|
|
●
|
2017
operating profit of £2,239 million, an increase of £6,321
million compared with 2016.
|
●
|
Adjusted
operating profit(1)(2) increased by
31.1% to £4,818 million.
|
●
|
2017
attributable profit of £752 million.
|
●
|
Q4 2017
operating loss before tax of £583 million and an attributable
loss of £579 million.
|
●
|
4.0%
increase in adjusted income(1) and an 8.1%
reduction in adjusted operating expenses(2) driving a 12.1%
improvement in operating leverage.
|
●
|
Net
interest margin (NIM) reduced by 5 basis points to 2.13% compared
with 2016.
|
●
|
Supported
the UK economy through a £6.0 billion, or 2.2%,(3) increase in net
lending across PBB, CPB and RBSI. Whilst behind our 3% target, this
represents strong growth in a competitive environment.
|
●
|
Grow income: Adjusted income increased by £490 million,
or 4.0%.(1)
|
●
|
Cut costs: Excluding VAT recoveries, adjusted operating
expenses reduced by £810 million,(2) or
9.6%.
|
●
|
Reduce capital usage: Excluding volume growth, RWAs reduced
by £20.8 billion across PBB (£0.6 billion), CPB
(£12.9 billion), RBSI (£4.4 billion) and NatWest Markets
core (£2.9 billion), already achieving our 2018
target.
|
●
|
Resolve legacy issues; during 2017, RBS:
● Wound up the former Capital Resolution business.
Legacy RWAs now represent around 11% of total;
● Received formal approval from the European
Commission for its alternative remedies package in respect of the
business previously described as Williams & Glyn;
and
● Reached settlement with the Federal Housing
Finance Agency (FHFA) and the California State Attorney General in
the US and resolved the 2008 rights issue shareholder
litigation.
|
●
|
CET1
ratio increased by 250 basis points to 15.9%, despite absorbing
significant additional legacy costs.
|
●
|
IFRS 9
adoption on 1 January 2018 increased CET1 by a further 30 basis
points.
|
●
|
Increased
investment and innovation spend focused on achieving higher levels
of digitisation and automation.
|
●
|
Faster
repositioning of the bank's existing distribution network and
technology platforms towards mobile, cloud based platforms and
virtualisation.
|
Strategy goal
|
2017 target
|
2017
|
Strength
and sustainability
|
Maintain bank CET1 ratio of 13%
|
CET1 ratio of 15.9%; up 250 basis points from Q4 2016
|
Customer experience
|
Significantly increase NPS or maintain No.1 in chosen customer
segments
|
We have achieved target in half our key customer segments and
Commercial Banking remains ahead of its main competitors. Trust has
improved for both NatWest and Royal Bank of Scotland
|
Simplifying the bank
|
Reduce adjusted operating expenses by at least £750
million
|
Adjusted operating expenses down £810 million, or 9.6%,
excluding VAT recoveries
|
Supporting growth
|
Net 3% growth on total PBB, CPB and RBSI loans to
customers
|
Net customer loans in PBB, CPB and RBSI up 2.2%(3)
|
Employee engagement
|
Improve employee engagement
|
Employee engagement improved by 7 basis points to 83, 1 point above
the GFS norm
|
(1)
|
Income
excluding own credit adjustments £69 million loss (2016 -
£180 million gain), loss on redemption of own debt £7
million (2016 - £126 million), and strategic disposals
£347 million (2016 - £164 million).
|
(2)
|
Operating
expenses excluding litigation and conduct costs £1,285 million
(2016 - £5,868 million), restructuring costs £1,565
million (2016 - £2,106 million), and VAT recoveries of
£86 million (2016 - £227 million).
|
(3)
|
Excluding
transfers. See notes on page 4 for further details.
|
|
Year ended
|
|
Quarter ended
|
|||||||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
||||
Performance key metrics and ratios
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
||||
Operating profit
|
2,239
|
(4,082)
|
|
(583)
|
871
|
(4,063)
|
||||
Operating profit - adjusted (1,2)
|
4,818
|
3,674
|
|
512
|
1,245
|
1,185
|
||||
Profit/(loss) attributable to ordinary shareholders
|
752
|
(6,955)
|
|
(579)
|
392
|
(4,441)
|
||||
Net interest margin
|
2.13%
|
2.18%
|
|
2.04%
|
2.12%
|
2.19%
|
||||
Average interest earning assets
|
£422,337m
|
£399,598m
|
|
£430,902m
|
£430,962m
|
£401,548m
|
||||
Cost:income ratio (3)
|
79.0%
|
129.0%
|
|
111.5%
|
67.5%
|
230.2%
|
||||
Cost:income ratio - adjusted (1,2,3)
|
58.2%
|
66.0%
|
|
73.6%
|
55.6%
|
66.3%
|
||||
Earnings per share
|
|
|
|
|
|
|
||||
- basic
|
6.3p
|
(59.5p)
|
|
(4.9p)
|
3.3p
|
(37.7p)
|
||||
- basic fully diluted
|
6.3p
|
(59.5p)
|
|
(4.9p)
|
3.3p
|
(37.7p)
|
||||
- adjusted basic (1,2)
|
25.2p
|
5.2p
|
|
3.0p
|
5.9p
|
7.0p
|
||||
- adjusted fully diluted (1,2,4)
|
25.2p
|
5.2p
|
|
3.0p
|
5.9p
|
7.0p
|
||||
Return on tangible equity
|
2.2%
|
(17.9%)
|
|
(6.7%)
|
4.5%
|
(48.2%)
|
||||
Return on tangible equity - adjusted (1,2)
|
8.8%
|
1.6%
|
|
4.0%
|
8.2%
|
8.6%
|
||||
Average tangible equity
|
£34,053m
|
£38,791m
|
|
£34,403m
|
£34,465m
|
£36,855m
|
||||
Average number of ordinary shares
|
|
|
|
|
|
|
||||
outstanding during the period (millions)
|
|
|
|
|
|
|
||||
- basic
|
11,867
|
11,692
|
|
11,944
|
11,886
|
11,766
|
||||
- fully diluted (4)
|
11,936
|
11,743
|
|
12,003
|
11,943
|
11,846
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Period ended
|
||
|
31 December
|
30 September
|
31 December
|
Balance sheet related key metrics and ratios
|
2017
|
2017
|
2016
|
Total assets
|
£738.1bn
|
£751.8bn
|
£798.7bn
|
Funded assets
|
£577.2bn
|
£580.0bn
|
£551.7bn
|
Loans and advances to customers (excludes reverse
repos)
|
£323.2bn
|
£324.7bn
|
£323.0bn
|
Customer deposits (excludes repos)
|
£367.0bn
|
£359.9bn
|
£353.9bn
|
|
|
|
|
Liquidity coverage ratio (LCR)
|
152%
|
147%
|
123%
|
Liquidity portfolio
|
£186bn
|
£177bn
|
£164bn
|
Net stable funding ratio (NSFR)
|
132%
|
126%
|
121%
|
Loan:deposit ratio
|
88%
|
90%
|
91%
|
Risk elements in lending
|
£8.9bn
|
£9.0bn
|
£10.3bn
|
Impairment provisions
|
£3.8bn
|
£3.9bn
|
£4.5bn
|
Short-term wholesale funding
|
£18bn
|
£21bn
|
£14bn
|
Wholesale funding
|
£70bn
|
£69bn
|
£59bn
|
|
|
|
|
Common Equity Tier 1 (CET1) ratio
|
15.9%
|
15.5%
|
13.4%
|
Total capital ratio
|
21.3%
|
20.6%
|
19.2%
|
Risk-weighted assets (RWAs)
|
£200.9bn
|
£210.6bn
|
£228.2bn
|
CRR leverage ratio
|
5.3%
|
5.3%
|
5.1%
|
UK leverage ratio
|
6.1%
|
6.0%
|
5.6%
|
|
|
|
|
Tangible net asset value (TNAV) per ordinary share
|
294p
|
299p
|
296p
|
Tangible net asset value (TNAV) per ordinary share - fully
diluted
|
292p
|
298p
|
294p
|
Tangible equity
|
£35,164m
|
£35,621m
|
£34,982m
|
Number of ordinary shares in issue (millions)
|
11,965
|
11,905
|
11,823
|
Number of ordinary shares in issue (millions) - fully
diluted (4,5)
|
12,031
|
11,950
|
11,906
|
|
|
|
|
(1)
|
Excluding
own credit adjustments, (loss)/gain on redemption of own debt and
strategic disposals.
|
|
(2)
|
Excluding
restructuring costs and litigation and conduct costs.
|
|
(3)
|
Operating
lease depreciation included in income (year ended 31 December 2017
- £142 million, year ended December 2016 - £152 million,
Q4 2017 - £35 million, Q3 2017 - £35 million; Q4 2016 -
£37 million).
|
|
(4)
|
Includes the effect of dilutive share options and convertible
securities. Dilutive shares on an average basis for Q4 2017 were 59
million shares and for the twelve months ended 31 December 2017
were 69 million shares (year ended 31 December 2016 51 million
shares; Q3 2017 - 57 million shares; Q4 2016 - 80 million shares)
and as at 31 December 2017 were 66 million shares (30 September
2017 - 45 million shares, 31 December 2016 - 83
million shares)
|
|
(5)
|
Includes 16 million treasury shares (30 September 2017 - 17 million
shares; 31 December 2016 - 39 million
shares).
|
(1)
|
Shipping
and other activities which were formerly in Capital Resolution,
were transferred from NatWest Markets on 1 October 2017, including
net loans and advances to customers of £2.6 billion and RWAs
of £2.1 billion. Commercial Banking transferred whole business
securitisations and relevant financial institution's (RFI) to
NatWest Markets during December 2017, including net loans and
advances to customers of £0.8 billion and RWAs of £0.6
billion. Comparatives were not re-presented for these
transfers.
|
(2)
|
UK PBB
Collective Investment Funds (CIFL) business was transferred from UK
PBB on 1 October 2017, including total income in Q4 2017 of
£11 million and assets under management of £3.3 billion.
Private Banking transferred Coutts Crown Dependency (CCD) to
NatWest Markets during Q4 2017, including total income of £2
million and assets under management of £1.3 billion.
Comparatives were not re-presented for these
transfers.
|
(3)
|
Shipping
and other activities which were formerly in Capital Resolution,
were transferred to Commercial Banking on 1 October 2017, including
RWAs of £2.1 billion. Whole business securitisations and
relevant financial institutions (RFI) were transferred from
Commercial Banking during December 2017, including RWAs of
£0.6 billion. Comparatives were not re-presented for these
transfers.
|
(4)
|
Transfers
include £0.4 billion loans and advances transferred from
Commercial Banking to UK PBB during 2017 to better align Business
banking customers. Comparatives were not re-presented for these
transfers
|
●
|
potential
final costs of a resolution with the US Department of
Justice;
|
●
|
future
potential pension contributions and the interplay with capital
buffers for the bank for investment risk being run in the pension
plan;
|
●
|
RWA
inflation as a result of IFRS 16, Bank of England mortgage floors
and Basel 3 amendments;
|
●
|
expected
increased and pro-cyclical impairment volatility as a result of
IFRS 9; and
|
●
|
the
collective impact of these items on our stress test
results
|
(1)
|
The
targets, expectations and trends discussed in this section
represent management's current expectations and are subject to
change, including as a result of the factors described in this
document and in the "Risk Factors" on pages 372 to 402 of the
2017 Annual Report and Accounts. These statements constitute
forward looking statements, refer
to Forward Looking Statements on pages 46 and 47 of this
announcement.
|
|
|
Q4 2016
|
Q3 2017
|
Q4 2017
|
NPS:
Personal Banking
|
NatWest
(England & Wales)(1)
|
13
|
12
|
12
|
Royal
Bank of Scotland (Scotland)(1)
|
(4)
|
(13)
|
(6)
|
|
Ulster
Bank (Northern Ireland)(2)
|
(16)
|
(4)
|
(5)
|
|
Ulster
Bank (Republic of Ireland)(2)
|
(7)
|
(6)
|
(7)
|
|
NPS:
Business Banking
|
NatWest
(England & Wales)(3)
|
(2)
|
(10)
|
(7)
|
Royal
Bank of Scotland (Scotland)(3)
|
(5)
|
(14)
|
(15)
|
|
NPS:
Commercial Banking(4)
|
20
|
21
|
21
|
|
Trust(5)
|
NatWest
(England & Wales)
|
55%
|
59%
|
57%
|
Royal
Bank of Scotland (Scotland)
|
13%
|
22%
|
27%
|
(1)
|
Source:
GfK FRS 6 month rolling data. Latest base sizes: NatWest (England
& Wales) (3361) Royal Bank of Scotland (Scotland) (440). Based
on the question: "How likely is it that you would recommend (brand)
to a relative, friend or colleague in the next 12 months for
current account banking?" Base: Claimed main banked current account
customers.
|
(2)
|
Source:
Coyne Research 12 month rolling data. Latest base sizes: Ulster
Bank NI (294) Ulster Bank RoI (275) Question: "Please indicate to
what extent you would be likely to recommend (brand) to your
friends or family using a scale of 0 to 10 where 0 is not at all
likely and 10 is extremely likely".
|
(3)
|
Source:
Charterhouse Research Business Banking Survey, YE Q4 2017.
Based on interviews with businesses with an annual turnover up to
£2 million. Latest base sizes: NatWest England & Wales
(1245), RBS Scotland (437). Question: "How likely would you be to
recommend (bank)". Base: Claimed main bank. Data weighted by region
and turnover to be representative of businesses in Great
Britain.
|
(4)
|
Source:
Charterhouse Research Business Banking Survey, YE Q4 2017.
Commercial £2m+ in GB (RBSG sample size, excluding don't
knows: (904). Question: "How likely would you be to recommend
(bank)". Base: Claimed main bank. Data weighted by region and
turnover to be representative of businesses in Great
Britain.
|
(5)
|
Source:
Populus. Latest quarter's data. Measured as a net of those that
trust RBS/NatWest to do the right thing, less those that do not.
Latest base sizes: NatWest,
England
& Wales (948), RBS Scotland (203).
|
Summary consolidated income statement for the period ended 31
December 2017
|
||||||
|
|
|
|
|
|
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Net interest income
|
8,987
|
8,708
|
|
2,211
|
2,304
|
2,208
|
|
|
|
|
|
|
|
Own credit adjustments
|
(69)
|
180
|
|
9
|
(5)
|
(114)
|
(Loss)/gain on redemption of own debt
|
(7)
|
(126)
|
|
-
|
-
|
1
|
Strategic disposals
|
347
|
164
|
|
191
|
-
|
-
|
Other non-interest income
|
3,875
|
3,664
|
|
646
|
858
|
1,121
|
|
|
|
|
|
|
|
Non-interest income
|
4,146
|
3,882
|
|
846
|
853
|
1,008
|
|
|
|
|
|
|
|
Total income
|
13,133
|
12,590
|
|
3,057
|
3,157
|
3,216
|
|
|
|
|
|
|
|
Litigation and conduct costs
|
(1,285)
|
(5,868)
|
|
(764)
|
(125)
|
(4,128)
|
Restructuring costs
|
(1,565)
|
(2,106)
|
|
(531)
|
(244)
|
(1,007)
|
Other expenses
|
(7,551)
|
(8,220)
|
|
(2,111)
|
(1,774)
|
(2,219)
|
|
|
|
|
|
|
|
Operating expenses
|
(10,401)
|
(16,194)
|
|
(3,406)
|
(2,143)
|
(7,354)
|
|
|
|
|
|
|
|
Profit/(loss) before impairment (losses)/releases
|
2,732
|
(3,604)
|
|
(349)
|
1,014
|
(4,138)
|
Impairment (losses)/releases
|
(493)
|
(478)
|
|
(234)
|
(143)
|
75
|
|
|
|
|
|
|
|
Operating profit/(loss) before tax
|
2,239
|
(4,082)
|
|
(583)
|
871
|
(4,063)
|
Tax (charge)/credit
|
(824)
|
(1,166)
|
|
168
|
(265)
|
(244)
|
|
|
|
|
|
|
|
Profit/(loss) for the period
|
1,415
|
(5,248)
|
|
(415)
|
606
|
(4,307)
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
Non-controlling interests
|
35
|
10
|
|
14
|
(8)
|
(27)
|
Other owners
|
628
|
504
|
|
150
|
222
|
161
|
Dividend access share
|
-
|
1,193
|
|
-
|
-
|
-
|
Ordinary shareholders
|
752
|
(6,955)
|
|
(579)
|
392
|
(4,441)
|
Total income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory total income
|
13,133
|
12,590
|
|
3,057
|
3,157
|
3,216
|
Adjusted for
|
|
|
|
|
|
|
Own credit adjustments
|
69
|
(180)
|
|
(9)
|
5
|
114
|
Loss/(gain) on redemption of own debt
|
7
|
126
|
|
-
|
-
|
(1)
|
Strategic disposals
|
(347)
|
(164)
|
|
(191)
|
-
|
-
|
|
|
|
|
|
|
|
Adjusted total income
|
12,862
|
12,372
|
|
2,857
|
3,162
|
3,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notable items within adjusted total income
|
|
|
|
|
|
|
IFRS volatility in Central items(1)
|
2
|
(510)
|
|
(173)
|
21
|
308
|
UK PBB debt sale gain
|
185
|
19
|
|
9
|
168
|
15
|
Commercial Banking disposal gain/(loss)
|
6
|
-
|
|
(46)
|
52
|
-
|
FX (losses)/gains in Central items
|
(183)
|
446
|
|
(8)
|
(67)
|
140
|
NatWest Markets legacy business disposal losses
|
(712)
|
(491)
|
|
(163)
|
(446)
|
(325)
|
|
Year ended
|
|
Quarter ended
|
||||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
|
Net interest income
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
|
|
|
|
|
RBS
|
8,987
|
8,708
|
|
2,211
|
2,304
|
2,208
|
|
|
|
|
|
|
|
|
|
- UK Personal & Business Banking
|
5,130
|
4,945
|
|
1,272
|
1,294
|
1,263
|
|
- Ulster Bank RoI
|
421
|
409
|
|
111
|
104
|
105
|
|
- Commercial Banking
|
2,286
|
2,143
|
|
575
|
570
|
542
|
|
- Private Banking
|
464
|
449
|
|
122
|
116
|
111
|
|
- RBS International
|
325
|
303
|
|
81
|
83
|
77
|
|
- NatWest Markets
|
203
|
343
|
|
38
|
99
|
73
|
|
- Central items & other
|
158
|
116
|
|
12
|
38
|
37
|
|
Average interest earning assets (IEA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RBS
|
422,337
|
399,598
|
|
430,902
|
430,962
|
401,548
|
|
- UK Personal & Business Banking
|
179,453
|
166,778
|
|
182,614
|
181,131
|
172,849
|
|
- Ulster Bank RoI
|
25,214
|
25,193
|
|
25,056
|
26,073
|
26,259
|
|
- Commercial Banking
|
131,177
|
121,677
|
|
130,055
|
130,047
|
128,174
|
|
- Private Banking
|
18,799
|
16,887
|
|
19,796
|
19,242
|
17,679
|
|
- RBS International
|
23,930
|
22,254
|
|
24,062
|
23,667
|
22,793
|
|
- NatWest Markets
|
31,231
|
37,856
|
|
27,442
|
32,592
|
33,780
|
|
- Central items & other
|
12,533
|
8,953
|
|
21,877
|
18,210
|
14
|
|
Yields, spreads and margins of the banking business
|
|
|
|
|
|
|
|
Gross yield on interest-earning assets of the
|
|
|
|
|
|
|
|
banking business (1,2)
|
2.57%
|
2.80%
|
|
2.49%
|
2.55%
|
2.72%
|
|
Cost of interest-bearing liabilities of banking business
(1)
|
(0.69%)
|
(0.94%)
|
|
(0.76%)
|
(0.66%)
|
(0.82%)
|
|
Interest spread of the banking business (1,3)
|
1.88%
|
1.86%
|
|
1.73%
|
1.89%
|
1.90%
|
|
Benefit from interest-free funds
|
0.25%
|
0.32%
|
|
0.31%
|
0.23%
|
0.29%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RBS
|
2.13%
|
2.18%
|
|
2.04%
|
2.12%
|
2.19%
|
|
- UK Personal & Business Banking
|
2.86%
|
2.97%
|
|
2.76%
|
2.83%
|
2.91%
|
|
- Ulster Bank RoI
|
1.67%
|
1.62%
|
|
1.76%
|
1.58%
|
1.59%
|
|
- Commercial Banking
|
1.74%
|
1.76%
|
|
1.75%
|
1.74%
|
1.68%
|
|
- Private Banking
|
2.47%
|
2.66%
|
|
2.44%
|
2.39%
|
2.50%
|
|
- RBS International
|
1.36%
|
1.36%
|
|
1.34%
|
1.39%
|
1.34%
|
|
- NatWest Markets
|
0.65%
|
0.91%
|
|
0.55%
|
1.24%
|
0.86%
|
Third party customer rates
(5)
|
|
|
|
|
|
|
Third party asset rates
|
|
|
|
|
|
|
- UK Personal & Business Banking
|
3.47%
|
3.83%
|
|
3.38%
|
3.45%
|
3.64%
|
- Ulster Bank RoI (6)
|
2.38%
|
2.19%
|
|
2.47%
|
2.29%
|
2.20%
|
- Commercial Banking
|
2.73%
|
2.77%
|
|
2.77%
|
2.68%
|
2.65%
|
- Private Banking
|
2.71%
|
2.90%
|
|
2.76%
|
2.67%
|
2.76%
|
- RBS International
|
2.71%
|
3.04%
|
|
2.59%
|
2.77%
|
2.93%
|
|
|
|
|
|
|
|
Third party customer funding rate
|
|
|
|
|
|
|
- UK Personal & Business Banking
|
(0.16%)
|
(0.45%)
|
|
(0.21%)
|
(0.15%)
|
(0.28%)
|
- Ulster Bank RoI (6)
|
(0.31%)
|
(0.50%)
|
|
(0.24%)
|
(0.28%)
|
(0.42%)
|
- Commercial Banking
|
(0.15%)
|
(0.33%)
|
|
(0.20%)
|
(0.10%)
|
(0.27%)
|
- Private Banking
|
(0.09%)
|
(0.18%)
|
|
(0.11%)
|
(0.10%)
|
(0.12%)
|
- RBS International
|
(0.02%)
|
(0.14%)
|
|
(0.03%)
|
(0.01%)
|
(0.08%)
|
(1)
|
For the
purpose of calculating gross yields and interest spread, both
interest receivable and payable has decreased by £182 million
(2016 - £76 million) and by £55 million for Q4 2017 (Q4
2016 - £20 million) in respect of negative
interest.
|
(2)
|
Gross
yield is the interest earned on average interest-earning assets as
a percentage of average interest-earning assets.
|
(3)
|
Interest
spread is the difference between the gross yield and interest paid
on average interest-bearing liabilities as a percentage of average
interest-bearing liabilities.
|
(4)
|
Net
interest margin is net interest income as a percentage of average
interest-earning assets.
|
(5)
|
Net
interest margin includes Treasury allocations and interest on
intercompany borrowings, which are excluded from third party
customer rates.
|
(6)
|
Ulster
Bank Ireland DAC manages its funding and liquidity requirements
locally. Its liquid asset portfolios and non-customer related
funding sources are included within its net interest margin, but
excluded from its third party asset and liability
rates.
|
●
|
Net
interest income of £8,987 million increased by £279
million compared with 2016. The movement was principally driven by
higher mortgage volumes in UK PBB, up £185 million or 3.7%,
and deposit re-pricing benefits in Commercial Banking, up £143
million or 6.7%, partially offset by planned balance sheet
reductions in NatWest Markets.
|
●
|
The net
interest margin (NIM) was 2.13% for 2017, 5 basis points lower than
2016 reflecting increased liquidity, mix impacts and competitive
pressures on margin.
|
●
|
UK PBB
NIM of 2.86% was 11 basis points lower than 2016 reflecting lower
mortgage margins, asset mix and reduced current account hedge
yield, partially offset by savings re-pricing benefits from actions
taken in 2016 and following the Q4 2017 base rate
increase.
|
●
|
Ulster
Bank RoI NIM increased by 5 basis points to 1.67% driven by a
combination of improved deposit and loan margins, one-off income
adjustments and successful deleveraging measures in 2016 which have
reduced the concentration of low yielding loans.
|
●
|
Commercial
Banking NIM decreased by 2 basis points as active re-pricing of
assets and deposits has been more than offset by asset margin
pressure in a low rate environment.
|
●
|
Private
Banking NIM decreased by 19 basis points to 2.47% reflecting the
competitive market and low rate environment, partially offset by
higher funding benefits on deposits following the Q4 2017 base rate
increase.
|
●
|
RBSI
NIM remained stable at 1.36% as active re-pricing of deposits has
been offset by the low rate environment.
|
●
|
Structural hedges of £129 billion generated a benefit of
£1.3 billion through net interest income for the
year.
|
●
|
Net
interest income of £2,211 million decreased by £93
million compared with Q3 2017 principally driven by one-off income
releases in Q3 2017 relating to NatWest Markets.
|
●
|
NIM for
Q4 2017 was 2.04%, 8 basis points lower than Q3 2017 driven by
one-off income releases in Q3 2017 and a Q4 2017 charge in UK PBB
associated with an annual review of mortgage customer repayment
behaviour. Excluding the impact of one-off adjustments, NIM was
broadly stable.
|
●
|
Net
interest income of £2,211 million remained broadly stable
compared with Q4 2016 as higher volumes and re-pricing benefits
have been offset by planned balance sheet reductions in NatWest
Markets.
|
●
|
NIM was
2.04% for Q4 2017, 15 basis points lower than Q4 2016 reflecting
increased liquidity, mix impacts and competitive pressures on
margin.
|
●
|
Average
interest earning assets increased by £29,354 million, or 7.3%,
compared with Q4 2016 reflecting increased asset volumes in UK PBB,
5.6% higher, and a £21,863 million increase in Central items
associated with a build-up in liquidity.
|
|
|
|
|
|
|
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
Operating expenses
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Statutory operating expenses
|
10,401
|
16,194
|
|
3,406
|
2,143
|
7,354
|
Adjusted for
|
|
|
|
|
|
|
Litigation and conduct costs
|
(1,285)
|
(5,868)
|
|
(764)
|
(125)
|
(4,128)
|
Restructuring costs
|
(1,565)
|
(2,106)
|
|
(531)
|
(244)
|
(1,007)
|
|
|
|
|
|
|
|
Adjusted operating expenses
|
7,551
|
8,220
|
|
2,111
|
1,774
|
2,219
|
|
|
|
|
|
|
|
Notable items within adjusted operating expenses
|
|
|
|
|
|
|
VAT recovery in Central items
|
86
|
227
|
|
6
|
29
|
-
|
|
|
|
|
|
|
|
Notable items within restructuring costs
|
|
|
|
|
|
|
Property exit costs
|
(303)
|
-
|
|
(100)
|
14
|
-
|
|
|
|
|
|
|
|
Employee numbers (FTE-thousands)
|
71.2
|
77.8
|
|
71.2
|
73.6
|
77.8
|
|
Year ended
|
|||||
|
31 December
|
31 December
|
||||
|
2017
|
2016
|
||||
UK Bank levy segmental allocations
|
£m
|
£m
|
||||
UK Personal & Business Banking
|
33
|
34
|
||||
Ulster Bank RoI
|
1
|
3
|
||||
Commercial Banking
|
91
|
90
|
||||
Private Banking
|
18
|
19
|
||||
RBS International
|
14
|
19
|
||||
NatWest Markets
|
28
|
35
|
||||
Central items
|
30
|
(10)
|
||||
|
|
|
||||
Total UK Bank levy
|
215
|
190
|
2017 compared with 2016
|
|
●
|
Total
operating expenses of £10,401 million were £5,793
million, or 35.8%, lower than 2016 reflecting a £4,583 million
reduction in litigation and conduct costs, a £669 million, or
8.1%, reduction in adjusted operating expenses and a £541
million reduction in restructuring costs.
|
●
|
Excluding VAT recoveries, adjusted operating expenses have reduced
by £810 million for the year, ahead of our £750 million
targeted reduction, with approximately 45% of the cost reduction
delivered across PBB, CPB, RBSI and the NatWest Markets core
business, adjusting for transfers.
|
●
|
Staff costs of £3,923 million were £559 million, or
12.5%, lower than 2016 underpinned by a 6,600, or 8.5%, reduction
in FTEs.
|
●
|
Restructuring
costs of £1,565 million included: a £303 million charge
relating to the reduction in our property portfolio; a £319
million charge in NatWest Markets principally relating to the
run-down and closure of the legacy business; £221 million
relating to the business previously described as Williams &
Glyn; £194 million in respect of implementing ring-fencing
requirements; and a £73 million net settlement relating to the
RBS Netherlands pension scheme.
|
●
|
Litigation
and conduct costs of £1,285 million included: additional
charges in respect of settlement with Federal Housing Finance
Agency (FHFA) and the California State Attorney General and
additional RMBS related provisions in the US; a further provision
in relation to settling the 2008 rights issue shareholder
litigation; an additional £175 million PPI provision; and a
£169 million provision in Ulster Bank RoI for customer
remediation and project costs relating to tracker mortgages and
other legacy business issues.
|
Q4 2017 compared with Q3 2017
|
|
●
|
Total
operating expenses of £3,406 million were £1,263 million
higher than Q3 2017 reflecting a £639 million increase in
litigation and conduct costs, a £337 million increase in
adjusted operating expenses and a £287 million increase in
restructuring costs.
|
●
|
Adjusted
operating expenses of £2,111 million were £337 million
higher than Q3 2017 reflecting the UK bank levy charge of £215
million, the non-repeat of £55 million of VAT and other
releases in Q3 2016 and the timing of innovation and marketing
spend in the quarter.
|
●
|
Restructuring
costs of £531 million included: a £97 million charge
relating to the reduction in our property portfolio; a £129
million charge in NatWest Markets including costs relating to the
run-down and closure of the legacy business and back office
restructuring activity in the core business; £147 million
relating to the business previously described as Williams &
Glyn; and £59 million in respect of implementing ring-fencing
requirements.
|
●
|
Litigation
and conduct costs of £764 million included: £442 million
of additional US RMBS related provisions; an additional £175
million PPI provision and a £135 million provision in Ulster
Bank RoI for customer remediation and project costs relating to
tracker mortgages and other legacy business issues.
|
Q4 2017 compared with Q4 2016
|
|
●
|
Total
operating expenses of £3,406 million were £3,948 million
lower than Q4 2016 reflecting a £3,364 million reduction in
litigation and conduct costs, a £476 million reduction in
restructuring costs and a £108 million reduction in adjusted
operating expenses.
|
●
|
Adjusted
operating expenses of £2,111 million were £108 million,
or 4.9%, lower than Q4 2016 reflecting cost efficiencies and
reduced headcount.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
Impairment (releases)/losses
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Impairment losses
|
493
|
478
|
|
234
|
143
|
(75)
|
|
|
|
|
|
|
|
Notable items within impairment losses
|
|
|
|
|
|
|
Ulster Bank RoI impairment losses/(releases)
|
60
|
(113)
|
|
81
|
(10)
|
(47)
|
Commercial Banking impairment losses
|
362
|
206
|
|
117
|
151
|
83
|
NatWest Markets impairment (releases)/losses
|
(174)
|
253
|
|
(26)
|
(71)
|
(130)
|
|
|
|
|
|
31 December
|
30 September
|
31 December
|
Credit metrics
|
2017
|
2017
|
2016
|
|
|
|
|
Gross customer loans
|
£326,998m
|
£328,504m
|
£327,478m
|
Loan impairment provisions
|
£3,814m
|
£3,854m
|
£4,455m
|
Risk elements in lending (REIL)
|
£8,904m
|
£9,019m
|
£10,310m
|
Provisions as a % of REIL
|
43%
|
43%
|
43%
|
REIL as a % of gross customer loans
|
2.7%
|
2.7%
|
3.1%
|
Provisions as a % of gross customer loans
|
1.2%
|
1.2%
|
1.4%
|
2017 compared with 2016
|
|
●
|
A net impairment loss of £493 million, 15 basis points of
gross customer loans, compared with £478 million in
2016.
|
●
|
UK PBB
reported a net impairment charge of £235 million, or 14 basis
points of gross customer loans, reflecting continued benign credit
conditions.
|
●
|
Ulster Bank RoI reported a net impairment loss of €68 million
compared with a €138 million release in 2016. The charge for
the year included a provision relating to a change in the
non performing loan strategy to allow for further portfolio sales
whilst 2016 included gains arising
from the impact of asset disposals.
|
●
|
Commercial
Banking net impairment losses of £362 million were £156
million higher than 2016, reflecting a small number of single name
impairments.
|
●
|
NatWest
Markets net impairment release of £174 million compared with a
net impairment loss of £253 million in 2016 and mainly
comprised releases relating to the legacy business.
|
●
|
REIL
reduced by £1,406 million during 2017 to £8,904 million
principally reflecting reductions in NatWest Markets, as legacy
portfolios are run-down, and reductions across UK PBB and Ulster
Bank RoI. REIL represented 2.7% of gross customer loans, compared
with 3.1% in 2016.
|
Q4 2017 compared with Q3 2017
|
|
●
|
A net impairment loss of £234 million, or 29 basis points of
gross customer loans, compared with £143 million in Q3
2017.
|
●
|
Ulster
Bank RoI reported a net impairment charge of €92 million,
compared with a release of €11 million in Q3 2017, which
included a provision relating to a change in the non
performing loan strategy to allow for further portfolio
sales.
|
●
|
Commercial
Banking net impairment losses of £117 million were £34
million lower than Q3 2017.
|
Q4 2017 compared with Q4 2016
|
|
●
|
A net impairment loss of £234 million, compared with a net
impairment release of £75 million in Q4 2016.
|
|
|
|
|
|
End-point CRR basis
|
||
|
31 December
|
30 September
|
31 December
|
|
2017
|
2017
|
2016
|
Risk asset ratios
|
%
|
%
|
%
|
|
|
|
|
CET1
|
15.9
|
15.5
|
13.4
|
Tier 1
|
17.9
|
17.4
|
15.2
|
Total
|
21.3
|
20.6
|
19.2
|
|
|
|
|
Capital
|
|
|
|
Tangible equity
|
35,164
|
35,621
|
34,982
|
|
|
|
|
Expected loss less impairment provisions
|
(1,286)
|
(1,197)
|
(1,371)
|
Prudential valuation adjustment
|
(496)
|
(459)
|
(532)
|
Deferred tax assets
|
(849)
|
(865)
|
(906)
|
Own credit adjustments
|
(90)
|
(110)
|
(304)
|
Pension fund assets
|
(287)
|
(185)
|
(208)
|
Cash flow hedging reserve
|
(227)
|
(298)
|
(1,030)
|
Other adjustments for regulatory purposes
|
28
|
51
|
(8)
|
|
|
|
|
Total deductions
|
(3,207)
|
(3,063)
|
(4,359)
|
CET1 capital
|
31,957
|
32,558
|
30,623
|
AT1 capital
|
4,041
|
4,041
|
4,041
|
Tier 1 capital
|
35,998
|
36,599
|
34,664
|
Tier 2 capital
|
6,765
|
6,841
|
9,161
|
|
|
|
|
Total regulatory capital
|
42,763
|
43,440
|
43,825
|
|
|
|
|
Risk-weighted assets
|
|
|
|
|
|
|
|
Credit risk
|
|
|
|
- non-counterparty
|
144,700
|
154,400
|
162,200
|
- counterparty
|
15,400
|
16,000
|
22,900
|
Market risk
|
17,000
|
16,400
|
17,400
|
Operational risk
|
23,800
|
23,800
|
25,700
|
|
|
|
|
Total RWAs
|
200,900
|
210,600
|
228,200
|
|
|
|
|
Leverage (1)
|
|
|
|
|
|
|
|
Cash and balances at central banks
|
98,300
|
88,200
|
74,200
|
Derivatives
|
160,800
|
171,700
|
247,000
|
Loans and advances
|
339,400
|
341,500
|
340,300
|
Reverse repos
|
40,700
|
36,700
|
41,800
|
Other assets
|
98,900
|
113,700
|
95,400
|
|
|
|
|
Total assets
|
738,100
|
751,800
|
798,700
|
Derivatives
|
|
|
|
- netting and variation margin
|
(161,700)
|
169,500
|
(241,700)
|
- potential future exposures
|
49,400
|
54,100
|
65,300
|
Securities financing transactions gross up
|
2,300
|
2,300
|
2,300
|
Undrawn commitments
|
53,100
|
52,600
|
58,600
|
Regulatory deductions and other adjustments
|
(2,100)
|
200
|
100
|
|
|
|
|
CRR Leverage exposure
|
679,100
|
691,500
|
683,300
|
|
|
|
|
CRR leverage ratio%
|
5.3
|
5.3
|
5.1
|
|
|
|
|
UK leverage exposure (2)
|
587,100
|
609,400
|
614,600
|
|
|
|
|
UK leverage ratio% (2)
|
6.1
|
6.0
|
5.6
|
(1)
|
Based
on end-point CRR Tier 1 capital and leverage exposure under the CRR
Delegated Act.
|
(2)
|
Based
on end-point CRR Tier 1 capital and UK leverage exposures
reflecting the post EU referendum measures announced by the Bank of
England in the third quarter of 2016.
|
|
Year ended 31 December 2017
|
|||||||||
|
PBB
|
|
CPB
|
|
|
|
Central
|
|
||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
other
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
5,130
|
421
|
|
2,286
|
464
|
325
|
|
203
|
158
|
8,987
|
Other non-interest income
|
1,347
|
186
|
|
1,198
|
214
|
64
|
|
887
|
(21)
|
3,875
|
Total income - adjusted (2)
|
6,477
|
607
|
|
3,484
|
678
|
389
|
|
1,090
|
137
|
12,862
|
Own credit adjustments
|
-
|
(3)
|
|
-
|
-
|
-
|
|
(66)
|
-
|
(69)
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(7)
|
(7)
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
26
|
321
|
347
|
Total income
|
6,477
|
604
|
|
3,484
|
678
|
389
|
|
1,050
|
451
|
13,133
|
Direct expenses - staff costs
|
(773)
|
(191)
|
|
(467)
|
(145)
|
(61)
|
|
(677)
|
(1,609)
|
(3,923)
|
- other costs
|
(259)
|
(66)
|
|
(232)
|
(32)
|
(25)
|
|
(287)
|
(2,727)
|
(3,628)
|
Indirect expenses
|
(2,126)
|
(194)
|
|
(1,115)
|
(268)
|
(116)
|
|
(564)
|
4,383
|
-
|
Operating expenses - adjusted (4)
|
(3,158)
|
(451)
|
|
(1,814)
|
(445)
|
(202)
|
|
(1,528)
|
47
|
(7,551)
|
Restructuring costs - direct
|
(79)
|
(27)
|
|
(48)
|
(20)
|
(5)
|
|
(319)
|
(1,067)
|
(1,565)
|
- indirect
|
(382)
|
(29)
|
|
(119)
|
(25)
|
(4)
|
|
(117)
|
676
|
-
|
Litigation and conduct costs
|
(210)
|
(169)
|
|
(33)
|
(39)
|
(8)
|
|
(237)
|
(589)
|
(1,285)
|
Operating expenses
|
(3,829)
|
(676)
|
|
(2,014)
|
(529)
|
(219)
|
|
(2,201)
|
(933)
|
(10,401)
|
Operating profit/(loss) before impairment
(losses)/releases
|
2,648
|
(72)
|
|
1,470
|
149
|
170
|
|
(1,151)
|
(482)
|
2,732
|
Impairment (losses)/releases
|
(235)
|
(60)
|
|
(362)
|
(6)
|
(3)
|
|
174
|
(1)
|
(493)
|
Operating profit/(loss)
|
2,413
|
(132)
|
|
1,108
|
143
|
167
|
|
(977)
|
(483)
|
2,239
|
Operating profit/(loss) - adjusted (2,4)
|
3,084
|
96
|
|
1,308
|
227
|
184
|
|
(264)
|
183
|
4,818
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
23.7%
|
(5.0%)
|
|
6.6%
|
6.4%
|
11.2%
|
|
(9.0%)
|
nm
|
2.2%
|
Return on equity - adjusted (2,4,5)
|
30.7%
|
3.6%
|
|
8.2%
|
11.3%
|
12.6%
|
|
(3.7%)
|
nm
|
8.8%
|
Cost:income ratio (3)
|
59.1%
|
111.9%
|
|
56.0%
|
78.0%
|
56.3%
|
|
nm
|
nm
|
79.0%
|
Cost:income ratio - adjusted (2,3,4)
|
48.8%
|
74.3%
|
|
50.0%
|
65.6%
|
51.9%
|
|
140.2%
|
nm
|
58.2%
|
Total assets (£bn)
|
190.6
|
24.6
|
|
149.5
|
20.3
|
25.9
|
|
277.9
|
49.3
|
738.1
|
Funded assets (£bn) (6)
|
190.6
|
24.5
|
|
149.5
|
20.3
|
25.9
|
|
118.7
|
47.7
|
577.2
|
Net loans and advances to customers (£bn)
|
161.7
|
19.5
|
|
97.0
|
13.5
|
8.7
|
|
22.7
|
0.1
|
323.2
|
Risk elements in lending (£bn)
|
2.0
|
3.3
|
|
3.2
|
0.1
|
0.1
|
|
0.3
|
(0.1)
|
8.9
|
Impairment provisions (£bn)
|
(1.3)
|
(1.1)
|
|
(1.2)
|
-
|
-
|
|
(0.2)
|
-
|
(3.8)
|
Customer deposits (£bn)
|
180.6
|
17.5
|
|
98.0
|
26.9
|
29.0
|
|
14.8
|
0.2
|
367.0
|
Risk-weighted assets (RWAs) (£bn)
|
43.0
|
18.0
|
|
71.8
|
9.1
|
5.1
|
|
52.9
|
1.0
|
200.9
|
RWA equivalent (£bn) (5)
|
46.7
|
18.9
|
|
76.8
|
9.1
|
5.2
|
|
56.4
|
1.1
|
214.2
|
Employee numbers (FTEs - thousands) (7)
|
19.8
|
2.7
|
|
4.6
|
1.5
|
1.6
|
|
5.7
|
35.3
|
71.2
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to this table refer to page 23. nm = not
meaningful
|
|
|
|
|
|
|
|
|
|
|
Quarter ended 31 December 2017
|
|||||||||
|
PBB
|
|
CPB
|
|
|
|
Central
|
|
||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
other
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
1,272
|
111
|
|
575
|
122
|
81
|
|
38
|
12
|
2,211
|
Other non-interest income
|
276
|
50
|
|
231
|
69
|
16
|
|
127
|
(123)
|
646
|
|
|
|
|
|
|
|
|
|
|
|
Total income adjusted (2)
|
1,548
|
161
|
|
806
|
191
|
97
|
|
165
|
(111)
|
2,857
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
9
|
-
|
9
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
26
|
165
|
191
|
Total income
|
1,548
|
161
|
|
806
|
191
|
97
|
|
200
|
54
|
3,057
|
Direct expenses - staff costs
|
(189)
|
(45)
|
|
(109)
|
(35)
|
(25)
|
|
(153)
|
(372)
|
(928)
|
- other costs
|
(73)
|
(25)
|
|
(66)
|
(14)
|
(15)
|
|
(83)
|
(907)
|
(1,183)
|
Indirect expenses
|
(554)
|
(45)
|
|
(344)
|
(78)
|
(23)
|
|
(154)
|
1,198
|
-
|
Operating expenses - adjusted (4)
|
(816)
|
(115)
|
|
(519)
|
(127)
|
(63)
|
|
(390)
|
(81)
|
(2,111)
|
Restructuring costs - direct
|
(55)
|
(2)
|
|
(6)
|
(19)
|
(3)
|
|
(129)
|
(317)
|
(531)
|
- indirect
|
(198)
|
(2)
|
|
(23)
|
(9)
|
-
|
|
(13)
|
245
|
-
|
Litigation and conduct costs
|
(197)
|
(135)
|
|
(27)
|
(39)
|
-
|
|
(51)
|
(315)
|
(764)
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
(1,266)
|
(254)
|
|
(575)
|
(194)
|
(66)
|
|
(583)
|
(468)
|
(3,406)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) before impairment
(losses)/releases
|
282
|
(93)
|
|
231
|
(3)
|
31
|
|
(383)
|
(414)
|
(349)
|
Impairment (losses)/releases
|
(60)
|
(81)
|
|
(117)
|
(2)
|
-
|
|
26
|
-
|
(234)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
222
|
(174)
|
|
114
|
(5)
|
31
|
|
(357)
|
(414)
|
(583)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - adjusted (2,4)
|
672
|
(35)
|
|
170
|
62
|
34
|
|
(199)
|
(192)
|
512
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
7.8%
|
(26.5%)
|
|
1.3%
|
(2.9%)
|
9.2%
|
|
(14.0%)
|
nm
|
(6.7%)
|
Return on equity - adjusted (2,4,5)
|
26.2%
|
(5.3%)
|
|
3.1%
|
12.1%
|
10.4%
|
|
(8.7%)
|
nm
|
4.0%
|
Cost:income ratio (6)
|
81.8%
|
157.8%
|
|
70.0%
|
101.6%
|
68.0%
|
|
nm
|
nm
|
111.5%
|
Cost:income ratio - adjusted (2,3,4)
|
52.7%
|
71.4%
|
|
62.8%
|
66.5%
|
64.9%
|
|
nm
|
nm
|
73.6%
|
Total assets (£bn)
|
190.6
|
24.6
|
|
149.5
|
20.3
|
25.9
|
|
277.9
|
49.3
|
738.1
|
Funded assets (£bn) (6)
|
190.6
|
24.5
|
|
149.5
|
20.3
|
25.9
|
|
118.7
|
47.7
|
577.2
|
Net loans and advances to customers (£bn)
|
161.7
|
19.5
|
|
97.0
|
13.5
|
8.7
|
|
22.7
|
0.1
|
323.2
|
Risk elements in lending (£bn)
|
2.0
|
3.3
|
|
3.2
|
0.1
|
0.1
|
|
0.3
|
(0.1)
|
8.9
|
Impairment provisions (£bn)
|
(1.3)
|
(1.1)
|
|
(1.2)
|
-
|
-
|
|
(0.2)
|
-
|
(3.8)
|
Customer deposits (£bn)
|
180.6
|
17.5
|
|
98.0
|
26.9
|
29.0
|
|
14.8
|
0.2
|
367.0
|
Risk-weighted assets (RWAs) (£bn)
|
43.0
|
18.0
|
|
71.8
|
9.1
|
5.1
|
|
52.9
|
1.0
|
200.9
|
RWA equivalent (£bn) (5)
|
46.7
|
18.9
|
|
76.8
|
9.1
|
5.2
|
|
56.4
|
1.1
|
214.2
|
Employee numbers (FTEs - thousands) (7)
|
19.8
|
2.7
|
|
4.6
|
1.5
|
1.6
|
|
5.7
|
35.3
|
71.2
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to this table refer to page 23. nm = not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
Year ended 31 December 2016
|
|||||||||
|
PBB
|
|
CPB
|
|
|
|
Central
|
|
||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
other (1)
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
4,945
|
409
|
|
2,143
|
449
|
303
|
|
343
|
116
|
8,708
|
Other non-interest income
|
1,182
|
164
|
|
1,272
|
208
|
71
|
|
763
|
4
|
3,664
|
|
|
|
|
|
|
|
|
|
|
|
Total income - adjusted (2)
|
6,127
|
573
|
|
3,415
|
657
|
374
|
|
1,106
|
120
|
12,372
|
Own credit adjustments
|
-
|
3
|
|
-
|
-
|
-
|
|
187
|
(10)
|
180
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(126)
|
(126)
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
(81)
|
245
|
164
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
6,127
|
576
|
|
3,415
|
657
|
374
|
|
1,212
|
229
|
12,590
|
Direct expenses - staff costs
|
(832)
|
(207)
|
|
(522)
|
(154)
|
(45)
|
|
(358)
|
(2,364)
|
(4,482)
|
- other costs
|
(320)
|
(55)
|
|
(235)
|
(44)
|
(17)
|
|
(119)
|
(2,948)
|
(3,738)
|
Indirect expenses
|
(2,246)
|
(195)
|
|
(1,179)
|
(313)
|
(107)
|
|
(1,607)
|
5,647
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - adjusted (4)
|
(3,398)
|
(457)
|
|
(1,936)
|
(511)
|
(169)
|
|
(2,084)
|
335
|
(8,220)
|
Restructuring costs - direct
|
(46)
|
(38)
|
|
(25)
|
(7)
|
(2)
|
|
(75)
|
(1,913)
|
(2,106)
|
- indirect
|
(198)
|
(2)
|
|
(83)
|
(30)
|
(3)
|
|
(115)
|
431
|
-
|
Litigation and conduct costs
|
(634)
|
(172)
|
|
(423)
|
(1)
|
-
|
|
(550)
|
(4,088)
|
(5,868)
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
(4,276)
|
(669)
|
|
(2,467)
|
(549)
|
(174)
|
|
(2,824)
|
(5,235)
|
(16,194)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) before impairment
(losses)/releases
|
1,851
|
(93)
|
|
948
|
108
|
200
|
|
(1,612)
|
(5,006)
|
(3,604)
|
Impairment (losses)/releases
|
(125)
|
113
|
|
(206)
|
3
|
(10)
|
|
(253)
|
-
|
(478)
|
Operating profit/(loss)
|
1,726
|
20
|
|
742
|
111
|
190
|
|
(1,865)
|
(5,006)
|
(4,082)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - adjusted (2,4)
|
2,604
|
229
|
|
1,273
|
149
|
195
|
|
(1,231)
|
455
|
3,674
|
|
|
|
|
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
16.2%
|
0.7%
|
|
4.1%
|
5.6%
|
13.8%
|
|
(12.5%)
|
nm
|
(17.9%)
|
Return on equity - adjusted (2,4,5)
|
25.1%
|
8.4%
|
|
8.4%
|
7.8%
|
14.2%
|
|
(8.7%)
|
nm
|
1.6%
|
Cost:income ratio (3)
|
69.8%
|
116.1%
|
|
71.0%
|
83.6%
|
46.5%
|
|
nm
|
nm
|
129.0%
|
Cost:income ratio - adjusted (2,3,4)
|
55.5%
|
79.8%
|
|
54.8%
|
77.8%
|
45.2%
|
|
188.4%
|
nm
|
66.0%
|
Total assets (£bn)
|
181.4
|
24.1
|
|
150.5
|
18.6
|
23.4
|
|
372.5
|
28.2
|
798.7
|
Funded assets (£bn) (6)
|
181.4
|
24.0
|
|
150.5
|
18.5
|
23.4
|
|
128.5
|
25.4
|
551.7
|
Net loans and advances to customers (£bn)
|
152.7
|
18.9
|
|
100.1
|
12.2
|
8.8
|
|
30.2
|
0.1
|
323.0
|
Risk elements in lending (£bn)
|
2.4
|
3.5
|
|
1.9
|
0.1
|
0.1
|
|
2.3
|
-
|
10.3
|
Impairment provisions (£bn)
|
(1.5)
|
(1.2)
|
|
(0.8)
|
-
|
-
|
|
(0.8)
|
(0.2)
|
(4.5)
|
Customer deposits (£bn)
|
170.0
|
16.1
|
|
97.9
|
26.6
|
25.2
|
|
17.9
|
0.2
|
353.9
|
Risk-weighted assets (RWAs) (£bn)
|
42.3
|
18.1
|
|
78.5
|
8.6
|
9.5
|
|
69.7
|
1.5
|
228.2
|
RWA equivalent (£bn) (5)
|
45.8
|
19.5
|
|
82.6
|
8.6
|
9.5
|
|
74.7
|
1.7
|
242.4
|
Employee numbers (FTEs - thousands)
|
21.6
|
3.1
|
|
5.5
|
1.7
|
0.8
|
|
1.6
|
43.5
|
77.8
|
For the notes to this table please refer to page 23. nm = not
meaningful.
|
|
|
|
|
|
|
Quarter ended 30 September 2017
|
|||||||||
|
PBB
|
|
CPB
|
|
|
|
Central
|
|
||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
other
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
1,294
|
104
|
|
570
|
116
|
83
|
|
99
|
38
|
2,304
|
Other non-interest income
|
463
|
46
|
|
358
|
50
|
14
|
|
(74)
|
1
|
858
|
Total income - adjusted (2)
|
1,757
|
150
|
|
928
|
166
|
97
|
|
25
|
39
|
3,162
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
(5)
|
-
|
(5)
|
Total income
|
1,757
|
150
|
|
928
|
166
|
97
|
|
20
|
39
|
3,157
|
|
|
|
|
|
|
|
|
|
|
|
Direct expenses - staff costs
|
(191)
|
(50)
|
|
(113)
|
(36)
|
(13)
|
|
(163)
|
(388)
|
(954)
|
- other costs
|
(55)
|
(17)
|
|
(55)
|
(6)
|
(3)
|
|
(72)
|
(612)
|
(820)
|
Indirect expenses
|
(525)
|
(52)
|
|
(252)
|
(58)
|
(33)
|
|
(132)
|
1,052
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - adjusted (4)
|
(771)
|
(119)
|
|
(420)
|
(100)
|
(49)
|
|
(367)
|
52
|
(1,774)
|
Restructuring costs - direct
|
(1)
|
(1)
|
|
(2)
|
(1)
|
(2)
|
|
(29)
|
(208)
|
(244)
|
- indirect
|
(47)
|
(8)
|
|
(19)
|
(2)
|
-
|
|
(28)
|
104
|
-
|
Litigation and conduct costs
|
-
|
(1)
|
|
(2)
|
-
|
(8)
|
|
(102)
|
(12)
|
(125)
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
(819)
|
(129)
|
|
(443)
|
(103)
|
(59)
|
|
(526)
|
(64)
|
(2,143)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) before impairment
(losses)/releases
|
938
|
21
|
|
485
|
63
|
38
|
|
(506)
|
(25)
|
1,014
|
Impairment (losses)/releases
|
(78)
|
10
|
|
(151)
|
3
|
2
|
|
71
|
-
|
(143)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
860
|
31
|
|
334
|
66
|
40
|
|
(435)
|
(25)
|
871
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - adjusted (2,4)
|
908
|
41
|
|
357
|
69
|
50
|
|
(271)
|
91
|
1,245
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
34.2%
|
4.6%
|
|
8.6%
|
13.2%
|
10.4%
|
|
(15.4%)
|
nm
|
4.5%
|
Return on equity - adjusted (2,4,5)
|
36.2%
|
6.1%
|
|
9.3%
|
13.8%
|
13.6%
|
|
(10.3%)
|
nm
|
8.2%
|
Cost:income ratio (3)
|
46.6%
|
86.0%
|
|
45.7%
|
62.0%
|
60.8%
|
|
nm
|
nm
|
67.5%
|
Cost:income ratio - adjusted (2,3,4)
|
43.9%
|
79.3%
|
|
43.1%
|
60.2%
|
50.5%
|
|
nm
|
nm
|
55.6%
|
Total assets (£bn)
|
190.1
|
25.1
|
|
147.3
|
19.9
|
24.3
|
|
305.0
|
40.1
|
751.8
|
Funded assets (£bn) (6)
|
190.1
|
25.1
|
|
147.3
|
19.9
|
24.3
|
|
134.9
|
38.4
|
580.0
|
Net loans and advances to customers (£bn)
|
160.8
|
19.5
|
|
96.6
|
13.3
|
9.3
|
|
25.1
|
0.1
|
324.7
|
Risk elements in lending (£bn)
|
2.0
|
3.4
|
|
1.7
|
0.1
|
0.1
|
|
1.6
|
0.1
|
9.0
|
Impairment provisions (£bn)
|
(1.3)
|
(1.1)
|
|
(0.8)
|
-
|
-
|
|
(0.5)
|
(0.2)
|
(3.9)
|
Customer deposits (£bn)
|
178.6
|
17.3
|
|
98.2
|
27.0
|
24.9
|
|
13.7
|
0.2
|
359.9
|
Risk-weighted assets (RWAs) (£bn)
|
43.3
|
17.9
|
|
74.6
|
9.2
|
9.6
|
|
54.9
|
1.1
|
210.6
|
RWA equivalent (£bn) (5)
|
47.0
|
18.9
|
|
77.4
|
9.2
|
9.6
|
|
59.1
|
1.3
|
222.5
|
Employee numbers (FTEs - thousands) (7)
|
20.5
|
2.8
|
|
4.9
|
1.6
|
0.8
|
|
6.0
|
37.0
|
73.6
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to this table refer to page 23. nm = not
meaningful.
|
|
|
|
|
|
|
Quarter ended 31 December 2016
|
|||||||||
|
PBB
|
|
CPB
|
|
|
|
Central
|
|
||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
other
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
1,263
|
105
|
|
542
|
111
|
77
|
|
73
|
37
|
2,208
|
Other non-interest income
|
293
|
32
|
|
325
|
50
|
19
|
|
(44)
|
446
|
1,121
|
Total income - adjusted (2)
|
1,556
|
137
|
|
867
|
161
|
96
|
|
29
|
483
|
3,329
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
(37)
|
(77)
|
(114)
|
Gain on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
1
|
1
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
1,556
|
137
|
|
867
|
161
|
96
|
|
(8)
|
407
|
3,216
|
Direct expenses - staff costs
|
(196)
|
(57)
|
|
(130)
|
(39)
|
(12)
|
|
(87)
|
(504)
|
(1,025)
|
- other costs
|
(76)
|
(23)
|
|
(69)
|
(12)
|
(4)
|
|
(10)
|
(1,000)
|
(1,194)
|
Indirect expenses
|
(602)
|
(65)
|
|
(357)
|
(95)
|
(45)
|
|
(417)
|
1,581
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - adjusted (4)
|
(874)
|
(145)
|
|
(556)
|
(146)
|
(61)
|
|
(514)
|
77
|
(2,219)
|
Restructuring costs - direct
|
(1)
|
(6)
|
|
(12)
|
(6)
|
(1)
|
|
(24)
|
(957)
|
(1,007)
|
- indirect
|
(50)
|
2
|
|
(34)
|
(8)
|
(1)
|
|
(30)
|
121
|
-
|
Litigation and conduct costs
|
(214)
|
(77)
|
|
(407)
|
1
|
(1)
|
|
(581)
|
(2,849)
|
(4,128)
|
Operating expenses
|
(1,139)
|
(226)
|
|
(1,009)
|
(159)
|
(64)
|
|
(1,149)
|
(3,608)
|
(7,354)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) before impairment
(losses)/releases
|
417
|
(89)
|
|
(142)
|
2
|
32
|
|
(1,157)
|
(3,201)
|
(4,138)
|
Impairment (losses)/releases
|
(27)
|
47
|
|
(83)
|
8
|
1
|
|
130
|
(1)
|
75
|
Operating profit/(loss)
|
390
|
(42)
|
|
(225)
|
10
|
33
|
|
(1,027)
|
(3,202)
|
(4,063)
|
Operating profit/(loss) - adjusted (2,4)
|
655
|
39
|
|
228
|
23
|
36
|
|
(355)
|
559
|
1,185
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
15.1%
|
(5.8%)
|
|
(9.1%)
|
1.6%
|
8.8%
|
|
(27.0%)
|
nm
|
(48.2%)
|
Return on equity - adjusted (2,4,5)
|
26.2%
|
5.4%
|
|
5.3%
|
4.5%
|
9.8%
|
|
(10.3%)
|
nm
|
8.6%
|
Cost:income ratio (3)
|
73.2%
|
165.0%
|
|
117.1%
|
98.8%
|
66.7%
|
|
nm
|
nm
|
230.2%
|
Cost:income ratio - adjusted (2,3,4)
|
56.2%
|
105.8%
|
|
62.6%
|
90.7%
|
63.5%
|
|
nm
|
nm
|
66.3%
|
Total assets (£bn)
|
181.4
|
24.1
|
|
150.5
|
18.6
|
23.4
|
|
372.5
|
28.2
|
798.7
|
Funded assets (£bn) (6)
|
181.4
|
24.0
|
|
150.5
|
18.5
|
23.4
|
|
128.5
|
25.4
|
551.7
|
Net loans and advances to customers (£bn)
|
152.7
|
18.9
|
|
100.1
|
12.2
|
8.8
|
|
30.2
|
0.1
|
323.0
|
Risk elements in lending (£bn)
|
2.4
|
3.5
|
|
1.9
|
0.1
|
0.1
|
|
2.3
|
-
|
10.3
|
Impairment provisions (£bn)
|
(1.5)
|
(1.2)
|
|
(0.8)
|
-
|
-
|
|
(0.8)
|
(0.2)
|
(4.5)
|
Customer deposits (£bn)
|
170.0
|
16.1
|
|
97.9
|
26.6
|
25.2
|
|
17.9
|
0.2
|
353.9
|
Risk-weighted assets (RWAs) (£bn)
|
42.3
|
18.1
|
|
78.5
|
8.6
|
9.5
|
|
69.7
|
1.5
|
228.2
|
RWA equivalent (£bn) (5)
|
45.8
|
19.5
|
|
82.6
|
8.6
|
9.5
|
|
74.7
|
1.7
|
242.4
|
Employee numbers (FTEs - thousands)
|
21.6
|
3.1
|
|
5.5
|
1.7
|
0.8
|
|
1.6
|
43.5
|
77.8
|
(1)
|
Central
items include unallocated transactions which principally comprise
volatile items under IFRS and balances in relation to international
private banking for Q1 2016.
|
(2)
|
Excluding
own credit adjustments, (loss)/gain on redemption of own debt and
strategic disposals.
|
(3)
|
Operating
lease depreciation included in income (year ended December 2017 -
£142 million; Q4 2017 - £35 million; year ended 31
December 2016 - £152 million, Q3 2017 - £35 million and
Q4 2016 -
£37 million).
|
(4)
|
Excluding
restructuring costs and litigation and conduct costs.
|
(5)
|
RBS's
CET 1 target is 13% but for the purposes of computing segmental
return on equity (ROE), to better reflect the differential drivers
of capital usage, segmental operating profit after tax and adjusted
for preference dividends is divided by average notional equity
allocated at different rates of 14% (Ulster Bank RoI - 11% prior to
Q1 2017), 11% (Commercial Banking), 14% (Private Banking - 15%
prior to Q1 2017), 16% (RBS International - 12% prior to November
2017) and 15% for all other segments, of the monthly average of
segmental risk-weighted assets incorporating the effect of capital
deductions (RWAes). RBS's Return on equity is calculated using
profit/(loss) for the period attributable to ordinary
shareholders.
|
(6)
|
Funded
assets exclude derivative assets.
|
(7)
|
On 1
January 2017 4.5 thousand employees on a FTE basis were transferred
from Central items to NatWest Markets in preparation for
ring-fencing. On 1 October 2017 0.8 thousand employees on a FTE
basis were transferred from Central Items to RBS International,
also in preparation for ring-fencing.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
Total income by segment
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
UK PBB
|
|
|
|
|
|
|
Personal advances
|
998
|
1,010
|
|
247
|
251
|
260
|
Personal deposits
|
841
|
732
|
|
198
|
207
|
184
|
Mortgages
|
2,641
|
2,560
|
|
657
|
674
|
658
|
Cards
|
743
|
653
|
|
145
|
310
|
159
|
Business banking
|
781
|
737
|
|
197
|
198
|
185
|
Commercial (1)
|
417
|
415
|
|
108
|
103
|
104
|
Other
|
56
|
20
|
|
(4)
|
14
|
6
|
Total
|
6,477
|
6,127
|
|
1,548
|
1,757
|
1,556
|
|
|
|
|
|
|
|
Ulster Bank RoI
|
|
|
|
|
|
|
Corporate
|
187
|
176
|
|
54
|
45
|
34
|
Retail
|
415
|
392
|
|
107
|
104
|
101
|
Other
|
2
|
8
|
|
-
|
1
|
2
|
Total
|
604
|
576
|
|
161
|
150
|
137
|
|
|
|
|
|
|
|
Commercial Banking
|
|
|
|
|
|
|
Commercial lending
|
1,880
|
1,875
|
|
404
|
515
|
503
|
Deposits
|
508
|
474
|
|
133
|
127
|
109
|
Asset and invoice finance
|
662
|
712
|
|
158
|
169
|
175
|
Other
|
434
|
354
|
|
111
|
117
|
80
|
Total
|
3,484
|
3,415
|
|
806
|
928
|
867
|
|
|
|
|
|
|
|
Private Banking
|
|
|
|
|
|
|
Investments
|
119
|
97
|
|
39
|
29
|
23
|
Banking
|
559
|
560
|
|
152
|
137
|
138
|
Total
|
678
|
657
|
|
191
|
166
|
161
|
|
|
|
|
|
|
|
RBS International
|
389
|
374
|
|
97
|
97
|
96
|
|
|
|
|
|
|
|
NatWest Markets
|
|
|
|
|
|
|
Rates
|
985
|
837
|
|
144
|
236
|
125
|
Currencies
|
470
|
551
|
|
102
|
112
|
157
|
Financing
|
456
|
344
|
|
99
|
119
|
89
|
Revenue share paid to other segments
|
(246)
|
(211)
|
|
(61)
|
(66)
|
(57)
|
Core income excluding OCA
|
1,665
|
1,521
|
|
284
|
401
|
314
|
Legacy
|
(575)
|
(415)
|
|
(119)
|
(376)
|
(285)
|
Total income - adjusted
|
1,090
|
1,106
|
|
165
|
25
|
29
|
Own credit adjustments
|
(66)
|
187
|
|
9
|
(5)
|
(37)
|
Strategic disposals
|
26
|
(81)
|
|
26
|
-
|
-
|
Total income
|
1,050
|
1,212
|
|
200
|
20
|
(8)
|
|
|
|
|
|
|
|
Central items & other
|
451
|
229
|
|
54
|
39
|
407
|
Total RBS
|
13,133
|
12,590
|
|
3,057
|
3,157
|
3,216
|
(1)
|
Commercial
income relating to business previously described as Williams &
Glyn.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
Impairment losses/(releases) by
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
segment
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
UK PBB
|
|
|
|
|
|
|
Personal advances
|
167
|
105
|
|
40
|
47
|
46
|
Mortgages
|
(42)
|
(20)
|
|
(8)
|
(1)
|
(41)
|
Cards
|
82
|
36
|
|
23
|
26
|
21
|
Business banking
|
4
|
(11)
|
|
(6)
|
3
|
(3)
|
Commercial
|
24
|
15
|
|
11
|
3
|
4
|
Total
|
235
|
125
|
|
60
|
78
|
27
|
|
|
|
|
|
|
|
Ulster Bank RoI
|
|
|
|
|
|
|
Mortgages
|
72
|
29
|
|
83
|
(12)
|
(30)
|
Commercial real estate
|
|
|
|
|
|
|
Investment
|
(6)
|
(24)
|
|
(6)
|
(2)
|
(1)
|
Development
|
(3)
|
(20)
|
|
-
|
3
|
(1)
|
Other lending
|
(3)
|
(98)
|
|
4
|
1
|
(15)
|
Total
|
60
|
(113)
|
|
81
|
(10)
|
(47)
|
|
|
|
|
|
|
|
Commercial Banking
|
|
|
|
|
|
|
Commercial real estate
|
29
|
4
|
|
29
|
1
|
8
|
Asset and invoice finance
|
57
|
35
|
|
19
|
10
|
21
|
Private sector services (education,
|
|
|
|
|
|
|
health etc)
|
22
|
8
|
|
8
|
-
|
7
|
Banks & financial institutions
|
-
|
2
|
|
-
|
(1)
|
-
|
Wholesale and retail trade repairs
|
59
|
15
|
|
48
|
-
|
6
|
Hotels and restaurants
|
1
|
27
|
|
(1)
|
-
|
7
|
Manufacturing
|
5
|
3
|
|
-
|
1
|
1
|
Construction
|
187
|
18
|
|
35
|
152
|
13
|
Other
|
2
|
94
|
|
(21)
|
(12)
|
20
|
Total
|
362
|
206
|
|
117
|
151
|
83
|
|
|
|
|
|
|
|
Private Banking
|
6
|
(3)
|
|
2
|
(3)
|
(8)
|
|
|
|
|
|
|
|
RBS International
|
3
|
10
|
|
-
|
(2)
|
(1)
|
|
|
|
|
|
|
|
NatWest Markets
|
(174)
|
253
|
|
(26)
|
(71)
|
(130)
|
|
|
|
|
|
|
|
Central items & other
|
1
|
-
|
|
-
|
-
|
1
|
Total RBS
|
493
|
478
|
|
234
|
143
|
(75)
|
|
31 December
|
30 September
|
31 December
|
|
2017
|
2017
|
2016
|
Loans and advances to customers (gross) by segment
|
£bn
|
£bn
|
£bn
|
UK PBB
|
|
|
|
Personal advances
|
7.1
|
7.0
|
6.9
|
Mortgages
|
136.8
|
135.7
|
128.0
|
Cards
|
4.0
|
3.9
|
4.2
|
Business banking
|
6.8
|
6.9
|
6.3
|
Commercial
|
8.3
|
8.6
|
8.8
|
Total
|
163.0
|
162.1
|
154.2
|
|
|
|
|
Ulster Bank RoI
|
|
|
|
Mortgages
|
15.4
|
15.4
|
15.3
|
Commercial real estate
|
|
|
|
Investment
|
0.9
|
0.9
|
0.7
|
Development
|
0.1
|
0.1
|
0.2
|
Other lending
|
4.2
|
4.2
|
3.9
|
Total
|
20.6
|
20.6
|
20.1
|
|
|
|
|
Commercial Banking
|
|
|
|
Commercial real estate
|
15.4
|
15.7
|
16.9
|
Asset and invoice finance
|
16.1
|
15.0
|
14.1
|
Private sector services (education, health etc)
|
6.9
|
7.0
|
6.9
|
Banks & financial institutions
|
7.1
|
8.3
|
8.9
|
Wholesale and retail trade repairs
|
7.8
|
7.9
|
8.4
|
Hotels and restaurants
|
3.5
|
3.6
|
3.7
|
Manufacturing
|
5.6
|
5.8
|
6.6
|
Construction
|
2.0
|
2.1
|
2.1
|
Other
|
33.8
|
32.0
|
33.3
|
Total
|
98.2
|
97.4
|
100.9
|
|
|
|
|
Private Banking
|
|
|
|
Personal advances
|
2.3
|
2.2
|
2.3
|
Mortgages
|
8.2
|
8.0
|
7.0
|
Other
|
3.0
|
3.1
|
2.9
|
Total
|
13.5
|
13.3
|
12.2
|
|
|
|
|
RBS International
|
|
|
|
Corporate
|
5.7
|
6.6
|
6.2
|
Mortgages
|
2.7
|
2.7
|
2.6
|
Other
|
0.3
|
-
|
-
|
Total
|
8.7
|
9.3
|
8.8
|
|
|
|
|
NatWest Markets
|
22.9
|
25.6
|
31.0
|
|
|
|
|
Central items & other
|
0.1
|
0.3
|
0.3
|
|
31 December
|
30 September
|
31 December
|
|
2017
|
2017
|
2016
|
Analysis of NatWest Markets RWAs
|
£bn
|
£bn
|
£bn
|
Total risk-weighted assets
|
52.9
|
54.9
|
69.7
|
Of which:
|
|
|
|
Core RWAs
|
32.3
|
31.8
|
35.2
|
Legacy RWAs ex Alawwal
|
14.0
|
16.1
|
26.6
|
Alawwal
|
6.6
|
7.0
|
7.9
|
|
|
|
|
2017 compared with 2016
|
|
●
|
Operating
profit was £2,413 million compared with £1,726 million in
2016. The increase was driven by higher income, lower adjusted
operating expenses and lower litigation and conduct charges,
partially offset by higher restructuring costs, largely relating to
the reduction in our property portfolio and costs associated with
the business previously described as Williams & Glyn, and
higher impairments. Return on equity increased to 23.7% from 16.2%
in 2016.
|
●
|
Total
income of £6,477 million was £350 million, or 5.7%,
higher than 2016, principally reflecting strong balance growth,
savings re-pricing benefits and a £185 million debt sale gain.
Net interest margin declined by 11 basis points to 2.86% driven by
lower mortgage margins, asset mix and reduced current account hedge
yield, partially offset by savings re-pricing benefits from actions
taken in 2016 and following the Q4 2017 base rate
increase.
|
●
|
Adjusted
operating expenses decreased by £240 million, or 7.1%, to
£3,158 million compared with 2016 driven by a £59
million, or 7.1%, reduction in staff costs, with headcount down
8.3%, and a £181 million reduction in operational costs
following process and productivity improvements in service
operations and re-integration benefits in respect of the business
previously described as Williams & Glyn(1). Adjusted
cost:income ratio improved to 48.8% in 2017 compared with 55.5% in
2016.
|
●
|
The net
impairment charge of £235 million, or 14 basis points of gross
customer loans, reflected continued benign credit conditions. 2017
had lower recoveries partly as a result of the debt sales
undertaken, compared with 2016. Defaults remained at very low
levels across all portfolios compared to historic trends, although
slightly higher than in 2016.
|
●
|
Net
loans and advances increased by £9.0 billion, or 5.9%, to
£161.7 billion as UK PBB continued to deliver support for both
personal and business banking customers. Gross new mortgage lending
in 2017 was £31.0 billion with market share of new mortgages
at approximately 12%, resulting in stock share of approximately 10%
at 31 December 2017 compared with 9.7% at 31 December 2016.
Positive momentum continued across business banking lending, with
net balances up 3.0% compared with 31 December 2016, adjusting for
transfers(3).
|
●
|
Customer
deposits increased by £10.6 billion, or 6.2%, to £180.6
billion, driven by strong personal current account and business
deposit growth.
|
●
|
UK PBB
includes commercial income from the business previously described
as Williams & Glyn of approximately £417 million, gross
loans and advances of £8.3 billion and deposits of £14.3
billion. An estimated £70 million of the commercial income,
£1.7 billion of gross loans and advances and £1.8 billion
of deposits relates to mid-corporate customers not subject to the
European Commission alternative remedies package. 120,000 of the
remaining approximately 220,000 customers will be subject to the
remedies package.
|
Q4 2017 compared with Q3 2017
|
|
●
|
Operating
profit decreased by £638 million compared with Q3 2017
principally driven by higher restructuring and litigation and
conduct costs and lower income, as Q3 2017 included a £168
million debt sale gain whilst Q4 2017 included a charge of £16
million following an annual review of mortgage customer repayment
behaviour.
|
●
|
Gross
new mortgage lending in the quarter was £8.0 billion with
market share of new mortgages at approximately 12%. Mortgage
approval share decreased to approximately 12%, from around 14% in
Q3 2017, in part reflecting intense price competition in the
market.
|
●
|
Net
interest margin decreased by 7 basis points to 2.76% driven by the
charge associated with the annual review of mortgage customer
repayment behaviour, asset mix and lower mortgage new business
margins, which were 14 basis points lower in the quarter as a
result of intense market price competition. Current account hedge
returns are now stable.
|
●
|
Adjusted
operating expenses increased by £45 million principally due to
the annual UK bank levy charge, £33 million, and other timing
and seasonal factors.
|
●
|
An
impairment charge of £60 million was £18 million lower
than Q3 2017 mainly due to higher portfolio provision releases.
Default levels remained stable.
|
Q4 2017 compared with Q4 2016
|
|
●
|
Operating
profit decreased by £168 million compared with Q4 2016
primarily due to an increase in restructuring costs and lower
impairment write backs, partially offset by lower litigation and
conduct costs.
|
●
|
Net
interest margin decreased 15 basis points driven by reduced
mortgage margins and lower deposit hedge income, partially offset
by savings re-pricing benefits and higher funding benefits on
savings, following the base rate increase in Q4 2017.
|
●
|
Adjusted
operating expenses decreased by £58 million, or 6.6%, to
£816 million compared with Q4 2016 driven by a £51
million reduction in operational costs reflecting continued
operations and re-integrations benefits in respect of the business
previously described as Williams & Glyn. Staff costs were
£7 million, or 3.6%, lower with headcount 8.3%
lower.
|
2017 compared with 2016
|
|
●
|
An operating loss of €151 million compared with a €24
million profit in 2016 primarily reflecting a €206 million
increase in impairment losses, largely relating to a change in the
non performing loan strategy to allow for further portfolio
sales. Adjusted
return on equity was 3.6% compared with 8.4% in
2016.
|
●
|
Adjusted
income of €693 million was €8 million, or 1.1%, lower
than 2016 primarily reflecting a €53 million reduction in
income on free funds, partially offset by one off items, higher
lending income and reduced funding costs. Net interest margin of
1.67% was 5 basis points higher than 2016 reflecting a combination
of improved deposit and loan margins, one-off income adjustments
and successful deleveraging measures in 2016 which have reduced the
concentration of low yielding loans.
|
●
|
Adjusted
operating expenses of €516 million were 7.7% lower than 2016
primarily due to continued progress in the delivery of cost saving
initiatives, as evidenced by a 12.9% reduction in headcount, and
lower pension costs.
Adjusted
cost:income ratio of 74.3% compared with 79.8% in
2016.
|
●
|
A
litigation and conduct provision of €192 million related to
customer remediation and project costs associated with legacy
business issues.
|
●
|
A net
impairment loss of €68 million compared with a €138
million release in 2016. The movement was driven by a provision
relating to a change in the non performing loan strategy to allow
for further portfolio sales, gains associated with asset disposals
in 2016 and refinements to the mortgage provision models in 2017.
REILs were €3.7 billion, 9.8% lower than 2016 reflecting
credit quality improvements.
|
●
|
Ulster
Bank RoI gross new lending was €2.6 billion in 2017, up 3.4%
compared with 2016.
|
●
|
RWAs of
€20.2 billion reduced by €0.9 billion, or 4.3%,
compared with 2016.
|
Q4 2017 compared with Q3 2017
|
|
●
|
An
operating loss of €199 million compared with a profit of
€36 million in Q3 2017. An impairment charge of €92
million, compared with a release of €11 million in Q3 2017,
included a provision for a change in the non performing loan
strategy, partially offset by releases relating to improvements in
the housing market. In addition Ulster Bank RoI recognised a
€153 million conduct and litigation provision in Q4 2017 for
customer remediation and project costs associated with legacy
business issues.
|
●
|
Net
interest margin increased by 18 basis points to 1.76% primarily
driven by one off income gains in Q4 2017.
|
Q4 2017 compared with Q4 2016
|
|
●
|
An
operating loss of €199 million was €145 million higher
than Q4 2016 primarily due to a provision for a change in the non
performing loan strategy and a €60 million increase in
litigation and conduct costs, relating to legacy business
issues.
|
●
|
Adjusted
operating expenses reduced by 21.9% driven by one off charges in Q4
2016 and the benefit of transformation activity and lower pension
costs.
|
(1)
|
The
business previously described as Williams & Glyn was integrated
in to the reportable operating segment UK PBB in Q4 2017 and
prior year comparatives re-presented.
|
(2)
|
UK PBB
Collective Investment Funds (CIFL) business was transferred to
Private Banking on 1 October 2017. CIFL Business transfer included
total income of £33 million and total expenses of £9
million. Comparatives were not re-presented.
|
(3)
|
Transfers
include £0.4 billion loans and advances transferred from
Commercial Banking to UK PBB during 2017 to better align Business
banking customers. Comparatives were not re-presented.
|
2017 compared with 2016
|
|
●
|
Operating
profit of £1,108 million compared with £742 million in
2016, primarily reflecting a reduction in litigation and conduct
costs. Adjusted operating profit of £1,308 million was
£35 million, or 2.7%, higher than 2016 reflecting lower
adjusted operating expenses and higher income, partially offset by
higher impairments. Adjusted return on equity remained broadly
stable at 8.2%.
|
●
|
Total
income increased by £69 million, or 2.0%, to £3,484
million primarily reflecting increased volumes in targeted segments
and re-pricing benefits on deposits. Net interest margin decreased
by 2 basis points as active re-pricing of assets and deposits has
been more than offset by wider asset margin pressure in a low rate
environment.
|
●
|
Adjusted
operating expenses of £1,814 million were £122 million,
or 6.3%, lower than 2016, reflecting operating model simplification
and productivity improvements, including a 16.4% reduction in front
office headcount, and a £25 million intangible asset
write-down in 2016. Adjusted cost:income ratio improved to 50.0%
compared with 54.8% in 2016.
|
●
|
Net
impairment losses of £362 million were £156 million
higher than 2016, reflecting a small number of single name
impairments.
|
●
|
Adjusting
for transfers(1), net loans and
advances decreased by £4.9 billion to £97.0 billion,
compared with 2016, as growth in targeted segments has been more
than offset by active capital management of the lending book.
|
●
|
Adjusting
for transfers(1), RWAs decreased by
£8.2 billion, or 10.4%, to £71.8 billion compared with
2016 reflecting active capital management of the lending book,
achieving £12.5 billion of gross RWA reductions.
|
Q4 2017 compared with Q3 2017
|
|
●
|
Operating
profit of £114 million was £220 million lower than Q3
2017 principally reflecting increased operating expenses, largely
due to the annual UK bank levy charge, £91 million, and lower
income.
|
●
|
Total
income decreased by £122 million to £806 million compared
with Q3 2017 reflecting asset disposal and fair value losses of
£46 million, compared with an asset disposal gain of £52
million in Q3 2017, and lower lending volumes.
|
●
|
Adjusting
for transfers(1), RWAs decreased by
£4.3 billion to £71.8 billion compared with Q3 2017
reflecting active capital management of the lending
book.
|
|
|
Q4 2017 compared with Q4 2016
|
|
●
|
Operating
profit of £114 million compared with a loss of £225
million in Q4 2016, primarily reflecting lower conduct and
litigation costs.
|
●
|
Total
income decreased by £61 million, or 7.0%, to £806 million
compared with Q4 2016, principally reflecting asset disposal and
fair value losses of £46 million and lower lending volumes.
Net interest margin increased by 7 basis points to 1.75% primarily
due to asset and deposit re-pricing activity.
|
●
|
Adjusted
operating expenses decreased by £37 million, or 6.7%, to
£519 million reflecting cost efficiencies and reduced
headcount.
|
(1)
|
Shipping
and other activities which were formerly in Capital Resolution,
were transferred from NatWest Markets on 1 October 2017, including
net loans and advances to
customers
of £2.6 billion and RWAs of £2.1 billion. Commercial
Banking transferred whole business securitisations and relevant
financial institution's (RFI) to NatWest Markets
during
December 2017, including net loans and advances to customers of
£0.8 billion and RWAs of £0.6 billion. Comparatives were
not re-presented for these transfers.
|
2017 compared with 2016
|
|
●
|
Operating profit increased by £32 million, or 28.8%, to
£143 million compared with 2016 and return on equity increased
from 5.6% to 6.4%. Adjusted operating profit of £227 million
was £78 million, or 52.3%, higher than 2016 primarily
reflecting lower adjusted operating expenses and higher
income. Adjusted return on
equity increased to 11.3% from 7.8% in 2016.
|
●
|
Adjusting
for transfers(1),total income
increased by £12 million to £678 million due to increased
lending volumes and an £8 million gain on a property sale,
partially offset by ongoing margin pressure. Net interest margin
fell 19 basis points to 2.47% reflecting the competitive market and
low rate environment.
|
●
|
Adjusted
operating expenses of £445 million decreased by £66
million, or 12.9%, compared with 2016 largely reflecting management
actions to reduce costs, including an 11.8% reduction in front
office headcount. Adjusted cost:income ratio improved to 65.6%
compared with 77.8% in 2016.
|
●
|
Net
loans and advances of £13.5 billion were £1.3 billion, or
10.7%, higher than 2016 principally driven by growth in
mortgages.
|
●
|
Adjusting
for transfers(1), assets under
management were £2.4 billion, or 14.4%, higher than 2016 at
£21.5 billion, reflecting both organic growth and favourable
market conditions.
|
●
|
RWAs of
£9.1 billion were £0.5 billion, or 5.8%, higher than 2016
primarily due to increased mortgage lending.
|
Q4 2017 compared with Q3 2017
|
|
●
|
An
operating loss of £5 million in Q4 2017, compared with a
profit of £66 million in Q3 2017, principally due to increased
litigation and conduct costs and increased restructuring costs.
Adjusted operating profit of £62 million decreased by £7
million compared with Q3 2017, primarily reflecting higher adjusted
operating expenses partially offset by higher income.
|
●
|
Adjusting
for transfers(1), total income
increased by £16 million to £191 million, compared with
Q3 2017, reflecting improved margins and an £8 million gain on
a property sale. Net interest margin increased by 5 basis points to
2.44% due to re-pricing benefits and higher funding benefits on
deposits following the Q4 2017 base rate increase.
|
●
|
Adjusted
operating expenses increased by £27 million to £127
million principally due to the annual UK bank levy charge, £18
million.
|
Q4 2017 compared with Q4 2016
|
|
●
|
An
operating loss of £5 million in Q4 2017 compared with a profit
of £10 million in Q4 2016, reflecting increased litigation and
conduct costs and increased restructuring costs, partially offset
by increased income. Adjusted operating profit of £62 million
was £39 million higher than Q4 2016 principally due to higher
income and lower adjusted expenses.
|
●
|
Adjusting
for transfers(1), total income
increased by £21 million to £191 million compared with Q4
2016 reflecting higher lending volumes, re-pricing benefits and an
£8 million gain on a property sale, partially offset by margin
pressures.
|
●
|
Adjusted
operating expenses decreased by £19 million, or 13.0%, to
£127 million reflecting cost efficiencies and reduced
headcount.
|
(1)
|
UK PBB Collective Investment Funds (CIFL) business was transferred
from UK PBB on 1 October 2017, including total income in Q4 2017of
£11 million and assets under management of £3.3 billion.
Private Banking transferred Coutts Crown Dependencies (CCD) to RBS
International during Q4 2017, including total income of £2
million and assets under management of £1.2 billion.
Comparatives were not re-presented for these
transfers.
|
2017 compared with 2016
|
|
●
|
Operating
profit of £167 million decreased by £23 million, or
12.1%, compared with 2016 and return on equity decreased to 11.2%
from 13.8%, reflecting increased operational costs associated with
the creation of a bank outside the ring-fence, partially offset by
higher income. Adjusted return on equity decreased to 12.6% from
14.2% in 2016 and adjusted cost:income ratio of 51.9% increased
from 45.2% in 2016.
|
●
|
Total
income increased by £15 million, or 4.0%, to £389 million
driven by increased average lending balances in 2017 and re-pricing
benefits on the deposit book.
|
●
|
Net
loans and advances were broadly stable compared with 2016 and
customer deposits increased by £3.8 billion to £29.0
billion primarily reflecting increased short term placements in the
Funds sector.
|
●
|
RWAs of
£5.1 billion reduced by £4.4 billion, or 46.3%, compared
with 2016, reflecting the benefit of receiving the Advanced
Internal Rating Based Waiver on the wholesale corporate book in
November 2017, in advance of becoming a bank outside the
ring-fence.
|
●
|
From
1st Jan 2018 RBS International will include the funds and trustee
depositary business transferred from Commercial Banking, which
generated around £150 million of income and £60 million
of costs in 2017.
|
Q4 2017 compared with Q3 2017
|
|
●
|
Operating
profit of £31 million was £9 million lower than Q3 2017
principally reflecting the Q4 2017 bank levy charge of £14
million.
|
●
|
RWAs
were £5.1 billion, a decrease of £4.5 billion compared
with Q3 2017 reflecting the benefit of receiving the Advanced
Internal Rating Based Waiver on the wholesale corporate book in
November 2017, in advance of becoming a bank outside the
ring-fence.
|
Q4 2017 compared with Q4 2016
|
|
●
|
Adjusted
operating expenses increased by £2 million, or 3.3%, to
£63 million reflecting increased operational costs associated
with the creation of a bank outside the ring-fence.
|
2017 compared with 2016
|
|
●
|
An
operating loss of £977 million compared with £1,865
million in 2016. The core business operating profit increased by
£427 million to £41 million reflecting lower litigation
and conduct costs, lower adjusted costs and higher income,
partially offset by increased restructuring costs reflecting back
office restructuring activity. Adjusted operating loss of £264
million, compared with £1,231 million in 2016, reflecting
lower adjusted costs and a net impairment release of £174
million in 2017, compared with a charge of £253 million in
2016.
|
●
|
Total income of £1,050 million compared with £1,212
million in 2016. In the core business, adjusted income increased by
£144 million, or 9.5%, to £1,665 million, principally
driven by Rates as the business navigated markets well despite a
lower level of customer activity than in 2016, which benefited from
favourable market conditions following the EU
referendum.
|
●
|
Adjusted
operating expenses of £1,528 million were £556 million,
or 26.7%, lower than 2016. In the legacy business, adjusted
operating expenses decreased significantly reflecting a 77.7%
reduction in headcount as the business moved towards closure. In
the core business, adjusted operating expenses reduced as the
business continues to drive cost reductions. NatWest Markets
adjusted costs, excluding costs associated with the legacy
business, were £1,268 million compared to £1,320 million
in 2016.
|
●
|
RWAs
decreased by £15.3 billion, adjusting for
transfers(1),
to £52.9 billion primarily reflecting reductions in the legacy
business. In the core business RWAs decreased by £3.1 billion
to £32.3 billion reflecting lower counterparty credit risk
through mitigation activities and business initiatives. At the end
of 2017 the legacy business within NatWest Markets had RWAs of
£14.0 billion, excluding RBS's stake in Alawwal Bank, a
reduction of £10.9 billion, adjusting for
transfers(1),
over the course of the year.
|
●
|
Funded
assets fell to £118.7 billion, a reduction of £7.3
billion, adjusting for transfers(1), mainly reflecting
disposal activity.
|
(1)
|
Shipping and other activities which were formerly in Capital
Resolution, were transferred to Commercial Banking on 1 October
2017, including total funded assets of £3.3 billion, net loans
and advances to customers of £2.6 billion, and RWAs of
£2.1 billion. Whole business securitisations and relevant
financial institutions (RFI) were transferred from Commercial
Banking during December 2017, including net loans and advances to
customers of £0.8 billion, and RWAs of £0.6 billion.
Comparatives were not re-presented for these
transfers.
|
Q4 2017 compared with Q3 2017
|
|
●
|
An
operating loss of £357 million compared with £435 million
in Q3 2017 reflecting higher income partially offset by higher
restructuring costs. Adjusted income in the core business decreased
by £117 million to £284 million, reflecting seasonally
lower customer activity and more challenging market conditions in
Q4 2017.
|
●
|
Adjusted
operating expenses increased by £23 million to £390
million principally due to the annual UK bank levy charge, £28
million.
|
●
|
Adjusting
for transfers(1), RWAs decreased by
£0.5 billion to £52.9 billion and funded assets decreased
by £13.7 billion to £118.7 billion principally reflecting
ongoing reductions in the legacy business and seasonally lower
balances in the core business.
|
Q4 2017 compared with Q4 2016
|
|
●
|
Adjusted income of £165 million was £136 million higher
than Q4 2016 largely reflecting lower legacy business disposal
losses. In the core business, adjusted income of £284 million
was £30 million, or 9.6%, lower than Q4 2016 primarily due to
lower levels of customer activity.
|
●
|
Legacy
disposal losses, other adjustments and impairments decreased by
£83 million to £112 million.
|
●
|
Adjusted
expenses decreased by £124 million to £390 million driven
by headcount reductions in the legacy business.
|
2017 compared with 2016
|
|
●
|
Central
items not allocated represented a charge of £483 million in
2017, compared with a £5,006 million charge in 2016, and
included litigation and conduct costs of £589 million,
compared with £4,088 million in 2016. Treasury funding costs
were a charge of £58 million, compared with a charge of
£94 million in 2016. Restructuring costs in the year included
£94 million relating to the former Williams & Glyn
business, compared with £1,399 million in 2016. In addition to
a VAT recovery of £86 million, compared with £227 million
in 2016, a £156 million gain on the sale of Vocalink and a
£135 million gain in relation to the sale of
EuroClear(2).
|
Q4 2017 compared with Q3 2017
|
|
●
|
Central
items not allocated represented a charge of £414 million in
the quarter, compared with a £25 million charge in Q3 2017,
and included litigation and conduct costs of £315 million,
compared with £12 million in Q3 2017. Q4 2017 Treasury funding
costs were a charge of £129 million, compared with £61
million in Q3 2017, and included a £173 million IFRS
volatility charge.
|
Q4 2017 compared with Q4 2016
|
|
●
|
Central
items not allocated represented a charge of £414 million in
the quarter, compared with a £3,202 million charge in Q4 2016,
and included litigation and conduct costs of £315 million,
compared with £2,849 million in 2016. Q4 2017 Treasury funding
costs were a charge of £129 million, compared with a gain of
£465 million in Q4 2016, and included a £173 million IFRS
volatility charge and an FX loss of £8 million, compared with
a £308 million IFRS volatility gain and a £140 million FX
gain in Q4 2016.
|
(1)
|
Shipping and other activities which were formerly in Capital
Resolution, were transferred to Commercial Banking on 1 October
2017, including total funded assets of £3.3 billion, net loans
and advances to customers of £2.6 billion, and RWAs of
£2.1 billion. Whole business securitisations and relevant
financial institutions (RFI) were transferred from Commercial
Banking during December 2017, including net loans and advances to
customers of £0.8 billion, and RWAs of £0.6 billion.
Comparatives were not re-presented for these
transfers.
|
(2)
|
The total gain in relation to the sale of Euroclear was £161
million, of which £135 million central items and £26
million NatWest Markets.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Interest receivable
|
11,034
|
11,258
|
|
2,754
|
2,818
|
2,770
|
Interest payable
|
(2,047)
|
(2,550)
|
|
(543)
|
(514)
|
(562)
|
|
|
|
|
|
|
|
Net interest income
(1)
|
8,987
|
8,708
|
|
2,211
|
2,304
|
2,208
|
|
|
|
|
|
|
|
Fees and commissions receivable
|
3,338
|
3,340
|
|
846
|
826
|
821
|
Fees and commissions payable
|
(883)
|
(805)
|
|
(231)
|
(204)
|
(213)
|
Income from trading activities
|
634
|
974
|
|
(198)
|
(52)
|
590
|
(Loss)/gain on redemption of own debt
|
(7)
|
(126)
|
|
-
|
-
|
1
|
Other operating income
|
1,064
|
499
|
|
429
|
283
|
(191)
|
|
|
|
|
|
|
|
Non-interest income
|
4,146
|
3,882
|
|
846
|
853
|
1,008
|
|
|
|
|
|
|
|
Total income
|
13,133
|
12,590
|
|
3,057
|
3,157
|
3,216
|
|
|
|
|
|
|
|
Staff costs
|
(4,676)
|
(5,124)
|
|
(1,100)
|
(1,129)
|
(1,142)
|
Premises and equipment
|
(1,565)
|
(1,388)
|
|
(524)
|
(363)
|
(382)
|
Other administrative expenses
|
(3,323)
|
(8,745)
|
|
(1,587)
|
(528)
|
(5,511)
|
Depreciation and amortisation
|
(808)
|
(778)
|
|
(178)
|
(119)
|
(249)
|
Write down of other intangible assets
|
(29)
|
(159)
|
|
(17)
|
(4)
|
(70)
|
|
|
|
|
|
|
|
Operating expenses
|
(10,401)
|
(16,194)
|
|
(3,406)
|
(2,143)
|
(7,354)
|
|
|
|
|
|
|
|
Profit/(loss) before impairment
|
|
|
|
|
|
|
(losses)/releases
|
2,732
|
(3,604)
|
|
(349)
|
1,014
|
(4,138)
|
Impairment (losses)/releases
|
(493)
|
(478)
|
|
(234)
|
(143)
|
75
|
|
|
|
|
|
|
|
Operating profit/(loss) before tax
|
2,239
|
(4,082)
|
|
(583)
|
871
|
(4,063)
|
Tax (charge)/credit
|
(824)
|
(1,166)
|
|
168
|
(265)
|
(244)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) for the period
|
1,415
|
(5,248)
|
|
(415)
|
606
|
(4,307)
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
Non-controlling interests
|
35
|
10
|
|
14
|
(8)
|
(27)
|
Preference share and other dividends
|
628
|
504
|
|
150
|
222
|
161
|
Dividend access share
|
-
|
1,193
|
|
-
|
-
|
-
|
Ordinary shareholders
|
752
|
(6,955)
|
|
(579)
|
392
|
(4,441)
|
|
|
|
|
|
|
|
Earnings/(loss) per ordinary share (EPS)
|
|
|
|
|
|
|
Earnings/(loss) per ordinary share (2)
|
6.3p
|
(59.5p)
|
|
(4.9p)
|
3.3p
|
(37.7p)
|
(1)
|
Negative
interest on loans and advances is classed as interest payable.
Negative interest on customer deposits is classed as interest
receivable.
|
(2)
|
There
is no dilutive impact in any period.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Profit/(loss) for the period
|
1,415
|
(5,248)
|
|
(415)
|
606
|
(4,307)
|
Items that do not qualify for reclassification
|
|
|
|
|
|
|
Gain/(loss) on remeasurement of retirement benefit
schemes
|
90
|
(1,049)
|
|
116
|
-
|
(2)
|
Loss on fair value of credit in financial liabilities
|
|
|
|
|
|
|
designated at fair value through profit or loss
|
|
|
|
|
|
|
due to own credit risk
|
(126)
|
-
|
|
(19)
|
(30)
|
-
|
Tax
|
(10)
|
288
|
|
(5)
|
3
|
3
|
|
(46)
|
(761)
|
|
92
|
(27)
|
1
|
Items that do qualify for reclassification
|
|
|
|
|
|
|
Available-for-sale financial assets
|
26
|
(94)
|
|
(11)
|
8
|
68
|
Cash flow hedges
|
(1,069)
|
765
|
|
(86)
|
(372)
|
(750)
|
Currency translation
|
100
|
1,263
|
|
18
|
(21)
|
(13)
|
Tax
|
256
|
(106)
|
|
19
|
76
|
191
|
|
(687)
|
1,828
|
|
(60)
|
(309)
|
(504)
|
Other comprehensive (loss)/income after tax
|
(733)
|
1,067
|
|
32
|
(336)
|
(503)
|
|
|
|
|
|
|
|
Total comprehensive income/(loss) for the period
|
682
|
(4,181)
|
|
(383)
|
270
|
(4,810)
|
|
|
|
|
|
|
|
Total comprehensive income/(loss) is attributable to:
|
|
|
|
|
|
|
Non-controlling interests
|
52
|
121
|
|
22
|
(19)
|
(36)
|
Preference shareholders
|
234
|
260
|
|
79
|
70
|
68
|
Paid-in equity holders
|
394
|
244
|
|
71
|
152
|
93
|
Dividend access share
|
-
|
1,193
|
|
-
|
-
|
-
|
Ordinary shareholders
|
2
|
(5,999)
|
|
(555)
|
67
|
(4,935)
|
|
682
|
(4,181)
|
|
(383)
|
270
|
(4,810)
|
|
31 December
|
30 September
|
31 December
|
2017
|
2017
|
2016
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
Assets
|
|
|
|
Cash and balances at central banks
|
98,337
|
88,210
|
74,250
|
Net loans and advances to banks
|
16,254
|
16,671
|
17,278
|
Reverse repurchase agreements and stock borrowing
|
13,997
|
12,905
|
12,860
|
Loans and advances to banks
|
30,251
|
29,576
|
30,138
|
Net loans and advances to customers
|
323,184
|
324,650
|
323,023
|
Reverse repurchase agreements and stock borrowing
|
26,735
|
23,767
|
28,927
|
Loans and advances to customers
|
349,919
|
348,417
|
351,950
|
Debt securities
|
78,933
|
87,860
|
72,522
|
Equity shares
|
450
|
507
|
703
|
Settlement balances
|
2,517
|
8,528
|
5,526
|
Derivatives
|
160,843
|
171,720
|
246,981
|
Intangible assets
|
6,543
|
6,484
|
6,480
|
Property, plant and equipment
|
4,602
|
4,777
|
4,590
|
Deferred tax
|
1,740
|
1,637
|
1,803
|
Prepayments, accrued income and other assets
|
3,921
|
4,046
|
3,713
|
|
|
|
|
Total assets
|
738,056
|
751,762
|
798,656
|
|
|
|
|
Liabilities
|
|
|
|
Bank deposits
|
39,479
|
36,186
|
33,317
|
Repurchase agreements and stock lending
|
7,419
|
7,047
|
5,239
|
Deposits by banks
|
46,898
|
43,233
|
38,556
|
Customer deposits
|
367,034
|
359,879
|
353,872
|
Repurchase agreements and stock lending
|
31,002
|
33,245
|
27,096
|
Customer accounts
|
398,036
|
393,124
|
380,968
|
Debt securities in issue
|
30,559
|
31,700
|
27,245
|
Settlement balances
|
2,844
|
9,094
|
3,645
|
Short positions
|
28,527
|
31,793
|
22,077
|
Derivatives
|
154,506
|
164,394
|
236,475
|
Provisions for liabilities and charges
|
7,757
|
7,109
|
12,836
|
Accruals and other liabilities
|
6,402
|
6,925
|
7,006
|
Retirement benefit liabilities
|
129
|
152
|
363
|
Deferred tax
|
583
|
516
|
662
|
Subordinated liabilities
|
12,722
|
14,248
|
19,419
|
|
|
|
|
Total liabilities
|
688,963
|
702,288
|
749,252
|
|
|
|
|
Equity
|
|
|
|
Non-controlling interests
|
763
|
746
|
795
|
Owners' equity*
|
|
|
|
Called up share capital
|
11,965
|
11,906
|
11,823
|
Reserves
|
36,365
|
36,822
|
36,786
|
|
|
|
|
Total equity
|
49,093
|
49,474
|
49,404
|
|
|
|
|
Total liabilities and equity
|
738,056
|
751,762
|
798,656
|
|
|
|
|
*Owners' equity attributable to:
|
|
|
|
Ordinary shareholders
|
41,707
|
42,105
|
41,462
|
Other equity owners
|
6,623
|
6,623
|
7,147
|
|
|
|
|
|
48,330
|
48,728
|
48,609
|
|
Year ended
|
|
Quarter ended
|
||||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
||
£m
|
£m
|
|
£m
|
£m
|
£m
|
||
|
|
|
|
|
|
|
|
Called-up share capital
|
|
|
|
|
|
|
|
At beginning of period
|
11,823
|
11,625
|
|
11,906
|
11,876
|
11,792
|
|
Ordinary shares issued
|
142
|
198
|
|
59
|
30
|
31
|
|
|
|
|
|
|
|
|
|
At end of period
|
11,965
|
11,823
|
|
11,965
|
11,906
|
11,823
|
|
|
|
|
|
|
|
|
|
Paid-in equity
|
|
|
|
|
|
|
|
At beginning of period
|
4,582
|
2,646
|
|
4,058
|
4,491
|
4,582
|
|
Redeemed/reclassified (1)
|
(524)
|
(110)
|
|
-
|
(433)
|
-
|
|
Additional Tier 1 capital (2)
|
|
-
|
2,046
|
|
-
|
-
|
-
|
At end of period
|
4,058
|
4,582
|
|
4,058
|
4,058
|
4,582
|
|
|
|
|
|
|
|
|
|
Share premium account
|
|
|
|
|
|
|
|
At beginning of period
|
25,693
|
25,425
|
|
739
|
-
|
25,663
|
|
Ordinary shares issued
|
235
|
268
|
|
92
|
47
|
30
|
|
Redemption of debt preference shares (5)
|
|
748
|
-
|
|
56
|
692
|
-
|
Capital reduction (3)
|
|
(25,789)
|
-
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
At end of period
|
887
|
25,693
|
|
887
|
739
|
25,693
|
|
|
|
|
|
|
|
|
|
Merger reserve
|
|
|
|
|
|
|
|
At the beginning and end of period
|
|
10,881
|
10,881
|
|
10,881
|
10,881
|
10,881
|
|
|
|
|
|
|
|
|
Available-for-sale reserve
|
|
|
|
|
|
|
|
At beginning of period
|
238
|
307
|
|
260
|
259
|
188
|
|
Unrealised gains
|
202
|
282
|
|
53
|
49
|
69
|
|
Realised gains
|
(176)
|
(376)
|
|
(64)
|
(41)
|
(1)
|
|
Tax
|
(9)
|
25
|
|
6
|
(7)
|
(18)
|
|
|
|
|
|
|
|
|
|
At end of period
|
255
|
238
|
|
255
|
260
|
238
|
|
|
|
|
|
|
|
|
|
Cash flow hedging reserve
|
|
|
|
|
|
|
|
At beginning of period
|
1,030
|
458
|
|
298
|
575
|
1,565
|
|
Amount recognised in equity
|
(277)
|
1,867
|
|
141
|
(178)
|
(471)
|
|
Amount transferred from equity to earnings
|
(792)
|
(1,102)
|
|
(227)
|
(194)
|
(279)
|
|
Tax
|
266
|
(193)
|
|
15
|
95
|
215
|
|
|
|
|
|
|
|
|
|
At end of period
|
227
|
1,030
|
|
227
|
298
|
1,030
|
|
|
|
|
|
|
|
|
|
Foreign exchange reserve
|
|
|
|
|
|
|
|
At beginning of period
|
2,888
|
1,674
|
|
2,962
|
2,984
|
2,898
|
|
Retranslation of net assets
|
111
|
1,470
|
|
13
|
(26)
|
(40)
|
|
Foreign currency (losses)/gains on hedges
|
|
|
|
|
|
|
|
of net assets
|
(6)
|
(278)
|
|
(2)
|
4
|
35
|
|
Tax
|
(1)
|
62
|
|
(2)
|
(12)
|
(6)
|
|
Recycled to profit or loss on disposal of businesses
(4)
|
(22)
|
(40)
|
|
(1)
|
12
|
1
|
|
|
|
|
|
|
|
|
|
At end of period
|
2,970
|
2,888
|
|
2,970
|
2,962
|
2,888
|
|
|
|
|
|
|
|
|
|
Capital redemption reserve
|
|
|
|
|
|
|
|
At the beginning of period
|
4,542
|
4,542
|
|
-
|
-
|
4,542
|
|
Capital reduction (3)
|
|
(4,542)
|
-
|
|
-
|
-
|
-
|
At end of period
|
|
-
|
4,542
|
|
-
|
-
|
4,542
|
|
|
|
|
|
|
|
|
For the notes to this table refer to the notes on page
38.
|
|
|
|
|
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Retained earnings
|
|
|
|
|
|
|
At beginning of period
|
(12,936)
|
(4,020)
|
|
17,669
|
18,184
|
(8,500)
|
Profit/(loss) attributable to ordinary shareholders
|
|
|
|
|
|
|
and other equity owners
|
1,380
|
(5,258)
|
|
(429)
|
614
|
(4,280)
|
Equity preference dividends paid
|
(234)
|
(260)
|
|
(79)
|
(70)
|
(68)
|
Paid-in equity dividends paid, net of tax
|
(394)
|
(244)
|
|
(71)
|
(152)
|
(93)
|
Capital reduction (3)
|
30,331
|
-
|
|
-
|
-
|
-
|
Dividend access share dividend
|
-
|
(1,193)
|
|
-
|
-
|
-
|
Redemption of debt preference shares (5)
|
(748)
|
|
|
(56)
|
(692)
|
-
|
Redemption of equity preference shares (5)
|
-
|
(1,160)
|
|
-
|
-
|
-
|
Gain/(loss) on remeasurement of the retirement
|
|
|
|
|
|
|
benefit schemes
|
|
|
|
|
|
|
- gross
|
90
|
(1,049)
|
|
116
|
-
|
(2)
|
- tax
|
(28)
|
288
|
|
(8)
|
-
|
3
|
Changes in fair value of credit in financial
liabilities
|
|
|
|
|
|
|
designated at fair value through profit or
loss
|
|
|
|
|
|
|
- gross
|
(126)
|
-
|
|
(19)
|
(30)
|
-
|
- tax
|
18
|
-
|
|
3
|
3
|
-
|
Shares issued under employee share schemes
|
(5)
|
(10)
|
|
-
|
-
|
-
|
Share-based payments
|
|
|
|
|
|
|
- gross
|
(22)
|
(9)
|
|
4
|
8
|
4
|
Redemption/reclassification of paid-in equity
|
(196)
|
(21)
|
|
-
|
(196)
|
-
|
|
|
|
|
|
|
|
At end of period
|
17,130
|
(12,936)
|
|
17,130
|
17,669
|
(12,936)
|
|
|
|
|
|
|
|
Own shares held
|
|
|
|
|
|
|
At beginning of period
|
(132)
|
(107)
|
|
(45)
|
(45)
|
(136)
|
Shares utilised for employee share schemes
|
161
|
41
|
|
5
|
-
|
7
|
Own shares acquired
|
(72)
|
(66)
|
|
(3)
|
-
|
(3)
|
|
|
|
|
|
|
|
At end of period
|
(43)
|
(132)
|
|
(43)
|
(45)
|
(132)
|
|
|
|
|
|
|
|
Owners' equity at end of period
|
48,330
|
48,609
|
|
48,330
|
48,728
|
48,609
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2017
|
2016
|
|
2017
|
2017
|
2016
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Non-controlling interests
|
|
|
|
|
|
|
At beginning of period
|
795
|
716
|
|
746
|
844
|
853
|
Currency translation adjustments and other
|
|
|
|
|
|
|
movements
|
17
|
111
|
|
8
|
(11)
|
(9)
|
Profit/(loss) attributable to non-controlling
interests
|
35
|
10
|
|
14
|
(8)
|
(27)
|
Dividends paid
|
(25)
|
-
|
|
(5)
|
(20)
|
-
|
Equity withdrawn and disposals
|
(59)
|
(42)
|
|
-
|
(59)
|
(22)
|
|
|
|
|
|
|
|
At end of period
|
763
|
795
|
|
763
|
746
|
795
|
|
|
|
|
|
|
|
Total equity at end of period
|
49,093
|
49,404
|
|
49,093
|
49,474
|
49,404
|
|
|
|
|
|
|
|
Total equity is attributable to:
|
|
|
|
|
|
|
Non-controlling interests
|
763
|
795
|
|
763
|
746
|
795
|
Preference shareholders
|
2,565
|
2,565
|
|
2,565
|
2,565
|
2,565
|
Paid-in equity holders
|
4,058
|
4,582
|
|
4,058
|
4,058
|
4,582
|
Ordinary shareholders
|
41,707
|
41,462
|
|
41,707
|
42,105
|
41,462
|
|
|
|
|
|
|
|
|
49,093
|
49,404
|
|
49,093
|
49,474
|
49,404
|
(1)
|
Paid-in
equity reclassified to liabilities as a result of the call of RBS
Capital Trust D in March 2017 (redeemed in June 2017) and the call
of US$564 million and CAD321 million EMTN notes in August 2017
(redeemed in October 2017).
|
(2)
|
AT1
capital notes totalling £2.0 billion issued in August
2016.
|
(3)
|
On 15
June 2017, the Court of Session approved a reduction of RBSG plc
capital so that the amounts which stood to the credit of share
premium account and capital redemption reserve were transferred to
retained earnings.
|
(4)
|
Nil tax
impact.
|
(5)
|
During
2017, non-cumulative US dollar preference shares recorded as debt
were redeemed at their original issue price of US$1.1 billion. The
nominal value of £0.3 million has been credited to the capital
redemption reserve; share premium increased by £0.7 billion in
respect of the premium received on issue, with a corresponding
decrease in retained earnings. During 2016, non-cumulative US
dollar preference shares were redeemed at their original price of
US$1.5 billion. The nominal value of £0.3 million was
transferred from share capital to capital redemption reserve and
ordinary owners equity was reduced by £0.4 billion in respect
of the movement in exchange rates since issue.
|
|
Year ended
|
|
|
31 December
|
31 December
|
|
2017
|
2016
|
|
£m
|
£m
|
|
|
|
Operating activities
|
|
|
Operating profit/(loss) before tax
|
2,239
|
(4,082)
|
Adjustments for non-cash items
|
(5,125)
|
(7,810)
|
|
|
|
Net cash outflow from trading activities
|
(2,886)
|
(11,892)
|
Changes in operating assets and liabilities
|
42,147
|
8,413
|
|
|
|
Net cash flows from operating activities before tax
|
39,261
|
(3,479)
|
Income taxes paid
|
(520)
|
(171)
|
|
|
|
Net cash flows from operating activities
|
38,741
|
(3,650)
|
|
|
|
Net cash flows from investing activities
|
(6,482)
|
(4,359)
|
|
|
|
Net cash flows from financing activities
|
(8,208)
|
(5,107)
|
|
|
|
Effects of exchange rate changes on cash and cash
equivalents
|
(16)
|
8,094
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
24,035
|
(5,022)
|
Cash and cash equivalents at beginning of year
|
98,570
|
103,592
|
|
|
|
Cash and cash equivalents at end of year
|
122,605
|
98,570
|
|
|
|
|
Payment
|
Other
|
Residential
|
Litigation
|
|
|
|
protection
|
customer
|
mortgage
|
and other
|
|
|
|
insurance (1)
|
redress
|
backed securities
|
regulatory
|
Other (2)
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
At 1 January 2017
|
1,253
|
1,105
|
6,752
|
1,918
|
1,808
|
12,836
|
Currency translation and other movements
|
-
|
(1)
|
(114)
|
(13)
|
10
|
(118)
|
Charge to income statement
|
-
|
-
|
-
|
32
|
204
|
236
|
Releases to income statement
|
-
|
(2)
|
-
|
(3)
|
(39)
|
(44)
|
Provisions utilised
|
(78)
|
(99)
|
-
|
(950)
|
(164)
|
(1,291)
|
At 31 March 2017
|
1,175
|
1,003
|
6,638
|
984
|
1,819
|
11,619
|
|
|
|
|
|
|
|
Currency translation and other movements
|
-
|
5
|
(237)
|
(17)
|
38
|
(211)
|
Charge to income statement
|
-
|
55
|
222
|
59
|
182
|
518
|
Releases to income statement
|
-
|
(38)
|
-
|
(4)
|
(96)
|
(138)
|
Provisions utilised
|
(81)
|
(114)
|
(44)
|
(113)
|
(209)
|
(561)
|
At 30 June 2017
|
1,094
|
911
|
6,579
|
909
|
1,734
|
11,227
|
|
|
|
|
|
|
|
Currency translation and other movements
|
-
|
1
|
(159)
|
(4)
|
(14)
|
(176)
|
Charge to income statement
|
-
|
1
|
-
|
105
|
118
|
224
|
Releases to income statement
|
-
|
(1)
|
-
|
(2)
|
(1)
|
(4)
|
Provisions utilised (3)
|
(115)
|
(84)
|
(3,588)
|
(221)
|
(154)
|
(4,162)
|
At 30 September 2017
|
979
|
828
|
2,832
|
787
|
1,683
|
7,109
|
|
|
|
|
|
|
|
Currency translation and other movements
|
-
|
(1)
|
(31)
|
3
|
1
|
(28)
|
Charge to income statement
|
175
|
172
|
492
|
84
|
499
|
1,422
|
Releases to income statement
|
-
|
(13)
|
(50)
|
(147)
|
(73)
|
(283)
|
Provisions utilised
|
(101)
|
(116)
|
-
|
(86)
|
(160)
|
(463)
|
At 31 December 2017
|
1,053
|
870
|
3,243
|
641
|
1,950
|
7,757
|
(1)
|
To
reflect the increased volume of complaints following the FCA's
introduction of an August 2019 PPI timebar as outlined in FCA
announcement CP17/3 and the introduction of new Plevin (unfair
commission) complaint handling rules, RBS increased its provision
for PPI by £175m in 2017.
|
(2)
|
The
Group recognised a £750 million provision in 2016 as a
consequence of the announcement that HM Treasury is seeking a
revised package of remedies that would conclude its remaining State
Aid commitments. An additional charge of £50 million was taken
in Q2 2017 following further revisions to the package, taking the
total provision to £800 million.
|
(3)
|
Q3 2017
utilisation includes the $4.75 billion payment made following the
settlement reached between RBS and the Federal Housing Finance
Agency in relation to RBS's issuance and underwriting of RMBS in
the US.
|
|
2017
|
2016
|
|
£m
|
£m
|
Loans
and advances
|
130
|
156
|
Customer
deposits
|
111
|
64
|
|
|
|
Total
income
|
28
|
30
|
Operating
expenses
|
23
|
8
|
●
|
the
financial statements, prepared in accordance with International
Financial Reporting Standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
company and the undertakings included in the consolidation taken as
a whole; and
|
●
|
the
Strategic Report and Directors' report (incorporating the Business
review) include a fair review of the development and performance of
the business and the position of the company and the undertakings
included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they
face.
|
Howard
Davies
|
Ross
McEwan
|
Ewen
Stevenson
|
Chairman
|
Chief
Executive
|
Chief
Financial Officer
|
Chairman
|
Executive directors
|
Non-executive directors
|
Howard
Davies
|
Ross
McEwan
Ewen
Stevenson
|
Frank
Dangeard
Alison
Davis
Morten
Friis
Robert
Gillespie
John
Hughes
Penny
Hughes
Yasmin
Jetha
Brendan
Nelson
Sheila
Noakes
Mike
Rogers
Mark
Seligman
Dr Lena
Wilson
|
●
|
'Adjusted'
measures of financial performance, principally operating
performance before: own credit adjustments; gain or loss on
redemption of own debt; strategic disposals; restructuring costs
and litigation and conduct costs;
|
●
|
Performance,
funding and credit metrics such as 'return on tangible equity',
'adjusted return on tangible equity' and related RWA equivalents
incorporating the effect of capital deductions (RWAes), total
assets excluding derivatives (funded assets), net interest margin
(NIM) adjusted for items designated at fair value through profit or
loss (non-statutory NIM), cost:income ratio, loan:deposit ratio and
REIL/impairment provision ratios. These are internal metrics used
to measure business performance;
|
●
|
Personal
& Business Banking (PBB) franchise results, combining the
reportable segments of UK Personal & Business Banking (UK PBB)
and Ulster Bank RoI, Commercial & Private Banking (CPB)
franchise results, combining the reportable segments of Commercial
Banking and Private Banking and 'core businesses' results combining
PBB, CPB, RBS International (RBSI) and NatWest Markets results
which are presented to provide investors with a summary of the
Group's business performance; and
|
●
|
Cost
savings progress and 2017 target calculated using operating
expenses excluding litigation and conduct costs, restructuring
costs and the VAT recoveries.
|
●
|
The
former Williams & Glyn reportable operating segment has been
integrated into the UK PBB reportable segment;
|
●
|
The
former Capital Resolution reportable operating segment has been
integrated into the NatWest Markets reportable segment, with the
exception of the costs in relation to the RMBS claims, which have
been transferred to the Central items & other reportable
segment;
|
●
|
The
RBSI reportable operating segment is no longer presented within the
CPB franchise.
|
●
|
Shipping
and other activities, which were formerly in the Capital Resolution
reportable operating segment, were transferred from the NatWest
Markets reportable operating segment to the Commercial Banking
reportable operating segment.
|
●
|
UK PBB
Collective Investment Funds (CIFL) business was transferred to the
Private Banking reportable operating segment in order to better
serve customers.
|
●
|
The RBS
International (RBSI) reportable operating segment was aligned to
the legal entity The Royal Bank of Scotland International
(Holdings) Limited. This predominantly involved transfers from the
Private Banking reportable operating segment, and Services and
Functions within Central items & other in preparation for the
implementation of the UK ring-fencing regime.
|
●
|
Commercial
Banking whole business securitisations and relevant financial
institutions (RFI) were transferred to NatWest Markets during
December 2017. RFIs are prohibited from being within the ring-fence
due to their nature and exposure to global financial markets. The
move is in preparation for the implementation of the UK
ring-fencing regime.
|
Franchise
|
Reportable operating segment
|
Personal
& Business Banking (PBB)
|
UK
Personal & Business Banking (UK PBB)
|
Ulster
Bank RoI
|
|
Commercial
& Private Banking (CPB)
|
Commercial
Banking
|
Private
Banking
|
|
Other
reportable segments
|
RBS
International (RBSI)
|
NatWest
Markets
|
|
Central
items & other
|
Analyst enquiries:
|
Matt
Waymark
|
Investor
Relations
|
+44 (0)
207 672 1758
|
Media enquiries:
|
RBS
Press Office
|
|
+44 (0)
131 523 4205
|
|
|
|
|
|
Analyst and investor presentation
|
Fixed Income
|
Web cast and dial in details
|
Date:
|
Friday
23 February 2018
|
Friday
23 February 2018
|
www.rbs.com/results
|
Time:
|
9:30 am
UK time
|
1:30 pm
UK time
|
International
- +44 (0) 20 3009 5755
|
Conference ID:
|
3294479
|
8735879
|
UK Free
Call - 0800 279 6637
US
Local Dial-In, New York - 1 646 517 5063
|
●
|
Announcement
and slides
|
●
|
Annual
Report and Accounts 2017
|
●
|
A
financial supplement containing income statement, balance sheet and
segment performance for the nine quarters ended 31 December
2017
|
●
|
Pillar
3 Report 2017
|
●
|
IFRS 9
Transition Report
|
|
PBB
|
|
CPB
|
|
|
|
Central
|
|
||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
Natwest
|
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
Markets
|
|
other
|
RBS
|
Year ended 31 December 2017
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
6,477
|
604
|
|
3,484
|
678
|
389
|
1,050
|
|
451
|
13,133
|
Own credit adjustments
|
-
|
3
|
|
-
|
-
|
-
|
66
|
|
-
|
69
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
7
|
7
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
(26)
|
|
(321)
|
(347)
|
Total income - adjusted
|
6,477
|
607
|
|
3,484
|
678
|
389
|
1,090
|
|
137
|
12,862
|
Operating expenses - statutory
|
(3,829)
|
(676)
|
|
(2,014)
|
(529)
|
(219)
|
(2,201)
|
|
(933)
|
(10,401)
|
Restructuring costs - direct
|
79
|
27
|
|
48
|
20
|
5
|
319
|
|
1,067
|
1,565
|
- indirect
|
382
|
29
|
|
119
|
25
|
4
|
117
|
|
(676)
|
-
|
Litigation and conduct costs
|
210
|
169
|
|
33
|
39
|
8
|
237
|
|
589
|
1,285
|
Operating expenses - adjusted
|
(3,158)
|
(451)
|
|
(1,814)
|
(445)
|
(202)
|
(1,528)
|
|
47
|
(7,551)
|
Impairment (losses)/releases
|
(235)
|
(60)
|
|
(362)
|
(6)
|
(3)
|
174
|
|
(1)
|
(493)
|
Operating profit/(loss) - statutory
|
2,413
|
(132)
|
|
1,108
|
143
|
167
|
(977)
|
|
(483)
|
2,239
|
Operating profit/(loss) - adjusted
|
3,084
|
96
|
|
1,308
|
227
|
184
|
(264)
|
|
183
|
4,818
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
23.7%
|
(5.0%)
|
|
6.6%
|
6.4%
|
11.2%
|
(9.0%)
|
|
nm
|
2.2%
|
Return on equity - adjusted (1,2)
|
30.7%
|
3.6%
|
|
8.2%
|
11.3%
|
12.6%
|
(3.7%)
|
|
nm
|
8.8%
|
Cost:income ratio (3)
|
59.1%
|
111.9%
|
|
56.0%
|
78.0%
|
56.3%
|
nm
|
|
nm
|
79.0%
|
Cost:income ratio - adjusted (2,3)
|
48.8%
|
74.3%
|
|
50.0%
|
65.6%
|
51.9%
|
140.2%
|
|
nm
|
58.2%
|
|
|
|
|
|
|
|
|
|
|
|
Year ended 31 December 2016
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
6,127
|
576
|
|
3,415
|
657
|
374
|
1,212
|
|
229
|
12,590
|
Own credit adjustments
|
-
|
(3)
|
|
-
|
-
|
-
|
(187)
|
|
10
|
(180)
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
126
|
126
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
81
|
|
(245)
|
(164)
|
Total income - adjusted
|
6,127
|
573
|
|
3,415
|
657
|
374
|
1,106
|
|
120
|
12,372
|
Operating expenses - statutory
|
(4,276)
|
(669)
|
|
(2,467)
|
(549)
|
(174)
|
(2,824)
|
|
(5,235)
|
(16,194)
|
Restructuring costs - direct
|
46
|
38
|
|
25
|
7
|
2
|
75
|
|
1,913
|
2,106
|
- indirect
|
198
|
2
|
|
83
|
30
|
3
|
115
|
|
(431)
|
-
|
Litigation and conduct costs
|
634
|
172
|
|
423
|
1
|
-
|
550
|
|
4,088
|
5,868
|
Operating expenses - adjusted
|
(3,398)
|
(457)
|
|
(1,936)
|
(511)
|
(169)
|
(2,084)
|
|
335
|
(8,220)
|
Impairment (losses)/releases
|
(125)
|
113
|
|
(206)
|
3
|
(10)
|
(253)
|
|
-
|
(478)
|
Operating profit/(loss) - statutory
|
1,726
|
20
|
|
742
|
111
|
190
|
(1,865)
|
|
(5,006)
|
(4,082)
|
Operating profit/(loss) - adjusted
|
2,604
|
229
|
|
1,273
|
149
|
195
|
(1,231)
|
|
455
|
3,674
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
16.2%
|
0.7%
|
|
4.1%
|
5.6%
|
13.8%
|
(12.5%)
|
|
nm
|
(17.9%)
|
Return on equity - adjusted (1,2)
|
25.1%
|
8.4%
|
|
8.4%
|
7.8%
|
14.2%
|
(8.7%)
|
|
nm
|
1.6%
|
Cost:income ratio (3)
|
69.8%
|
116.1%
|
|
71.0%
|
83.6%
|
46.5%
|
nm
|
|
nm
|
129.0%
|
Cost:income ratio - adjusted (2,3)
|
55.5%
|
79.8%
|
|
54.8%
|
77.8%
|
45.2%
|
188.4%
|
|
nm
|
66.0%
|
|
|
|
|
|
|
|
|
|
|
|
For notes refer to page 3 of this appendix.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBB
|
|
CPB
|
|
|
|
Central
|
|
||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
NatWest
|
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
Markets
|
|
other
|
RBS
|
Quarter ended 31 December 2017
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
1,548
|
161
|
|
806
|
191
|
97
|
200
|
|
54
|
3,057
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
(9)
|
|
-
|
(9)
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
(26)
|
|
(165)
|
(191)
|
Total income - adjusted
|
1,548
|
161
|
|
806
|
191
|
97
|
165
|
|
(111)
|
2,857
|
Operating expenses - statutory
|
(1,266)
|
(254)
|
|
(575)
|
(194)
|
(66)
|
(583)
|
|
(468)
|
(3,406)
|
Restructuring costs - direct
|
55
|
2
|
|
6
|
19
|
3
|
129
|
|
317
|
531
|
- indirect
|
198
|
2
|
|
23
|
9
|
-
|
13
|
|
(245)
|
-
|
Litigation and conduct costs
|
197
|
135
|
|
27
|
39
|
-
|
51
|
|
315
|
764
|
Operating expenses - adjusted
|
(816)
|
(115)
|
|
(519)
|
(127)
|
(63)
|
(390)
|
|
(81)
|
(2,111)
|
Impairment (losses)/releases
|
(60)
|
(81)
|
|
(117)
|
(2)
|
-
|
26
|
|
-
|
(234)
|
Operating profit/(loss) - statutory
|
222
|
(174)
|
|
114
|
(5)
|
31
|
(357)
|
|
(414)
|
(583)
|
Operating profit/(loss) - adjusted
|
672
|
(35)
|
|
170
|
62
|
34
|
(199)
|
|
(192)
|
512
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
7.8%
|
(26.5%)
|
|
1.3%
|
(2.9%)
|
9.2%
|
(14.0%)
|
|
nm
|
(6.7%)
|
Return on equity - adjusted (1,2)
|
26.2%
|
(5.3%)
|
|
3.1%
|
12.1%
|
10.4%
|
(8.7%)
|
|
nm
|
4.0%
|
Cost:income ratio (3)
|
81.8%
|
157.8%
|
|
70.0%
|
101.6%
|
68.0%
|
nm
|
|
nm
|
111.5%
|
Cost:income ratio - adjusted (2,3)
|
52.7%
|
71.4%
|
|
62.8%
|
66.5%
|
64.9%
|
nm
|
|
nm
|
73.6%
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended 30 September 2017
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
1,757
|
150
|
|
928
|
166
|
97
|
20
|
|
39
|
3,157
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
5
|
|
-
|
5
|
Total income - adjusted
|
1,757
|
150
|
|
928
|
166
|
97
|
25
|
|
39
|
3,162
|
Operating expenses - statutory
|
(819)
|
(129)
|
|
(443)
|
(103)
|
(59)
|
(526)
|
|
(64)
|
(2,143)
|
Restructuring costs - direct
|
1
|
1
|
|
2
|
1
|
2
|
29
|
|
208
|
244
|
- indirect
|
47
|
8
|
|
19
|
2
|
-
|
28
|
|
(104)
|
-
|
Litigation and conduct costs
|
-
|
1
|
|
2
|
-
|
8
|
102
|
|
12
|
125
|
Operating expenses - adjusted
|
(771)
|
(119)
|
|
(420)
|
(100)
|
(49)
|
(367)
|
|
52
|
(1,774)
|
Impairment (losses)/releases
|
(78)
|
10
|
|
(151)
|
3
|
2
|
71
|
|
-
|
(143)
|
Operating profit/(loss) - statutory
|
860
|
31
|
|
334
|
66
|
40
|
(435)
|
|
(25)
|
871
|
Operating profit/(loss) - adjusted
|
908
|
41
|
|
357
|
69
|
50
|
(271)
|
|
91
|
1,245
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
34.2%
|
4.6%
|
|
8.6%
|
13.2%
|
10.4%
|
(15.4%)
|
|
nm
|
4.5%
|
Return on equity - adjusted (1,2)
|
36.2%
|
6.1%
|
|
9.3%
|
13.8%
|
13.6%
|
(10.3%)
|
|
nm
|
8.2%
|
Cost:income ratio (3)
|
46.6%
|
86.0%
|
|
45.7%
|
62.0%
|
60.8%
|
nm
|
|
nm
|
67.5%
|
Cost:income ratio - adjusted (2,3)
|
43.9%
|
79.3%
|
|
43.1%
|
60.2%
|
50.5%
|
nm
|
|
nm
|
55.6%
|
|
|
|
|
|
|
|
|
|
|
|
For notes refer to next page.
|
|
|
|
|
|
|
|
|
|
|
|
PBB
|
|
CPB
|
|
|
Central
|
|
||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
NatWest
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
Markets
|
other
|
RBS
|
Quarter ended 31 December 2016
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
1,556
|
137
|
|
867
|
161
|
96
|
(8)
|
407
|
3,216
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
37
|
77
|
114
|
Gain on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
-
|
(1)
|
(1)
|
Total income - adjusted
|
1,556
|
137
|
|
867
|
161
|
96
|
29
|
483
|
3,329
|
Operating expenses - statutory
|
(1,139)
|
(226)
|
|
(1,009)
|
(159)
|
(64)
|
(1,149)
|
(3,608)
|
(7,354)
|
Restructuring costs - direct
|
1
|
6
|
|
12
|
6
|
1
|
24
|
957
|
1,007
|
- indirect
|
50
|
(2)
|
|
34
|
8
|
1
|
30
|
(121)
|
-
|
Litigation and conduct costs
|
214
|
77
|
|
407
|
(1)
|
1
|
581
|
2,849
|
4,128
|
Operating expenses - adjusted
|
(874)
|
(145)
|
|
(556)
|
(146)
|
(61)
|
(514)
|
77
|
(2,219)
|
Impairment (losses)/releases
|
(27)
|
47
|
|
(83)
|
8
|
1
|
130
|
(1)
|
75
|
Operating profit/(loss) - statutory
|
390
|
(42)
|
|
(225)
|
10
|
33
|
(1,027)
|
(3,202)
|
(4,063)
|
Operating profit/(loss) - adjusted
|
655
|
39
|
|
228
|
23
|
36
|
(355)
|
559
|
1,185
|
|
|
|
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
15.1%
|
(5.8%)
|
|
(9.1%)
|
1.6%
|
8.8%
|
(27.0%)
|
nm
|
(48.2%)
|
Return on equity - adjusted (1,2)
|
26.2%
|
5.4%
|
|
5.3%
|
4.5%
|
9.8%
|
(10.3%)
|
nm
|
8.6%
|
Cost income ratio (3)
|
73.2%
|
165.0%
|
|
117.1%
|
98.8%
|
66.7%
|
nm
|
nm
|
230.2%
|
Cost income ratio - adjusted (2,3)
|
56.2%
|
105.8%
|
|
62.6%
|
90.7%
|
63.5%
|
nm
|
nm
|
66.3%
|
(1)
|
RBS's
CET1 target is 13% but for the purposes of computing segmental
return on equity (ROE), to better reflect the differential drivers
of capital usage, segmental operating profit after tax and adjusted
for preference dividends is divided by notional equity allocated at
different rates of 14% (Ulster Bank RoI - 11% prior to Q1 2017),
11% (Commercial Banking), 14% (Private Banking - 15% prior to Q1
2017), 16% (RBS International - 12% prior to November 2017) and 15%
for all other segments, of the monthly average of segmental
risk-weighted assets incorporating the effect of capital deductions
(RWAes). RBS Return on equity is calculated using profit for the
period attributable to ordinary shareholders.
|
(2)
|
Excluding
own credit adjustments, (loss)/gain on redemption of own debt,
strategic disposals, restructuring costs and litigation and conduct
costs.
|
(3)
|
Operating
lease depreciation included in income (year ended 31 December 2017
- £142 million; year ended December 2016 - £152 million;
Q4 2017 - £35 million; Q3 2017 - £35 million; Q4 2016 -
£37 million).
|
|
THE
ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
|
|
|
|
By: /s/
Jan Cargill
|
|
|
|
Name:
Jan Cargill
|
|
Title:
Deputy Secretary
|