Interim Management Statement - Part 5 of 5

RNS Number : 9321D
Royal Bank of Scotland Group PLC
03 May 2013
 



 

 

 

 

 

 

 

 

Appendix 1

 

Income statement reconciliations and Segmental analysis

 


 

Appendix 1 Income statement reconciliations and Segmental analysis

 

 

Quarter ended 31 March 2013

 

Managed 

One-off items 

reallocation 

DLG results 

to 12/3/13 (1)

Statutory 

£m 

£m 

£m

£m 

 

 

 

 

 

Interest receivable

4,336 

- 

(57)

4,279 

Interest payable

(1,614)

(2)

7 

(1,609)

 

 

 

 

 

Net interest income

2,722 

(2)

(50)

2,670 

 

 

 

 

 

Fees and commissions receivable

1,317 

- 

(1)

1,316 

Fees and commissions payable

(284)

- 

74 

(210)

Income from trading activities

1,015 

99 

1 

1,115 

Loss on redemption of own debt

- 

(51)

- 

(51)

Other operating income (2)

381 

245 

(14)

612 

Insurance net premium income

699 

- 

(699)

- 

 

 

 

 

 

Non-interest income

3,128 

293 

(639)

2,782 

 

 

 

 

 

Total income

5,850 

291 

(689)

5,452 

 

 

 

 

 

Staff costs

(1,893)

(67)

73 

(1,887)

Premises and equipment

(580)

(10)

34 

(556)

Other administrative expenses

(731)

(86)

54 

(763)

Depreciation and amortisation

(339)

(58)

10 

(387)

 

 

 

 

 

Operating expenses

(3,543)

(221)

171 

(3,593)

 

 

 

 

 

Profit before insurance net claims and impairment losses

2,307 

70 

(518)

1,859 

Insurance net claims

(445)

- 

445 

- 

 

 

 

 

 

Operating profit before impairment losses

1,862 

70 

(73)

1,859 

Impairment losses

(1,033)

- 

- 

(1,033)

 

 

 

 

 

Operating profit

829 

70 

(73)

826 

 

For the notes to this table refer to the following page.

 

Appendix 1 Income statement reconciliations and Segmental analysis (continued)

 

 

Quarter ended 31 March 2013

 

Managed 

One-off items 

reallocation 

DLG results 

to 12/3/13 (1)

Statutory 

 

£m 

£m 

£m 

£m 

 

 

 

 

 

Operating profit

829 

70 

(73)

826 

Own credit adjustments (3)

249 

(249)

- 

- 

Interest Rate Hedging Products redress and related costs

(50)

50 

- 

- 

Integration and restructuring costs (4)

(131)

131 

- 

- 

Loss on redemption of own debt

(51)

51 

- 

- 

Amortisation of purchased intangible assets

(41)

41 

- 

- 

Strategic disposals

66 

(66)

- 

- 

RFS Holdings minority interest

100 

(100)

- 

- 

 

 

 

 

 

Profit including the results of Direct Line Group discontinued operations

971 

(72)

(73)

826 

Direct Line Group discontinued operations

(145)

72 

73 

- 

 

 

 

 

 

Profit before tax

826 

- 

- 

826 

Tax charge

(350)

- 

- 

(350)

 

 

 

 

 

Profit from continuing operations

476 

- 

- 

476 

 

 

 

 

 

Profit from discontinued operations, net of tax

 

 

 

 

  - Direct Line Group

127 

- 

- 

127 

  - Other

2 

- 

- 

2 

 

 

 

 

 

Profit from discontinued operations, net of tax

129 

- 

- 

129 

 

 

 

 

 

Profit for the period

605 

- 

- 

605 

Non-controlling interests

(131)

- 

- 

(131)

Preference share and other dividends

(81)

- 

- 

(81)

 

 

 

 

 

Profit attributable to ordinary and B shareholders

393 

- 

- 

393 

 

Notes:

(1)

The statutory results of Direct Line Group, which is classified as a discontinued operation.

(2)

Includes the Group's share of profit of Direct Line Group as an associated undertaking of £7 million from 13 March 2013.

(3)

Reallocation of £99 million gain to income from trading activities and £150 million gain to other operating income.

(4)

Includes £9 million in Direct Line Group.

 

 

Appendix 1 Income statement reconciliations and Segmental analysis

 

 

Quarter ended

 

31 December 2012

 

31 March 2012

 

Managed 

One-off items 

reallocation 

DLG (1)

Statutory 

 

Managed 

One-off items 

reallocation 

DLG (1)

Statutory 

 

£m 

£m 

£m 

£m 

 

£m 

£m 

£m 

£m 

 

 

 

 

 

 

 

 

 

 

Interest receivable

4,517 

- 

(78)

4,439 

 

5,017 

- 

(83)

4,934 

Interest payable

(1,675)

(3)

12 

(1,666)

 

(2,010)

(8)

(1)

(2,019)

 

 

 

 

 

 

 

 

 

 

Net interest income

2,842 

(3)

(66)

2,773 

 

3,007 

(8)

(84)

2,915 

 

 

 

 

 

 

 

 

 

 

Fees and commissions receivable

1,375 

- 

(1)

1,374 

 

1,487 

- 

(2)

1,485 

Fees and commissions payable

(324)

(1)

80 

(245)

 

(290)

- 

111 

(179)

Income from trading activities

567 

(97)

4 

474 

 

1,264 

(1,052)

- 

212 

Gain on redemption of own debt

- 

- 

- 

- 

 

- 

577 

- 

577 

Other operating income

381 

(138)

(16)

227 

 

725 

(1,472)

(53)

(800)

Insurance net premium income

919 

- 

(919)

- 

 

938 

- 

(938)

- 

 

 

 

 

 

 

 

 

 

 

Non-interest income

2,918 

(236)

(852)

1,830 

 

4,124 

(1,947)

(882)

1,295 

 

 

 

 

 

 

 

 

 

 

Total income

5,760 

(239)

(918)

4,603 

 

7,131 

(1,955)

(966)

4,210 

 

 

 

 

 

 

 

 

 

 

Staff costs

(1,467)

(312)

123 

(1,656)

 

(2,249)

(349)

90 

(2,508)

Premises and equipment

(573)

(73)

54 

(592)

 

(550)

(13)

1 

(562)

Other administrative expenses

(723)

(1,834)

51 

(2,506)

 

(819)

(197)

133 

(883)

Depreciation and amortisation

(384)

(138)

24 

(498)

 

(394)

(74)

11 

(457)

Write down of goodwill and other intangible assets

- 

(124)

- 

(124)

 

- 

- 

- 

- 

 

 

 

 

 

 

 

 

 

 

Operating expenses

(3,147)

(2,481)

252 

(5,376)

 

(4,012)

(633)

235 

(4,410)

 

 

 

 

 

 

 

 

 

 

Profit/(loss) before insurance net claims and impairment losses

2,613 

(2,720)

(666)

(773)

 

3,119 

(2,588)

(731)

(200)

Insurance net claims

(606)

- 

606 

- 

 

(649)

- 

649 

- 

 

 

 

 

 

 

 

 

 

 

Operating profit/(loss) before impairment losses

2,007 

(2,720)

(60)

(773)

 

2,470 

(2,588)

(82)

(200)

Impairment losses

(1,454)

- 

- 

(1,454)

 

(1,314)

- 

- 

(1,314)

 

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

553 

(2,720)

(60)

(2,227)

 

1,156 

(2,588)

(82)

(1,514)

 

For the notes to this table refer to page 5.

 

Appendix 1 Income statement reconciliations and Segmental analysis (continued)

 

 

Quarter ended

 

31 December 2012

 

31 March 2012

 

Managed 

One-off items 

reallocation 

DLG (1)

Statutory 

 

Managed 

One-off items 

reallocation 

DLG (1)

Statutory 

 

£m 

£m 

£m 

£m 

 

£m 

£m 

£m 

£m 

 

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

553 

(2,720)

(60)

(2,227)

 

1,156 

(2,588)

(82)

(1,514)

Own credit adjustments (2)

(220)

220 

- 

- 

 

(2,456)

2,456 

- 

- 

Payment Protection Insurance costs

(450)

450 

- 

- 

 

(125)

125 

- 

- 

Interest Rate Hedging Products redress and related costs

(700)

700 

- 

- 

 

- 

- 

- 

- 

Regulatory fines

(381)

381 

- 

- 

 

- 

- 

- 

- 

Integration and restructuring costs

(620)

620 

- 

- 

 

(460)

460 

- 

- 

Gain on redemption of own debt

- 

- 

- 

- 

 

577 

(577)

- 

- 

Write-down of goodwill and other intangible assets

(518)

518 

- 

- 

 

- 

- 

- 

- 

Asset Protection Scheme (3)

- 

- 

- 

- 

 

(43)

43 

- 

- 

Amortisation of purchased intangible assets

(32)

32 

- 

- 

 

(48)

48 

- 

- 

Strategic disposals

(16)

16 

- 

- 

 

(8)

8 

- 

- 

Bank levy

(175)

175 

- 

- 

 

- 

- 

- 

- 

RFS Holdings minority interest

(2)

2 

- 

- 

 

(25)

25 

- 

- 

 

 

 

 

 

 

 

 

 

 

Loss including the results of Direct Line Group discontinued operations

(2,561)

394 

(60)

(2,227)

 

(1,432)

- 

(82)

(1,514)

Direct Line Group discontinued operations

334 

(394)

60 

- 

 

(82)

- 

82 

- 

 

 

 

 

 

 

 

 

 

 

Loss before tax

(2,227)

- 

- 

(2,227)

 

(1,514)

- 

- 

(1,514)

Tax charge

(39)

- 

- 

(39)

 

(138)

- 

- 

(138)

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations

(2,266)

- 

- 

(2,266)

 

(1,652)

- 

- 

(1,652)

 

For the notes to this table refer to page 5.

 

Appendix 1 Income statement reconciliations and Segmental analysis (continued)

 

 

Quarter ended

 

31 December 2012

 

31 March 2012

 

Managed 

One-off items 

reallocation 

DLG (1)

Statutory 

 

Managed 

One-off items 

reallocation 

DLG (1)

Statutory 

 

£m 

£m 

£m 

£m 

 

£m 

£m 

£m 

£m 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit from discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

  - Direct Line Group

(351)

- 

- 

(351)

 

88 

- 

- 

88 

  - Other

6 

- 

- 

6 

 

5 

- 

- 

5 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit from discontinued operations, net of tax

(345)

- 

- 

(345)

 

93 

- 

- 

93 

 

 

 

 

 

 

 

 

 

 

Loss for the period

(2,611)

- 

- 

(2,611)

 

(1,559)

- 

- 

(1,559)

Non-controlling interests

108 

- 

- 

108 

 

14 

- 

- 

14 

Preference share and other dividends

(115)

- 

- 

(115)

 

- 

- 

- 

- 

 

 

 

 

 

 

 

 

 

 

Loss attributable to ordinary and B shareholders

(2,618)

- 

- 

(2,618)

 

(1,545)

- 

- 

(1,545)

 

Notes:

(1)

The statutory results of Direct Line Group, which is classified as a discontinued operation.

(2)

Reallocation (Q4 2012 - £98 million loss; Q1 2012 - £1,009 million loss) to income from trading activities and (Q4 2012 - £122 million loss; Q1 2012 - £1,447 million loss) to other operating income.

(3)

Reallocation to income from trading activities.

 

 


 

Appendix 1 Income statement reconciliations and Segmental analysis (continued)

 

Segmental analysis

 

Analysis of divisional operating profit/(loss)

The following tables provide an analysis of divisional operating profit/(loss) by main income statement captions. The divisional income statements on pages 22 to 64 of the main announcement reflect certain presentational reallocations as described in the notes below. These do not affect the overall operating profit/(loss).

 

 

Net 

interest 

income 

Non- 

interest 

income 

Total 

income 

Operating 

expenses 

Insurance 

net claims 

Impairment 

losses 

Operating 

profit/(loss)

Quarter ended 31 March 2013

£m 

£m 

£m 

£m 

£m 

£m 

£m 

 

 

 

 

 

 

 

 

UK Retail

965 

226 

1,191 

(634)

- 

(80)

477 

UK Corporate 

706 

378 

1,084 

(541)

- 

(185)

358 

Wealth

169 

104 

273 

(212)

- 

(5)

56 

International Banking

197 

285 

482 

(333)

- 

(55)

94 

Ulster Bank

154 

54 

208 

(132)

- 

(240)

(164)

US Retail & Commercial

471 

292 

763 

(555)

- 

(19)

189 

Markets

30 

1,010 

1,040 

(746)

- 

(16)

278 

Direct Line Group (1)

49 

647 

696 

(162)

(445)

- 

89 

Central items

18 

2 

20 

(63)

- 

- 

(43)

 

 

 

 

 

 

 

 

Core

2,759 

2,998 

5,757 

(3,378)

(445)

(600)

1,334 

Non-Core (2)

(37)

130 

93 

(165)

- 

(433)

(505)

 

 

 

 

 

 

 

 

Managed basis

2,722 

3,128 

5,850 

(3,543)

(445)

(1,033)

829 

Reconciling items

 

 

 

 

 

 

 

Own credit adjustments (3)

- 

249 

249 

- 

- 

- 

249 

Interest Rate Hedging Products redress

  and related costs

- 

- 

- 

(50)

- 

- 

(50)

Integration and restructuring costs

- 

- 

- 

(131)

- 

- 

(131)

Loss on redemption of own debt

- 

(51)

(51)

- 

- 

- 

(51)

Amortisation of purchased intangible

  assets

- 

- 

- 

(41)

- 

- 

(41)

Strategic disposals

- 

66 

66 

- 

- 

- 

66 

RFS Holdings minority interest

(2)

101 

99 

1 

- 

- 

100 

 

 

 

 

 

 

 

 

Statutory basis including the results of

  Direct Line Group discontinued operations

2,720 

3,493 

6,213 

(3,764)

(445)

(1,033)

971 

Direct Line Group discontinued

  operations (4)

(50)

(711)

(761)

171 

445 

- 

(145)

 

 

 

 

 

 

 

 

Statutory basis

2,670 

2,782 

5,452 

(3,593)

- 

(1,033)

826 

 

Notes:

(1)

Total income includes £27 million of investment income, £25 million in net interest income and £2 million in non-interest income. Reallocation of £24 million between non-interest income and net interest income in respect of instalment income.

(2)

Reallocation of £9 million between net interest income and non-interest income in respect of funding costs of rental assets.

(3)

Comprises £99 million gain included in 'Income from trading activities' and £150 million gain included in 'Other operating income' on a statutory basis.

(4)

Included within Direct Line Group discontinued operations are the managed basis divisional results of Direct Line Group (DLG), certain DLG related activities in Central items, and related one-off and other items including integration and restructuring costs.


 

Appendix 1 Income statement reconciliations and Segmental analysis (continued)

 

Analysis of divisional operating profit/(loss) (continued)

 

 

Net 

interest 

income 

Non- 

interest 

income 

Total 

income 

Operating 

expenses 

Insurance 

net claims 

Impairment 

losses 

Operating 

profit/(loss)

Quarter ended 31 December 2012

£m 

£m 

£m 

£m 

£m 

£m 

£m 

 

 

 

 

 

 

 

 

UK Retail

1,011 

219 

1,230 

(624)

- 

(93)

513 

UK Corporate 

717 

456 

1,173 

(515)

- 

(234)

424 

Wealth

178 

107 

285 

(193)

- 

(16)

76 

International Banking

201 

283 

484 

(292)

- 

(37)

155 

Ulster Bank

161 

51 

212 

(137)

- 

(318)

(243)

US Retail & Commercial

465 

275 

740 

(517)

- 

(23)

200 

Markets (1)

49 

592 

641 

(480)

- 

(22)

139 

Direct Line Group (2)

67 

851 

918 

(199)

(606)

- 

113 

Central items

(60)

169 

109 

17 

- 

(8)

118 

 

 

 

 

 

 

 

 

Core

2,789 

3,003 

5,792 

(2,940)

(606)

(751)

1,495 

Non-Core (3)

53 

(85)

(32)

(207)

- 

(703)

(942)

 

 

 

 

 

 

 

 

Managed basis

2,842 

2,918 

5,760 

(3,147)

(606)

(1,454)

553 

Reconciling items

 

 

 

 

 

 

 

Own credit adjustments (4)

- 

(220)

(220)

- 

- 

- 

(220)

Payment Protection Insurance costs

- 

- 

- 

(450)

- 

- 

(450)

Interest Rate Hedging Products redress

  and related costs

- 

- 

- 

(700)

- 

- 

(700)

Regulatory fines

- 

- 

- 

(381)

- 

- 

(381)

Integration and restructuring costs

- 

- 

- 

(620)

- 

- 

(620)

Write-down of goodwill and other

  intangible assets

- 

- 

- 

(518)

- 

- 

(518)

Amortisation of purchased intangible

  assets

- 

- 

- 

(32)

- 

- 

(32)

Strategic disposals

- 

(16)

(16)

-

- 

- 

(16)

Bank levy

- 

- 

- 

(175)

- 

- 

(175)

RFS Holdings minority interest

(3)

- 

(3)

1 

- 

- 

(2)

 

 

 

 

 

 

 

 

Statutory basis including the results of

  Direct Line Group discontinued operations

2,839 

2,682 

5,521 

(6,022)

(606)

(1,454)

(2,561)

Direct Line Group discontinued

  operations (5)

(66)

(852)

(918)

646 

606 

- 

334 

 

 

 

 

 

 

 

 

Statutory basis

2,773 

1,830 

4,603 

(5,376)

- 

(1,454)

(2,227)

 

Notes:

(1)

Reallocation of £3 million between net interest income and non-interest income to record interest on financial assets and liabilities designated as at fair value through profit or loss.

(2)

Total income includes £32 million of investment income, £35 million in net interest income and £(3) million in non-interest income. Reallocation of £32 million between non-interest income and net interest income in respect of instalment income.

(3)

Reallocation of £6 million between net interest income and non-interest income in respect of funding costs of rental assets, £12 million, offset by £6 million to record interest on financial assets and liabilities designated as at fair value through profit or loss.

(4)

Comprises £98 million loss included in 'Income from trading activities' and £122 million loss included in 'Other operating income' on a statutory basis.

(5)

Included within Direct Line Group discontinued operations are the managed basis divisional results of Direct Line Group (DLG), certain DLG related activities in Central items; and related one-off and other items including write-down of goodwill, integration and restructuring costs and strategic disposals.


 

Appendix 1 Income statement reconciliations and Segmental analysis (continued)

 

Analysis of divisional operating profit/(loss) (continued)

 

 

Net 

interest 

income 

Non- 

interest 

income 

Total 

income 

Operating 

expenses 

Insurance 

net claims 

Impairment 

losses 

Operating 

profit/(loss)

Quarter ended 31 March 2012

£m 

£m 

£m 

£m 

£m 

£m 

£m 

 

 

 

 

 

 

 

 

UK Retail

1,001 

266 

1,267 

(635)

- 

(155)

477 

UK Corporate 

756 

445 

1,201 

(533)

- 

(176)

492 

Wealth

179 

111 

290 

(237)

- 

(10)

43 

International Banking (1)

251 

291 

542 

(410)

- 

(35)

97 

Ulster Bank

165 

49 

214 

(130)

- 

(394)

(310)

US Retail & Commercial

491 

265 

756 

(635)

- 

(19)

102 

Markets (2)

16 

1,718 

1,734 

(908)

- 

(2)

824 

Direct Line Group (3)

84 

882 

966 

(233)

(649)

- 

84 

Central items

- 

(108)

(108)

(28)

- 

(34)

(170)

 

 

 

 

 

 

 

 

Core

2,943 

3,919 

6,862 

(3,749)

(649)

(825)

1,639 

Non-Core (4)

64 

205 

269 

(263)

- 

(489)

(483)

 

 

 

 

 

 

 

 

Managed basis

3,007 

4,124 

7,131 

(4,012)

(649)

(1,314)

1,156 

Reconciling items

 

 

 

 

 

 

 

Own credit adjustments (5)

- 

(2,456)

(2,456)

- 

- 

- 

(2,456)

Payment Protection Insurance costs

- 

- 

- 

(125)

- 

- 

(125)

Integration and restructuring costs

- 

- 

- 

(460)

- 

- 

(460)

Gain on redemption of own debt

- 

577 

577 

- 

- 

- 

577 

Asset Protection Scheme (6)

- 

(43)

(43)

- 

- 

- 

(43)

Amortisation of purchased intangible assets

- 

- 

- 

(48)

- 

- 

(48)

Strategic disposals

- 

(8)

(8)

- 

- 

- 

(8)

RFS Holdings minority interest

(8)

(17)

(25)

- 

- 

- 

(25)

 

 

 

 

 

 

 

 

Statutory basis including the results of

  Direct Line Group discontinued operations

2,999 

2,177 

5,176 

(4,645)

(649)

(1,314)

(1,432)

Direct Line Group discontinued

  operations (7)

(84)

(882)

(966)

235 

649 

- 

(82)

 

 

 

 

 

 

 

 

Statutory basis

2,915 

1,295 

4,210 

(4,410)

- 

(1,314)

(1,514)

 

Notes:

(1)

Reallocation of £9 million between net interest income and non-interest income in respect of funding costs of rental assets.

(2)

Reallocation of £8 million between net interest income and non-interest income to record interest on financial assets and liabilities designated as at fair value through profit or loss.

(3)

Total income includes £90 million of investment income, £53 million in net interest income and £37 million in non-interest income. Reallocation of £31 million between non-interest income and net interest income in respect of instalment income.

(4)

Reallocation of £51 million between net interest income and non-interest income in respect of funding costs of rental assets.

(5)

Comprises £1,009 million loss included in 'Income from trading activities' and £1,447 million loss included in 'Other operating income' on a statutory basis.

(6)

Included in 'Income from trading activities' on a statutory basis.

(7)

Included within Direct Line Group discontinued operations are the managed basis divisional results of Direct Line Group (DLG), certain DLG related activities in Central items; and related one-off and other items including integration and restructuring costs and strategic disposals.

 

 



 

 

 

 

 

 

 

 

Appendix 2

 

Analysis of balance sheet

pre and post disposal groups

 


 

Appendix 2 Analysis of balance sheet pre and post disposal groups

 

In accordance with IFRS 5 assets and liabilities of disposal groups are presented as a single line on the face of the balance sheet. As allowed by IFRS, disposal groups are included within risk measures.

 

31 March 2013


31 December 2012


Balance 

sheet 

Disposal 

groups (1)

Gross of 

disposal 

groups 

 

 

Balance 

sheet 

Disposal 

groups (2)

Gross of 

disposal 

groups 


£m 

£m 

£m 


£m 

£m 

£m 









Assets








Cash and balances at central banks

86,718 

16 

86,734 


79,290 

18 

79,308 

Net loans and advances to banks

34,025 

105 

34,130 


29,168 

2,112 

31,280 

Reverse repurchase agreements and stock borrowing

43,678 

- 

43,678 


34,783 

- 

34,783 

Loans and advances to banks

77,703 

105 

77,808 


63,951 

2,112 

66,063 

Net loans and advances to customers

432,360 

1,058 

433,418 


430,088 

1,863 

431,951 

Reverse repurchase agreements and stock borrowing

59,427 

- 

59,427 


70,047 

- 

70,047 

Loans and advances to customers

491,787 

1,058 

492,845 


500,135 

1,863 

501,998 

Debt securities

153,248 

33 

153,281 


157,438 

7,186 

164,624 

Equity shares

11,861 

6 

11,867 


15,232 

5 

15,237 

Settlement balances

15,805 

- 

15,805 


5,741 

- 

5,741 

Derivatives

432,435 

2 

432,437 


441,903 

15 

441,918 

Intangible assets

13,928 

- 

13,928 


13,545 

750 

14,295 

Property, plant and equipment

9,482 

121 

9,603 


9,784 

223 

10,007 

Deferred tax

3,280 

- 

3,280 


3,443 

- 

3,443 

Other financial assets

- 

- 

- 


- 

924 

924 

Prepayments, accrued income and other assets

10,200 

221 

10,421 


7,820 

742 

8,562 

Assets of disposal groups (3)

1,726 

(1,562)

164 


14,013 

(13,838)

175 









Total assets

1,308,173 

- 

1,308,173 


1,312,295 

- 

1,312,295 

 

For the notes to this table refer to page 3.



 

Appendix 2 Analysis of balance sheet pre and post disposal groups (continued)

 

31 March 2013


31 December 2012


Balance 

sheet 

Disposal 

groups (1)

Gross of 

disposal 

groups 

 

 

Balance 

sheet 

Disposal 

groups (2)

Gross of 

disposal 

groups 


£m 

£m 

£m 


£m 

£m 

£m 


 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Bank deposits

54,536 

- 

54,536 

 

57,073 

1 

57,074 

Repurchase agreements and stock lending

39,575 

- 

39,575 

 

44,332 

- 

44,332 

Deposits by banks

94,111 

- 

94,111 

 

101,405 

1 

101,406 

Customer deposits

437,437 

800 

438,237 

 

433,239 

753 

433,992 

Repurchase agreements and stock lending

88,658 

- 

88,658 

 

88,040 

- 

88,040 

Customer accounts

526,095 

800 

526,895 

 

521,279 

753 

522,032 

Debt securities in issue

92,740 

- 

92,740 

 

94,592 

- 

94,592 

Settlement balances

14,640 

- 

14,640 

 

5,878 

- 

5,878 

Short positions

30,610 

- 

30,610 

 

27,591 

- 

27,591 

Derivatives

429,881 

2 

429,883 

 

434,333 

7 

434,340 

Accruals, deferred income and other liabilities

15,630 

158 

15,788 

 

14,801 

2,679 

17,480 

Retirement benefit liabilities

3,533 

- 

3,533 

 

3,884 

- 

3,884 

Deferred tax

1,019 

- 

1,019 

 

1,141 

- 

1,141 

Insurance liabilities

- 

- 

- 

 

- 

6,193 

6,193 

Subordinated liabilities

27,788 

- 

27,788 

 

26,773 

529 

27,302 

Liabilities of disposal groups (3)

961 

(960)

1 

 

10,170 

(10,162)

8 


 

 

 

 

 

 

 

Total liabilities

1,237,008 

- 

1,237,008 

 

1,241,847 

- 

1,241,847 

 

For the notes to this table refer to page 3.



 

Appendix 2 Analysis of balance sheet pre and post disposal groups (continued)

 

31 March 2013


31 December 2012


Balance 

sheet 

Disposal 

groups (1)

Gross of 

disposal 

groups 

 

 

Balance 

sheet 

Disposal 

groups (2)

Gross of 

disposal 

groups 


£m 

£m 

£m 


£m 

£m 

£m 


 

 

 

 

 

 

 

Selected financial data

 

 

 

 

 

 

 

Gross loans and advances to customers

453,735 

1,070 

454,805 

 

451,224 

1,875 

453,099 

Customer loan impairment provisions

(21,375)

(12)

(21,387)

 

(21,136)

(12)

(21,148)

Net loans and advances to customers

432,360 

1,058 

433,418 

 

430,088 

1,863 

431,951 


 

 

 

 

 

 

 

Gross loans and advances to banks

34,144 

105 

34,249 

 

29,282 

2,112 

31,394 

Bank loan impairment provisions

(119)

- 

(119)

 

(114)

- 

(114)

Net loans and advances to banks

34,025 

105 

34,130 

 

29,168 

2,112 

31,280 


 

 

 

 

 

 

 

Total loan impairment provisions

(21,494)

(12)

(21,506)

 

(21,250)

(12)

(21,262)


 

 

 

 

 

 

 

Customer REIL

40,890 

13 

40,903 

 

40,993 

13 

41,006 

Bank REIL

139 

- 

139 

 

134 

- 

134 

Total REIL

41,029 

13 

41,042 

 

41,127 

13 

41,140 


 

 

 

 

 

 

 

Gross unrealised gains on debt securities

3,640 

- 

3,640 

 

3,946 

230 

4,176 

Gross unrealised losses on debt securities

(1,523)

- 

(1,523)

 

(1,832)

(15)

(1,847)

 

Notes:

(1)

Disposal groups at 31 March 2013 primarily comprise a number of RBS NV businesses.

(2)

Disposal groups at 31 December 2012 primarily comprised Direct Line Group (DLG). To comply with EC state aid requirements, the Group agreed to cede control of DLG by the end of 2013 and divest completely by the end of 2014. Following the successful initial public offering in Q4 2012, in which the Group sold 34.7% of its shareholding, DLG was classified as a disposal group and discontinued operation on 31 December 2012. On 13 March 2013, the Group sold a further 16.8% of the share capital of DLG and now holds 48.5% of the issued ordinary share capital in DLG. Consequently, the minority share of DLG still held by the Group is recognised as an associated undertaking and no longer as either a disposal group or discontinued operation at 31 March 2013. The Group recognised a gain on disposal of £72 million in Q1 2013. This gain is recorded in other income within discontinued operations. On initial classification as held-for-sale, disposal groups are required to be measured at the lower of carrying amount and fair value less costs to sell. Accordingly, at 31 December 2012, DLG's carrying amount exceeded its fair value less costs to sell (based on the quoted price for DLG shares on 31 December 2012) by £394 million and goodwill attributable to DLG was written down by this amount. The write down was recorded in other expenses within discontinued operations in Q4 2012.

(3)

Residual assets and liabilities of disposal groups relate to businesses acquired as part of the ABN AMRO acquisition in 2007 with a view to disposal rather than use.

 


 

 

 

 

 

 

 

 

 

Appendix 3

 

Risk management supplement

 

 

Appendix 3 Risk management supplement

 

 

Page 

 

 

Credit risk

2 

Loans and related credit metrics

2 

  Loans, REIL, provisions and impairments

2 

  Sector and geographical regional analyses

2 

  REIL flow statement

8 

  Impairment provisions flow statement

9 

  Impairment charge analysis

11 

Wholesale renegotiations

13 

Retail forbearance

14 

Key loan portfolios

15 

  Commercial real estate

15 

  Ulster Bank Group (Core and Non-Core)

17 

Debt securities: AFS reserves by issuer

19 

Country risk

20 

  Overview

20 

  Eurozone periphery by country

22 

  - Ireland

22 

  - Spain

23 

  - Italy

24 

  - Portugal

25 

  - Greece

26 

  - Cyprus

27 

 

 

Appendix 3 Risk management supplement (continued)

 

Credit risk

 

Loans and related credit metrics: Loans, REIL, provisions and impairments 

Sector and geographical regional analyses - Group

The tables below analyse gross loans and advances to banks and customers (excluding reverse repos) and related credit metrics by sector and geography (by location of lending office) for the Group, Core and Non-Core.





Credit metrics



31 March 2013

Gross 

loans 

£m 

REIL 

£m 

Provisions 

£m 

REIL as a 

% of 

gross loans 

% 

Provisions 

as a % 

of REIL 

% 

Provisions 

as a % of 

gross loans 

% 

Impairment 

charge 

£m 

Amounts 

written-off 

£m 










Government (1)

10,272 

- 

- 

- 

- 

- 

- 

- 

Finance

42,726 

651 

354 

1.5 

54 

0.8 

30 

- 

Personal

- mortgages

151,281 

6,871 

1,973 

4.5 

29 

1.3 

176 

76 


- unsecured

30,884 

2,876 

2,370 

9.3 

82 

7.7 

138 

198 

Property

70,537 

20,598 

9,936 

29.2 

48 

14.1 

384 

464 

Construction

8,368 

1,437 

711 

17.2 

49 

8.5 

95 

37 

Manufacturing

24,115 

749 

374 

3.1 

50 

1.6 

30 

13 

Finance leases (2)

13,990 

320 

219 

2.3 

68 

1.6 

(2)

68 

Retail, wholesale and repairs

22,225 

1,147 

642 

5.2 

56 

2.9 

28 

40 

Transport and storage

18,671 

934 

230 

5.0 

25 

1.2 

24 

145 

Health, education and leisure

17,045 

1,232 

567 

7.2 

46 

3.3 

41 

13 

Hotels and restaurants

8,562 

1,667 

740 

19.5 

44 

8.6 

30 

29 

Utilities

6,464 

253 

98 

3.9 

39 

1.5 

42 

- 

Other

29,665 

2,168 

1,216 

7.3 

56 

4.1 

71 

73 

Latent

- 

- 

1,957 

- 

- 

- 

(51)

- 











454,805 

40,903 

21,387 

9.0 

52 

4.7 

1,036 

1,156 










of which:









UK









  - residential mortgages

110,212 

2,374 

458 

2.2 

19 

0.4 

16 

5 

  - personal lending

18,770 

2,414 

2,103 

12.9 

87 

11.2 

94 

145 

  - property

51,745 

9,519 

3,932 

18.4 

41 

7.6 

178 

442 

  - construction

6,532 

1,070 

511 

16.4 

48 

7.8 

61 

37 

  - other

123,766 

3,648 

2,521 

2.9 

69 

2.0 

82 

135 

Europe









  - residential mortgages

18,362 

3,372 

1,300 

18.4 

39 

7.1 

116 

3 

  - personal lending

1,614 

232 

213 

14.4 

92 

13.2 

9 

11 

  - property

14,584 

10,741 

5,851 

73.6 

54 

40.1 

213 

18 

  - construction

1,411 

320 

170 

22.7 

53 

12.0 

11 

- 

  - other

26,621 

4,742 

3,046 

17.8 

64 

11.4 

166 

235 

US









  - residential mortgages

22,387 

1,098 

207 

4.9 

19 

0.9 

44 

68 

  - personal lending

9,358 

230 

54 

2.5 

23 

0.6 

35 

41 

  - property

3,832 

153 

30 

4.0 

20 

0.8 

(7)

4 

  - construction

385 

41 

25 

10.6 

61 

6.5 

23 

- 

  - other

30,415 

433 

660 

1.4 

152 

2.2 

2 

10 

RoW









  - residential mortgages

320 

27 

8 

8.4 

30 

2.5 

- 

- 

  - personal lending

1,142 

- 

- 

- 

- 

- 

- 

1 

  - property

376 

185 

123 

49.2 

66 

32.7 

- 

- 

  - construction

40 

6 

5 

15.0 

83 

12.5 

- 

- 

  - other

12,933 

298 

170 

2.3 

57 

1.3 

(7)

1 











454,805 

40,903 

21,387 

9.0 

52 

4.7 

1,036 

1,156 










Banks

34,249 

139 

119 

0.4 

86 

0.3 

- 

- 

 

For the notes to this table refer to page 7.

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

Sector and geographical regional analyses - Group (continued)

 




Credit metrics



31 December 2012

Gross 

loans 

£m 

REIL 

£m 

Provisions 

£m 

REIL as a 

% of 

gross loans 

% 

Provisions 

as a % 

of REIL 

% 

Provisions 

as a % of 

gross loans 

% 

Impairment 

charge 

£m 

Amounts 

written-off 

£m 










Government (1)

9,853 

- 

- 

- 

- 

- 

- 

- 

Finance

42,198 

592 

317 

1.4 

54 

0.8 

64 

175 

Personal

- mortgages

149,625 

6,549 

1,824 

4.4 

28 

1.2 

163 

91 


- unsecured

32,212 

2,903 

2,409 

9.0 

83 

7.5 

168 

199 

Property

72,219 

21,223 

9,859 

29.4 

46 

13.7 

624 

237 

Construction

8,049 

1,483 

640 

18.4 

43 

8.0 

- 

30 

Manufacturing

23,787 

755 

357 

3.2 

47 

1.5 

54 

67 

Finance leases (2)

13,609 

442 

294 

3.2 

67 

2.2 

- 

116 

Retail, wholesale and repairs

21,936 

1,143 

644 

5.2 

56 

2.9 

70 

100 

Transport and storage

18,341 

834 

336 

4.5 

40 

1.8 

89 

65 

Health, education and leisure

16,705 

1,190 

521 

7.1 

44 

3.1 

21 

32 

Hotels and restaurants

7,877 

1,597 

726 

20.3 

45 

9.2 

33 

54 

Utilities

6,631 

118 

21 

1.8 

18 

0.3 

- 

- 

Other

30,057 

2,177 

1,240 

7.2 

57 

4.1 

37 

251 

Latent

- 

- 

1,960 

- 

- 

- 

80 

- 











453,099 

41,006 

21,148 

9.1 

52 

4.7 

1,403 

1,417 










of which:









UK









  - residential mortgages

109,530 

2,440 

457 

2.2 

19 

0.4 

31 

10 

  - personal lending

20,498 

2,477 

2,152 

12.1 

87 

10.5 

89 

121 

  - property

53,730 

10,521 

3,944 

19.6 

37 

7.3 

356 

120 

  - construction

6,507 

1,165 

483 

17.9 

41 

7.4 

(17)

19 

  - other

122,029 

3,729 

2,611 

3.1 

70 

2.1 

291 

453 

Europe









  - residential mortgages

17,836 

3,092 

1,151 

17.3 

37 

6.5 

103 

42 

  - personal lending

1,905 

226 

208 

11.9 

92 

10.9 

9 

- 

  - property

14,634 

10,347 

5,766 

70.7 

56 

39.4 

273 

61 

  - construction

1,132 

289 

146 

25.5 

51 

12.9 

18 

10 

  - other

27,424 

4,451 

2,996 

16.2 

67 

10.9 

186 

208 

US









  - residential mortgages

21,929 

990 

208 

4.5 

21 

0.9 

27 

39 

  - personal lending

8,748 

199 

48 

2.3 

24 

0.5 

67 

76 

  - property

3,343 

170 

29 

5.1 

17 

0.9 

(3)

28 

  - construction

388 

8 

1 

2.1 

13 

0.3 

(1)

1 

  - other

29,354 

352 

630 

1.2 

179 

2.1 

(15)

26 

RoW









  - residential mortgages

330 

27 

8 

8.2 

30 

2.4 

2 

- 

  - personal lending

1,061 

1 

1 

0.1 

100 

0.1 

3 

2 

  - property

512 

185 

120 

36.1 

65 

23.4 

(2)

28 

  - construction

22 

21 

10 

95.5 

48 

45.5 

- 

- 

  - other

12,187 

316 

179 

2.6 

57 

1.5 

(14)

173 











453,099 

41,006 

21,148 

9.1 

52 

4.7 

1,403 

1,417 










Banks

31,394 

134 

114 

0.4 

85 

0.4 

(1)

4 

 

For notes to this table refer to page 7.

 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

Sector and geographical regional analyses - Core

 




Credit metrics



31 March 2013

Gross 

loans 

£m 

REIL 

£m 

Provisions 

£m 

REIL as a 

% of 

gross loans 

% 

Provisions 

as a % 

of REIL 

% 

Provisions 

as a % of 

gross loans 

% 

Impairment 

charge 

£m 

Amounts 

written-off 

£m 










Government (1)

8,855 

- 

- 

- 

- 

- 

- 

- 

Finance

40,827 

205 

165 

0.5 

80 

0.4 

17 

- 

Personal

- mortgages

148,436 

6,549 

1,839 

4.4 

28 

1.2 

152 

40 


- unsecured

29,910 

2,670 

2,262 

8.9 

85 

7.6 

124 

182 

Property

43,457 

4,545 

1,650 

10.5 

36 

3.8 

89 

142 

Construction

6,322 

760 

406 

12.0 

53 

6.4 

72 

16 

Manufacturing

22,726 

498 

225 

2.2 

45 

1.0 

22 

11 

Finance leases (2)

9,542 

131 

89 

1.4 

68 

0.9 

(1)

7 

Retail, wholesale and repairs

21,280 

777 

433 

3.7 

56 

2.0 

27 

37 

Transport and storage

14,800 

545 

87 

3.7 

16 

0.6 

7 

38 

Health, education and leisure

16,187 

779 

334 

4.8 

43 

2.1 

42 

10 

Hotels and restaurants

7,623 

1,113 

480 

14.6 

43 

6.3 

22 

22 

Utilities

5,040 

143 

47 

2.8 

33 

0.9 

42 

- 

Other

26,877 

1,433 

840 

5.3 

59 

3.1 

48 

24 

Latent

- 

- 

1,291 

- 

- 

- 

(64)

- 











401,882 

20,148 

10,148 

5.0 

50 

2.5 

599 

529 










of which:









UK









  - residential mortgages

110,212 

2,374 

458 

2.2 

19 

0.4 

16 

5 

  - personal lending

18,724 

2,385 

2,081 

12.7 

87 

11.1 

91 

144 

  - property

34,980 

2,659 

814 

7.6 

31 

2.3 

60 

140 

  - construction

5,153 

652 

333 

12.7 

51 

6.5 

45 

17 

  - other

111,929 

2,634 

1,673 

2.4 

64 

1.5 

76 

101 

Europe









  - residential mortgages

17,976 

3,339 

1,272 

18.6 

38 

7.1 

116 

3 

  - personal lending

1,246 

146 

141 

11.7 

97 

11.3 

7 

9 

  - property

4,850 

1,655 

742 

34.1 

45 

15.3 

37 

- 

  - construction

747 

63 

43 

8.4 

68 

5.8 

3 

- 

  - other

21,882 

2,596 

1,823 

11.9 

70 

8.3 

89 

41 

US









  - residential mortgages

19,928 

809 

101 

4.1 

12 

0.5 

20 

32 

  - personal lending

8,804 

139 

40 

1.6 

29 

0.5 

26 

29 

  - property

3,406 

92 

12 

2.7 

13 

0.4 

(8)

2 

  - construction

382 

39 

25 

10.2 

64 

6.5 

24 

- 

  - other

29,298 

336 

446 

1.1 

133 

1.5 

(3)

6 

RoW









  - residential mortgages

320 

27 

8 

8.4 

30 

2.5 

- 

- 

  - personal lending

1,136 

- 

- 

0.0 

- 

- 

- 

- 

  - property

221 

139 

82 

62.9 

59 

37.1 

- 

- 

  - construction

40 

6 

5 

15.0 

83 

12.5 

- 

(1)

  - other

10,648 

58 

49 

0.5 

84 

0.5 

- 

1 











401,882 

20,148 

10,148 

5.0 

50 

2.5 

599 

529 










Banks

33,855 

138 

118 

0.4 

86 

0.3 

- 

- 

 

For the notes to this table refer to page 7.

 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

Sector and geographical regional analyses - Core (continued)

 




Credit metrics



31 December 2012

Gross 

loans 

£m 

REIL 

£m 

Provisions 

£m 

REIL as a 

% of 

gross loans 

% 

Provisions 

as a % 

of REIL 

% 

Provisions 

as a % of 

gross loans 

% 

Impairment 

charge 

£m 

Amounts 

written-off 

£m 










Government (1)

8,485 

- 

- 

- 

- 

- 

- 

- 

Finance

39,658 

185 

149 

0.5 

81 

0.4 

36 

153 

Personal

- mortgages

146,770 

6,229 

1,691 

4.2 

27 

1.2 

149 

43 


- unsecured

31,247 

2,717 

2,306 

8.7 

85 

7.4 

137 

174 

Property

43,602 

4,672 

1,674 

10.7 

36 

3.8 

226 

44 

Construction

6,020 

757 

350 

12.6 

46 

5.8 

21 

18 

Manufacturing

22,234 

496 

225 

2.2 

45 

1.0 

50 

35 

Finance leases (2)

9,201 

159 

107 

1.7 

67 

1.2 

8 

8 

Retail, wholesale and repairs

20,842 

791 

439 

3.8 

55 

2.1 

51 

68 

Transport and storage

14,590 

440 

112 

3.0 

25 

0.8 

45 

13 

Health, education and leisure

15,770 

761 

299 

4.8 

39 

1.9 

20 

14 

Hotels and restaurants

6,891 

1,042 

473 

15.1 

45 

6.9 

40 

32 

Utilities

5,131 

10 

5 

0.2 

50 

0.1 

- 

- 

Other

26,315 

1,374 

794 

5.2 

58 

3.0 

(4)

82 

Latent

- 

- 

1,325 

- 

- 

- 

(49)

- 











396,756 

19,633 

9,949 

4.9 

51 

2.5 

730 

684 










of which:









UK









  - residential mortgages

109,511 

2,440 

457 

2.2 

19 

0.4 

31 

10 

  - personal lending

20,443 

2,454 

2,133 

12.0 

87 

10.4 

89 

121 

  - property

35,532 

2,777 

896 

7.8 

32 

2.5 

72 

34 

  - construction

5,101 

671 

301 

13.2 

45 

5.9 

23 

9 

  - other

108,713 

2,662 

1,737 

2.4 

65 

1.6 

208 

149 

Europe









  - residential mortgages

17,446 

3,060 

1,124 

17.5 

37 

6.4 

104 

17 

  - personal lending

1,540 

143 

138 

9.3 

97 

9.0 

6 

(1)

  - property

4,896 

1,652 

685 

33.7 

41 

14.0 

157 

5 

  - construction

513 

60 

39 

11.7 

65 

7.6 

(2)

9 

  - other

22,218 

2,280 

1,711 

10.3 

75 

7.7 

16 

86 

US









  - residential mortgages

19,483 

702 

102 

3.6 

15 

0.5 

12 

16 

  - personal lending

8,209 

119 

34 

1.4 

29 

0.4 

42 

53 

  - property

2,847 

112 

13 

3.9 

12 

0.5 

(3)

5 

  - construction

384 

5 

- 

1.3 

- 

- 

- 

- 

  - other

28,267 

252 

432 

0.9 

171 

1.5 

(19)

20 

RoW









  - residential mortgages

330 

27 

8 

8.2 

30 

2.4 

2 

- 

  - personal lending

1,055 

1 

1 

0.1 

100 

0.1 

- 

1 

  - property

327 

131 

80 

40.1 

61 

24.5 

- 

- 

  - construction

22 

21 

10 

95.5 

48 

45.5 

- 

- 

  - other

9,919 

64 

48 

0.6 

75 

0.5 

(8)

150 











396,756 

19,633 

9,949 

4.9 

51 

2.5 

730 

684 










Banks

30,917 

133 

113 

0.4 

85 

0.4 

(1)

4 

 

For the notes to this table refer to page 7.

 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

Sector and geographical regional analyses - Non-Core

 




Credit metrics



31 March 2013

Gross 

loans 

£m 

REIL 

£m 

Provisions 

£m 

REIL as a 

% of 

gross loans 

% 

Provisions 

as a % 

of REIL 

% 

Provisions 

as a % of 

gross loans 

% 

Impairment 

charge 

£m 

 

Amounts 

written-off 

£m 










Government (1)

1,417 

- 

- 

- 

- 

- 

- 

- 

Finance

1,899 

446 

189 

23.5 

42 

10.0 

13 

- 

Personal

- mortgages

2,845 

322 

134 

11.3 

42 

4.7 

24 

36 


- unsecured

974 

206 

108 

21.1 

52 

11.1 

14 

16 

Property

27,080 

16,053 

8,286 

59.3 

52 

30.6 

295 

322 

Construction

2,046 

677 

305 

33.1 

45 

14.9 

23 

21 

Manufacturing

1,389 

251 

149 

18.1 

59 

10.7 

8 

2 

Finance leases (2)

4,448 

189 

130 

4.2 

69 

2.9 

(1)

61 

Retail, wholesale and repairs

945 

370 

209 

39.2 

56 

22.1 

1 

3 

Transport and storage

3,871 

389 

143 

10.0 

37 

3.7 

17 

107 

Health, education and leisure

858 

453 

233 

52.8 

51 

27.2 

(1)

3 

Hotels and restaurants

939 

554 

260 

59.0 

47 

27.7 

8 

7 

Utilities

1,424 

110 

51 

7.7 

46 

3.6 

- 

- 

Other

2,788 

735 

376 

26.4 

51 

13.5 

23 

49 

Latent

- 

- 

666 

- 

- 

- 

13 

- 











52,923 

20,755 

11,239 

39.2 

54 

21.2 

437 

627 










of which:









UK









  - personal lending

46 

29 

22 

63.0 

76 

47.8 

3 

1 

  - property

16,765 

6,860 

3,118 

40.9 

45 

18.6 

118 

302 

  - construction

1,379 

418 

178 

30.3 

43 

12.9 

16 

20 

  - other

11,837 

1,014 

848 

8.6 

84 

7.2 

6 

34 

Europe









  - residential mortgages

386 

33 

28 

8.5 

85 

7.3 

- 

- 

  - personal lending

368 

86 

72 

23.4 

84 

19.6 

2 

2 

  - property

9,734 

9,086 

5,109 

93.3 

56 

52.5 

176 

18 

  - construction

664 

257 

127 

38.7 

49 

19.1 

8 

- 

  - other

4,739 

2,146 

1,223 

45.3 

57 

25.8 

77 

194 

US









  - residential mortgages

2,459 

289 

106 

11.8 

37 

4.3 

24 

36 

  - personal lending

554 

91 

14 

16.4 

15 

2.5 

9 

12 

  - property

426 

61 

18 

14.3 

30 

4.2 

1 

2 

  - construction

3 

2 

- 

66.7 

- 

- 

(1)

- 

  - other

1,117 

97 

214 

8.7 

221 

19.2 

5 

4 

RoW









  - personal lending

6 

- 

- 

- 

- 

- 

- 

1 

  - property

155 

46 

41 

29.7 

89 

26.5 

- 

- 

  - construction

- 

- 

- 

- 

- 

- 

- 

1 

  - other

2,285 

240 

121 

10.5 

50 

5.3 

(7)

- 











52,923 

20,755 

11,239 

39.2 

54 

21.2 

437 

627 










Banks

394 

1 

1 

0.3 

100 

0.3 

- 

- 

 

For the notes to this table refer to page 7.

 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

Sector and geographical regional analyses - Non-Core (continued)

 




Credit metrics



31 December 2012

Gross 

loans 

£m 

REIL 

£m 

Provisions 

£m 

REIL as a 

% of 

gross loans 

% 

Provisions 

as a % 

of REIL 

% 

Provisions 

as a % of 

gross loans 

% 

Impairment 

charge 

£m 

Amounts 

written-off 

£m 










Government (1)

1,368 

- 

- 

- 

- 

- 

- 

- 

Finance

2,540 

407 

168 

16.0 

41 

6.6 

28 

22 

Personal

- mortgages

2,855 

320 

133 

11.2 

42 

4.7 

14 

48 


- unsecured

965 

186 

103 

19.3 

55 

10.7 

31 

25 

Property

28,617 

16,551 

8,185 

57.8 

49 

28.6 

398 

193 

Construction

2,029 

726 

290 

35.8 

40 

14.3 

(21)

12 

Manufacturing

1,553 

259 

132 

16.7 

51 

8.5 

4 

32 

Finance leases (2)

4,408 

283 

187 

6.4 

66 

4.2 

(8)

108 

Retail, wholesale and repairs

1,094 

352 

205 

32.2 

58 

18.7 

19 

32 

Transport and storage

3,751 

394 

224 

10.5 

57 

6.0 

44 

52 

Health, education and leisure

935 

429 

222 

45.9 

52 

23.7 

1 

18 

Hotels and restaurants

986 

555 

253 

56.3 

46 

25.7 

(7)

22 

Utilities

1,500 

108 

16 

7.2 

15 

1.1 

- 

- 

Other

3,742 

803 

446 

21.5 

56 

11.9 

41 

169 

Latent

- 

- 

635 

- 

- 

- 

129 

- 











56,343 

21,373 

11,199 

37.9 

52 

19.9 

673 

733 










of which:









UK









  - residential mortgages

19 

- 

- 

- 

- 

- 

- 

- 

  - personal lending

55 

23 

19 

41.8 

83 

34.5 

- 

- 

  - property

18,198 

7,744 

3,048 

42.6 

39 

16.7 

284 

86 

  - construction

1,406 

494 

182 

35.1 

37 

12.9 

(40)

10 

  - other

13,316 

1,067 

874 

8.0 

82 

6.6 

83 

304 

Europe









  - residential mortgages

390 

32 

27 

8.2 

84 

6.9 

(1)

25 

  - personal lending

365 

83 

70 

22.7 

84 

19.2 

3 

1 

  - property

9,738 

8,695 

5,081 

89.3 

58 

52.2 

116 

56 

  - construction

619 

229 

107 

37.0 

47 

17.3 

20 

1 

  - other

5,206 

2,171 

1,285 

41.7 

59 

24.7 

170 

122 

US









  - residential mortgages

2,446 

288 

106 

11.8 

37 

4.3 

15 

23 

  - personal lending

539 

80 

14 

14.8 

18 

2.6 

25 

23 

  - property

496 

58 

16 

11.7 

28 

3.2 

- 

23 

  - construction

4 

3 

1 

75.0 

33 

25.0 

(1)

1 

  - other

1,087 

100 

198 

9.2 

198 

18.2 

4 

6 

RoW









  - personal lending

6 

- 

- 

- 

- 

- 

3 

1 

  - property

185 

54 

40 

29.2 

74 

21.6 

(2)

28 

  - other

2,268 

252 

131 

11.1 

52 

5.8 

(6)

23 











56,343 

21,373 

11,199 

37.9 

52 

19.9 

673 

733 










Banks

477 

1 

1 

0.2 

100 

0.2 

- 

- 

 

Notes:

(1)

Includes central and local government.

(2)

Includes instalment credit.

 


 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

REIL flow statement

REIL are stated without giving effect to any security held that could reduce the eventual loss should it occur or to any provisions marked.

 

UK 

Retail 

UK 

Corporate 

Wealth 

International 

Banking 

Ulster 

Bank 

US Retail & 

Commercial 

Markets 

Other 

Core 

Non- 

Core 

Total 


£m 

£m 

£m 

£m 

£m 

£m 

£m 

£m 

£m 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

At 1 January 2013

4,569 

5,452 

248 

422 

7,533 

1,146 

396 

- 

19,766 

21,374 

41,140 

Currency translation

- 

5 

3 

24 

254 

76 

14 

- 

376 

528 

904 

Additions

267 

935 

50 

179 

518 

139 

8 

1 

2,097 

939 

3,036 

Transfers (1)

(44)

26 

- 

107 

- 

- 

- 

- 

89 

31 

120 

Transfers to performing book

- 

(40)

(1)

- 

- 

- 

- 

- 

(41)

(33)

(74)

Repayments

(222)

(821)

(40)

(28)

(326)

(29)

(6)

- 

(1,472)

(1,456)

(2,928)

Amounts written-off

(142)

(228)

(1)

(62)

(27)

(69)

- 

- 

(529)

(627)

(1,156)


 

 

 

 

 

 

 

 

 

 

 

At 31 March 2013

4,428 

5,329 

259 

642 

7,952 

1,263 

412 

1 

20,286 

20,756 

41,042 

 

Non-Core (by donating division)


UK 

Corporate 

International 

Banking 

Ulster 

Bank 

US Retail & 

Commercial 

Other 

Total 


£m 

£m 

£m 

£m 

£m 

£m 


 

 

 

 

 

 

At 1 January 2013

2,622 

6,907 

11,399 

418 

28 

21,374 

Currency translation

3 

162 

336 

27 

- 

528 

Additions

416 

115 

362 

45 

1 

939 

Transfers (1)

31 

- 

- 

- 

- 

31 

Transfers to performing book

(31)

- 

(2)

- 

- 

(33)

Repayments

(451)

(782)

(212)

(10)

(1)

(1,456)

Amounts written-off

(137)

(375)

(62)

(51)

(2)

(627)


 

 

 

 

 

 

At 31 March 2013

2,453 

6,027 

11,821 

429 

26 

20,756 

 

Note:

(1)

Represents transfers to/from REIL from/to potential problem loans.


 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

Impairment provisions flow statement

The movement in loan impairment provisions by division is shown in the table below.

 

UK 

Retail 

UK 

Corporate 

Wealth 

International 

Banking 

Ulster 

Bank 

US 

R&C (1)


Total 

R&C (1)

Markets 

Other 


Total 

Core 

Non-Core 

Group 

£m 

£m 

£m 

£m 

£m 

£m 


£m 

£m 

£m 


£m 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 January 2013

2,629 

2,432 

109 

391 

3,910 

285 

 

9,756 

305 

1 

 

10,062 

11,200 

21,262 

Currency translation

- 

2 

- 

(4)

124 

20 

 

142 

(6)

- 

 

136 

266 

402 

Amounts written-off

(142)

(228)

(1)

(62)

(27)

(69)

 

(529)

- 

- 

 

(529)

(627)

(1,156)

Recoveries of amounts

  previously written-off

11 

4 

- 

5 

- 

29 

 

49 

- 

- 

 

49 

16 

65 

Charged to income statement

80 

185 

5 

55 

240 

19 

 

584 

15 

- 

 

599 

437 

1,036 

Unwind of discount (2)

(20)

(8)

(1)

(1)

(21)

- 

 

(51)

- 

- 

 

(51)

(52)

(103)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 March 2013

2,558 

2,387 

112 

384 

4,226 

284 

 

9,951 

314 

1 

 

10,266 

11,240 

21,506 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually assessed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  - banks

- 

- 

- 

7 

- 

- 

 

7 

111 

- 

 

118 

1 

119 

  - customers

- 

986 

99 

259 

1,322 

57 

 

2,723 

196 

1 

 

2,920 

9,860 

12,780 

Collectively assessed

2,382 

1,105 

- 

- 

2,328 

122 

 

5,937 

- 

- 

 

5,937 

713 

6,650 

Latent

176 

296 

13 

118 

576 

105 

 

1,284 

7 

- 

 

1,291 

666 

1,957 


 

 

 

 

 

 

 

 

 

 

 

 

 

 


2,558 

2,387 

112 

384 

4,226 

284 

 

9,951 

314 

1 

 

10,266 

11,240 

21,506 

 

For the notes to this table refer to the following page.

 


 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

Impairment provisions flow statement (continued)

Non-Core (by donating division)


UK 

Corporate 

International 

Banking 

Ulster 

Bank 

US 

R&C (1)

Other 

Total 

£m 

£m 

£m 

£m 

£m 

£m 


 

 

 

 

 

 

At 1 January 2013

1,167 

2,815 

6,933 

257 

28 

11,200 

Currency translation

11 

58 

180 

17 

- 

266 

Amounts written-off

(137)

(375)

(62)

(51)

(2)

(627)

Recoveries of amounts previously written-off

3 

2 

- 

10 

1 

16 

Charged to income statement

72 

85 

242 

39 

(1)

437 

Unwind of discount (2)

(4)

(12)

(36)

- 

- 

(52)


 

 

 

 

 

 

At 31 March 2013

1,112 

2,573 

7,257 

272 

26 

11,240 


 

 

 

 

 

 

Individually assessed

 

 

 

 

 

 

  - banks

- 

1 

- 

- 

- 

1 

  - customers

686 

2,361 

6,781 

23 

9 

9,860 

Collectively assessed

368 

- 

238 

90 

17 

713 

Latent

58 

211 

238 

159 

- 

666 


 

 

 

 

 

 


1,112 

2,573 

7,257 

272 

26 

11,240 

 

Notes:

(1)

Retail & Commercial.

(2)

Recognised in interest income.

 

 


 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

Impairment charge analysis

The table below analyses the impairment charge for loans and securities.

 

Quarter ended 31 March 2013

UK 

Retail 

UK 

Corporate 

Wealth 

International 

Banking 

Ulster 

Bank 

US 

R&C (1)


Total 

R&C (1)

Markets 

Central 

items 


Total 

Core 

Non-Core 

Group 

£m 

£m 

£m 

£m 

£m 

£m 


£m 

£m 

£m 


£m 

£m 

£m 
















Individually assessed

- 

113 

5 

53 

89 

(3)

 

257 

17 

- 

 

274 

372 

646 

Collectively assessed

94 

73 

- 

- 

182 

40 

 

389 

- 

- 

 

389 

52 

441 

Latent loss

(14)

(1)

- 

2 

(31)

(18)

 

(62)

(2)

- 

 

(64)

13 

(51)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans to customers

80 

185 

5 

55 

240 

19 

 

584 

15 

- 

 

599 

437 

1,036 

Securities

- 

- 

- 

- 

- 

- 

 

- 

1 

- 

 

1 

(4)

(3)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge to income statement

80 

185 

5 

55 

240 

19 

 

584 

16 

- 

 

600 

433 

1,033 

 

Quarter ended 31 December 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually assessed

- 

164 

15 

86 

61 

(4)

 

322 

16 

1 

 

339 

479 

818 

Collectively assessed

114 

72 

- 

(1)

195 

60 

 

440 

- 

- 

 

440 

65 

505 

Latent loss

(21)

(4)

1 

(47)

62 

(37)

 

(46)

(3)

- 

 

(49)

129 

80 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans to customers

93 

232 

16 

38 

318 

19 

 

716 

13 

1 

 

730 

673 

1,403 

Loans to banks

- 

- 

- 

(1)

- 

- 

 

(1)

- 

- 

 

(1)

- 

(1)

Securities

- 

2 

- 

- 

- 

4 

 

6 

9 

7 

 

22 

30 

52 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge to income statement

93 

234 

16 

37 

318 

23 

 

721 

22 

8 

 

751 

703 

1,454 

 

Note:

(1)

Retail & Commercial.

 


 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)

 

Impairment charge analysis (continued)

 

Quarter ended 31 March 2013

Non-Core (by donating division)

UK 

Corporate 

International 

Banking 

Ulster 

Bank 

US 

R&C (1)

Other 

Total 

£m 

£m 

£m 

£m 

£m 

£m 


 

 

 

 

 

 

Individually assessed

61 

84 

229 

(2)

- 

372 

Collectively assessed

11 

- 

9 

32 

- 

52 

Latent loss

- 

- 

4 

9 

- 

13 


 

 

 

 

 

 

Loans to customers

72 

84 

242 

39 

- 

437 

Securities

- 

(4)

- 

- 

- 

(4)


 

 

 

 

 

 

Charge to income statement

72 

80 

242 

39 

- 

433 

 

Quarter ended 31 December 2012

 

 

 

 

 

 


 

 

 

 

 

 

Individually assessed

40 

207 

226 

5 

1 

479 

Collectively assessed

16 

- 

17 

32 

- 

65 

Latent loss

- 

1 

121 

7 

- 

129 


 

 

 

 

 

 

Loans to customers

56 

208 

364 

44 

1 

673 

Securities

- 

30 

- 

- 

- 

30 


 

 

 

 

 

 

Charge to income statement

56 

238 

364 

44 

1 

703 

 

Note:

(1)

Retail & Commercial.

 

 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics(continued)

 

For a description of the Group's early problem debt identification and problem debt management refer to pages 172 to 180 of the Group's 2012 Annual Report and Accounts.

 

Wholesale renegotiations

The data presented below include loans where renegotiations were completed during the period. Thresholds for inclusion are set at divisional level and range from nil to £10 million. The vast majority of wholesale loan renegotiations take place within the Global Restructuring Group (GRG). Comparison and analysis of renegotiated loans may be skewed by the impact of individual material cases reaching legal completion during a given period, as well as being subject to seasonality.

 

Quarter ended 31 March 2013


Year ended 31 December 2012

Sector

Performing 

£m 

Non- 

performing 

£m 

Provision 

 coverage 

% 


Performing 

£m 

Non- 

performing 

£m 

Provision 

 coverage 

% 

 

 

 

 

 

 

 

 

Property

507 

216 

18 


1,954 

3,288 

18 

Transport

52 

100 

18 


832 

99 

23 

Telecommunications, media

  and technology

16 

27 

- 


237 

341 

46 

Retail and leisure

64 

40 

- 


487 

111 

34 

Other

111 

41 

- 


792 

245 

28 

 








 

750 

424 

14 


4,302 

4,084 

22 

 

Key points

●

Renegotiations completed in Q1 2013, were £1.2 billion (year ended 31 December 2012 - £8.4 billion). Renegotiations continue at a high level as difficult economic conditions persist in the UK and Ireland, particularly in the real estate markets, and the Group continues its active problem debt management.

 

 

●

Renegotiations are likely to remain significant: at 31 March 2013, loans totalling £13.8 billion (31 December 2012 - £13.7 billion) were in the process of being renegotiated but had not yet reached legal completion (they are not included in the table above). 62% of completed and 92% of "in progress" renegotiated cases in Q1 2013 were managed by GRG.

 

 

●

Renegotiated loans above may have been subject to one or more covenant waivers or modifications. In addition, loans totalling £0.7 billion were granted financial covenant concessions only during the period. These loans are not included in the table above.


 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics (continued)

 

Retail forbearance

The mortgage arrears information for retail accounts in forbearance and related provision are shown in the tables below.

 

No missed

payments


1-3 months

in arrears


>3 months

in arrears


Total

 

Balance 

Provision 


Balance 

Provision 


Balance 

Provision 


Balance 

Provision 

Forborne 

balances 

£m 

£m 


£m 

£m 


£m 

£m 


£m 

£m 

% 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 March 2013

 

 

 

 

 

 

 

 

 

 

 

 

UK Retail (1,2)

4,159 

21 

 

416 

18 

 

452 

61 

 

5,027 

100 

5.1 

Ulster Bank (1,2)

950 

104 

 

528 

58 

 

545 

205 

 

2,023 

367 

10.3 

RBS Citizens

- 

- 

 

183 

22 

 

181 

14 

 

364 

36 

1.6 

Wealth

48 

- 

 

- 

- 

 

23 

1 

 

71 

1 

0.8 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,157 

125 

 

1,127 

98 

 

1,201 

281 

 

7,485 

504 

5.0 


 

 

 

 

 

 

 

 

 

 

 

 

31 December 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UK Retail (1,2)

4,006 

20 


388 

16 


450 

64 


4,844 

100 

4.9 

Ulster Bank (1,2)

915 

100 


546 

60 


527 

194 


1,988 

354 

10.4 

RBS Citizens

- 

- 


179 

25 


160 

10 


339 

35 

1.6 

Wealth

38 

- 


- 

- 


7 

- 


45 

- 

0.5 

 













 

4,959 

120 


1,113 

101 


1,144 

268 


7,216 

489 

4.9 

 

Notes:

(1)

Includes all forbearance arrangements whether relating to the customer's lifestyle changes or financial difficulty.

(2)

Includes the current stock position of forbearance deals agreed since early 2008 for UK Retail and early 2009 for Ulster Bank.

 

Key points

 

UK Retail

●

The UK Retail definition of forbearance is broad and includes mortgages where customers have made changes to contractual terms, including those where customers are up-to-date on payments and are not necessarily evidencing signs of financial stress. The reported figures above include stock dating back to 1 January 2008. The forbearance stock continues to grow, influenced by the fixed start date and the permanent nature of certain changes to contractual terms, for example, term extensions, historic interest only conversions and capitalisations.

 


●

At 31 March 2013, stock levels of £5.0 billion represented 5% of the total mortgage assets, a 4% increase in Q1 2013. The flow of new forbearance in the quarter (£463 million) was slightly lower than the average of the preceding four quarters (£498 million).

 


●

Approximately 83% of assets subject to forbearance were up-to-date with payments (compared with approximately 97% of the assets not subject to forbearance activity). The provision cover on assets subject to forbearance was around 4.5 times that on assets not subject to forbearance.

 


●

Of the total stock of assets subject to historic or current forbearance treatment, 44% were term extensions (31 December 2012 - 47%), 25% interest-only conversions (31 December 2012 - 25%) and 18% capitalisations of arrears (31 December 2012 - 19%). The stock of cases subject to interest-only conversions reflects legacy policy; conversions to interest-only loans are no longer permitted on residential mortgages.


 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Loans and related credit metrics: Retail forbearance (continued)

 

Key points

 

Ulster Bank

●

The Ulster Bank definition of forbearance is broad and includes mortgages where customers have made changes to contractual terms, including those where customers are up-to-date on payments and are not necessarily evidencing signs of financial stress. The reported figures include stock dating back to early 2009.

 


●

At 31 March 2013, 10.3% of total mortgage assets (£2.0 billion) were subject to a forbearance arrangement (31 December 2012 - 10.4%, £2.0 billion). The majority of these forbearance arrangements were in the performing book (73%) and not 90 days past due. The flow of new forbearance in the quarter (£609 million) was lower than the average of the preceding four quarters (£794 million).

 


●

The majority of the forbearance arrangements offered by Ulster Bank are currently short term, accounting for 83% of assets subject to forbearance at 31 March 2013. These are offered for periods of one to three years and are based on the customer's ability to pay. Additional treatment options recently developed by Ulster Bank will lead to a shift to more long term arrangements over time where customer circumstances require it.

 


●

Of these short term forbearance types, the largest category at 31 March 2013 was interest-only conversions, accounting for 43% of total assets subject to forbearance. The other categories of temporary forbearance were payment concessions: positive and negative amortisation agreements (27% and 8% of the total, respectively); and payment holidays (5%).

 


●

The provision cover on performing assets subject to forbearance was approximately eight times higher than that on performing assets not subject to forbearance.

 

Key loan portfolios

Commercial real estate

The commercial real estate sector comprises exposures to entities involved in the development of, or investment in, commercial and residential properties (including housebuilders). The analysis of lending utilisations below excludes rate risk management and contingent obligations.

 

31 March 2013


31 December 2012


Investment 

Development 

Total 


Investment 

Development 

Total 

By division (1)

£m 

£m 

£m 


£m 

£m 

£m 


 

 

 





Core

 

 

 





UK Corporate

22,300 

3,904 

26,204 


22,504 

4,091 

26,595 

Ulster Bank

3,620 

746 

4,366 


3,575 

729 

4,304 

US Retail & Commercial

3,964 

3 

3,967 


3,857 

3 

3,860 

International Banking

815 

301 

1,116 


849 

315 

1,164 

Markets

172 

35 

207 


630 

57 

687 


 

 

 






30,871 

4,989 

35,860 


31,415 

5,195 

36,610 


 

 

 





Non-Core

 

 

 





UK Corporate

2,504 

885 

3,389 


2,651 

983 

3,634 

Ulster Bank

3,451 

7,574 

11,025 


3,383 

7,607 

10,990 

US Retail & Commercial

360 

- 

360 


392 

- 

392 

International Banking

9,709 

122 

9,831 


11,260 

154 

11,414 


 

 

 






16,024 

8,581 

24,605 


17,686 

8,744 

26,430 


 

 

 





Total

46,895 

13,570 

60,465 


49,101 

13,939 

63,040 

 

For the notes to this table refer to the following page.

 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Key loan portfolios: Commercial real estate (continued)

 

By geography (1)

Investment

 

Development

 

 

Commercial 

Residential 

Total 


Commercial 

Residential 

Total 


Total 

£m 

£m 

£m 


£m 

£m 

£m 


£m 


 

 

 

 

 

 

 

 

 

31 March 2013

 

 

 

 

 

 

 

 

 

UK (excluding NI) (2)

24,380 

5,544 

29,924 

 

813 

4,362 

5,175 

 

35,099 

Ireland (ROI and NI) (2)

4,704 

1,010 

5,714 

 

2,240 

5,789 

8,029 

 

13,743 

Western Europe (other)

5,797 

364 

6,161 

 

24 

42 

66 

 

6,227 

US

3,779 

994 

4,773 

 

- 

4 

4 

 

4,777 

RoW (2)

323 

- 

323 

 

69 

227 

296 

 

619 


 

 

 

 

 

 

 

 

 


38,983 

7,912 

46,895 

 

3,146 

10,424 

13,570 

 

60,465 











31 December 2012




















UK (excluding NI) (2)

25,864 

5,567 

31,431 


839 

4,777 

5,616 


37,047 

Ireland (ROI and NI) (2)

4,651 

989 

5,640 


2,234 

5,712 

7,946 


13,586 

Western Europe (other)

5,995 

370 

6,365 


22 

33 

55 


6,420 

US

4,230 

981 

5,211 


- 

15 

15 


5,226 

RoW (2)

454 

- 

454 


65 

242 

307 


761 












41,194 

7,907 

49,101 


3,160 

10,779 

13,939 


63,040 

 

Notes:

(1)

Excludes commercial real estate lending in Wealth as these loans are generally supported by personal guarantees in addition to collateral. This portfolio, which totalled £1.3 billion at 31 March 2013 (31 December 2012 - £1.4 billion), continues to perform in line with expectations and requires minimal provisions.

(2)

ROI: Republic of Ireland; NI: Northern Ireland; RoW: Rest of World.

 

Key points

·

In line with Group strategy, the overall exposure to commercial real estate fell by 4% during the first quarter. Most of the decrease was in Non-Core and was the result of repayments, asset sales and write-offs. The Non-Core portfolio totalled £24.6 billion (41% of the portfolio) at 31 March 2013 (31 December 2012 - £26.4 billion or 42% of the portfolio).


 

·

The reduction in Markets was caused by a decrease in the inventory of US commercial real estate earmarked for securitisation, following successful issuances.

 


·

The average interest coverage ratios for UK Corporate (Core and Non-Core), International Banking (Non-Core) were 3.05x and 1.29x, respectively, at 31 March 2013 (31 December 2012 - 2.96x and 1.30x). The US Retail & Commercial portfolio is managed on the basis of debt service coverage, which includes scheduled principal amortisation. The average debt service coverage for this portfolio (Core and Non-Core) was 1.45x at 31 March 2013 (31 December 2012 - 1.34x). As a number of different approaches are used within the Group and across geographies to calculate interest coverage ratios, they may not be comparable for different portfolio types and organisations.

 

 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Key loan portfolios: Commercial real estate (continued)

Credit quality metrics relating to commercial real estate lending were as follows:

 

Total


Non-Core


31 March 

2013 

31 December 

2012 


31 March 

2013 

31 December 

2012 







Lending (gross)

£60.5bn 

£63.0bn 


£24.6bn 

£26.4bn 

Of which REIL

£21.4bn 

£22.1bn 


£16.5bn 

£17.1bn 

Provisions

£10.2bn 

£10.1bn 


£8.4bn 

£8.3bn 

REIL as a % of gross loans to customers

35.4% 

35.1% 


67.1% 

64.8% 

Provisions as a % of REIL

48% 

46% 


51% 

49% 

 

Note:

(1)

Excludes property related lending to customers in other sectors managed by Real Estate Finance.

 

Ulster Bank is a significant contributor to Non-Core commercial real estate lending. For further information refer to the section on Ulster Bank Group (Core and Non-Core) below.

 

Ulster Bank Group (Core and Non-Core)

The table below analyses the Ulster Bank Group's loans, REIL and impairments by sector.

 

 

 

 

 

Credit metrics

 

 

Gross 

loans 

REIL 

Provisions 

REIL as a 

% of gross 

loans 

Provisions 

as a % of 

REIL 

Provisions 

as a % of 

gross loans 

Impairment 

charge 

Amounts 

written-off 

Sector analysis

£m 

£m 

£m 

% 

% 

% 

£m 

£m 










31 March 2013









Core









Mortgages

19,672 

3,432 

1,659 

17.4 

48 

8.4 

90 

5 

Commercial real estate

 

 

 

 

 

 

 

 

  - investment

3,620 

1,543 

649 

42.6 

42 

17.9 

46 

- 

  - development

746 

384 

213 

51.5 

55 

28.6 

14 

- 

Other corporate

7,792 

2,384 

1,499 

30.6 

63 

19.2 

75 

8 

Other lending

1,270 

209 

206 

16.5 

99 

16.2 

15 

14 


 

 

 

 

 

 

 

 

 

33,100 

7,952 

4,226 

24.0 

53 

12.8 

240 

27 


 

 

 

 

 

 

 

 

Non-Core

 

 

 

 

 

 

 

 

Commercial real estate

 

 

 

 

 

 

 

 

  - investment

3,451 

3,039 

1,489 

88.1 

49 

43.1 

47 

10 

  - development 

7,574 

7,437 

4,918 

98.2 

66 

64.9 

155 

46 

Other corporate

1,621 

1,259 

777 

77.7 

62 

47.9 

38 

1 


 

 

 

 

 

 

 

 


12,646 

11,735 

7,184 

92.8 

61 

56.8 

240 

57 


 

 

 

 

 

 

 

 

Ulster Bank Group

 

 

 

 

 

 

 

 

Mortgages

19,672 

3,432 

1,659 

17.4 

48 

8.4 

90 

5 

Commercial real estate

 

 

 

 

 

 

 

 

  - investment

7,071 

4,582 

2,138 

64.8 

47 

30.2 

93 

10 

  - development

8,320 

7,821 

5,131 

94.0 

66 

61.7 

169 

46 

Other corporate

9,413 

3,643 

2,276 

38.7 

62 

24.2 

113 

9 

Other lending

1,270 

209 

206 

16.5 

99 

16.2 

15 

14 

 

 

 

 

 

 

 

 

 


45,746 

19,687 

11,410 

43.0 

58 

24.9 

480 

84 

 

 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Key loan portfolios: Ulster Bank Group (Core and Non-Core) (continued)

 

 

 

 

 

Credit metrics

 

 

Gross 

loans 

REIL 

Provisions 

REIL as a 

% of gross 

loans 

Provisions 

as a % of 

REIL 

Provisions 

as a % of 

gross loans 

Impairment 

charge 

Amounts 

written-off 

Sector analysis

£m 

£m 

£m 

% 

% 

% 

£m 

£m 


 

 

 

 

 

 

 

 

31 December 2012









Core









Mortgages

19,162 

3,147 

1,525 

16.4 

48 

8.0 

135 

13 

Commercial real estate









  - investment

3,575 

1,551 

593 

43.4 

38 

16.6 

52 

- 

  - development

729 

369 

197 

50.6 

53 

27.0 

17 

- 

Other corporate

7,772 

2,259 

1,394 

29.1 

62 

17.9 

97 

7 

Other lending

1,414 

207 

201 

14.6 

97 

14.2 

17 

8 










 

32,652 

7,533 

3,910 

23.1 

52 

12.0 

318 

28 










Non-Core









Commercial real estate









  - investment

3,383 

2,800 

1,433 

82.8 

51 

42.4 

91 

12 

  - development

7,607 

7,286 

4,720 

95.8 

65 

62.0 

256 

30 

Other corporate

1,570 

1,230 

711 

78.3 

58 

45.3 

16 

16 











12,560 

11,316 

6,864 

90.1 

61 

54.6 

363 

58 










Ulster Bank Group









Mortgages

19,162 

3,147 

1,525 

16.4 

48 

8.0 

135 

13 

Commercial real estate









  - investment

6,958 

4,351 

2,026 

62.5 

47 

29.1 

143 

12 

  - development

8,336 

7,655 

4,917 

91.8 

64 

59.0 

273 

30 

Other corporate

9,342 

3,489 

2,105 

37.3 

60 

22.5 

113 

23 

Other lending

1,414 

207 

201 

14.6 

97 

14.2 

17 

8 

 










45,212 

18,849 

10,774 

41.7 

57 

23.8 

681 

86 

 

Key points

·

At 31 March 2013, Ulster Bank Group accounted for 10% of the Group's total gross loans to customers (31 December 2012 - 10%) and 8% of the Group's Core gross loans to customers (31 December 2012 - 8%). Ulster Bank's financial performance continues to be influenced by the challenging economic climate in Ireland, with impairments remaining elevated as high unemployment, coupled with higher taxation and limited liquidity in the economy, all continue to depress the property market and domestic spending. However, there has been some modest improvement in the outlook with key economic indicators such as tax revenue, house price indices and GDP growth forecast stabilising.

 

 

·

The impairment charge of £480 million for Q1 2013 (Q4 2012 - £681 million) was driven by a combination of new defaulting customers and higher provisions on existing defaulted cases due primarily to deteriorating security values.

 

 

·

Provisions as a percentage of REIL increased marginally from 57% at the year end, to 58% in Q1 2013, principally as a result of the deterioration in the value of the commercial real estate development portfolio. Ulster Bank impairment provisions take into account recovery strategies for its commercial real estate portfolio, reflecting limited liquidity in Irish commercial and development property.


 

Appendix 3 Risk management supplement (continued)

 

Credit risk: Key loan portfolios: Ulster Bank Group (Core and Non-Core) (continued)

 

Key points (continued)

·

The Core impairment charge for Q1 2013 was £240 million (Q4 2012 - £318 million) with a quarterly decrease driven by lower defaults on mortgage and other corporate portfolios.

 

 

·

The Non-Core impairment charge for Q1 2013 was £240 million, a decrease of £123 million from Q4 2012. The commercial real estate sector accounted for £202 million (84%) of the total Non-Core Q1 2013 impairment charge.

 

Debt securities: AFS reserves by issuer

The table below analyses available-for-sale (AFS) debt securities and related reserves, gross of tax.

 

31 March 2013


31 December 2012


UK 

US 

Other (1)

Total 


UK 

US 

Other (1)

Total 


£m 

£m 

£m 

£m 


£m 

£m 

£m 

£m 


 

 

 

 

 

 

 

 

 

Government (2)

8,273 

19,097 

13,313 

40,683 

 

9,774 

19,046 

16,155 

44,975 

Banks

583 

106 

6,435 

7,124 

 

1,085 

357 

7,419 

8,861 

Other financial institutions

2,601 

9,399 

9,518 

21,518 

 

2,861 

10,613 

10,416 

23,890 

Corporate

27 

12 

176 

215 

 

1,318 

719 

1,130 

3,167 


 

 

 

 

 





Total

11,484 

28,614 

29,442 

69,540 

 

15,038 

30,735 

35,120 

80,893 


 

 

 

 

 





Of which ABS

2,942 

13,762 

12,713 

29,417 

 

3,558 

14,209 

12,976 

30,743 


 

 

 

 

 





AFS reserves (gross)

618 

629 

(849)

398 

 

667 

763 

(1,277)

153 

 

Notes:

(1)

Includes eurozone countries as detailed on the following page.

(2)

Includes central and local government.

 

 

Appendix 3 Risk management supplement (continued)

 

Country risk: Overview 

Countries shown on page 96 are those in which the Group's balance sheet exposure to counterparties incorporated within them exceeded £1 billion and which had external ratings of A+ or below from Standard and Poor's, Moody's or Fitch at 31 March 2013. Selected eurozone countries are also included. The numbers are stated before taking into account mitigants, such as collateral (with the exception of reverse repos), insurance or guarantees, which may have been taken to reduce or eliminate exposure to country risk events. Exposures relating to ocean-going vessels are not included. For a description of the governance, monitoring and management of the Group's country risk framework and definitions, refer to pages 254 and 255 of the Group's 2012 Annual Report and Accounts.

 

Key points

·

At 31 March 2013, sterling had depreciated 6.2% against the US dollar and 3.6% against the euro, compared with 31 December 2012. This resulted in exposures denominated in these currencies (and in other currencies linked to the same) increasing in sterling terms.

 

 

·

Balance sheet and off-balance sheet exposures to many countries shown in the table on page 96 continued to decline during Q1 2013, as the Group maintained a cautious stance and many clients reduced debt levels. In Ireland and a few Asian countries, exposure increased, largely owing to exchange rate movements. Reductions were seen notably in derivatives and repos. Non-Core lending exposure declined further in most countries as the Group continued to execute its disposal strategy.

 

 

·

Most of the Group's country risk exposure is in International Banking (primarily trade facilities, other lending and off-balance sheet exposure to corporates), Markets (mostly derivatives and repos with financial institutions, and HFT debt securities), Ulster Bank (mostly lending exposure to corporates and consumers in Ireland) and Group Treasury (cash balances at central banks and AFS debt securities including Spanish covered bonds).

 

 

·

Eurozone - Balance sheet exposure declined with reductions in most countries. This reflected a drop in liquidity held with the Bundesbank, lending write-offs, active exposure management and debt reduction efforts by bank clients.

 


·

Eurozone periphery - Balance sheet exposure was broadly stable, but with an increase in Ireland reflecting exchange rate movements offset by reductions in Italy and Portugal.

 


 

○

Ireland - Lending and off-balance sheet exposure increased by £0.8 billion and £0.2 billion, respectively, but declined on a constant currency basis. Repo exposure to banks declined by £0.4 billion.

 

○

Spain - Lending exposure decreased primarily in the telecommunications and commercial real estate sectors. The fair value of AFS debt securities increased by £0.5 billion due to favourable market sentiment for Spanish bonds.

 

○

Italy - AFS debt securities decreased by £0.3 billion due to redemptions.

 

○

Portugal - Modest further reductions took place in lending exposure to the commercial real estate sector, off-balance sheet exposure to the oil and gas sector and derivatives exposure to banks.

 

○

Greece - Derivatives exposure to banks and off-balance sheet exposure increased slightly because of exchange rate movements.

 

○

Cyprus - Balance sheet exposure to Cyprus amounted to £0.3 billion at 31 March 2013, comprising mainly lending exposure to special purpose vehicles incorporated in Cyprus but with assets and cash flows largely elsewhere.


 

Appendix 3 Risk management supplement (continued)

 

Country risk: Overview (continued)

 

Key points (continued)

·

Germany - The Group holds significant short-term surplus liquidity with the central bank because of credit risk and capital considerations, and limited alternative investment opportunities. This exposure also fluctuates as part of the Group's asset and liability management. German AFS bond positions in Group Treasury decreased by £2.1 billion in line with internal liquidity management strategies. Net HFT positions in German bonds in Markets increased by £1.2 billion during Q1 2013, driven by market opportunities.

 


·

France - During Q1 2013, the Group reduced its holdings in bonds, both AFS in Group Treasury and HFT in Markets. Derivatives exposure, mostly to banks, decreased by £1.2 billion.

 


·

Japan - Exposure decreased by £4.0 billion in Q1 2013, reflecting sales and maturities of debt securities of £3.2 billion, mostly in the HFT portfolio. Derivatives exposure to banks and deposits with the central bank also fell.

 


·

India - Lending exposure to corporates increased by £0.5 billion, largely reflecting higher lending to the oil and gas sector.

 

Redenomination risk

·

The Group's focus continues to be on reducing its asset exposures and funding mismatches in the eurozone periphery countries. The estimated funding mismatch at risk of redenomination was £8.5 billion (31 December 2012 - £9.0 billion) for Ireland, £4.0 billion (31 December 2012 - £4.5 billion) for Spain, and £1.0 billion (31 December 2012 - £1.0 billion) for Italy at 31 March 2013. These numbers can fluctuate owing to volatility in trading book positions and changes in bond prices. The net positions for Greece, Portugal and Cyprus were all minimal. For more information on redenomination risk considerations, refer to page 254 of the Group's 2012 Annual Report and Accounts.

 

 

 


 

Appendix 3 Risk management supplement (continued)

 

Country risk: Eurozone periphery by country: Ireland

 

 

Lending 

REIL 

Provisions 

 

AFS and 

LAR debt 

securities 

AFS 

reserves 

 

HFT

debt securities

 

Total debt 

securities 

 

Net

 

Balance 

sheet 

 

Off-balance 

 sheet 

 

Gross

Long 

Short 

Derivatives 

Repos 

Derivatives 

Repos 

31 March 2013

£m 

£m 

£m 

 

£m 

£m 

 

£m 

£m 

£m 

£m 

£m 

 

£m 

 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

Government

44 

- 

- 

 

138 

(17)

 

96 

46 

 

188 

 

33 

- 

 

265 

 

2 

 

38 

- 

Central bank

44 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

44 

 

- 

 

- 

- 

Other banks

99 

- 

- 

 

184 

(3)

 

18 

3 

 

199 

 

692 

90 

 

1,080 

 

- 

 

15,238 

3,836 

Other FI

522 

- 

- 

 

99 

- 

 

175 

2 

 

272 

 

546 

89 

 

1,429 

 

705 

 

1,259 

3,081 

Corporate

18,235 

11,449 

6,721 

 

- 

- 

 

201 

3 

 

198 

 

356 

- 

 

18,789 

 

1,900 

 

378 

169 

Personal

18,393 

3,538 

1,799 

 

- 

- 

 

- 

- 

 

- 

 

1 

- 

 

18,394 

 

528 

 

1 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


37,337 

14,987 

8,520 

 

421 

(20)

 

490 

54 

 

857 

 

1,628 

179 

 

40,001 

 

3,135 

 

16,914 

7,086 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 December 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government

42 

- 

- 

 

127 

(23)

 

79 

56 

 

150 

 

2 

- 

 

194 

 

2 

 

6 

- 

Central bank

73 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

73 

 

- 

 

- 

- 

Other banks

98 

- 

- 

 

191 

(6)

 

18 

1 

 

208 

 

695 

476 

 

1,477 

 

- 

 

15,258 

3,547 

Other FI

532 

- 

- 

 

46 

- 

 

325 

2 

 

369 

 

583 

103 

 

1,587 

 

601 

 

1,365 

4,121 

Corporate

17,921 

11,058 

6,226 

 

60 

- 

 

- 

- 

 

60 

 

411 

- 

 

18,392 

 

1,840 

 

436 

326 

Personal

17,893 

3,286 

1,686 

 

- 

- 

 

- 

- 

 

- 

 

1 

- 

 

17,894 

 

515 

 

1 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


36,559 

14,344 

7,912 

 

424 

(29)

 

422 

59 

 

787 

 

1,692 

579 

 

39,617 

 

2,958 

 

17,066 

7,994 

 

31 March 2013

 

31 December 2012


Notional


Fair value

 

Notional


Fair value


Bought 

Sold 


Bought  

Sold 

 

Bought 

Sold 

 

Bought 

Sold 

CDS by reference entity

£m 

£m 


£m  

£m 

 

£m 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

Government

2,632 

2,615 

 

48  

(48)


2,486 

2,525 

 

72 

(71)

Other banks

30 

18 

 

5  

(5)


43 

32 

 

1 

(2)

Other FI

451 

385 

 

3  

(16)


759 

677 

 

21 

(33)

Corporate

218 

154 

 

(14) 

14 


236 

165 

 

(17)

17 


 

 

 

 

 


 

 

 

 

 


3,331 

3,172 

 

42  

(55)


3,524 

3,399 

 

77 

(89)

 


 

Appendix 3 Risk management supplement (continued)

 

Country risk: Eurozone periphery by country: Spain

 

 

Lending 

REIL 

Provisions 

 

AFS and 

LAR debt 

securities 

AFS 

reserves 

 

HFT

debt securities

 

Total debt 

securities 

 

Net

 

Balance 

sheet 

 

Off-balance 

 sheet 

 

Gross

Long 

Short 

Derivatives 

Repos 

Derivatives 

Repos 

31 March 2013

£m 

£m 

£m 

£m 

£m 

 

£m 

£m 

£m 

£m 

£m 

 

£m 

 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

Government

- 

- 

- 

41 

(8)

 

573 

391 

 

223 

 

4 

- 

 

227 

 

15 

 

35 

- 

Central bank

8 

- 

- 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

8 

 

- 

 

- 

- 

Other banks

49 

- 

- 

3,475 

(423)

 

73 

100 

 

3,448 

 

1,120 

- 

 

4,617 

 

44 

 

4,877 

2,279 

Other FI

54 

- 

- 

1,837 

(416)

 

61 

16 

 

1,882 

 

28 

- 

 

1,964 

 

144 

 

51 

- 

Corporate

4,202 

689 

348 

- 

- 

 

38 

40 

 

(2)

 

430 

- 

 

4,630 

 

1,594 

 

455 

- 

Personal

347 

55 

23 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

347 

 

57 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


4,660 

744 

371 

5,353 

(847)

 

745 

547 

 

5,551 

 

1,582 

- 

 

11,793 

 

1,854 

 

5,418 

2,279 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 December 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government

- 

- 

- 

37 

(10)

 

786 

403 

 

420 

 

18 

- 

 

438 

 

14 

 

56 

- 

Central bank

6 

- 

- 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

6 

 

- 

 

- 

- 

Other banks

1 

- 

- 

3,169 

(634)

 

100 

76 

 

3,193 

 

1,254 

- 

 

4,448 

 

42 

 

5,116 

610 

Other FI

59 

- 

- 

1,661 

(540)

 

96 

18 

 

1,739 

 

26 

- 

 

1,824 

 

139 

 

50 

- 

Corporate

4,260 

601 

246 

4 

- 

 

36 

18 

 

22 

 

456 

- 

 

4,738 

 

1,373 

 

472 

- 

Personal

340 

61 

27 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

340 

 

56 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


4,666 

662 

273 

4,871 

(1,184)

 

1,018 

515 

 

5,374 

 

1,754 

- 

 

11,794 

 

1,624 

 

5,694 

610 

 

31 March 2013

 

31 December 2012


Notional


Fair value

 

Notional


Fair value


Bought 

Sold 


Bought 

Sold 

 

Bought 

Sold 

 

Bought 

Sold 

CDS by reference entity

£m 

£m 


£m 

£m 

 

£m 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

Government

5,934 

5,923 

 

358 

(361)


5,934 

5,905 

 

361 

(359)

Other banks

1,514 

1,560 

 

50 

(45)


1,583 

1,609 

 

34 

(30)

Other FI

1,267 

1,123 

 

55 

(37)


1,209 

1,061 

 

47 

(28)

Corporate

2,247 

1,967 

 

21 

(16)


2,263 

2,011 

 

7 

(4)


 

 

 

 

 


 

 

 

 

 


10,962 

10,573 

 

484 

(459)


10,989 

10,586 

 

449 

(421)


 

Appendix 3 Risk management supplement (continued)

 

Country risk: Eurozone periphery by country: Italy

 

 

Lending 

REIL 

Provisions 

 

AFS and 

LAR debt 

securities 

AFS 

reserves 

 

HFT

debt securities

 

Total debt 

securities 

 

Net

 

Balance 

sheet 

 

Off-balance 

 sheet 

 

Gross

Long 

Short 

Derivatives 

Repos 

Derivatives 

Repos 

31 March 2013

£m 

£m 

£m 

 

£m 

£m 

 

£m 

£m 

£m 

£m 

£m 

 

£m 

 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

Government

10 

- 

- 

 

417 

(76)

 

2,365 

1,671 

 

1,111 

 

79 

- 

 

1,200 

 

- 

 

130 

- 

Central bank

22 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

22 

 

- 

 

- 

- 

Other banks

145 

- 

- 

 

- 

- 

 

11 

53 

 

(42)

 

1,509 

- 

 

1,612 

 

37 

 

8,431 

2 

Other FI

103 

- 

- 

 

200 

(1)

 

54 

17 

 

237 

 

120 

- 

 

460 

 

679 

 

120 

- 

Corporate

1,425 

57 

16 

 

34 

- 

 

54 

66 

 

22 

 

582 

- 

 

2,029 

 

1,812 

 

865 

86 

Personal

24 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

24 

 

12 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


1,729 

57 

16 

 

651 

(77)

 

2,484 

1,807 

 

1,328 

 

2,290 

- 

 

5,347 

 

2,540 

 

9,546 

88 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 December 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government

9 

- 

- 

 

408 

(81)

 

2,781 

2,224 

 

965 

 

80 

- 

 

1,054 

 

- 

 

131 

- 

Central bank

21 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

21 

 

- 

 

- 

- 

Other banks

200 

- 

- 

 

125 

(8)

 

42 

54 

 

113 

 

1,454 

- 

 

1,767 

 

33 

 

8,428 

3 

Other FI

218 

- 

- 

 

357 

(1)

 

23 

1 

 

379 

 

99 

- 

 

696 

 

671 

 

100 

- 

Corporate

1,392 

34 

5 

 

87 

2 

 

85 

22 

 

150 

 

664 

- 

 

2,206 

 

1,900 

 

938 

- 

Personal

23 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

23 

 

12 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 


1,863 

34 

5 

 

977 

(88)

 

2,931 

2,301 

 

1,607 

 

2,297 

- 

 

5,767 

 

2,616 

 

9,597 

3 

 

31 March 2013

 

31 December 2012


Notional


Fair value

 

Notional


Fair value


Bought 

Sold 


Bought 

Sold 

 

Bought 

Sold 

 

Bought 

Sold 

CDS by reference entity

£m 

£m 


£m 

£m 

 

£m 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

Government

14,255 

14,144 

 

846 

(885)


13,181 

13,034 


717 

(754)

Other banks

3,202 

3,327 

 

272 

(244)


3,537 

3,488 


163 

(139)

Other FI

581 

573 

 

24 

(21)


616 

607 


8 

(5)

Corporate

2,643 

2,251 

 

61 

(51)


2,580 

2,295 


28 

(20)


 

 

 

 

 








20,681 

20,295 

 

1,203 

(1,201)


19,914 

19,424 


916 

(918)


 

Appendix 3 Risk management supplement (continued)

 

Country risk: Eurozone periphery by country: Portugal

 

 

Lending 

REIL 

Provisions 

 

AFS and 

LAR debt 

securities 

AFS 

reserves 

 

HFT

debt securities

 

Total debt 

securities 

 

Net

 

Balance 

sheet 

 

Off-balance 

 sheet 

 

Gross

Long 

Short 

Derivatives 

Repos 

Derivatives 

Repos 

31 March 2013

£m 

£m 

£m 

 

£m 

£m 

 

£m 

£m 

£m 

£m 

£m 

 

£m 

 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

Government

- 

- 

- 

 

78 

(16)

 

58 

17 

 

119 

 

16 

- 

 

135 

 

- 

 

16 

- 

Other banks

1 

- 

- 

 

72 

(9)

 

1 

2 

 

71 

 

350 

- 

 

422 

 

- 

 

456 

695 

Other FI

- 

- 

- 

 

1 

- 

 

24 

13 

 

12 

 

41 

- 

 

53 

 

- 

 

41 

- 

Corporate

257 

161 

98 

 

42 

- 

 

11 

9 

 

44 

 

79 

- 

 

380 

 

226 

 

79 

- 

Personal

7 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

7 

 

8 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


265 

161 

98 

 

193 

(25)

 

94 

41 

 

246 

 

486 

- 

 

997 

 

234 

 

592 

695 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 December 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government

- 

- 

- 

 

72 

(18)

 

28 

15 

 

85 

 

17 

- 

 

102 

 

- 

 

17 

- 

Other banks

- 

- 

- 

 

66 

(12)

 

5 

- 

 

71 

 

380 

- 

 

451 

 

- 

 

481 

26 

Other FI

- 

- 

- 

 

1 

- 

 

21 

11 

 

11 

 

38 

- 

 

49 

 

3 

 

38 

- 

Corporate

336 

253 

188 

 

41 

- 

 

7 

- 

 

48 

 

79 

- 

 

463 

 

247 

 

82 

- 

Personal

7 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

7 

 

8 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


343 

253 

188 

 

180 

(30)

 

61 

26 

 

215 

 

514 

- 

 

1,072 

 

258 

 

618 

26 

 

31 March 2013

 

31 December 2012


Notional


Fair value

 

Notional


Fair value


Bought 

Sold 


Bought 

Sold 

 

Bought 

Sold 

 

Bought 

Sold 

CDS by reference entity

£m 

£m 


£m 

£m 

 

£m 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

Government

3,486 

3,435 

 

287 

(264)


3,182 

3,134 


302 

(275)

Other banks

786 

772 

 

40 

(39)


856 

863 


31 

(30)

Other FI

8 

5 

 

- 

(1)


8 

5 


- 

(1)

Corporate

592 

510 

 

4 

(7)


426 

353 


3 

(7)


 

 

 

 

 








4,872 

4,722 

 

331 

(311)


4,472 

4,355 


336 

(313)


 

Appendix 3 Risk management supplement (continued)

 

Country risk: Eurozone periphery by country: Greece

 

 

Lending 

REIL 

Provisions 

 

AFS and 

LAR debt 

securities 

AFS 

reserves 

 

HFT

debt securities

 

Total debt 

securities 

 

Net

 

Balance 

sheet 

 

Off-balance 

 sheet 

 

Gross

Long 

Short 

Derivatives 

Repos 

Derivatives 

Repos 

31 March 2013

£m 

£m 

£m 

£m 

£m 

 

£m 

£m 

£m 

£m 

£m 

 

£m 

 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

Government

- 

- 

- 

- 

- 

 

8 

8 

 

- 

 

17 

- 

 

17 

 

- 

 

156 

- 

Other banks

1 

- 

- 

- 

- 

 

- 

- 

 

- 

 

313 

- 

 

314 

 

- 

 

413 

- 

Other FI

1 

- 

- 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

1 

 

- 

 

- 

- 

Corporate

181 

31 

21 

- 

- 

 

- 

- 

 

- 

 

42 

- 

 

223 

 

25 

 

42 

- 

Personal

14 

- 

- 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

14 

 

9 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


197 

31 

21 

- 

- 

 

8 

8 

 

- 

 

372 

- 

 

569 

 

34 

 

611 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 December 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government

- 

- 

- 

- 

- 

 

9 

- 

 

9 

 

17 

- 

 

26 

 

- 

 

151 

- 

Central bank

7 

- 

- 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

7 

 

- 

 

- 

- 

Other banks

- 

- 

- 

- 

- 

 

- 

- 

 

- 

 

299 

- 

 

299 

 

- 

 

411 

- 

Other FI

1 

- 

- 

- 

- 

 

- 

8 

 

(8)

 

- 

- 

 

(7)

 

- 

 

- 

- 

Corporate

179 

38 

38 

- 

- 

 

- 

- 

 

- 

 

44 

- 

 

223 

 

18 

 

61 

- 

Personal

14 

- 

- 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

14 

 

9 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


201 

38 

38 

- 

- 

 

9 

8 

 

1 

 

360 

- 

 

562 

 

27 

 

623 

- 

 

31 March 2013

 

31 December 2012


Notional


Fair value

 

Notional


Fair value


Bought 

Sold 


Bought 

Sold 

 

Bought 

Sold 

 

Bought 

Sold 

CDS by reference entity

£m 

£m 


£m 

£m 

 

£m 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

Other banks

4 

4 

 

1 

(1)


4 

4 


1 

(1)

Corporate

271 

274 

 

23 

(24)


319 

317 


31 

(33)


 

 

 

 

 








275 

278 

 

24 

(25)


323 

321 


32 

(34)


 

Appendix 3 Risk management supplement (continued)

 

Country risk: Eurozone periphery by country: Cyprus

 

 

Lending 

REIL 

Provisions 

 

AFS and 

LAR debt 

securities 

AFS 

reserves 

 

HFT

debt securities

 

Total debt 

securities 

 

Net

 

Balance 

sheet 

 

Off-balance 

 sheet 

 

Gross

Long 

Short 

Derivatives 

Repos 

Derivatives 

Repos 

31 March 2013

£m 

£m 

£m 

 

£m 

£m 

 

£m 

£m 

£m 

£m 

£m 

 

£m 

 

£m 

 

£m 

£m 


 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

Government

- 

- 

- 

 

- 

- 

 

1 

- 

 

1 

 

- 

- 

 

1 

 

- 

 

- 

- 

Other banks

- 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

10 

- 

 

10 

 

- 

 

11 

- 

Other FI

- 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

- 

 

1 

 

13 

14 

Corporate

289 

168 

56 

 

- 

- 

 

- 

1 

 

(1)

 

24 

- 

 

312 

 

29 

 

24 

- 

Personal

14 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

14 

 

11 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


303 

168 

56 

 

- 

- 

 

1 

1 

 

- 

 

34 

- 

 

337 

 

41 

 

48 

14 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 December 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government

- 

- 

- 

 

- 

- 

 

3 

- 

 

3 

 

- 

- 

 

3 

 

- 

 

- 

- 

Other banks

- 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

11 

- 

 

11 

 

- 

 

12 

- 

Other FI

2 

- 

- 

 

- 

- 

 

1 

- 

 

1 

 

- 

- 

 

3 

 

- 

 

4 

15 

Corporate

274 

162 

54 

 

- 

- 

 

- 

- 

 

- 

 

24 

- 

 

298 

 

36 

 

38 

- 

Personal

15 

- 

- 

 

- 

- 

 

- 

- 

 

- 

 

- 

- 

 

15 

 

11 

 

- 

- 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


291 

162 

54 

 

- 

- 

 

4 

- 

 

4 

 

35 

- 

 

330 

 

47 

 

54 

15 

 

 

 

 

 


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