
(260)
|
(25)
|
1,363
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - adjusted (3)
|
(709)
|
(101)
|
|
(415)
|
(123)
|
(38)
|
|
(392)
|
(409)
|
(76)
|
(45)
|
(2,308)
|
|
Restructuring costs - direct
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(16)
|
-
|
(431)
|
(447)
|
|
- indirect
|
(30)
|
1
|
|
1
|
3
|
(2)
|
|
(91)
|
(184)
|
-
|
302
|
-
|
|
Litigation and conduct costs
|
(354)
|
-
|
|
-
|
(2)
|
-
|
|
(334)
|
(166)
|
-
|
-
|
(856)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
(1,093)
|
(100)
|
|
(414)
|
(122)
|
(40)
|
|
(817)
|
(775)
|
(76)
|
(174)
|
(3,611)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before impairment losses
|
221
|
38
|
|
375
|
43
|
53
|
|
(287)
|
(317)
|
128
|
(346)
|
(92)
|
|
Impairment (losses)/releases
|
(20)
|
25
|
|
1
|
1
|
(2)
|
|
8
|
145
|
21
|
(50)
|
129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
201
|
63
|
|
376
|
44
|
51
|
|
(279)
|
(172)
|
149
|
(396)
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - adjusted (2,3)
|
585
|
62
|
|
375
|
43
|
53
|
|
100
|
143
|
149
|
(155)
|
1,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional information *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (4)
|
8.4%
|
10.1%
|
|
12.4%
|
7.8%
|
18.8%
|
|
(13.3%)
|
nm
|
nm
|
nm
|
(4.3%)
|
|
Return on equity - adjusted (2,3,4)
|
27.2%
|
9.9%
|
|
12.4%
|
7.5%
|
19.5%
|
|
3.0%
|
nm
|
nm
|
nm
|
7.4%
|
|
Cost:income ratio
|
83%
|
72%
|
|
52%
|
74%
|
43%
|
|
154%
|
nm
|
37%
|
nm
|
103%
|
|
Cost:income ratio - adjusted (2,3)
|
54%
|
73%
|
|
53%
|
75%
|
41%
|
|
81%
|
nm
|
37%
|
nm
|
65%
|
|
Total assets (£bn)
|
137.8
|
21.7
|
|
131.1
|
17.3
|
24.3
|
|
308.7
|
338.7
|
23.7
|
101.6
|
1,104.9
|
|
Funded assets (£bn)
|
137.8
|
21.6
|
|
131.1
|
17.3
|
24.3
|
|
152.1
|
108.3
|
23.7
|
97.7
|
713.9
|
|
Net loans and advances to customers (£bn)
|
111.7
|
16.7
|
|
86.2
|
11.1
|
7.2
|
|
31.6
|
48.5
|
19.5
|
67.7
|
400.2
|
|
Risk elements in lending (£bn)
|
3.4
|
4.0
|
|
2.3
|
0.1
|
0.1
|
|
-
|
10.4
|
0.6
|
1.4
|
22.3
|
|
Impairment provisions (£bn)
|
(2.4)
|
(2.1)
|
|
(0.8)
|
(0.1)
|
(0.1)
|
|
-
|
(7.3)
|
(0.4)
|
(0.6)
|
(13.8)
|
|
Customer deposits (£bn)
|
131.6
|
13.5
|
|
90.0
|
22.0
|
22.7
|
|
11.2
|
34.6
|
22.1
|
74.9
|
422.6
|
|
Risk-weighted assets (RWAs) (£bn)
|
35.9
|
20.4
|
|
63.1
|
8.4
|
7.9
|
|
43.8
|
84.3
|
10.5
|
74.3
|
348.6
|
|
RWA equivalent (£bn)
|
38.6
|
19.3
|
|
69.7
|
8.4
|
7.9
|
|
44.5
|
90.1
|
11.1
|
74.7
|
364.3
|
|
Employee numbers (FTEs - thousands)
|
22.7
|
2.4
|
|
5.8
|
2.0
|
0.6
|
|
1.6
|
2.3
|
4.4
|
49.9
|
91.7
|
|
nm = not meaningful. *Restated - refer to page 32 for further details.
|
|
|
|
|
|
|
|
|||||
|
(1)
|
Central items includes unallocated costs and assets which principally comprise volatile items under IFRS and balances in relation to Citizens for Q1 2015 and international private banking.
|
|
(2)
|
Excluding own credit adjustments, gains/(losses) on redemption of own debt and strategic disposals. Tax on these items was a £59 million charge in Q1 2016 (Q4 2015 - £72 million credit; Q1 2015 - £25 million charge).
|
|
(3)
|
Excluding restructuring costs, litigation and conduct costs and write down of goodwill. Tax on these items was £60 million in Q1 2016 (Q4 2015 - £141 million; Q1 2015 - £104 million).
|
|
(4)
|
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% for all other segments, of the monthly average of segmental risk-weighted assets after capital deductions (RWAes). Franchise adjusted (2,3) return on equity was 10.9% (Return on equity for Personal & Business Banking (PBB), Commercial & Private Banking (CPB) and CIB combined).
|
|
●
|
UK PBB operating profit of £509 million improved from a £201 million profit in Q1 2015 and a £290 million loss in Q4 2015 largely due to the absence of litigation and conduct costs. Adjusted operating profit of £531 million was down £54 million, or 9%, from Q1 2015, but was £127 million, or 31%, higher than Q4 2015 principally reflecting the UK bank levy charge, £45 million, and write down of intangible assets, £48 million, in Q4 2015.
|
|
●
|
Mortgage activity continued to strengthen with applications up 61% from £6.4 billion in Q1 2015 to £10.3 billion providing a strong forward pipeline for Q2 2016. Gross new lending almost doubled to £7.0 billion. Market share of new mortgages was approximately 11.4% compared with a stock share of 8.3% helping to support mortgage balance growth of 13%.
|
|
●
|
Further steps were taken during the quarter to enhance customer experience in digital channels, including the ability for NatWest customers to apply for a personal loan or credit card via our mobile app.
|
|
●
|
The Reward account continues to show positive momentum and now has 539,000 fee-paying customers, compared with 202,000 at 31 December 2015. We are seeing positive evidence of increased levels of engagement and continue to embed the product across our population of main bank customers.
|
|
●
|
Excluding the impact of business transfers(1),net loans and advances grew by £11.2 billion, or 10%, from Q1 2015, principally driven by mortgages, and increased by £3.2 billion from Q4 2015 with continued strong mortgage growth and positive momentum in business and personal unsecured lending.
|
|
●
|
Income of £1,275 million was 3% down on Q1 2015, or 2% excluding the impact of business transfers(1), but was 2% higher than Q4 2015 as margins stabilised. Net interest margin was 25bps lower than Q1 2015 at 3.02% reflecting lower current account hedge income, the impact of asset growth being skewed towards mortgages, and mortgage customers switching from standard variable rate (SVR) to lower rate products. SVR balances represented 16% of the mortgage book at 31 March 2016 compared with 20% a year earlier and 17% at the end of Q4 2015. Non-interest income reduced by £26 million, or 9%, to £256 million reflecting reduced interchange fees on credit and debit cards after regulatory changes and cash-back payments following the launch of the Reward account.
|
|
●
|
Total expenses were 31% lower than Q1 2015 at £750 million principally driven by the absence of litigation and conduct charges. Adjusted operating expenses increased by 3% to £728 million reflecting increased technology investment in the business partly offset by lower direct staff costs as headcount efficiencies continue.
|
|
●
|
In addition, plans were announced to reorganise our investment advice and protection businesses, including the launch of an online investment platform, and to enhance and streamline our distribution model.
|
|
●
|
The net impairment charge of £16 million reflects continued benign credit conditions.
|
|
(1)
|
The business transfers included: net loans and advances of £1.1 billion, customer deposits of £2.0 billion and total income of £13 million in Q1 2015 comparatives have not been restated.
|
|
●
|
Ulster Bank RoI recorded an operating profit of €78 million, down 6% on Q1 2015 due to a lower level of impairment releases. Adjusted operating profit was stable at €82 million compared with Q1 2015 and was €66 million higher than Q4 2015.
|
|
●
|
A non-recurring profit of €28 million relating to asset disposals has been recognised in Q1 2016, of which €14 million was reported in income.
|
|
●
|
Income increased by 11% from Q1 2015 to €205 million. Excluding the benefit of asset disposals, underlying business income growth, driven by deposit re-pricing and new business lending, was partly offset by reduced income on free funds. Net interest margin increased by 9 basis points to 1.75%.
|
|
●
|
Adjusted operating expenses remained flat at €136 million compared with Q1 2015 despite a €6 million increase in regulatory levies. Total operating expenses increased by 7% reflecting higher restructuring costs primarily relating to asset disposals. The adjusted cost:income ratio reduced to 67% compared with 73% in Q1 2015. A realignment of costs within direct expenses resulted in an increase in staff costs in Q1 2016 with an offsetting reduction in other costs. This reflects the re-allocation of 640 staff from UK PBB to align with current management responsibilities following the separation of the Northern Ireland and Republic of Ireland businesses.
|
|
●
|
A net impairment release of €17 million was largely driven by asset disposals which benefited from improved market conditions. Underlying credit metrics also continue to benefit from the improving economic environment and RWAs reduced by 9% to €25.7 billion compared with Q1 2015.
|
|
●
|
New lending indicators remain positive, underpinned by the continued improvement in Irish economic conditions, with gross new mortgage lending increasing by 32% to €0.2 billion compared with Q1 2015. Net loans and advances to customers(1) reduced by €0.6 billion from Q1 2015 and include a reduction of €0.9 billion in the low yielding tracker mortgage portfolio to €11.6 billion.
|
|
●
|
Commercial Banking reported an operating profit of £401 million, up 7% from Q1 2015. Return on equity was 11% compared with 12% in the prior year.
|
|
●
|
Net loans and advances, adjusting for the impact of transfers(2), increased by £4.0 billion from Q1 2015 to £96.4 billion and increased by £3.9 billion compared with Q4 2015, principally reflecting increased borrowing by large UK and Western Europe corporate customers. The increase compared with Q1 2015 comprised £6.5 billion of net new lending, partially offset by £2.5 billion of strategic run-off and disposals. Excluding the transferred businesses, customer deposits of £97.1 billion were up £5.0 billion on Q1 2015 and £6.1 billion on Q4 2015.
|
|
●
|
Total income of £853 million was 8% higher than Q1 2015 largely reflecting increased asset volumes, supplemented by the impact of portfolio transfers. Net interest margin of 1.88% remained broadly stable compared with Q1 2015 but has increased by 6 basis points compared with Q4 2015 driven by reduced funding costs.
|
|
●
|
Operating expenses increased by 6% from Q1 2015 to £438 million largely due to the impact of the portfolio transfers. Adjusted operating expenses fell by £148 million from Q4 2015 principally due to the UK bank levy charge of £103 million in the prior quarter.
|
|
●
|
Net impairment losses were £14 million compared with a release of £1 million in Q1 2015. Impairments remained at low levels.
|
|
●
|
RWAs were £75.7 billion, an increase of £12.6 billion on Q1 2015 reflecting asset growth and portfolio transfers of £9.9 billion partially offset by active portfolio management.
|
|
(1)
|
Gross loans and advances to customers at 31 March 2016 include €1.0 billion (€0.2 billion net of impairment provisions) of largely non-performing balances transferred from Capital Resolution on 1 January 2016. Comparatives have not been restated.
|
|
(2)
|
The portfolio transfers included: total income of £51 million (Q4 2015 - £47 million; Q1 2015 - nil); operating expenses of £25 million (Q4 2015 - £12 million; Q1 2015 - nil); net loans and advances to customers of £7.3 billion (31 December 2015 - £5.0 billion; 31 March 2015 - nil); customer deposits of £2.0 billion (31 December 2015 and 31 March 2015 - nil); and RWAs of £9.9 billion (31 December 2015 - £8.4 billion; 31 March 2015 - nil). The portfolio transfers were as follows: Q2 2015 - UK corporate loan; Q4 2015 - Western European corporate loan; Q1 2016 - Ulster Bank NI commercial and RCR residual portfolios. Comparatives have not been restated. Asset growth in transferred businesses achieved since Q4 is included in underlying commercial business.
|
|
●
|
Private Banking made an operating profit of £10 million, £34 million lower than Q1 2015. The £516 million loss reported in Q4 2015 included a £498 million goodwill impairment charge.
|
|
●
|
Net loans and advances increased 5% to £11.6 billion, due to increased mortgage lending, and customer deposits grew by 5% to £23.2 billion from Q1 2015. Assets under management reduced by £0.3 billion to £14.0 billion reflecting adverse market conditions.
|
|
●
|
Total income at £165 million was in line with Q1 2015 as the benefit of an increase in net interest margin was offset by a more competitive market in investments and transactional flows driving down net fees and commissions. Income was up £7 million compared with Q4 2015 due to an increase in net interest margin reflecting reduced funding costs.
|
|
●
|
Adjusted operating expenses were 11% higher than Q1 2015 at £137 million reflecting increased infrastructure costs absorbed from the sale of the international business, partially offset by reduced staff costs as employee numbers declined by over 10%. Adjusted operating expenses fell by £22 million from Q4 2015 driven by the Q4 2015 UK bank levy charge of £22 million.
|
| RBS International | ||
|
●
|
RBS International (RBSI) reported an operating profit of £52 million, broadly in line with Q1 2015.
|
|
|
●
|
Net loans and advances to customers increased by 11% to £8.0 billion from Q1 2015 principally reflecting balance drawdowns in the corporate lending portfolio. Customer deposits fell by £1.1 billion to £21.6 billion due to planned re-pricing activity.
|
|
|
●
|
Total income fell 3% from Q1 2015 to £90 million driven by lower deposit margins partially offset by increased asset volumes.
|
|
|
●
|
CIB reported an operating loss of £20 million compared with an operating loss of £279 million in Q1 2015. The adjusted operating loss for the quarter was £54 million compared with a profit of £100 million in Q1 2015. The reduction was driven by lower income partially offset by lower adjusted expenses, down £61 million, or 16%, compared with Q1 2015.
|
|
●
|
Total income reduced by £189 million, or 36%, to £341 million compared with £530 million in Q1 2015. Adjusted income of £277 million was £165 million lower than Q1 2015, excluding a £42 million movement associated with the transfer of portfolios to Commercial Banking, driven by reductions in Rates and Financing reflecting the difficult market conditions in Q1 2016 and the reduced scale of the business. Currencies performed robustly in Q1 2016, which contrasted with Q1 2015 when a loss relating to the removal of the Swiss Franc’s peg to the Euro was incurred. Adjusted income was 10% higher than in Q4 2015 (£277 million compared with £252 million).
|
|
●
|
Operating expenses reduced by £456 million, or 56%, to £361 million compared with £817 million in Q1 2015. Adjusted operating expenses fell by £61 million, or 16%, to £331 million as business reshaping and headcount reductions continued. Adjusted operating expenses fell by £33 million compared with Q4 2015 principally reflecting the UK bank levy charge of £24 million in the prior quarter.
|
|
●
|
Funded assets fell by £36.1 billion to £116.0 billion compared with £152.1 billion in Q1 2015. Excluding the impact of transfers(1), funded assets fell by £15.1 billion as business reshaping continues.
|
|
●
|
RWAs were stable compared with Q1 2015 at £36.1 billion, adjusting for the impact of transfers to Commercial Banking. The £3.0 billion increase from Q4 2015 was principally due to model updates and the impact of market volatility in Q1 2016.
|
|
(1)
|
The portfolio transfers included third party assets of £16 billion of Short Term Money markets business to Treasury and £5 billion to Commercial Banking. Comparatives have not been restated.
|
|
●
|
RWAs reduced by £1.4 billion in the quarter to £47.6 billion reflecting a moderate level of disposal activity, partially offset by an increase associated with the weakening of sterling in the quarter and the lowering of rates.
|
|
●
|
Funded assets reduced by £3.2 billion in Q1 2016 to £50.2 billion with the most significant reductions across Markets and Shipping.
|
|
●
|
An operating loss of £301 million was recorded in Q1 2016 compared with a £172 million loss in Q1 2015. Total income of £153 million has fallen by £305 million compared with Q1 2015 but increased by £415 million compared with Q4 2015 primarily due to lower disposal losses and favourable own credit adjustments. Q1 income includes £109 million in respect of an expected distribution to successful plaintiffs in the Madoff related class action.
|
|
●
|
Adjusted expenses of £232 million reduced £177 million, or 43%, compared with Q1 2015, principally reflecting the impact of a 1,300 reduction in headcount, and by £162 million, or 41%, compared with Q4 2015.
|
|
●
|
A net impairment charge of £196 million was recorded in the quarter principally comprising charges relating to a number of shipping assets (£226 million). Impairment releases of £145 million and £356 million were reported in Q1 2015 and Q4 2015 respectively.
|
|
●
|
RWAs have fallen by £36.7 billion to £47.6 billion from Q1 2015, primarily due to run-off and loan portfolio disposals. Funded assets have reduced by £58.1 billion to £50.2 billion for the same period.
|
|
●
|
Central items not allocated represented a charge of £372 million in the quarter compared with a £396 million charge in Q1 2015. Treasury funding costs, including a £356 million charge for volatile items under IFRS, were a charge of £286 million, versus a charge of £108 million in Q1 2015. Restructuring costs in the quarter include a £138 million charge relating to Williams & Glyn. These were offset in part by an OCA gain of £81 million as spreads widened, and a gain of £2 million on the disposal of available-for-sale securities in Treasury (Q1 2015 - £27 million charge).
|
|
●
|
W&G’s reported segmental results reflect the contribution made by W&G’s ongoing business to RBS. These figures do not reflect the cost base, funding, liquidity and capital profile of W&G as a standalone bank and do not contain certain customer portfolios which are currently reported through other segments within RBS.
|
|
●
|
Progress has been made in a number of areas necessary to becoming a standalone bank including the majority of employee roles having now been filled, the transfer of over 5,000 people onto W&G terms and conditions and the resegmentation of commercial customers to an operating model fit for a challenger bank.
|
|
●
|
New lending increased by 50% to £1.4 billion compared with Q1 2015. Notably, new mortgages were up 107% to £581 million, driven by a more buoyant market, greater productivity and more competitive pricing, while commercial increased by 29% to £740 million.
|
|
●
|
This momentum has been a key driver of the 3% year on year increase in net loans and advances to £20.1 billion at the end of Q1 2016.
|
|
●
|
Momentum continued across both personal and commercial deposits delivering a £2.2 billion, or 10%, increase in total deposits over the last 12 months to £24.3 billion.
|
|
●
|
Operating profit of £81 million was down 46% from Q1 2015 largely due to increased operating expenses, as the business continued to build central functions incurring restructuring costs to do so, and increased impairments following a significant release in Q1 2015.
|
|
●
|
Total income was stable at £205 million compared with Q1 2015 as mortgage margin pressures have largely been offset by increased asset volumes.
|
|
●
|
Operating expenses were £118 million, an increase of £42 million, or 55%, on Q1 2015 as the business continued to build central functions and operations, including £20 million of IT restructuring spend.
|
|
●
|
Net impairment losses totalled £6 million compared with a net release of £21 million in Q1 2015. The charge was £14 million lower due to a large specific impairment taken in Q4 2015.
|
|
|
Quarter ended
|
||
|
|
31 March
|
31 December
|
31 March
|
|
2016
|
2015
|
2015*
|
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Interest receivable
|
2,829
|
2,855
|
3,076
|
|
Interest payable
|
(673)
|
(693)
|
(873)
|
|
|
|
|
|
|
Net interest income
|
2,156
|
2,162
|
2,203
|
|
|
|
|
|
|
Fees and commissions receivable
|
866
|
904
|
989
|
|
Fees and commissions payable
|
(212)
|
(251)
|
(177)
|
|
Income from trading activities
|
38
|
15
|
330
|
|
Loss on redemption of own debt
|
-
|
(263)
|
-
|
|
Other operating income
|
216
|
(83)
|
174
|
|
|
|
|
|
|
Non-interest income
|
908
|
322
|
1,316
|
|
|
|
|
|
|
Total income
|
3,064
|
2,484
|
3,519
|
|
|
|
|
|
|
Staff costs
|
(1,323)
|
(1,277)
|
(1,341)
|
|
Premises and equipment
|
(324)
|
(447)
|
(419)
|
|
Other administrative expenses
|
(575)
|
(3,192)
|
(1,339)
|
|
Depreciation, amortisation and write downs
|
(178)
|
(186)
|
(512)
|
|
Write down of goodwill and other intangible assets
|
(20)
|
(659)
|
-
|
|
|
|
|
|
|
Operating expenses
|
(2,420)
|
(5,761)
|
(3,611)
|
|
|
|
|
|
|
Profit/(loss) before impairment losses
|
644
|
(3,277)
|
(92)
|
|
Impairment (losses)/releases
|
(223)
|
327
|
129
|
|
|
|
|
|
|
Operating profit/(loss) before tax
|
421
|
(2,950)
|
37
|
|
Tax (charge)/credit
|
(80)
|
261
|
(190)
|
|
|
|
|
|
|
Profit/(loss) from continuing operations
|
341
|
(2,689)
|
(153)
|
|
Profit/(loss) from discontinued operations, net of tax
|
-
|
90
|
(316)
|
|
|
|
|
|
|
Profit/(loss) for the period
|
341
|
(2,599)
|
(469)
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
Non-controlling interests
|
22
|
20
|
(84)
|
|
Preference share and other dividends
|
94
|
121
|
74
|
|
Dividend access share
|
1,193
|
-
|
-
|
|
Ordinary shareholders
|
(968)
|
(2,740)
|
(459)
|
|
|
|
|
|
|
|
341
|
(2,599)
|
(469)
|
|
|
|
|
|
|
Loss per ordinary share (EPS)
|
|
|
|
|
Basic and diluted EPS from continuing and discontinued operations
|
(8.3p)
|
(23.6p)
|
(4.0p)
|
|
Basic and diluted EPS from continuing operations
|
(8.3p)
|
(24.5p)
|
(2.2p)
|
|
|
Quarter ended
|
||
|
|
31 March
|
31 December
|
31 March
|
|
2016
|
2015
|
2015*
|
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Profit/(loss) for the period
|
341
|
(2,599)
|
(469)
|
|
|
|
|
|
|
Items that do not qualify for reclassification
|
|
|
|
|
(Loss)/gain on remeasurement of retirement benefit schemes
|
(529)
|
(93)
|
3
|
|
Tax
|
143
|
310
|
-
|
|
|
|
|
|
|
|
(386)
|
217
|
3
|
|
|
|
|
|
|
Items that do qualify for reclassification
|
|
|
|
|
Available-for-sale financial assets
|
(8)
|
139
|
202
|
|
Cash flow hedges
|
946
|
(398)
|
124
|
|
Currency translation
|
582
|
(4)
|
11
|
|
Tax
|
(238)
|
2
|
(102)
|
|
|
|
|
|
|
|
1,282
|
(261)
|
235
|
|
|
|
|
|
|
Other comprehensive income/(loss) after tax
|
896
|
(44)
|
238
|
|
|
|
|
|
|
Total comprehensive income/(loss) for the period
|
1,237
|
(2,643)
|
(231)
|
|
|
|
|
|
|
Total comprehensive income/(loss) is attributable to:
|
|
|
|
|
Non-controlling interests
|
72
|
13
|
47
|
|
Preference shareholders
|
56
|
74
|
70
|
|
Paid-in equity holders
|
38
|
47
|
4
|
|
Dividend access share
|
1,193
|
-
|
-
|
|
Ordinary shareholders
|
(122)
|
(2,777)
|
(352)
|
|
|
|
|
|
|
|
1,237
|
(2,643)
|
(231)
|
|
●
|
Following payment of the outstanding deficit reduction contributions of £4.2 billion, there was a surplus in RBS’s main pension scheme which has been restricted to the recoverable amount (£413 million – refer to Note 3 on page 32), resulting in a pre-tax charge of £529 million during the quarter.
|
|
|
●
|
Cash flow hedging gains in the quarter principally result from decreases in sterling swap rates across the maturity profile of the portfolio.
|
|
|
●
|
Currency translation gains for the quarter have primarily resulted from the weakening of sterling against the euro and the US dollar.
|
|
|
|
31 March
|
31 December
|
|
2016
|
2015
|
|
|
|
£m
|
£m
|
|
|
|
|
|
Assets
|
|
|
|
Cash and balances at central banks
|
72,083
|
79,404
|
|
Net loans and advances to banks
|
19,295
|
18,361
|
|
Reverse repurchase agreements and stock borrowing
|
15,037
|
12,285
|
|
Loans and advances to banks
|
34,332
|
30,646
|
|
Net loans and advances to customers
|
317,088
|
306,334
|
|
Reverse repurchase agreements and stock borrowing
|
27,319
|
27,558
|
|
Loans and advances to customers
|
344,407
|
333,892
|
|
Debt securities
|
87,622
|
82,097
|
|
Equity shares
|
1,255
|
1,361
|
|
Settlement balances
|
9,331
|
4,116
|
|
Derivatives
|
312,217
|
262,514
|
|
Intangible assets
|
6,534
|
6,537
|
|
Property, plant and equipment
|
4,552
|
4,482
|
|
Deferred tax
|
2,160
|
2,631
|
|
Prepayments, accrued income and other assets
|
5,032
|
4,242
|
|
Assets of disposal groups
|
3,405
|
3,486
|
|
|
|
|
|
Total assets
|
882,930
|
815,408
|
|
|
|
|
|
Liabilities
|
|
|
|
Bank deposits
|
31,774
|
28,030
|
|
Repurchase agreements and stock lending
|
12,120
|
10,266
|
|
Deposits by banks
|
43,894
|
38,296
|
|
Customer deposits
|
352,344
|
343,186
|
|
Repurchase agreements and stock lending
|
26,910
|
27,112
|
|
Customer accounts
|
379,254
|
370,298
|
|
Debt securities in issue
|
29,576
|
31,150
|
|
Settlement balances
|
8,808
|
3,390
|
|
Short positions
|
22,666
|
20,809
|
|
Derivatives
|
304,789
|
254,705
|
|
Provisions, accruals and other liabilities
|
14,748
|
15,115
|
|
Retirement benefit liabilities
|
519
|
3,789
|
|
Deferred tax
|
825
|
882
|
|
Subordinated liabilities
|
20,870
|
19,847
|
|
Liabilities of disposal groups
|
2,816
|
2,980
|
|
|
|
|
|
Total liabilities
|
828,765
|
761,261
|
|
|
|
|
|
Equity
|
|
|
|
Non-controlling interests
|
788
|
716
|
|
Owners’ equity*
|
|
|
|
Called up share capital
|
11,662
|
11,625
|
|
Reserves
|
41,715
|
41,806
|
|
|
|
|
|
Total equity
|
54,165
|
54,147
|
|
|
|
|
|
Total liabilities and equity
|
882,930
|
815,408
|
|
|
|
|
|
* Owners’ equity attributable to:
|
|
|
|
Ordinary shareholders
|
47,426
|
47,480
|
|
Other equity owners
|
5,951
|
5,951
|
|
|
|
|
|
|
53,377
|
53,431
|
|
|
Quarter ended
|
|||
|
|
31 March
|
31 December
|
31 March
|
|
|
2016
|
2015
|
2015*
|
||
|
£m
|
£m
|
£m
|
||
|
|
|
|
|
|
|
Called-up share capital
|
|
|
|
|
|
At beginning of period
|
11,625
|
6,984
|
6,877
|
|
|
Ordinary shares issued
|
37
|
51
|
48
|
|
|
Conversion of B shares (1)
|
-
|
4,590
|
-
|
|
|
|
|
|
|
|
|
At end of period
|
11,662
|
11,625
|
6,925
|
|
|
|
|
|
|
|
|
Paid-in equity
|
|
|
|
|
|
At beginning of period
|
2,646
|
2,646
|
784
|
|
|
Redeemed/reclassified
|
-
|
-
|
(150)
|
|
|
|
|
|
|
|
|
At end of period
|
2,646
|
2,646
|
634
|
|
|
|
|
|
|
|
|
Share premium account
|
|
|
|
|
|
At beginning of period
|
25,425
|
25,315
|
25,052
|
|
|
Ordinary shares issued
|
85
|
110
|
112
|
|
|
|
|
|
|
|
|
At end of period
|
25,510
|
25,425
|
25,164
|
|
|
|
|
|
|
|
|
Merger reserve
|
|
|
|
|
|
At beginning of period
|
10,881
|
13,222
|
13,222
|
|
|
Transfer to retained earnings
|
-
|
(2,341)
|
-
|
|
|
At end of period
|
|
10,881
|
10,881
|
13,222
|
|
|
|
|
|
|
|
Available-for-sale reserve
|
|
|
|
|
|
At beginning of period
|
307
|
210
|
299
|
|
|
Unrealised (losses)/gains
|
(3)
|
139
|
39
|
|
|
Realised (gains)/losses
|
(5)
|
2
|
106
|
|
|
Tax
|
(1)
|
(44)
|
(26)
|
|
|
Transfer to retained earnings
|
-
|
-
|
(47)
|
|
|
|
|
|
|
|
|
At end of period
|
298
|
307
|
371
|
|
|
|
|
|
|
|
|
Cash flow hedging reserve
|
|
|
|
|
|
At beginning of period
|
458
|
810
|
1,029
|
|
|
Amount recognised in equity
|
1,233
|
(65)
|
498
|
|
|
Amount transferred from equity to earnings
|
(287)
|
(333)
|
(386)
|
|
|
Tax
|
(263)
|
46
|
(41)
|
|
|
Transfer to retained earnings
|
-
|
-
|
9
|
|
|
|
|
|
|
|
|
At end of period
|
1,141
|
458
|
1,109
|
|
|
|
|
|
|
|
|
Foreign exchange reserve
|
|
|
|
|
|
At beginning of period
|
1,674
|
1,679
|
3,483
|
|
|
Retranslation of net assets
|
628
|
17
|
494
|
|
|
Foreign currency losses on hedges of net assets
|
(67)
|
(26)
|
(566)
|
|
|
Tax
|
26
|
-
|
(14)
|
|
|
Transfer to retained earnings
|
-
|
-
|
(618)
|
|
|
Recycled to profit or loss on disposal of businesses
|
(29)
|
4
|
-
|
|
|
|
|
|
|
|
|
At end of period
|
2,232
|
1,674
|
2,779
|
|
|
|
|
|
|
|
|
Capital redemption reserve
|
|
|
|
|
|
At beginning of period
|
4,542
|
9,132
|
9,131
|
|
|
Conversion of B shares (1)
|
-
|
(4,590)
|
-
|
|
|
|
|
|
|
|
|
At end of period
|
4,542
|
4,542
|
9,131
|
|
|
(1)
|
In October 2015, all B shares were converted into ordinary shares of £1 each.
|
|
(2)
|
See Note 3 – Pensions.
|
|
(3)
|
Relates to the secondary offering of Citizens in March 2015.
|
|
|
Quarter ended
|
||
|
|
31 March
|
31 December
|
31 March
|
|
2016
|
2015
|
2015*
|
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Retained earnings
|
|
|
|
|
At beginning of period
|
(4,020)
|
(3,851)
|
(4,001)
|
|
Profit/(loss) attributable to ordinary shareholders and other equity owners
|
|
|
|
|
- continuing operations
|
319
|
(2,709)
|
(174)
|
|
- discontinued operations
|
-
|
90
|
(211)
|
|
Equity preference dividends paid
|
(56)
|
(74)
|
(70)
|
|
Paid-in equity dividends paid, net of tax
|
(38)
|
(47)
|
(4)
|
|
Dividend access share dividend
|
(1,193)
|
-
|
-
|
|
Transfer from available-for-sale reserve
|
-
|
-
|
47
|
|
Transfer from cash flow hedging reserve
|
-
|
-
|
(9)
|
|
Transfer from foreign exchange reserve
|
-
|
-
|
618
|
|
Transfer from merger reserve
|
-
|
2,341
|
-
|
|
Costs of placing Citizens equity
|
-
|
-
|
(29)
|
|
(Loss)/gain on remeasurement of retirement benefit schemes (2)
|
|
|
|
|
- gross
|
(529)
|
(87)
|
3
|
|
- tax
|
143
|
310
|
-
|
|
Shares issued under employee share schemes
|
(7)
|
(1)
|
(56)
|
|
Share-based payments
|
|
|
|
|
- gross
|
(25)
|
12
|
4
|
|
- tax
|
-
|
(4)
|
-
|
|
Reclassification of paid-in equity
|
-
|
-
|
(27)
|
|
|
|
|
|
|
At end of period
|
(5,406)
|
(4,020)
|
(3,909)
|
|
|
|
|
|
|
Own shares held
|
|
|
|
|
At beginning of period
|
(107)
|
(108)
|
(113)
|
|
Disposal of own shares
|
11
|
1
|
2
|
|
Shares issued under employee share schemes
|
(33)
|
-
|
-
|
|
|
|
|
|
|
At end of period
|
(129)
|
(107)
|
(111)
|
|
|
|
|
|
|
Owners’ equity at end of period
|
53,377
|
53,431
|
55,315
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
|
|
At beginning of period
|
716
|
703
|
2,946
|
|
Currency translation adjustments and other movements
|
50
|
1
|
83
|
|
Profit/(loss) attributable to non-controlling interests
|
|
|
|
|
- continuing operations
|
22
|
20
|
21
|
|
- discontinued operations
|
-
|
-
|
(105)
|
|
Dividends paid
|
-
|
-
|
(11)
|
|
Movements in available-for-sale securities
|
|
|
|
|
- unrealised (losses)/gains
|
-
|
(2)
|
57
|
|
- tax
|
-
|
-
|
(21)
|
|
Movements in cash flow hedging reserve
|
|
|
|
|
- amount recognised in equity
|
-
|
-
|
12
|
|
Actuarial losses recognised in retirement benefit schemes
|
|
|
|
|
- gross
|
-
|
(6)
|
-
|
|
Equity raised (3)
|
-
|
-
|
2,491
|
|
|
|
|
|
|
At end of period
|
788
|
716
|
5,473
|
|
|
|
|
|
|
Total equity at end of period
|
54,165
|
54,147
|
60,788
|
|
|
|
|
|
|
Total equity is attributable to:
|
|
|
|
|
Non-controlling interests
|
788
|
716
|
5,473
|
|
Preference shareholders
|
3,305
|
3,305
|
4,313
|
|
Paid-in equity holders
|
2,646
|
2,646
|
634
|
|
Ordinary shareholders
|
47,426
|
47,480
|
50,368
|
|
|
|
|
|
|
|
54,165
|
54,147
|
60,788
|
|
* Restated, refer to Note 1 on page 32 for further details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory and legal actions
|
|
|
|||
|
|
|
|
Other
|
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
|
|
(1)
|
Closing provision predominantly relates to investment advice and packaged accounts.
|
|
(2)
|
Relates to continuing operations.
|
|
|
|
|
|
|
|
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
|
|
(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.
|
|
|
|
|
|
|
|
Quarter ended
|
||
|
|
31 March
|
31 December
|
31 March
|
|
|
2016
|
2015
|
2015
|
|
Income statement
|
€m
|
€m
|
€m
|
|
|
|
|
|
|
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
|
€bn
|
€bn
|
€bn
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
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
|
|
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
|
|
|
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
|
|
|
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
|
|
|
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
|
|
|
|
|
APAC portfolio (4)
|
1
|
6
|
25
|
|
Americas portfolio
|
7
|
8
|
23
|
|
EMEA portfolio (5)
|
10
|
14
|
26
|
|
Legacy loan portfolio
|
(14)
|
(26)
|
107
|
|
Shipping
|
16
|
14
|
24
|
|
Markets
|
(29)
|
(32)
|
95
|
|
GTS
|
48
|
69
|
126
|
|
Other
|
8
|
(130)
|
(46)
|
|
|
|
|
|
|
Income excluding disposals and own credit adjustments
|
47
|
(77)
|
380
|
|
Disposal (losses)/gains
|
(2)
|
(180)
|
13
|
|
Own credit adjustments
|
108
|
(5)
|
65
|
|
|
|
|
|
|
Total income
|
153
|
(262)
|
458
|
|
|
|
|
|
|
31 March
|
31 December
|
31 March
|
|
|
2016
|
2015
|
2015
|
|
|
Analysis of RWA by portfolio
|
£bn
|
£bn
|
£bn
|
|
APAC portfolio (4)
|
0.3
|
0.5
|
3.9
|
|
Americas portfolio
|
0.6
|
1.0
|
8.6
|
|
EMEA portfolio (5)
|
1.2
|
1.2
|
5.1
|
|
Legacy loan portfolio
|
3.1
|
3.7
|
7.9
|
|
Shipping
|
4.2
|
4.5
|
5.5
|
|
Markets
|
22.4
|
20.7
|
30.4
|
|
GTS
|
3.3
|
3.6
|
8.7
|
|
Saudi Hollandi Bank
|
7.3
|
6.9
|
6.4
|
|
Other
|
2.4
|
2.9
|
3.8
|
|
|
|
|
|
|
Total credit and market risk
|
44.8
|
45.0
|
80.3
|
|
Operational risk
|
2.8
|
4.0
|
4.0
|
|
|
|
|
|
|
Total RWAs
|
47.6
|
49.0
|
84.3
|
|
Balance sheet
|
|||
|
|
|
|
|
|
Total loans and advances to customers (gross)
|
23.4
|
25.9
|
55.8
|
|
Loan impairment provisions
|
(1.0)
|
(2.3)
|
(7.3)
|
|
|
|
|
|
|
Net loans and advances to customers
|
22.4
|
23.6
|
48.5
|
|
|
|
|
|
|
Funded assets
|
50.2
|
53.4
|
108.3
|
|
|
|
|
|
|
|
Quarter ended
|
||
|
|
31 March
|
31 December
|
31 March
|
|
|
2016
|
2015
|
2015
|
|
Income statement (3)
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Net interest income
|
162
|
165
|
163
|
|
|
|
|
|
|
Net fees and commissions
|
40
|
40
|
38
|
|
Other non-interest income
|
3
|
3
|
3
|
|
|
|
|
|
|
Non-interest income
|
43
|
43
|
41
|
|
|
|
|
|
|
Total income
|
205
|
208
|
204
|
|
|
|
|
|
|
Direct expenses
|
|
|
|
|
- staff costs
|
(62)
|
(61)
|
(45)
|
|
- other costs
|
(15)
|
(24)
|
(6)
|
|
Indirect expenses
|
(21)
|
(22)
|
(25)
|
|
Restructuring costs
|
|
|
|
|
- direct
|
(20)
|
(28)
|
-
|
|
Operating expenses
|
(118)
|
(135)
|
(76)
|
|
|
|
|
|
|
Operating profit before impairment (losses)/releases
|
87
|
73
|
128
|
|
Impairment (losses)/releases
|
(6)
|
(20)
|
21
|
|
|
|
|
|
|
Operating profit
|
81
|
53
|
149
|
|
|
|
|
|
|
Operating expenses - adjusted (1)
|
(98)
|
(107)
|
(76)
|
|
|
|
|
|
|
Operating profit - adjusted (1)
|
101
|
81
|
149
|
|
|
|
|
|
|
Analysis of income by product
|
|
|
|
|
Retail
|
115
|
117
|
117
|
|
Commercial
|
90
|
91
|
87
|
|
|
|
|
|
|
Total income
|
205
|
208
|
204
|
|
|
|
|
|
|
Analysis of impairments by sector
|
|
|
|
|
Retail
|
5
|
1
|
5
|
|
Commercial
|
1
|
19
|
(26)
|
|
|
|
|
|
|
Total impairment losses/(releases)
|
6
|
20
|
(21)
|
|
|
|
|
|
|
31 March
|
31 December
|
31 March
|
|
|
|
2016
|
2015
|
2015
|
|
Balance sheet (3)
|
£bn
|
£bn
|
£bn
|
|
|
|
|
|
|
Loans and advances to customers (gross)
|
|
|
|
|
- Retail
|
11.7
|
11.6
|
11.2
|
|
- Commercial
|
8.7
|
8.7
|
8.7
|
|
|
|
|
|
|
Total loans and advances to customers (gross)
|
20.4
|
20.3
|
19.9
|
|
|
31 March 2016
|
|
31 December 2015
|
||||
|
|
RBS plc
|
NatWest Plc
|
UBIL (1)
|
|
RBS plc
|
NatWest Plc
|
UBIL (1)
|
|
Risk asset ratios
|
%
|
%
|
%
|
|
%
|
%
|
%
|
|
|
|
|
|
|
|
|
|
|
CET1
|
14.3
|
11.9
|
29.8
|
|
16.0
|
11.6
|
29.6
|
|
Tier 1
|
15.3
|
11.9
|
29.8
|
|
17.1
|
11.6
|
29.6
|
|
Total
|
23.5
|
19.4
|
32.5
|
|
25.3
|
19.6
|
32.1
|
|
|
|
|
|
|
|
|
|
|
Capital (2)
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
Tangible equity
|
49,181
|
12,255
|
6,316
|
|
49,212
|
10,784
|
5,753
|
|
|
|
|
|
|
|
|
|
|
Expected loss less impairment provisions
|
(299)
|
(634)
|
-
|
|
(395)
|
(703)
|
(22)
|
|
Prudential valuation adjustment
|
(403)
|
(1)
|
-
|
|
(349)
|
(1)
|
-
|
|
Deferred tax assets
|
(198)
|
(621)
|
(226)
|
|
(252)
|
(622)
|
(210)
|
|
Own credit adjustments
|
(176)
|
-
|
-
|
|
17
|
-
|
-
|
|
Pension fund adjustment
|
(143)
|
(285)
|
89
|
|
(138)
|
-
|
142
|
|
Instruments of financial sector entities where
|
|
|
|
|
|
|
|
|
the institution has a significant investment
|
(20,079)
|
(3,067)
|
-
|
|
(15,680)
|
(2,837)
|
-
|
|
Other adjustments for regulatory purposes
|
(203)
|
(35)
|
(112)
|
|
1
|
533
|
27
|
|
|
|
|
|
|
|
|
|
|
Total deductions
|
(21,501)
|
(4,643)
|
(249)
|
|
(16,796)
|
(3,630)
|
(63)
|
|
|
|
|
|
|
|
|
|
|
CET1 capital
|
27,680
|
7,612
|
6,067
|
|
32,416
|
7,154
|
5,690
|
|
AT1 capital
|
1,976
|
-
|
-
|
|
2,318
|
17
|
-
|
|
Tier 1 capital
|
29,656
|
7,612
|
6,067
|
|
34,734
|
7,171
|
5,690
|
|
Tier 2 capital
|
15,777
|
4,806
|
540
|
|
16,607
|
4,966
|
485
|
|
|
|
|
|
|
|
|
|
|
Total regulatory capital
|
45,433
|
12,418
|
6,607
|
|
51,341
|
12,137
|
6,175
|
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit risk
|
|
|
|
|
|
|
|
|
- non-counterparty - advanced IRB
|
58,665
|
42,300
|
17,534
|
|
57,790
|
39,231
|
16,761
|
|
- non-counterparty - standardised
|
75,605
|
13,437
|
1,184
|
|
88,654
|
15,191
|
968
|
|
- counterparty
|
25,278
|
434
|
459
|
|
21,769
|
402
|
345
|
|
Market risk
|
18,808
|
524
|
39
|
|
19,073
|
570
|
7
|
|
Operational risk
|
14,861
|
7,209
|
1,124
|
|
15,615
|
6,361
|
1,148
|
|
|
|
|
|
|
|
|
|
|
Total RWAs
|
193,217
|
63,904
|
20,340
|
|
202,901
|
61,755
|
19,229
|
|
|
|
|
|
|
|
|
|
|
Leverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
|
315,940
|
2,780
|
753
|
|
265,601
|
2,086
|
657
|
|
Loans and advances
|
181,522
|
209,834
|
21,101
|
|
175,906
|
207,632
|
19,876
|
|
Reverse repos
|
34,515
|
-
|
-
|
|
31,096
|
-
|
-
|
|
Other assets
|
201,615
|
10,570
|
2,378
|
|
196,579
|
10,674
|
2,245
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
733,592
|
223,184
|
24,232
|
|
669,182
|
220,392
|
22,778
|
|
Derivatives
|
|
|
|
|
|
|
|
|
- netting
|
(305,353)
|
(2,011)
|
(122)
|
|
(260,076)
|
(1,451)
|
(99)
|
|
- potential future exposures
|
77,234
|
186
|
249
|
|
76,804
|
196
|
246
|
|
Securities financing transactions gross up
|
8,462
|
-
|
-
|
|
5,162
|
-
|
-
|
|
Undrawn commitments
|
43,916
|
10,064
|
1,204
|
|
46,309
|
9,890
|
1,021
|
|
Regulatory deductions and other adjustments
|
(19,509)
|
(5,371)
|
(226)
|
|
(15,827)
|
(5,221)
|
(212)
|
|
Exclusion of core UK-group exposures
|
(20,433)
|
(67,899)
|
-
|
|
(18,919)
|
(70,752)
|
-
|
|
|
|
|
|
|
|
|
|
|
Leverage exposure
|
517,909
|
158,153
|
25,337
|
|
502,635
|
153,054
|
23,734
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital
|
29,656
|
7,612
|
6,067
|
|
34,734
|
7,171
|
5,690
|
|
|
|
|
|
|
|
|
|
|
Leverage ratio %
|
5.7
|
4.8
|
23.9
|
|
6.9
|
4.7
|
24.0
|
|
(1)
|
Ulster Bank Ireland Limited (UBIL) broadly aligns with the segment Ulster Bank RoI.
|
|
(2)
|
Capital Requirements Regulation (CRR) as implemented by the Prudential Regulation Authority 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 AFS securities which have been included from 2015 under the PRA transitional basis.
|
|
The key driver of the movements is the annual phasing-in of the CRR transition rules. The significant investment deduction has increased reflecting an incremental 10% increase in the percentage of significant investments which are treated as a capital deduction and a commensurate 10% decrease in the percentage of significant investments which are treated as risk-weighted assets.
|
||
|
●
|
RBS plc - The impact of the annual phasing-in is a reduction of 80 basis points. Also, CET1 has decreased as a result of the capital injection into NatWest Plc in the period. RWAs have decreased by £9.7 billion predominantly as a result of the significant investment change referred to above which reduced RWAs by £14.8 billion partly offset by an increase in counterparty risk RWAs of £3.5 billion.
|
|
|
●
|
NatWest Plc - The impact of the annual phasing-in is a reduction of 50 basis points. Also, CET1 has increased as a result of the capital injection from RBS plc offset by the impact of the pension payment of £4.2 billion to the Main Scheme, being an accelerated payment of existing committed future contributions. RWAs increased by £2.1 billion driven by the risk parameter recalibration of mortgage PDs and annual recalculation of operational risk RWAs offset by the changed treatment of significant investments referred to above.
|
|
|
●
|
UBIL - CET1 ratio has increased to 29.8% in the period. RWAs have decreased from €26.2 billion to €25.7 billion as a result of reduced exposures and risk parameter improvements. In sterling terms, RWAs have increased by £1.1 billion as a result of the appreciation of the euro against sterling.
|
|
|
THE ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
|
|
By:
|
/s/ Jan Cargill
|
|
Name:
Title:
|
Jan Cargill
Deputy Secretary
|