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Contents
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Page
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Introduction
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2
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Highlights
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3
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Chief
Executive’s message
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16
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Summary
consolidated results
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19
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Analysis
of results
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21
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Segment
performance
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30
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Statutory
results
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48
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Notes
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55
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Statement
of directors' responsibilities
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63
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Forward-looking
statements
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64
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Appendix
1 – Segmental income statement reconciliations
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For analyst enquiries:
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Alexander
Holcroft
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Investor
Relations
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+44 (0)
20 7672 1758
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For media enquiries:
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RBS
Press Office
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+44 (0)
131 523 4205
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Date:
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Friday
24 February 2017
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Time:
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9.30 am
UK time
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Conference ID:
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62910737
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Webcast:
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www.rbs.com/results
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Dial in details:
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International
– +44 (0) 1452 568 172
UK Free
Call – 0800 694 8082
US Toll
Free – 1 866 966 8024
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Date:
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Friday
24 February 2017
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Time:
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1.30 pm
UK time
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Conference ID
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57346988
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Webcast:
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www.rbs.com/results
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Dial in details:
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International
– +44 (0) 1452 568 172
UK Free
Call – 0800 694 8082
US Toll
Free – 1 866 966 8024
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Announcements
and slides
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Annual
Report and Account 2016
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A
financial supplement containing income statement, balance sheet and
segment performance information for the nine quarters ended 31
December 2016
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Pillar
3 Report 2016
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Pillar
3 Capital instruments annex
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‘Adjusted’ measures of financial performance,
principally operating performance before: own credit adjustments;
gain or loss on redemption of own debt; strategic disposals;
restructuring costs; litigation and conduct costs and write down of
goodwill (refer to Appendix 1 for reconciliations of the statutory
to adjusted basis);
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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;
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Personal
& Business Banking (PBB) franchise, combining the reportable
segments of UK Personal & Business Banking (UK PBB) and Ulster
Bank RoI; and Commercial & Private Banking (CPB) franchise,
combining the reportable segments of Commercial Banking, Private
Banking and RBS International (RBSI); and
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Cost
savings progress and 2016 target calculated using operating
expenses excluding litigation and conduct costs, restructuring
costs, write down of goodwill, the impairment of other intangible
assets, the operating costs of Williams & Glyn and the VAT
recovery.
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Year ended
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Quarter ended
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31 December
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31 December
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31 December
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30 September
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31 December
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Key metrics and ratios
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2016
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2015
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2016
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2016
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2015
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Attributable loss
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(£6,955m)
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(£1,979m)
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(£4,441m)
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(£469m)
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(£2,740m)
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Operating (loss)/profit
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(£4,082m)
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(£2,703m)
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(£4,063m)
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£255m
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(£2,950m)
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Operating profit - adjusted (2)
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£3,674m
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£4,405m
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£1,185m
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£1,333m
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£686m
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Net interest margin
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2.18%
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2.12%
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2.19%
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2.17%
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2.10%
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Cost:income ratio
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129%
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127%
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229%
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88%
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232%
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Cost:income ratio - adjusted (3,4)
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66%
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72%
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67%
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58%
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88%
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(Loss)/earnings per share from continuing operations
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- basic
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(59.5p)
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(27.7p)
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(37.7p)
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(3.9p)
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(24.5p)
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- adjusted (3,4)
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5.2p
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29.2p
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7.0p
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3.9p
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5.1p
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Return on tangible equity (5,6)
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(17.9%)
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(4.7%)
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(48.2%)
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(4.8%)
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(26.5%)
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Return on tangible equity - adjusted (3,4,6)
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1.6%
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11.0%
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8.6%
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4.6%
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6.6%
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Average tangible equity (6)
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£38,791m
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£41,821m
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£36,855m
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£38,696m
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£41,319m
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Average number of ordinary shares
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outstanding during the period (millions)
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11,692
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11,516
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11,766
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11,724
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11,554
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PBB, CPB & NWM
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Total income - adjusted (3)
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£11,830m
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£11,422m
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£2,914m
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£3,115m
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£2,672m
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Operating profit - adjusted (2)
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£4,249m
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£4,086m
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£848m
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£1,331m
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£528m
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Return on tangible equity - adjusted (3,4,6)
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11.1%
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11.2%
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8.5%
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14.2%
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5.3%
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Refer to following page for footnotes.
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31 December
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30 September
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31 December
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Balance sheet related key metrics and ratios
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2016
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2016
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2015
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Tangible net asset value (TNAV) per ordinary share
(6)
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296p
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338p
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352p
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Loan:deposit ratio (7,8)
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91%
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91%
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89%
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Short-term wholesale funding (7,9)
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£14bn
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£14bn
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£17bn
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Wholesale funding (7,9)
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£59bn
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£56bn
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£59bn
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Liquidity portfolio
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£164bn
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£149bn
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£156bn
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Liquidity coverage ratio (LCR) (10)
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123%
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112%
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136%
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Net stable funding ratio (NSFR) (11)
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121%
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119%
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121%
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Common Equity Tier 1 (CET1) ratio
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13.4%
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15.0%
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15.5%
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Risk-weighted assets (RWAs)
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£228.2bn
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£235.2bn
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£242.6bn
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Leverage ratio (12)
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5.1%
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5.6%
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5.6%
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Tangible equity (6)
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£34,982m
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£39,822m
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£40,943m
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Number of ordinary shares in issue (millions) (13)
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11,823
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11,792
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11,625
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(1)
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Attributable
to ordinary shareholders.
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(2)
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Operating
profit before tax excluding own credit adjustments, (loss)/gain on
redemption of own debt, strategic disposals, restructuring costs,
litigation and conduct costs and write down of
goodwill.
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(3)
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Excluding
own credit adjustments, (loss)/gain on redemption of own debt and
strategic disposals.
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(4)
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Excluding
restructuring costs, litigation and conduct costs and write down of
goodwill.
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(5)
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Calculated
using loss for the period attributable to ordinary
shareholders.
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(6)
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Tangible
equity is equity attributable to ordinary shareholders less
intangible assets. The dilutive impact was 2p (30 September 2016 -
1p; 31 December 2015 - 1p).
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(7)
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Excludes
repurchase agreements and stock lending.
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(8)
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Includes
disposal groups.
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(9)
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Excludes
derivative collateral.
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(10)
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On 1
October 2015 the LCR became the Prudential Regulation
Authority’s (PRA) primary regulatory liquidity standard; UK
banks are required to meet a minimum standard of 80% initally,
rising to 100% by 1 January 2018. The published LCR excludes Pillar
2 add-ons. RBS calculates the LCR using its own interpretation of
the EU LCR Delegated Act, which may change over time and may not be
fully comparable with that of other institutions.
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(11)
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NSFR
for all periods have been calculated using RBS’s current
interpretations of the revised BCBS guidance on NSFR issued in late
2014. Therefore, reported NSFR will change over time with
regulatory developments. Due to differences in interpretation,
RBS’s ratio may not be comparable with those of other
financial institutions.
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(12)
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Based
on end-point Capital Requirements Regulation (CRR) Tier 1 capital
and leverage exposure under the CRR Delegated Act.
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(13)
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Includes
39 million treasury shares (30 September 2016 - 41 million; 31
December 2015 - 26 million).
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RBS
reported an attributable loss of £6,955 million compared with
£1,979 million in 2015. The loss for the year included;
litigation and conduct costs of £5,868 million, restructuring
costs of £2,106 million, payment of the final DAS dividend of
£1,193 million, Capital Resolution disposal losses and
impairments of £825 million and a £300 million deferred
tax asset impairment.
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The
2016 operating loss of £4,082 million compared with an
operating loss of £2,703 million in 2015. The adjusted
operating profit of £3,674 million was £731 million, or
17%, lower than 2015.
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The net
interest margin (NIM) of 2.18% for 2016 was 6 basis points higher
than 2015, as the benefit associated with the reduction in low
yielding assets more than offset modest asset margin pressure and
mix impacts across the core franchises.
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Excluding
expenses associated with Williams & Glyn(1), write-down of
intangible assets and the VAT recovery in Q2, adjusted operating
expenses have reduced by £985 million, or 11%, compared with
2015, exceeding our target of £800 million. RBS has reduced
adjusted operating expenses by over £3 billion in the last
three years.
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Adjusted
cost income ratio for 2016 was 66% compared with 72% in
2015.
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Risk
elements in lending (REIL) as a % of gross customer loans was 3.1%,
80 basis points lower than 31 December 2015 as RBS continues to
de-risk its balance sheet.
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Tangible
net asset value (TNAV) per share decreased by 56p to 296p compared
with 2015 principally reflecting the attributable loss for the
year.
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RBS
reported an adjusted operating profit of £4,249 million across
PBB, CPB and NatWest Markets, 4% higher than 2015 and an average of
over £1 billion a quarter.
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Income
across PBB and CPB increased by 2% in 2016 compared with 2015,
adjusting for transfers(2), as increased
lending volumes more than offset reduced margins. NatWest Markets
adjusted income of £1,521 million increased by 16% compared
with 2015, adjusting for transfers(2), driven by Rates
and Currencies.
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PBB and
CPB net loans and advances of £272.1 billion have increased by
10% in 2016, compared with a target of 4%, reflecting strong growth
across both residential mortgages and commercial
lending.
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Adjusted
cost income ratio improved to 63% compared with 65% in 2015 as we
continue to deliver efficiencies across PBB, CPB and NatWest
Markets.
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Restructuring
costs were £2,106 million for 2016, compared with £2,931
million in 2015, and included a £750 million provision in
respect of the plan by the Commissioner responsible for EU
competition policy to propose to the College of Commissioners to
open proceedings to gather evidence on an alternative plan for RBS
to meet its remaining State Aid obligations in respect of Williams
& Glyn. If adopted, this alternative plan would replace the
existing requirement to achieve separation and divestment by 31
December 2017. In addition, £706 million of the remaining
restructuring costs related to Williams & Glyn, including
£146 million of termination costs associated with the decision
to discontinue the programme to create a cloned banking
platform.
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Litigation
and conduct costs of £5,868 million included; a £3,107
million provision in relation to various investigations and
litigation matters relating to RBS’s issuance and
underwriting of residential mortgage-backed securities (RMBS), an
additional charge in respect of the settlement with the National
Credit Union Administration Board to resolve two outstanding RMBS
lawsuits, a provision in respect of the UK 2008 rights issue
shareholder litigation, additional PPI provisions, a provision in
respect of the FCA review of RBS’s treatment of SMEs and a
provision in Ulster Bank RoI in respect of an industry wide
examination of tracker mortgages.
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A net
strategic disposal gain of £164 million includes a £246
million gain on disposal of RBS’s stake in Visa Europe
partially offset by losses associated with the sale of our Russian
subsidiary and exit of Kazakhstan.
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Across
our three customer facing franchises, PBB, CPB and NatWest Markets,
adjusted operating profit of £4,249 million, was £163
million, or 4% higher than 2015.
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○
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UK PBB
adjusted operating profit of £2,202 million was £33
million, or 2%, higher than 2015 as increased income and reduced
costs were partially offset by increased impairments. Total income
increased by £90 million, or 2%, to £5,290 million
compared with 2015 as the benefit of increased lending more than
offset reduced margins, down 17 basis points to 3.01%, and lower
fee income, reflecting reduced credit card interchange fees and
increased cash back payments following the launch of the Reward
account. Net loans and advances increased by 10% to £132.1
billion in 2016 principally driven by mortgage growth.
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○
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Ulster
Bank RoI adjusted operating profit of £229 million was
£35 million lower than 2015 principally reflecting a £28
million reduction in net impairments releases. REIL decreased by
£1.3 billion in Q4 2016 largely driven by the sale of a
portfolio of distressed loans.
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○
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Commercial
Banking adjusted operating profit of £1,273 million was
£111 million, or 8%, lower than 2015 primarily reflecting a
£137 million increase in net impairment losses, largely driven
by a single name charge in respect of the oil and gas portfolio.
Adjusting for business transfers, total income increased by
£21 million, or 1%, reflecting higher asset and deposit
volumes partially offset by asset margin pressure. Net loans and
advances increased by 10% in 2016 to £100.1
billion.
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○
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Private
Banking(3)
adjusted operating profit of £149 million increased by
£36 million, or 32%, compared with 2015 as increased asset
volumes drove a £13 million, or 2%, uplift in income and cost
efficiencies resulted in a £7 million, or 1%, reduction in
adjusted operating expenses. In addition, net impairment losses
reduced by £16 million.
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○
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RBS
International adjusted operating profit of £195 million was
£16 million, or 8%, lower than 2015 largely reflecting a
£13 million, or 8%, increase in adjusted operating expenses,
driven by a number of one-off charges, and a £10 million net
impairment loss in 2016. Partially offsetting, total income
increased by £7 million, or 2%, driven by increased asset
volumes.
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○
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NatWest
Markets adjusted income of £1,521 million was 16% higher than
2015, adjusting for transfers, driven by Rates and Currencies,
which benefited from sustained customer activity and favourable
market conditions following the EU referendum and subsequent
central bank actions. An adjusted operating profit of £201
million compared with a loss of £55 million in
2015.
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Capital
Resolution adjusted operating loss of £1,432 million compared
with a loss of £412 million in 2015 and included disposal
losses and impairments of £825 million, of which £683
million related to the shipping portfolio. RWAs reduced by
£14.5 billion in 2016 to £34.5 billion.
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Central
items adjusted operating profit of £455 million compared with
£272 million in 2015 and included a £349 million FX gain,
principally associated with the weakening of sterling against the
US dollar, a £227 million VAT recovery, a £97 million
foreign exchange reserve recycling gain and other gains, partially
offset by a £510 million loss in respect of IFRS
volatility(4) due to reductions
in long term interest rates (2015 - £15 million
profit).
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●
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An
attributable loss of £4,441 million compared with a loss of
£2,740 million in Q4 2015 and a loss of £469 million in
Q3 2016. The Q4 2016 loss included a litigation and conduct charge
of £4,128 million and restructuring costs of £1,007
million.
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●
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Q4 2016
adjusted operating profit of £1,185 million was £499
million, or 73%, higher than Q4 2015 but was £148 million
lower than Q3 2016 largely reflecting the £190 million UK bank
levy charge.
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Across
our three customer facing businesses, PBB, CPB and NatWest Markets,
adjusted operating profit of £848 million was £320
million, or 61%, higher than Q4 2015. Adjusted RoTE was 8.5%
compared with 5.3% in Q4 2015.
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Q4 2016
NIM of 2.19% was 9 basis points higher than Q4 2015 as the benefit
associated with the reduction in low yielding assets more than
offset modest asset margin pressure and mix impacts across the core
franchises. Compared with Q3 2016, NIM increased by 2 basis
points.
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●
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Net
loans and advances across PBB and CPB increased by £2.7
billion in Q4 2016 to £272.1 billion principally driven by
increased mortgage lending in UK PBB.
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●
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TNAV
per share reduced by 42p in the quarter to 296p principally
reflecting the attributable loss.
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Strategy goal
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2016 target
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2016
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Strength
and sustainability
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Maintain
Bank CET1 ratio of 13%
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CET1
ratio of 13.4%
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£2
billion AT1 issuance
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£2
billion equivalent AT1 issued in Q3 2016
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Capital
Resolution RWAs around £30-35 billion
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RWAs
down £14.5 billion to £34.5 billion
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Customer experience
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Narrow
the gap to No.1 in NPS in every primary UK brand
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Year on
year Commercial Banking have narrowed the gap. NatWest Personal,
Ulster Business & Commercial in Northern Ireland and Ulster
Business Direct in Republic of Ireland, have seen improvements in
NPS.
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Simplifying the bank
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Reduce
operating expenses by £800 million
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Operating
expenses down £985 million(5)
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Supporting growth
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Net 4%
growth in PBB and CPB customer loans
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Net
lending in PBB and CPB up 10%
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Employee engagement
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Raise
employee engagement to within two points of the GFS
norm
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Down 3
points to be 6 points adverse to GFS norm
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(1)
|
Williams
& Glyn refers to the business formerly intended to be divested
as a separate legal entity and comprises RBS England and Wales
branch-based businesses, along with certain small and medium
enterprises and corporate activities across the UK. During the
period presented Williams & Glyn has not operated as a separate
legal entity.
|
(2)
|
NatWest
Markets’ results include the following financials for
businesses subsequently transferred to Commercial Banking: total
income of £98 million for the year ended 2015.
|
(3)
|
Private
Banking serves high net worth individuals through Coutts and Adam
& Co.
|
(4)
|
IFRS
volatility arises from the changes to fair value of hedges of loans
which do not qualify for hedge accounting under IFRS.
|
(5)
|
Cost
saving target and progress 2016 calculated using operating expenses
excluding restructuring costs £2,106 million (2015 -
£2,931 million), litigation and conduct costs £5,868
(2015 - £3,568 million), write down of goodwill nil (2015 -
£498 million), write down of other intangible assets of
£117 million (2015 - £75 million), the operating costs of
Williams and Glyn £393 million (2015 - £359 million) and
the VAT recovery £227 million.
|
●
|
CET1
ratio remains ahead of our 13.0% target at 13.4%, a 210 basis
points reduction compared with Q4 2015 principally reflecting the
attributable loss, c.300 basis points, partially offset by a
£14.4 billion reduction in RWAs, c.100 basis points. During Q4
2016, CET1 ratio reduced by 160 basis points as the benefit of the
reduction in RWAs was more than offset by the attributable
loss.
|
●
|
RWAs
reduced by £14.4 billion, or 6%, during 2016 to £228.2
billion driven by £14.5 billion of disposals and run-off in
Capital Resolution and a £3.9 billion reduction associated
with the removal of Citizens operational risk RWAs, partially
offset by an increase associated with the weakening of sterling and
lending growth across our core franchises.
|
●
|
On 10
August 2016 RBS announced that it had successfully completed the
pricing of $2.65 billion 8.625% AT1 capital notes, with £4.0
billion equivalent issued since August 2015. (1.8% of Q4 2016
RWAs)
|
●
|
Leverage
ratio reduced by 50 basis points during 2016 to 5.1% reflecting the
attributable loss for the year partially offset by the AT1 issuance
and reduction in leverage exposure.
|
●
|
RBS
issued £4.2 billion equivalent senior debt, which it expects
to be eligible to meet its ‘Minimum Requirement for Own Funds
and Eligible Liabilities’ (MREL), in line with our targeted
£3-5 billion senior debt issuance for the year. €1.5
billion seven year 2.5% notes and $1.5 billion ten year 4.8% notes
were issued in Q1 2016 and $2.65 billion seven year 3.875% notes
were issued in Q3 2016.
|
●
|
In
addition, RBS successfully completed the cash tender of £2.3
billion of certain US dollar, sterling and euro senior debt
securities. The tender offers were part of the ongoing transition
to a holding company capital and term funding model in line with
regulatory requirements and included securities that RBS considers
non-compliant for MREL purposes. In total, during 2016, £10
billion has matured across our funding pools and we have redeemed
£8.2 billion though calls and repurchase.
|
●
|
As part
of the 2016 Bank of England stress testing exercise RBS submitted a
revised capital plan, incorporating further capital strengthening
actions, which was accepted by the PRA Board.
|
RBS has successfully addressed a number of the remaining legacy
issues and continues to de-risk its balance sheet
|
|
●
|
During
Q1 2016 RBS made the final dividend payment in respect of the DAS,
£1,193 million, an action that was taken to normalise the
ownership structure of the Bank.
|
●
|
In June
2016, the triennial funding valuation of the Main scheme of The
Royal Bank of Scotland Group Pension Fund was agreed which showed
that as at 31 December 2015 the value of liabilities exceeded the
value of assets by £5.8 billion. In March 2016, to mitigate
this anticipated deficit, RBS made a cash payment of £4.2
billion. The next triennial valuation is due to occur at the end of
2018 with agreement on any additional contributions by the end of
March 2020. As at 31 December 2016, the Main Scheme had an
unrecognised surplus reflected by a ratio of assets to liabilities
of c.115% under IAS 19 valuation principles.
|
●
|
On 11
April 2016, RBS completed the successful transfer of the Coutts
International businesses in Asia and the Middle East to Union
Bancaire Privée, the final milestone in the sale of our
International Private Bank. During 2016 we also completed the sale
of our Russia and Kazakhstan subsidiaries.
|
●
|
Risk
elements in lending (REIL) of £10.3 billion were £1.8
billion lower than 31 December 2015 and represented 3.1% of gross
customer loans, compared with 3.9% as at 31 December 2015 and 3.8%
at 30 September 2016.
|
●
|
In line
with the progress to de-risk the balance sheet, exposures to the
shipping and oil and gas sectors continued to reduce during 2016,
with potential exposures declining by 29% to £5.2 billion and
by 22% to £5.3 billion respectively. As at the end of 2016,
our total exposure to the coal mining, oil and gas and power
generation sectors represented 1.4% of our total
lending.
|
●
|
RBS continued to deliver strong support for both household and
business customers. Within UK PBB, gross new mortgage lending of
£29.8 billion was 29% higher than 2015. Across 2016, our
market share of new mortgages was 12%, supporting a growth in stock
share to 8.8% at end 2016 from 8.2% at end 2015. As a result, total
UK PBB net loans and advances increased by 10% compared with 2015.
Commercial Banking net loans and advances have also grown by 10%
over the course of 2016 reflecting increased borrowing across a
number of sectors.
|
●
|
The Reward account continued to show positive momentum and now has
1,149,000 fee-paying customers compared with 202,000 at 31 December
2015. We have seen positive evidence of increased levels of
engagement, with overall current account attrition levels falling
by 7% in the year. This is particularly evident across our Private
and Premium customer, with attrition 12% lower. We continue to
embed the product across our population of valuable main bank
customers.
|
●
|
RBS continues to support UK business growth through the launch of 6
new business accelerator hubs in 2016, bringing the total to 12.
This included the opening of an Entrepreneurial Centre in our
Edinburgh headquarters. In addition, NatWest launched a £1
billion lending fund to support small businesses.
|
●
|
RBS continued to make better use of our digital channels to make it
simpler to serve our customers and easier for them to do business
with us. We now have 4.2 million customers regularly using our
mobile app in the UK, 19% higher than the end of 2015, and around
60% of our personal customers used a digital channel within the
last 90 days. In 2016, we more than doubled the number of customers
who purchased a product through our mobile channel compared with
2015. NatWest customers can now apply for personal loans, credit
cards and overdrafts via the mobile app, facilitating approximately
8% of total applications. Our new business banking ‘Online
Account Opening’ service now allows start up business
customers to submit an application online in just ten minutes and
get a sort code and account number in under an hour.
|
●
|
Nearly 80% of our commercial customers’ interaction with us
is via digital channels, with around 270,000 payments processed
every day.
|
●
|
In addition to our digital channels, RBS continues to provide
multiple physical channels for serving customers, including access
to a network of c.11,500 Post Office branches in the UK, c.1,000 An
Post branches in the Republic of Ireland, and 41 mobile banking
vans, alongside our existing network of 1,425 branches and 4,646
ATMs across PBB.
|
●
|
RBS became the first UK Bank to be accredited by the Royal National
Institute for Blind People for having an accessible mobile app for
blind and partially sighted customers. In addition, we launched a
new service for British Sign Language (BSL) customers, making it
possible to instantly chat with an advisor through a BSL
interpreter.
|
●
|
Coutts won the best private bank in the UK for the fifth year
running, best private bank for philanthropy services and best
initiative of the year in client facing technology at the Global
Private Banking Awards, and was highly commended for innovation for
its ‘Coutts Concierge Online’.
|
●
|
In 2016, RBS was one of only two banks to achieve formal
recognition from the Chartered Banker Professional Standards Board
for excellence in implementing, monitoring, reporting and
commitment to the Foundation Standard for Professional
Bankers.
|
●
|
Delivered leadership training to almost 16,000 leaders through a
comprehensive ‘Determined to Lead’
programme.
|
●
|
We continue to work towards our goal of having at least 30% senior
women in our top three leadership layers across each business by
2020 and to be fully gender balanced (50/50) by 2030. As at 31
December 2016, in aggregate terms 34% of our top three leadership
layers were female.
|
●
|
RBS has attained silver status in the Business Disability
Forum’s Disability Standard, scoring 88% in its assessment of
accessibility and inclusion in the workplace.
|
●
|
RBS has moved up to 13th
place, from 32nd
last year, in Stonewall's annual Top
100 employers for lesbian, gay, bi and trans (LGBT) staff, the
highest position it has achieved in the index to
date.
|
|
|
Q4 2015
|
Q3 2016
|
Q4 2016
|
Year end 2016 target
|
Personal
Banking
|
NatWest
(England & Wales)(1)
|
9
|
11
|
13
|
15
|
Royal
Bank of Scotland (Scotland)(1)
|
-9
|
-2
|
-4
|
-5
|
|
Ulster
Bank (Northern Ireland)(2)
|
-9
|
-16
|
-16
|
-3
|
|
Ulster
Bank (Republic of Ireland)(2)
|
-14
|
-8
|
-7
|
-10
|
|
Business
Banking
|
NatWest
(England & Wales)(3)
|
9
|
4
|
-2
|
13
|
Royal
Bank of Scotland (Scotland)(3)
|
-7
|
-4
|
-5
|
2
|
|
Business
Direct
|
Ulster
Bank (Republic of Ireland)(5)
|
-21
|
n/a
|
-2
|
-15
|
Business
& Commercial
|
Ulster
Bank (Northern Ireland) (4)
|
-19
|
0
|
0
|
-4
|
Commercial
Banking(6)
|
9
|
21
|
20
|
17
|
|
|
Q4 2015
|
Q3 2016
|
Q4 2016
|
Year end 2016 target
|
Customer
trust(7)
|
NatWest
(England & Wales)
|
48%
|
48%
|
55%
|
51%
|
Royal
Bank of Scotland (Scotland)
|
14%
|
13%
|
13%
|
26%
|
(1)
|
Source:
GfK FRS 6 month rolling data. Latest base sizes: NatWest (England
& Wales) (3313) Royal Bank of Scotland (Scotland) (527). 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?“
|
(2)
|
Source:
Coyne Research 12 month rolling data. Latest base sizes: Ulster
Bank NI (375) Ulster Bank RoI (322) 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 (GB), based on
interviews with businesses with an annual turnover up to £2
million. Quarterly rolling data. Latest base sizes: NatWest England
& Wales (1258), RBS Scotland (422). Weighted by region and
turnover to be representative of businesses in England &
Wales/Scotland, 4 quarter rolling data.
|
(4)
|
Source:
Charterhouse Research Business Banking Survey (NI), based on
interviews with businesses with an annual turnover up to £1
billion. Latest base size: Ulster (399) Weighted by turnover and
industry sector to be representative of businesses in Northern
Ireland, 4 quarter rolling data.
|
(5)
|
Source:
PWC ROI Business Banking Tracker 2016 (annual study only). Latest
sample size: Ulster Bank (218)
In 2017
we will be switching the source of advocacy measurement for Ulster
Bank Business in RoI to Red C. Red C is a recognised research
agency that will provide more frequent reporting of NPS, as well as
additional diagnostic customer feedback to help us improve the
customer experience
|
(6)
|
Source:
Charterhouse Research Business Banking Survey (GB), based on
interviews with businesses with annual turnover between £2
million and £1 billion. Latest base size: RBSG Great Britain
(935). Weighted by region and turnover to be representative of
businesses in Great Britain, 4 quarter rolling data.
|
(7)
|
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 (871), RBS
Scotland (226).
|
●
|
It is our intention to implement a capital reorganisation in 2017
in order to increase the distributable reserves of the parent
company, RBSG plc, providing greater flexibility for future
distributions and preference share redemptions. We intend to seek
shareholder approval to reduce the share premium account by around
£25 billion and to cancel the capital redemption reserve,
around £5 billion. This will, subject to approval by
shareholders and regulators, and confirmation by the Court of
Session in Edinburgh, increase RBSG plc distributable reserves by
around £30 billion.
|
●
|
As previously announced, on 1 January 2017, RBS made a number of
changes to its legal entity structure to support the move towards a
ring-fenced structure, with further changes planned prior to 1
January 2019. Our new brand strategy is designed to align with our
business strategy and future ring-fenced structure. NatWest will be
our main customer facing brand in England, Wales and Western
Europe, and in Scotland, Royal Bank of Scotland will be our core
brand. In addition, our Corporate & Institutional Banking
business has been rebranded as NatWest Markets in readiness for our
future ring-fenced structure. The ring-fenced banking group is
expected to comprise of 80% of RBS risk-weighted
assets.(1)
|
(1)
|
Based
on RBS future business profile business and excludes Capital
Resolution.
|
●
|
RBS continues to develop its processes to enable IFRS 9
Financial
Instruments to be implemented
on 1 January 2018; an estimate of the initial impact will be
included in 2017 H1 interim reporting.
|
●
|
On 17 February 2017, RBS announced that it had been informed by HM
Treasury ("HMT") that the Commissioner responsible for EU
competition policy plans to propose to the College of Commissioners
to open proceedings to gather evidence on an alternative plan for
RBS to meet its remaining State Aid obligations. If adopted, this
alternative plan would replace the existing requirement to achieve
separation and divestment by 31 December 2017 of Williams &
Glyn. As previously disclosed, none of the proposals to acquire the
business received by RBS can deliver a full separation and
divestment before the 31 December 2017 deadline.
|
||
●
|
RBS has agreed that HMT will now seek formal amendment to RBS's
State Aid commitments to pave the way for the Commissioner to
propose to open proceedings, as described above. In addition to the
Commission's proceedings, HMT will carry out a market testing
exercise in parallel. The opening of the Commission's proceedings
does not prejudge the outcome of the investigation.
|
||
●
|
The plan envisages that RBS will deliver the following revised
package of remedies to promote competition in the market for
banking services to small and medium enterprises ("SMEs") in the
UK:
|
||
|
○
|
A fund, administered by an independent body, that eligible
challenger banks can access to increase their business banking
capabilities;
|
|
|
○
|
Funding for eligible challenger banks to help them incentivise SMEs
to switch their accounts from RBS paid in the form of "dowries" to
eligible challenger banks;
|
|
|
○
|
RBS granting business customers of eligible challenger banks access
to its branch network for cash and cheque handling, to support the
measures above; and
|
|
|
○
|
An independent fund to invest in fintech to support the business
banking of the future.
|
|
●
|
The 2016 Annual Results include a £750 million restructuring
provision as a consequence of this proposal.
|
●
|
Subject to providing fully
for the remaining legacy issues, RMBS exposures in particular, RBS
currently expects that 2017 will be its final year of substantive
legacy clean up with significant one-off costs. Consequently, we
anticipate that the bank will be profitable in 2018.
|
●
|
We are targeting net loans
and advances growth of 3% across PBB and CPB, including taking into
account the impact of balance sheet reductions associated with the
RWA reduction target. We anticipate that this growth will be
largely within PBB as we expect to see moderate growth in some
segments in CPB, whilst at the same time selectively reducing
exposures with weak returns and continuing to actively manage
certain legacy loan exposures.
|
●
|
We expect that income in
2017 will continue to be supported by balance sheet growth across
PBB and CPB. Within UK PBB, we anticipate that income will increase
in 2017 compared with 2016, as we have already absorbed significant
margin pressure from the changing mortgage mix and the impact of
the sharp fall in interchange rates. Across CPB, we expect income
to be broadly stable with continued competitive pressure on
margins, given the interest rate environment. NatWest Markets is
expected to continue to benefit from increased market volatility
and customer activity and we anticipate that 2017 income will be
above previously indicated targets of £1.3 - £1.4
billion.
|
●
|
RBS
plans to reduce adjusted operating expenses by a further £750
million in 2017, in addition to the £3.1 billion achieved
across 2014 to 2016, and we expect that the adjusted cost:income
ratio will improve across our combined PBB, CPB and NatWest Markets
franchises in 2017 compared with 2016.
|
●
|
Net
impairment charges should remain meaningfully below normalised
levels in 2017. However, we expect the level of net impairment
charges to be driven by a combination of increased gross charges
and a materially reduced benefit from releases. Recent UK economic
performance has been better than previous forecasts leading to
improved expectations for the 2017 economic outlook. However, the
medium term outlook remains less certain, and together with the
increased volatility expected with the introduction of IFRS 9,
quantification of future credit losses is more challenging beyond
2017 at this point. We continue to remain mindful of potential
downside risks including from single name/sector driven events and
lower releases of provisions.
|
●
|
We
continue to expect that cumulative Capital Resolution disposal
losses will total approximately £2.0 billion since the
beginning of 2015, with £1,192 million of losses incurred to
date (2016;£825 million, 2015;£367 million) with most of
the balance expected to be incurred during 2017. Excluding RBS's
stake in Alawwal Bank (previously Saudi Hollandi Bank, £7.9
billion at 31 December 2016), we expect Capital Resolution RWAs to
be in the range £15-£20 billion by the end of 2017, at
which point we plan to wind up Capital Resolution and transfer the
assets back into the rest of the bank.
|
●
|
Excluding
restructuring costs associated with the State Aid obligations
relating to Williams & Glyn, we expect to incur restructuring
costs of approximately £1 billion in 2017 and approximately a
further £1 billion in aggregate during 2018 and 2019.
Approximately 40% of this cost is expected to relate to the
optimisation of our property portfolio.
|
●
|
Further to the
update on 17 February 2017 in respect of the remaining State Aid
obligations regarding the business known as Williams & Glyn,
and subject to the alternative plan being finalised and adopted by
the European Commission (EC) and further discussions with the EC
and HMT, RBS will assess the timing and manner in which it would
reincorporate the business into the RBS franchises. This
reintegration would likely create some additional restructuring
charges during 2017 and 2018.
|
●
|
We are
targeting a CET1 ratio of at least 13% at the end of 2017. As part
of the 2016 Bank of England stress testing exercise, RBS submitted
a revised capital plan, incorporating further capital strengthening
actions, which was accepted by the PRA Board.
|
●
|
RBS
issuance plans for 2017 focus on issuing £3-£5 billion
MREL-compliant Senior holding company (RBSG) securities. We do not
currently anticipate the need for either AT1 or Tier 2 issuances.
In addition, and reflecting our strategic progress, we also target
a progressive return to other funding markets to support our
lending growth.
|
●
|
RBS
continues to deal with a range of significant risks and
uncertainties in the external economic, political and regulatory
environment and manage conduct-related investigations and
litigation, including RMBS. Substantial additional charges and
costs may be recognised in the coming quarters which would have an
impact on the RBS’s level of capital and financial
performance and condition.
|
●
|
We now
target achieving our sub 50% cost:income ratio and 12% return on
tangible equity targets in 2020, one year later than originally
planned. Our confidence in achieving the targets is underpinned by
our ability to protect income and drive cost reductions whilst
managing credit and market risk and driving further capital
efficiency.
|
●
|
We
expect to be able to grow volumes faster than market growth rates
over the coming years in chosen segments across PBB and
CPB.
|
●
|
We plan
to reduce adjusted operating expenses in the order of £2
billion in the next four years with around two thirds of this from
the core bank.
|
●
|
We are
targeting a gross RWA reduction of approximately £20 billion
across PBB, CPB and NatWest Markets by the end of 2018, with some
offsetting volume growth. We expect that the reduction will be
largely achieved through improvements in the quality of our risk
models, exiting low return, non strategic and risk intensive asset
pools, improved risk metrics in certain portfolios and benefits
from data clean-up. We estimate that the income loss associated
with this reduction will be in the range £250 million -
£300 million on an annualised, pre tax, basis.
|
●
|
We
continue to monitor the ongoing discussions around the potential
further tightening of regulatory capital rules and recognise that
this could result in RWA inflation in the medium term.
|
●
|
In view
of the significant risks and uncertainties in the external
economic, political and regulatory environment, including
uncertainties around the resolution of RMBS, the timing of
returning excess capital to shareholders through dividends or
buybacks remains uncertain.
|
(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 432 to 463
of the Annual Report and Accounts 2016. These statements constitute
forward looking statements, please see Forward Looking Statements
on pages 64 and 65 of this announcement.
|
Strategy goal
|
Our long-term targets
|
Our 2017 goals
|
Strength
and sustainability
|
CET1
ratio of 13%
RoTE(1,2) ≥ 12%
|
Maintain
bank CET1 ratio of 13%
|
Customer experience
|
Number
1 for service, trust and advocacy
|
Significantly
increase NPS or maintain No.1 in chosen customer
segments
|
Simplifying the bank
|
Headline
cost:income ratio <50%
|
Reduce
operating expenses by at least £750 million (3)
|
Supporting growth
|
Leading
market positions in every franchise
|
Net 3%
growth in total PBB and CPB loans to customers (4)
|
Employee engagement
|
Employee
engagement in upper quartile of Global Financial Services (GFS)
norm
|
Improve
employee engagement
|
(1)
|
Calculated
using (loss)/profit for the period attributable to ordinary
shareholders.
|
(2)
|
Tangible
equity is equity attributable to ordinary shareholders less
intangible assets.
|
(3)
|
Cost
saving target and progress 2017 calculated using operating expenses
excluding restructuring costs, litigation and conduct costs, write
down of goodwill and the 2016 VAT recovery.
|
(4)
|
Lending
growth target is after including the impact of balance sheet
reductions associated with the RWA reduction target across PBB, CPB
and NatWest Markets as outlined in the outlook
statement.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Net interest income
|
8,708
|
8,767
|
|
2,208
|
2,167
|
2,162
|
|
|
|
|
|
|
|
Own credit adjustments
|
180
|
309
|
|
(114)
|
(156)
|
(115)
|
(Loss)/gain on redemption of own debt
|
(126)
|
(263)
|
|
1
|
3
|
(263)
|
Strategic disposals
|
164
|
(157)
|
|
-
|
(31)
|
(22)
|
Other operating income
|
3,664
|
4,267
|
|
1,121
|
1,327
|
722
|
|
|
|
|
|
|
|
Non-interest income
|
3,882
|
4,156
|
|
1,008
|
1,143
|
322
|
|
|
|
|
|
|
|
Total income
|
12,590
|
12,923
|
|
3,216
|
3,310
|
2,484
|
|
|
|
|
|
|
|
Restructuring costs
|
(2,106)
|
(2,931)
|
|
(1,007)
|
(469)
|
(614)
|
Litigation and conduct costs
|
(5,868)
|
(3,568)
|
|
(4,128)
|
(425)
|
(2,124)
|
Write down of goodwill
|
-
|
(498)
|
|
-
|
-
|
(498)
|
Other costs
|
(8,220)
|
(9,356)
|
|
(2,219)
|
(2,017)
|
(2,525)
|
|
|
|
|
|
|
|
Operating expenses
|
(16,194)
|
(16,353)
|
|
(7,354)
|
(2,911)
|
(5,761)
|
|
|
|
|
|
|
|
(Loss)/profit before impairment (losses)/releases
|
(3,604)
|
(3,430)
|
|
(4,138)
|
399
|
(3,277)
|
Impairment (losses)/releases
|
(478)
|
727
|
|
75
|
(144)
|
327
|
|
|
|
|
|
|
|
Operating (loss)/profit before tax
|
(4,082)
|
(2,703)
|
|
(4,063)
|
255
|
(2,950)
|
Tax (charge)/credit
|
(1,166)
|
(23)
|
|
(244)
|
(582)
|
261
|
|
|
|
|
|
|
|
Loss from continuing operations
|
(5,248)
|
(2,726)
|
|
(4,307)
|
(327)
|
(2,689)
|
Profit from discontinued operations, net of tax
|
-
|
1,541
|
|
-
|
-
|
90
|
|
|
|
|
|
|
|
Loss for the period
|
(5,248)
|
(1,185)
|
|
(4,307)
|
(327)
|
(2,599)
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
Non-controlling interests
|
10
|
409
|
|
(27)
|
7
|
20
|
Other owners
|
504
|
385
|
|
161
|
135
|
121
|
Dividend access share
|
1,193
|
-
|
|
-
|
-
|
-
|
Ordinary shareholders
|
(6,955)
|
(1,979)
|
|
(4,441)
|
(469)
|
(2,740)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memo:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income - adjusted (1)
|
12,372
|
13,034
|
|
3,329
|
3,494
|
2,884
|
Operating expenses - adjusted (2)
|
(8,220)
|
(9,356)
|
|
(2,219)
|
(2,017)
|
(2,525)
|
Operating profit - adjusted (1,2)
|
3,674
|
4,405
|
|
1,185
|
1,333
|
686
|
(1)
|
Excluding
own credit adjustments, (loss)/gain on redemption of own debt and
strategic disposals.
|
(2)
|
Excluding
restructuring costs, litigation and conduct costs and write down of
goodwill.
|
|
31 December
|
30 September
|
31 December
|
|
2016
|
2016
|
2015
|
|
£m
|
£m
|
£m
|
|
|
|
|
Cash and balances at central banks
|
74,250
|
69,254
|
79,404
|
Net loans and advances to banks (1)
|
17,278
|
19,741
|
18,361
|
Net loans and advances to customers (1)
|
323,023
|
326,736
|
306,334
|
Reverse repurchase agreements and stock borrowing
|
41,787
|
45,955
|
39,843
|
Debt securities and equity shares
|
73,225
|
80,512
|
83,458
|
Assets of disposal groups (2)
|
13
|
13
|
3,486
|
Other assets
|
22,099
|
27,118
|
22,008
|
|
|
|
|
Funded assets
|
551,675
|
569,329
|
552,894
|
Derivatives
|
246,981
|
283,049
|
262,514
|
|
|
|
|
Total assets
|
798,656
|
852,378
|
815,408
|
|
|
|
|
Bank deposits (3)
|
33,317
|
32,172
|
28,030
|
Customer deposits (3)
|
353,872
|
358,844
|
343,186
|
Repurchase agreements and stock lending
|
32,335
|
36,408
|
37,378
|
Debt securities in issue
|
27,245
|
28,357
|
31,150
|
Subordinated liabilities
|
19,419
|
19,162
|
19,847
|
Derivatives
|
236,475
|
275,364
|
254,705
|
Provisions for liabilities and charges
|
12,836
|
9,021
|
7,366
|
Liabilities of disposal groups (2)
|
15
|
15
|
2,980
|
Other liabilities
|
33,738
|
38,707
|
36,619
|
|
|
|
|
Total liabilities
|
749,252
|
798,050
|
761,261
|
Non-controlling interests
|
795
|
853
|
716
|
Owners’ equity
|
48,609
|
53,475
|
53,431
|
|
|
|
|
Total liabilities and equity
|
798,656
|
852,378
|
815,408
|
|
|
|
|
Contingent liabilities and commitments
|
150,691
|
151,394
|
153,752
|
(1)
|
Excludes
reverse repurchase agreements and stock borrowing.
|
(2)
|
Primarily
consists of international private banking business at 31 December
2015.
|
(3)
|
Excludes
repurchase agreements and stock lending.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
|
Net interest income
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Net interest income (1)
|
|
|
|
|
|
|
RBS
|
8,708
|
8,767
|
|
2,208
|
2,167
|
2,162
|
|
|
|
|
|
|
|
- UK Personal & Business Banking
|
4,287
|
4,152
|
|
1,093
|
1,085
|
1,030
|
- Ulster Bank RoI
|
409
|
365
|
|
105
|
106
|
85
|
- Commercial Banking
|
2,143
|
1,997
|
|
542
|
534
|
512
|
- Private Banking
|
449
|
436
|
|
111
|
112
|
108
|
- RBS International
|
303
|
303
|
|
77
|
75
|
78
|
- NatWest Markets
|
104
|
87
|
|
29
|
32
|
28
|
- Capital Resolution
|
239
|
365
|
|
44
|
27
|
6
|
- Williams & Glyn
|
658
|
658
|
|
170
|
164
|
165
|
- Central items & other
|
116
|
404
|
|
37
|
32
|
150
|
|
|
|
|
|
|
|
Average interest-earning assets (IEA)
|
|
|
|
|
|
|
RBS
|
399,598
|
413,345
|
|
401,548
|
397,345
|
407,061
|
|
|
|
|
|
|
|
- UK Personal & Business Banking
|
142,458
|
130,702
|
|
147,703
|
145,649
|
134,687
|
- Ulster Bank RoI
|
25,193
|
23,232
|
|
26,259
|
26,026
|
23,195
|
- Commercial Banking
|
121,677
|
106,429
|
|
128,174
|
123,817
|
111,600
|
- Private Banking
|
16,887
|
15,835
|
|
17,679
|
16,978
|
16,025
|
- RBS International
|
22,254
|
20,518
|
|
22,793
|
23,332
|
20,773
|
- NatWest Markets
|
12,387
|
16,552
|
|
14,085
|
11,960
|
10,190
|
- Capital Resolution
|
25,468
|
60,656
|
|
19,696
|
22,352
|
39,875
|
- Williams & Glyn
|
24,321
|
22,940
|
|
25,145
|
24,597
|
23,327
|
- Central items & other
|
8,953
|
16,482
|
|
14
|
2,634
|
27,389
|
|
|
|
|
|
|
|
Yields, spreads and margins of the banking business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross yield on interest-earning assets
|
|
|
|
|
|
|
of the banking business (2,3)
|
2.80%
|
2.88%
|
|
2.72%
|
2.78%
|
2.78%
|
Cost of interest-bearing liabilities of banking business
(2)
|
(0.94%)
|
(1.11%)
|
|
(0.82%)
|
(0.92%)
|
(1.00%)
|
|
|
|
|
|
|
|
Interest spread of the banking business (2,4)
|
1.86%
|
1.77%
|
|
1.90%
|
1.86%
|
1.78%
|
Benefit from interest-free funds
|
0.32%
|
0.35%
|
|
0.29%
|
0.31%
|
0.32%
|
|
|
|
|
|
|
|
Net interest margin (1,5)
|
|
|
|
|
|
|
RBS
|
2.18%
|
2.12%
|
|
2.19%
|
2.17%
|
2.10%
|
|
|
|
|
|
|
|
- UK Personal & Business Banking
(6)
|
3.01%
|
3.18%
|
|
2.94%
|
2.96%
|
3.03%
|
- Ulster Bank RoI (6)
|
1.62%
|
1.57%
|
|
1.59%
|
1.62%
|
1.45%
|
- Commercial Banking (6)
|
1.76%
|
1.88%
|
|
1.68%
|
1.72%
|
1.82%
|
- Private Banking (6)
|
2.66%
|
2.75%
|
|
2.50%
|
2.62%
|
2.67%
|
- RBS International (6)
|
1.36%
|
1.48%
|
|
1.34%
|
1.28%
|
1.49%
|
- NatWest Markets
|
0.84%
|
0.53%
|
|
0.82%
|
1.06%
|
1.09%
|
- Capital Resolution
|
0.94%
|
0.60%
|
|
0.89%
|
0.48%
|
0.06%
|
- Williams & Glyn
|
2.71%
|
2.87%
|
|
2.69%
|
2.65%
|
2.81%
|
Third party customer rates
(7)
|
|
|
|
|
|
|
Third party customer asset rate
|
|
|
|
|
|
|
- UK Personal & Business Banking
|
3.83%
|
4.13%
|
|
3.64%
|
3.79%
|
4.00%
|
- Ulster Bank RoI (8)
|
2.19%
|
2.27%
|
|
2.20%
|
2.17%
|
2.19%
|
- Commercial Banking
|
2.77%
|
2.93%
|
|
2.65%
|
2.74%
|
2.84%
|
- Private Banking
|
2.90%
|
3.13%
|
|
2.76%
|
2.86%
|
3.06%
|
- RBS International
|
3.04%
|
3.10%
|
|
2.93%
|
2.95%
|
3.09%
|
Third party customer funding rate
|
|
|
|
|
|
|
- UK Personal & Business Banking
|
(0.45%)
|
(0.66%)
|
|
(0.28%)
|
(0.44%)
|
(0.63%)
|
- Ulster Bank RoI (8)
|
(0.50%)
|
(0.88%)
|
|
(0.42%)
|
(0.46%)
|
(0.74%)
|
- Commercial Banking
|
(0.33%)
|
(0.38%)
|
|
(0.27%)
|
(0.32%)
|
(0.36%)
|
- Private Banking
|
(0.18%)
|
(0.26%)
|
|
(0.12%)
|
(0.18%)
|
(0.25%)
|
- RBS International
|
(0.14%)
|
(0.31%)
|
|
(0.08%)
|
(0.10%)
|
(0.24%)
|
|
|
|
|
|
|
|
Refer to the following page for footnotes.
|
|
|
|
|
|
|
(1)
|
For the
purpose of net interest margin (NIM) calculations, no decrease for
2016 (2015 - £15 million) and no decrease for Q4 2016 (Q3 2016
– nil; Q4 2015 - £3 million) was made in respect of
interest on financial assets and liabilities designated as at fair
value through profit or loss. Related average interest-earning
assets and average interest-bearing liabilities have also been
adjusted.
|
(2)
|
For the
purpose of calculating gross yields and interest spread, interest
receivable and interest payable have both been decreased by
£76 million in respect of negative interest relating to
financial assets that attracted negative interest.
|
(3)
|
Gross
yield is the interest earned on average interest-earning assets as
a percentage of average interest-earning assets.
|
(4)
|
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.
|
(5)
|
Net
interest margin is net interest income as a percentage of average
interest-earning assets.
|
(6)
|
PBB NIM
for the year ended 2016 was 2.80% (year ended 2015 - 2.93%; Q4 2016
- 2.74%; Q3 2016 - 2.76%; Q4 2015 - 2.80%). CPB NIM for the year
ended 2016 was 1.80% (year ended 2015 - 1.92%; Q4 2016 - 1.72%; Q3
2016 - 1.75%; Q4 2015 - 1.87%).
|
(7)
|
Net
interest margin includes Treasury allocations and interest on
intercompany borrowings, which are excluded from third party
customer rates.
|
(8)
|
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 £8,708 million reduced by £59 million
compared with 2015 principally driven by a £126 million
reduction in Capital Resolution, in line with the planned shrinkage
of the balance sheet.
|
●
|
NIM was
2.18% for 2016, 6 basis points higher than 2015 as the benefit
associated with reductions in low yielding ‘non-core’
assets has been partially offset by modest asset margin pressure
and mix impacts across PBB and CPB.
|
●
|
Average
interest earning assets across the combined PBB and CPB increased
by 11% on 2015, compared with a 3% decline for RBS total, and
represented 82% of total average interest earning assets (2015 -
72%). NIM across PBB and CPB was 2.31%, 13 basis points lower than
2015.
|
●
|
UK PBB
NIM decreased by 17 basis points to 3.01% reflecting the impact of
the overall portfolio mix being increasingly weighted towards
secured lending and mortgage customers switching from standard
variable rate (SVR) to lower rate products. During the second half
of 2016 SVR balances stabilised at approximately 12% of mortgage
balances.
|
●
|
Ulster
Bank RoI NIM increased by 5 basis points to 1.62% driven by a
continued reduction in the cost of deposits and a reduced volume of
low yielding liquid assets, partly offset by reduced income on free
funds.
|
●
|
Commercial
Banking NIM fell by 12 basis points to 1.76% driven by asset margin
pressure in a competitive market and low rate
environment.
|
●
|
Private
Banking NIM reduced by 9 basis points to 2.66% principally driven
by asset margin pressure.
|
●
|
RBSI
NIM fell by 12 basis points to 1.36% reflecting asset and liability
margin pressures, partially offset by mitigating pricing
actions.
|
●
|
Structural
hedges of £123 billion generated a benefit of £1.3
billion through net interest income for the year. Around 73% of
these hedges are part of a five year rolling hedge programme (with
around 27% as part of a ten year hedge) that will progressively
roll-off over the coming years.
|
●
|
Net
interest income of £2,208 million increased by £41
million compared with Q3 2016 principally driven by a £16
million increase across PBB and CPB and a £17 million increase
in Capital Resolution.
|
●
|
NIM for
Q4 2016 was 2.19%, 2 basis points higher than Q3 2016. NIM for the
combined PBB and CPB franchises was 2.24%, 3 basis points lower
than Q3 2016.
|
●
|
UK PBB
NIM reduced by 2 basis points to 2.94% and Commercial Banking NIM
reduced by 4 basis points to 1.68% driven by asset margin
pressure.
|
●
|
Net
interest income of £2,208 million increased by £46
million compared with Q4 2015 principally driven by a £115
million increase across PBB and CPB.
|
●
|
NIM was
2.19% for Q4 2016, 9 basis points higher than Q4 2015 as the
benefit associated with reductions in low yielding
‘non-core’ assets has been partially offset by modest
asset margin pressure and mix impacts across PBB and
CPB.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
|
Non-interest income
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Net fees and commissions
|
2,535
|
2,933
|
|
608
|
643
|
653
|
Income from trading activities
|
820
|
806
|
|
622
|
465
|
59
|
Own credit adjustments
|
180
|
309
|
|
(114)
|
(156)
|
(115)
|
(Loss)/gain on redemption of own debt
|
(126)
|
(263)
|
|
1
|
3
|
(263)
|
Strategic disposals
|
164
|
(157)
|
|
-
|
(31)
|
(22)
|
Other operating income
|
309
|
528
|
|
(109)
|
219
|
10
|
|
|
|
|
|
|
|
Total non-interest income
|
3,882
|
4,156
|
|
1,008
|
1,143
|
322
|
|
|
|
|
|
|
|
Of which:
|
|
|
|
|
|
|
Capital Resolution
|
(601)
|
174
|
|
(337)
|
76
|
(268)
|
IFRS volatility in Treasury
|
(510)
|
15
|
|
308
|
(150)
|
59
|
●
|
Non-interest
income was £3,882 million, a reduction of £274 million,
or 7%, compared with 2015. Capital Resolution non-interest income
reduced by £775 million reflecting planned asset disposal,
including £572 million of disposal losses compared with
£367 million in 2015, and a funding valuation adjustment of
£170 million. In addition, we recognised a charge of £510
million for volatile items under IFRS compared with a £15
million gain in 2015. Partially offsetting, we reported a strategic
disposal gain of £164 million, compared with a loss of
£157 million in 2015, a loss on redemption of own debt of
£126 million, compared with £263 million in 2015, an FX
gain of £349 million following the significant weakening of
sterling against the dollar and a £97 million foreign exchange
reserve recycling gain.
|
●
|
Net
fees and commissions decreased by £398 million, or 14%,
compared with 2015 reflecting the planned Capital Resolution asset
run-down, £168 million, a reduction in NatWest Markets,
£175 million, and a £36 million reduction in UK PBB,
driven by lower credit card interchange fees and increased cash
back payments following the launch of the Rewards
account.
|
●
|
Income
from trading activities increased by £14 million to £820
million as a £219 million increase in NatWest Markets income
has been partially offset by Capital Resolution, £133 million,
and an increased charge for volatile items under IFRS.
|
●
|
Other
operating income reduced by £219 million principally
reflecting planned asset disposals in Capital
Resolution.
|
●
|
Non-interest
income of £1,008 million was £135 million, or 12%, lower
than Q3 2016. Capital Resolution decreased by £413 million
reflecting planned disposal activity, including disposal losses of
£325 million compared with £143 million in Q3 2016, and
NatWest Markets reduced by £183 million. Partially offsetting,
we recognised a £308 million gain for volatile items under
IFRS compared with a loss of £150 million in Q3
2016.
|
●
|
Non-interest
income was £686 million higher than Q4 2015. A gain of
£308 million was recognised for volatile items under IFRS,
compared with £59 million in Q4 2015, and Q4 2015 included a
£263 million loss on redemption of own debt. In addition,
NatWest Markets non-interest income increased by £98 million
to £256 million.
|
|
|
|
|
|
|
|
|
Year ended
|
Quarter ended
|
||||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
|
Operating expenses
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Staff costs
|
4,482
|
4,896
|
|
1,025
|
1,128
|
1,072
|
Premises and equipment
|
1,297
|
1,483
|
|
346
|
321
|
422
|
Other administrative expenses
|
1,619
|
2,124
|
|
601
|
393
|
786
|
Restructuring costs (see below)
|
2,106
|
2,931
|
|
1,007
|
469
|
614
|
Litigation and conduct costs
|
5,868
|
3,568
|
|
4,128
|
425
|
2,124
|
|
|
|
|
|
|
|
Administrative expenses
|
15,372
|
15,002
|
|
7,107
|
2,736
|
5,018
|
Depreciation and amortisation
|
705
|
778
|
|
178
|
175
|
170
|
Write down of goodwill
|
-
|
498
|
|
-
|
-
|
498
|
Write down of intangible assets
|
117
|
75
|
|
69
|
-
|
75
|
|
|
|
|
|
|
|
Operating expenses
|
16,194
|
16,353
|
|
7,354
|
2,911
|
5,761
|
|
|
|
|
|
|
|
Adjusted operating expenses (1)
|
8,220
|
9,356
|
|
2,219
|
2,017
|
2,525
|
|
|
|
|
|
|
|
Restructuring costs comprise:
|
|
|
|
|
|
|
- staff expenses
|
642
|
830
|
|
117
|
159
|
205
|
- premises, equipment, depreciation and
amortisation
|
164
|
746
|
|
107
|
33
|
41
|
- other
|
1,300
|
1,355
|
|
783
|
277
|
368
|
|
|
|
|
|
|
|
|
2,106
|
2,931
|
|
1,007
|
469
|
614
|
Of which: Williams & Glyn
|
1,456
|
658
|
|
810
|
301
|
209
|
|
|
|
|
|
|
|
Staff costs as a % of total income
|
36%
|
38%
|
|
32%
|
34%
|
43%
|
Cost:income ratio
|
129%
|
127%
|
|
229%
|
88%
|
232%
|
Cost:income ratio - adjusted (2)
|
66%
|
72%
|
|
67%
|
58%
|
88%
|
Employee numbers (FTE - thousands)
|
77.8
|
91.5
|
|
77.8
|
82.5
|
91.5
|
|
Year ended
|
|
|
31 December
|
31 December
|
|
2016
|
2015
|
UK Bank levy segmental allocations
|
£m
|
£m
|
|
|
|
UK Personal & Business Banking
|
34
|
45
|
Ulster Bank RoI
|
3
|
9
|
Commercial Banking
|
90
|
103
|
Private Banking
|
19
|
22
|
RBS International Banking
|
19
|
18
|
NatWest Markets
|
13
|
24
|
Capital Resolution
|
22
|
43
|
Central items
|
(10)
|
(34)
|
|
|
|
Total UK Bank levy
|
190
|
230
|
(1)
|
Excluding restructuring costs, litigation and conduct costs and
write down of goodwill.
|
(2)
|
Excluding own credit adjustments, (loss)/gain on redemption of own
debt, strategic disposals, restructuring costs, litigation and
conduct costs and write down of goodwill.
|
●
|
Operating
expenses of £16,194 million were £159 million, or 1%,
lower than 2015 reflecting a £1,136 million, or 12%, reduction
in adjusted operating expenses and a £825 million, or 28%,
reduction in restructuring costs. In addition, 2015 included a
£498 million write down of goodwill relating to Private
Banking. Partially offsetting the above, litigation and conduct
costs increased by £2,300 million.
|
●
|
Adjusted
operating expenses reduced by £1,136 million, or 12%, compared
with 2015 to £8,220 million. Excluding expenses associated
with Williams & Glyn, write down of intangibles and a £227
million VAT recovery, adjusted expenses reduced by
£985(1) million, or 11%,
in excess of our £800 million target. RBS has achieved a
cumulative cost reduction of £3.1 billion across 2014 –
2016.
|
●
|
Staff
costs of £4,482 million were £414 million, or 8%, lower
than 2015 underpinned by a 13,700, or 15%, reduction in
FTEs.
|
●
|
Restructuring
costs were £2,106 million for 2016, compared with £2,931
million in 2015, and included a £750 million provision in
respect of the 17 February 2017 update on RBS’s remaining
State Aid obligation regarding Williams & Glyn. In addition,
£706 million of the remaining restructuring costs relate to
Williams & Glyn, including £146 million of termination
costs associated with the decision to discontinue the programme to
create a cloned banking platform.
|
●
|
Litigation
and conduct costs of £5,868 million included; a £3,107
million provision in relation to various investigations and
litigation matters relating to RBS’s issuance and
underwriting of residential mortgage-backed securities (RMBS),
£601 million of additional PPI provisions, a £400 million
provision in respect of the FCA review of RBS’s treatment of
SMEs, an additional £169 million charge in respect of the
settlement with the National Credit Union Administration Board to
resolve two outstanding RMBS lawsuits in the United States relating
to residential mortgage backed securities, a £172 million
provision in Ulster Bank RoI, principally in respect of remediation
and programme costs associated with an industry wide examination of
tracker mortgages, and a provision in respect of the UK 2008 rights
issue shareholder litigation.
|
●
|
Operating
expenses of £7,354 million were £4,443 million higher
than Q3 2016 driven by a £3,703 million increase in litigation
and conduct costs, a £538 million increase in restructuring
costs and a £202 million increase in adjusted operating
expenses.
|
●
|
Adjusted
operating expenses of £2,219 million were £202 million
higher than Q3 2016 principally reflecting the UK bank levy charge
of £190 million.
|
●
|
Restructuring
costs of £1,007 million, compared with £469 million in Q3
2016, and included a £750 million provision in respect of the
17 February 2017 update on RBS’s remaining State Aid
obligation regarding Williams & Glyn. In addition, £60
million of the remaining cost related to Williams & Glyn,
£241 million, or 80%, lower than Q3 2016 following the
decision to discontinue the programme to create a cloned banking
platform.
|
●
|
Litigation
and conduct costs of £4,128 million included; a £3,107
million provision in relation to various investigations and
litigation matters relating to RBS’s issuance and
underwriting of RMBS, a £400 million provision in respect of
the FCA review of RBS’s treatment of SMEs, £201 million
of additional PPI provisions and a £77 million provision in
Ulster Bank RoI, principally in respect of remediation and
programme costs associated with an industry wide examination of
tracker mortgages.
|
●
|
Operating
expenses of £7,354 million were £1,593 million higher
than Q4 2015 reflecting a £2,004 million increase in
litigation and conduct costs and a £393 million increase in
restructuring costs, partially offset by a £498 million write
down of goodwill in Q4 2015 and a £306 million reduction in
adjusted operating expenses, principally driven by a £218
million reduction in Capital Resolution.
|
(1)
|
Operating expenses excluding restructuring costs £2,106
million (2015 - £2,931 million), litigation and conduct costs
£5,868 million (2015 - £3,568 million), write down of
goodwill nil (2015 - £498 million), write down of other
intangible assets of £117 million (2015 - £75 million),
the operating costs of Williams and Glyn £393 million (2015 -
£359 million) and the VAT recovery £227 million in
2016.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
|
Impairment (releases)/losses
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Loan impairment (releases)/losses
|
|
|
|
|
|
|
- individually assessed
|
535
|
(406)
|
|
(40)
|
217
|
(271)
|
- collectively assessed
|
218
|
(35)
|
|
(1)
|
176
|
(27)
|
- latent
|
(216)
|
(408)
|
|
(25)
|
(202)
|
(28)
|
|
|
|
|
|
|
|
Customer loans
|
537
|
(849)
|
|
(66)
|
191
|
(326)
|
Bank loans
|
-
|
(4)
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Total loan impairment (releases)/losses
|
537
|
(853)
|
|
(66)
|
191
|
(326)
|
Securities
|
(59)
|
126
|
|
(9)
|
(47)
|
(1)
|
|
|
|
|
|
|
|
Total impairment (releases)/losses
|
478
|
(727)
|
|
(75)
|
144
|
(327)
|
|
|
|
|
|
31 December
|
30 September
|
31 December
|
Credit metrics (1)
|
2016
|
2016
|
2015
|
|
|
|
|
Gross customer loans
|
£327,478m
|
£332,917m
|
£315,111m
|
Loan impairment provisions
|
£4,455m
|
£6,181m
|
£7,139m
|
Risk elements in lending (REIL)
|
£10,310m
|
£12,625m
|
£12,157m
|
Provisions as a % of REIL
|
43%
|
49%
|
59%
|
REIL as a % of gross customer loans
|
3.1%
|
3.8%
|
3.9%
|
Provisions as a % of gross customer loans
|
1.4%
|
1.9%
|
2.3%
|
(1)
|
Includes
disposal groups and excludes reverse repos.
|
●
|
A net
impairment loss of £478 million, 15 basis points of gross
customer loans, compared with a net impairment release of £727
million in 2015.
|
●
|
Capital
Resolution reported a net impairment loss of £253 million in
2016 compared with a release of £725 million in 2015. The loss
for the year included a charge of £424 million in respect of
the shipping portfolio reflecting difficult conditions in some
parts of the sector.
|
●
|
Commercial
Banking net impairment loss of £206 million was £137
million higher than 2015 principally reflecting a single name
charge in respect of the oil and gas portfolio.
|
●
|
UK PBB
reported a net impairment loss of £83 million compared with a
net release of £7 million in 2015.
|
●
|
Ulster
Bank RoI reported a net impairment release of €138 million
compared with €194 million in 2015. The 2016 impairment
release included a write back associated with the sale of a
portfolio of loans. REIL reduced by €0.6 billion driven by
the portfolio sale, partially offset by a widening of the
definition of loans which are considered to be
impaired.
|
●
|
REIL
reduced by £1,847 million during 2016 to £10,310 million
reflecting Capital Resolution run-down and a portfolio sale in
Ulster Bank RoI partially offset by an increase in the shipping
portfolio, foreign exchange movements and the implementation of a
revised mortgage methodology in Ulster Bank RoI. REIL represented
3.1% of gross customer loans compared with 3.9% at 31 December
2015. Provision coverage was 43% compared with 59% at 31 December
2015, with the reduction largely driven by Ulster Bank RoI and
Capital Resolution.
|
●
|
Excluding
Ulster Bank RoI and Capital Resolution, REIL represented 1.5% of
gross customer loans, compared with 2.0% at end 2015, and provision
coverage was 54% compared with 56% in 2015.
|
●
|
A net
impairment release of £75 million compared with a net
impairment charge of £144 million in Q3 2016.
|
●
|
Capital
Resolution reported a net impairment release of £130 million
compared with a net impairment charge of £120 million in Q3
2016.
|
●
|
Commercial
Banking reported a net impairment loss of £83 million compared
with £20 million in Q3 2016, with the uplift reflecting single
name charges in the quarter.
|
●
|
REIL of
£10,310 million were 3.1% of gross customer loans compared
with 3.8% as at 30 September 2016, with the reduction largely
reflecting the loan portfolio sale in Ulster Bank RoI.
|
●
|
A net
impairment release of £75 million compared with £327
million in Q4 2015. Capital Resolution reported a net impairment
release of £130 million compared with £356 million in Q4
2015.
|
Selected credit risk portfolios
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2016
|
|
30 September 2016
|
|
31 December 2015
|
||||||
|
CE (1)
|
PE
(1)
|
EAD
(2)
|
|
CE (1)
|
PE (1)
|
EAD (2)
|
|
CE (1)
|
PE (1)
|
EAD (2)
|
Natural resources
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas
|
2,911
|
5,286
|
4,278
|
|
2,989
|
6,000
|
4,739
|
|
3,544
|
6,798
|
5,606
|
Mining and metals
|
623
|
1,887
|
1,344
|
|
652
|
1,782
|
1,375
|
|
729
|
1,823
|
1,555
|
Electricity
|
3,430
|
9,076
|
6,143
|
|
3,256
|
8,466
|
5,782
|
|
2,851
|
7,683
|
5,205
|
Water and waste
|
5,436
|
9,176
|
6,779
|
|
5,875
|
8,772
|
7,381
|
|
4,657
|
8,261
|
5,873
|
|
12,400
|
25,425
|
18,544
|
|
12,772
|
25,020
|
19,277
|
|
11,781
|
24,565
|
18,239
|
Shipping
|
4,553
|
5,173
|
5,035
|
|
5,514
|
6,043
|
6,154
|
|
6,776
|
7,301
|
7,509
|
(1)
|
Current
Exposure (CE) and Potential Exposure (PE) are both net of
impairment provisions and credit valuation adjustments and after
the effect of risk transfer. For a full description of what is
included and excluded from Current and Potential Exposure refer to
page 209 of the 2016 Annual Report and Accounts.
|
(2)
|
Exposure
at default (EAD) reflects an estimate of the extent to which a bank
will be exposed under a specific facility on the default of a
customer or counterparty.
Uncommitted
undrawn facilities are excluded from CE but included within EAD;
therefore EAD can exceed CE.
|
●
|
Oil and
gas - Exposures to the oil and gas sector further reduced by
£1.5 billion on a PE basis during 2016. Regulated gas
distribution companies are no longer reported under the oil and gas
sector and this reclassification reduced sector exposure by
£724 million. There were also reductions due to the continued
run-off of the US and APAC portfolios. Credit quality remained
stable with the majority of the portfolio being investment grade.
AQ10 potential exposure, net of provisions, was £182 million
(31 December 2015 - £38 million).
|
●
|
Mining
and metals - The sector remained largely stable during 2016. The
sector was subject to continued tight credit monitoring and ongoing
risk appetite review, although concerns have reduced. AQ10
potential exposure, net of provisions was £3 million (31
December 2015 - £21 million).
|
●
|
Shipping
- RBS has decided to wind down its shipping finance portfolio and
has also sold some assets. This contributed to the reduction in
exposure, which has seen challenging market conditions affect
vessel values and contribute to high levels of forbearance and
impairments. Impairment charges of £424 million partially
offset by write offs in 2016, increasing provisions by £206
million to £387 million (30 September 2016 - £565
million; 31 December 2015 - £181 million). AQ10 exposure, net
of provisions, was £952 million (30 September 2016 -
£1,031 million; 31 December 2015 - £239 million). In
addition £363 million of current exposure was classified as at
risk of credit loss (30 September 2016 - £775
million).
|
Capital and leverage ratios
|
|
|
|
|
|
|
|
|
End-point CRR basis (1)
|
|
PRA transitional basis
|
||||
|
31 December
|
30 September
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2016
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
Risk asset ratios
|
%
|
%
|
%
|
|
%
|
%
|
%
|
|
|
|
|
|
|
|
|
CET1
|
13.4
|
15.0
|
15.5
|
|
13.4
|
15.0
|
15.5
|
Tier 1
|
15.2
|
16.7
|
16.3
|
|
17.7
|
19.1
|
19.1
|
Total
|
19.2
|
20.6
|
19.6
|
|
22.9
|
24.1
|
24.7
|
|
|
|
|
|
|
|
|
Capital
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
Tangible equity
|
34,982
|
39,822
|
40,943
|
|
34,982
|
39,822
|
40,943
|
|
|
|
|
|
|
|
|
Expected loss less impairment provisions
|
(1,371)
|
(862)
|
(1,035)
|
|
(1,371)
|
(862)
|
(1,035)
|
Prudential valuation adjustment
|
(532)
|
(734)
|
(381)
|
|
(532)
|
(734)
|
(381)
|
Deferred tax assets
|
(906)
|
(838)
|
(1,110)
|
|
(906)
|
(838)
|
(1,110)
|
Own credit adjustments
|
(304)
|
(435)
|
(104)
|
|
(304)
|
(435)
|
(104)
|
Pension fund assets
|
(208)
|
(209)
|
(161)
|
|
(208)
|
(209)
|
(161)
|
Cash flow hedging reserve
|
(1,030)
|
(1,565)
|
(458)
|
|
(1,030)
|
(1,565)
|
(458)
|
Other deductions
|
(8)
|
(9)
|
(86)
|
|
(8)
|
(9)
|
(64)
|
|
|
|
|
|
|
|
|
Total deductions
|
(4,359)
|
(4,652)
|
(3,335)
|
|
(4,359)
|
(4,652)
|
(3,313)
|
|
|
|
|
|
|
|
|
CET1 capital
|
30,623
|
35,170
|
37,608
|
|
30,623
|
35,170
|
37,630
|
AT1 capital
|
4,041
|
4,041
|
1,997
|
|
9,796
|
9,662
|
8,716
|
Tier 1 capital
|
34,664
|
39,211
|
39,605
|
|
40,419
|
44,832
|
46,346
|
Tier 2 capital
|
9,161
|
9,181
|
8,002
|
|
11,884
|
11,773
|
13,619
|
|
|
|
|
|
|
|
|
Total regulatory capital
|
43,825
|
48,392
|
47,607
|
|
52,303
|
56,605
|
59,965
|
|
|
|
|
|
|
|
|
Risk-weighted assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit risk
|
|
|
|
|
|
|
|
- non-counterparty
|
162,200
|
166,600
|
166,400
|
|
|
|
|
- counterparty
|
22,900
|
25,100
|
23,400
|
|
|
|
|
Market risk
|
17,400
|
17,800
|
21,200
|
|
|
|
|
Operational risk
|
25,700
|
25,700
|
31,600
|
|
|
|
|
|
|
|
|
|
|
|
|
Total RWAs
|
228,200
|
235,200
|
242,600
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
|
247,000
|
283,000
|
262,500
|
|
|
|
|
Loans and advances
|
340,300
|
346,500
|
327,000
|
|
|
|
|
Reverse repos
|
41,800
|
46,000
|
39,900
|
|
|
|
|
Other assets
|
169,600
|
176,900
|
186,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
798,700
|
852,400
|
815,400
|
|
|
|
|
Derivatives
|
|
|
|
|
|
|
|
- netting and variation margin
|
(241,700)
|
(281,700)
|
(258,600)
|
|
|
|
|
- potential future exposures
|
65,300
|
64,100
|
75,600
|
|
|
|
|
Securities financing transactions gross up
|
2,300
|
2,200
|
5,100
|
|
|
|
|
Undrawn commitments
|
58,600
|
62,100
|
63,500
|
|
|
|
|
Regulatory deductions and other
|
|
|
|
|
|
|
|
adjustments
|
100
|
4,100
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage exposure
|
683,300
|
703,200
|
702,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital
|
34,664
|
39,211
|
39,605
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage ratio %
|
5.1
|
5.6
|
5.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Average leverage exposure (3)
|
712,145
|
717,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Tier 1 capital (3)
|
37,959
|
38,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average leverage ratio % (3)
|
5.3
|
5.4
|
|
|
|
|
|
(1)
|
CRR as
implemented by the PRA in the UK, with effect from 1 January 2014.
All regulatory adjustments and deductions to CET1 have been applied
in full for both bases with the exception of unrealised gains on
available-for-sale securities which have been included from 2015
under the PRA transitional basis.
|
(2)
|
Based
on end-point CRR Tier 1 capital and leverage exposure under the CRR
Delegated Act.
|
(3)
|
Based
on 3 month average of month end leverage exposure and Tier 1
Capital.
|
●
|
The
CET1 ratio decreased by 210 basis points to 13.4% in 2016,
reflecting lower CET1 capital partially offset by a reduction in
RWAs.
|
●
|
Litigation
and conduct charges of £5.9 billion in 2016 contributed to a
significant reduction in the CET1 capital. Management actions to
normalise the ownership structure and improve the long-term
resilience of RBS also contributed to the reduction. These actions
included the final Dividend Access Share payment of £1.2
billion and the impact of the accelerated pension payment of
£4.2 billion.
|
●
|
Tier 1
capital benefitted from the successful issuance of £2 billion
of Additional Tier 1 (AT1) capital notes in August 2016. Total
end-point CRR compliant AT1 capital now stands at £4.0
billion.
|
●
|
RWAs
decreased by £14.4 billion in the year to £228.2 billion
consisting of reductions across all risk types predominantly driven
by the run down activity within Capital Resolution which resulted
in an RWA decrease of £14.5 billion.
|
|
o Non-counterparty
credit risk RWAs have decreased by £4.2 billion reflecting
disposal activity in Capital Resolution partly offset by the
adverse impact of foreign exchange movements.
|
|
o The
impact of sterling weakening and the implementation of a new risk
model for banks in the first half of the year, led to an increase
of £2.8 billion in counterparty credit risk RWAs in NatWest
Markets. This was offset by a reduction of £3.3 billion in
Capital Resolution to result in an overall decrease of £0.5
billion.
|
|
o Market
risk RWAs reduced by £3.8 billion driven by disposals in
Capital Resolution, business mitigation activity in NatWest Markets
and lower US dollar position risk in Treasury.
|
|
o Operational
risk RWAs decreased by £5.9 billion as a result of the annual
recalculation and the removal of the element relating to Citizens
following regulatory approval.
|
●
|
The
leverage ratio reduced by 50 basis points to 5.1% at 31 December
2016, primarily reflecting CET1 capital erosion partially offset by
additional AT1 issuance.
|
●
|
The
leverage exposure decreased by £19.2 billion to £683.3
billion. Growth in PBB and CPB lending has been more than offset by
lower undrawn commitments and derivative potential future
exposures. During 2016, approximately half the interest rate trades
cleared through London Clearing House have been settled-to-market
each day rather than being collateralised, reducing potential
future exposures by £10.3 billion.
|
●
|
The UK
leverage ratio reflecting the post EU referendum measures announced
by the Bank of England in Q3 2016 was estimated at
5.6%.
|
|
Year ended 31 December 2016
|
|||||||||||
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
Capital
|
Williams
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
Resolution
|
& Glyn (1)
|
other
(2)
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
4,287
|
409
|
|
2,143
|
449
|
303
|
|
104
|
239
|
658
|
116
|
8,708
|
Other non-interest income
|
1,003
|
164
|
|
1,272
|
208
|
71
|
|
1,417
|
(654)
|
179
|
4
|
3,664
|
Total income - adjusted (3)
|
5,290
|
573
|
|
3,415
|
657
|
374
|
|
1,521
|
(415)
|
837
|
120
|
12,372
|
Own credit adjustments
|
-
|
3
|
|
-
|
-
|
-
|
|
53
|
134
|
-
|
(10)
|
180
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(126)
|
(126)
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(81)
|
-
|
245
|
164
|
Total income
|
5,290
|
576
|
|
3,415
|
657
|
374
|
|
1,574
|
(362)
|
837
|
229
|
12,590
|
Direct expenses - staff costs
|
(690)
|
(207)
|
|
(522)
|
(154)
|
(45)
|
|
(256)
|
(102)
|
(250)
|
(2,256)
|
(4,482)
|
-
other costs
|
(293)
|
(55)
|
|
(235)
|
(44)
|
(17)
|
|
(35)
|
(84)
|
(59)
|
(2,916)
|
(3,738)
|
Indirect expenses
|
(2,022)
|
(195)
|
|
(1,179)
|
(313)
|
(107)
|
|
(1,029)
|
(578)
|
(84)
|
5,507
|
-
|
Operating expenses - adjusted (4)
|
(3,005)
|
(457)
|
|
(1,936)
|
(511)
|
(169)
|
|
(1,320)
|
(764)
|
(393)
|
335
|
(8,220)
|
Restructuring costs - direct
|
(51)
|
(38)
|
|
(25)
|
(7)
|
(2)
|
|
(19)
|
(56)
|
(57)
|
(1,851)
|
(2,106)
|
-
indirect
|
(136)
|
(2)
|
|
(83)
|
(30)
|
(3)
|
|
(93)
|
(22)
|
-
|
369
|
-
|
Litigation and conduct costs
|
(634)
|
(172)
|
|
(423)
|
(1)
|
-
|
|
(528)
|
(3,413)
|
-
|
(697)
|
(5,868)
|
Operating expenses
|
(3,826)
|
(669)
|
|
(2,467)
|
(549)
|
(174)
|
|
(1,960)
|
(4,255)
|
(450)
|
(1,844)
|
(16,194)
|
Profit/(loss) before impairment (losses)/releases
|
1,464
|
(93)
|
|
948
|
108
|
200
|
|
(386)
|
(4,617)
|
387
|
(1,615)
|
(3,604)
|
Impairment (losses)/releases
|
(83)
|
113
|
|
(206)
|
3
|
(10)
|
|
-
|
(253)
|
(42)
|
-
|
(478)
|
Operating profit/(loss)
|
1,381
|
20
|
|
742
|
111
|
190
|
|
(386)
|
(4,870)
|
345
|
(1,615)
|
(4,082)
|
Operating profit/(loss) - adjusted (3,4)
|
2,202
|
229
|
|
1,273
|
149
|
195
|
|
201
|
(1,432)
|
402
|
455
|
3,674
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
16.2%
|
0.7%
|
|
4.1%
|
5.6%
|
13.8%
|
|
(6.6%)
|
nm
|
nm
|
nm
|
(17.9%)
|
Return on equity - adjusted (3,4,5)
|
26.8%
|
8.4%
|
|
8.4%
|
7.8%
|
14.2%
|
|
1.1%
|
nm
|
nm
|
nm
|
1.6%
|
Cost:income ratio
|
72%
|
116%
|
|
72%
|
84%
|
47%
|
|
125%
|
nm
|
54%
|
nm
|
129%
|
Cost:income ratio - adjusted (3,4)
|
57%
|
80%
|
|
57%
|
78%
|
45%
|
|
87%
|
nm
|
47%
|
nm
|
66%
|
Total assets (£bn)
|
155.6
|
24.1
|
|
150.5
|
18.6
|
23.4
|
|
240.0
|
132.5
|
25.8
|
28.2
|
798.7
|
Funded assets (£bn) (6)
|
155.6
|
24.0
|
|
150.5
|
18.5
|
23.4
|
|
100.9
|
27.6
|
25.8
|
25.4
|
551.7
|
Net loans and advances to customers (£bn)
|
132.1
|
18.9
|
|
100.1
|
12.2
|
8.8
|
|
17.4
|
12.8
|
20.6
|
0.1
|
323.0
|
Risk elements in lending (£bn)
|
2.0
|
3.5
|
|
1.9
|
0.1
|
0.1
|
|
-
|
2.3
|
0.4
|
-
|
10.3
|
Impairment provisions (£bn)
|
(1.3)
|
(1.2)
|
|
(0.8)
|
-
|
-
|
|
-
|
(0.8)
|
(0.2)
|
(0.2)
|
(4.5)
|
Customer deposits (£bn)
|
145.8
|
16.1
|
|
97.9
|
26.6
|
25.2
|
|
8.4
|
9.5
|
24.2
|
0.2
|
353.9
|
Risk-weighted assets (RWAs) (£bn)
|
32.7
|
18.1
|
|
78.5
|
8.6
|
9.5
|
|
35.2
|
34.5
|
9.6
|
1.5
|
228.2
|
RWA equivalent (£bn) (5)
|
35.7
|
19.5
|
|
82.6
|
8.6
|
9.5
|
|
37.2
|
37.5
|
10.1
|
1.7
|
242.4
|
Employee numbers (FTEs - thousands)
|
18.3
|
3.1
|
|
5.5
|
1.7
|
0.8
|
|
1.2
|
0.4
|
4.5
|
42.3
|
77.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to this table refer to page 34. nm = not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended 31 December 2016
|
|||||||||||
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
Capital
|
Williams
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
Resolution
|
& Glyn (1)
|
other
(2)
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
1,093
|
105
|
|
542
|
111
|
77
|
|
29
|
44
|
170
|
37
|
2,208
|
Other non-interest income
|
246
|
32
|
|
325
|
50
|
19
|
|
285
|
(329)
|
47
|
446
|
1,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income adjusted (3)
|
1,339
|
137
|
|
867
|
161
|
96
|
|
314
|
(285)
|
217
|
483
|
3,329
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
(29)
|
(8)
|
-
|
(77)
|
(114)
|
Gain on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
1
|
1
|
Total income
|
1,339
|
137
|
|
867
|
161
|
96
|
|
285
|
(293)
|
217
|
407
|
3,216
|
Direct expenses - staff costs
|
(161)
|
(57)
|
|
(130)
|
(39)
|
(12)
|
|
(64)
|
(23)
|
(60)
|
(479)
|
(1,025)
|
-
other costs
|
(72)
|
(23)
|
|
(69)
|
(12)
|
(4)
|
|
(7)
|
(3)
|
(13)
|
(991)
|
(1,194)
|
Indirect expenses
|
(544)
|
(65)
|
|
(357)
|
(95)
|
(45)
|
|
(267)
|
(150)
|
(24)
|
1,547
|
-
|
Operating expenses - adjusted (4)
|
(777)
|
(145)
|
|
(556)
|
(146)
|
(61)
|
|
(338)
|
(176)
|
(97)
|
77
|
(2,219)
|
Restructuring costs - direct
|
(1)
|
(6)
|
|
(12)
|
(6)
|
(1)
|
|
(3)
|
(21)
|
-
|
(957)
|
(1,007)
|
-
indirect
|
(50)
|
2
|
|
(34)
|
(8)
|
(1)
|
|
(43)
|
13
|
-
|
121
|
-
|
Litigation and conduct costs
|
(214)
|
(77)
|
|
(407)
|
1
|
(1)
|
|
(466)
|
(3,156)
|
-
|
192
|
(4,128)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
(1,042)
|
(226)
|
|
(1,009)
|
(159)
|
(64)
|
|
(850)
|
(3,340)
|
(97)
|
(567)
|
(7,354)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before impairment (losses)/releases
|
297
|
(89)
|
|
(142)
|
2
|
32
|
|
(565)
|
(3,633)
|
120
|
(160)
|
(4,138)
|
Impairment (losses)/releases
|
(16)
|
47
|
|
(83)
|
8
|
1
|
|
-
|
130
|
(11)
|
(1)
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
281
|
(42)
|
|
(225)
|
10
|
33
|
|
(565)
|
(3,503)
|
109
|
(161)
|
(4,063)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - adjusted (3,4)
|
546
|
39
|
|
228
|
23
|
36
|
|
(24)
|
(331)
|
109
|
559
|
1,185
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
13.5%
|
(5.8%)
|
|
(9.1%)
|
1.6%
|
8.8%
|
|
(30.2%)
|
nm
|
nm
|
nm
|
(48.2%)
|
Return on equity - adjusted (3,4,5)
|
27.8%
|
5.4%
|
|
5.3%
|
4.5%
|
9.8%
|
|
(2.7%)
|
nm
|
nm
|
nm
|
8.6%
|
Cost:income ratio
|
78%
|
165%
|
|
116%
|
99%
|
67%
|
|
nm
|
nm
|
45%
|
nm
|
229%
|
Cost:income ratio - adjusted (3,4)
|
58%
|
106%
|
|
64%
|
91%
|
64%
|
|
108%
|
nm
|
45%
|
nm
|
67%
|
Total assets (£bn)
|
155.6
|
24.1
|
|
150.5
|
18.6
|
23.4
|
|
240.0
|
132.5
|
25.8
|
28.2
|
798.7
|
Funded assets (£bn) (6)
|
155.6
|
24.0
|
|
150.5
|
18.5
|
23.4
|
|
100.9
|
27.6
|
25.8
|
25.4
|
551.7
|
Net loans and advances to customers (£bn)
|
132.1
|
18.9
|
|
100.1
|
12.2
|
8.8
|
|
17.4
|
12.8
|
20.6
|
0.1
|
323.0
|
Risk elements in lending (£bn)
|
2.0
|
3.5
|
|
1.9
|
0.1
|
0.1
|
|
-
|
2.3
|
0.4
|
-
|
10.3
|
Impairment provisions (£bn)
|
(1.3)
|
(1.2)
|
|
(0.8)
|
-
|
-
|
|
-
|
(0.8)
|
(0.2)
|
(0.2)
|
(4.5)
|
Customer deposits (£bn)
|
145.8
|
16.1
|
|
97.9
|
26.6
|
25.2
|
|
8.4
|
9.5
|
24.2
|
0.2
|
353.9
|
Risk-weighted assets (RWAs) (£bn)
|
32.7
|
18.1
|
|
78.5
|
8.6
|
9.5
|
|
35.2
|
34.5
|
9.6
|
1.5
|
228.2
|
RWA equivalent (£bn) (5)
|
35.7
|
19.5
|
|
82.6
|
8.6
|
9.5
|
|
37.2
|
37.5
|
10.1
|
1.7
|
242.4
|
Employee numbers (FTEs - thousands)
|
18.3
|
3.1
|
|
5.5
|
1.7
|
0.8
|
|
1.2
|
0.4
|
4.5
|
42.3
|
77.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to table refer to page 34. nm = not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended 31 December 2015
|
|||||||||||
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
Capital
|
Williams
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
Resolution
|
& Glyn (1)
|
other (2)
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
4,152
|
365
|
|
1,997
|
436
|
303
|
|
87
|
365
|
658
|
404
|
8,767
|
Other non-interest income
|
1,048
|
185
|
|
1,257
|
208
|
64
|
|
1,320
|
37
|
175
|
(27)
|
4,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income - adjusted (3)
|
5,200
|
550
|
|
3,254
|
644
|
367
|
|
1,407
|
402
|
833
|
377
|
13,034
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
120
|
175
|
-
|
14
|
309
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(263)
|
(263)
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(38)
|
-
|
(119)
|
(157)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
5,200
|
550
|
|
3,254
|
644
|
367
|
|
1,527
|
539
|
833
|
9
|
12,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct expenses - staff costs
|
(801)
|
(160)
|
|
(483)
|
(176)
|
(42)
|
|
(348)
|
(296)
|
(215)
|
(2,375)
|
(4,896)
|
-
other costs
|
(272)
|
(85)
|
|
(238)
|
(35)
|
(16)
|
|
(122)
|
(202)
|
(52)
|
(3,438)
|
(4,460)
|
Indirect expenses
|
(1,965)
|
(182)
|
|
(1,080)
|
(307)
|
(98)
|
|
(997)
|
(1,041)
|
(92)
|
5,762
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - adjusted (4)
|
(3,038)
|
(427)
|
|
(1,801)
|
(518)
|
(156)
|
|
(1,467)
|
(1,539)
|
(359)
|
(51)
|
(9,356)
|
Restructuring costs - direct
|
(38)
|
(12)
|
|
(52)
|
(7)
|
-
|
|
(44)
|
(380)
|
(28)
|
(2,370)
|
(2,931)
|
-
indirect
|
(129)
|
(3)
|
|
(17)
|
(66)
|
(4)
|
|
(480)
|
(927)
|
-
|
1,626
|
-
|
Litigation and conduct costs
|
(972)
|
13
|
|
(51)
|
(12)
|
-
|
|
(378)
|
(2,105)
|
-
|
(63)
|
(3,568)
|
Write down of goodwill
|
-
|
-
|
|
-
|
(498)
|
-
|
|
-
|
-
|
-
|
-
|
(498)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
(4,177)
|
(429)
|
|
(1,921)
|
(1,101)
|
(160)
|
|
(2,369)
|
(4,951)
|
(387)
|
(858)
|
(16,353)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before impairment releases/(losses)
|
1,023
|
121
|
|
1,333
|
(457)
|
207
|
|
(842)
|
(4,412)
|
446
|
(849)
|
(3,430)
|
Impairment releases/(losses)
|
7
|
141
|
|
(69)
|
(13)
|
-
|
|
5
|
725
|
(15)
|
(54)
|
727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
1,030
|
262
|
|
1,264
|
(470)
|
207
|
|
(837)
|
(3,687)
|
431
|
(903)
|
(2,703)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - adjusted (3,4)
|
2,169
|
264
|
|
1,384
|
113
|
211
|
|
(55)
|
(412)
|
459
|
272
|
4,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
11.7%
|
10.6%
|
|
9.8%
|
(27.7%)
|
18.5%
|
|
(11.1%)
|
nm
|
nm
|
nm
|
(4.7%)
|
Return on equity - adjusted (3,4,5)
|
26.2%
|
10.6%
|
|
10.9%
|
4.9%
|
18.9%
|
|
(2.0%)
|
nm
|
nm
|
nm
|
11.0%
|
Cost:income ratio
|
80%
|
78%
|
|
59%
|
171%
|
44%
|
|
155%
|
nm
|
46%
|
nm
|
127%
|
Cost:income ratio - adjusted (3,4)
|
58%
|
78%
|
|
55%
|
80%
|
43%
|
|
104%
|
nm
|
43%
|
nm
|
72%
|
Total assets (£bn)
|
143.9
|
21.3
|
|
133.5
|
17.0
|
23.1
|
|
215.3
|
201.5
|
24.1
|
35.7
|
815.4
|
Funded assets (£bn) (6)
|
143.9
|
21.2
|
|
133.5
|
17.0
|
23.1
|
|
103.3
|
53.4
|
24.1
|
33.4
|
552.9
|
Net loans and advances to customers (£bn)
|
119.8
|
16.7
|
|
91.3
|
11.2
|
7.3
|
|
16.1
|
23.6
|
20.0
|
2.0
|
308.0
|
Risk elements in lending (£bn)
|
2.7
|
3.5
|
|
1.9
|
0.1
|
0.1
|
|
-
|
3.4
|
0.5
|
-
|
12.2
|
Impairment provisions (£bn)
|
(1.8)
|
(1.9)
|
|
(0.7)
|
-
|
(0.1)
|
|
-
|
(2.3)
|
(0.3)
|
-
|
(7.1)
|
Customer deposits (£bn)
|
137.8
|
13.1
|
|
88.9
|
23.1
|
21.3
|
|
5.7
|
26.0
|
24.1
|
6.0
|
346.0
|
Risk-weighted assets (RWAs) (£bn)
|
33.3
|
19.4
|
|
72.3
|
8.7
|
8.3
|
|
33.1
|
49.0
|
9.9
|
8.6
|
242.6
|
RWA equivalent (£bn) (5)
|
35.5
|
20.4
|
|
77.6
|
8.7
|
8.3
|
|
33.4
|
50.3
|
10.4
|
8.8
|
253.4
|
Employee numbers (FTEs - thousands)
|
22.4
|
2.5
|
|
5.8
|
1.9
|
0.7
|
|
1.3
|
1.4
|
5.1
|
50.4
|
91.5
|
For the notes to this table refer to page 34.nm = not
meaningful.
|
|
|
|
|
|
|
|
|
Quarter ended 30 September 2016
|
|||||||||||
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
Capital
|
Williams
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
Resolution
|
& Glyn (1)
|
other (2)
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
1,085
|
106
|
|
534
|
112
|
75
|
|
32
|
27
|
164
|
32
|
2,167
|
Other non-interest income
|
251
|
40
|
|
315
|
53
|
18
|
|
494
|
148
|
45
|
(37)
|
1,327
|
Total income - adjusted (3)
|
1,336
|
146
|
|
849
|
165
|
93
|
|
526
|
175
|
209
|
(5)
|
3,494
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
(55)
|
(42)
|
-
|
(59)
|
(156)
|
Gain on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
3
|
3
|
Strategic disposal
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(30)
|
-
|
(1)
|
(31)
|
Total income
|
1,336
|
146
|
|
849
|
165
|
93
|
|
471
|
103
|
209
|
(62)
|
3,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct expenses - staff costs
|
(168)
|
(53)
|
|
(127)
|
(38)
|
(11)
|
|
(61)
|
(17)
|
(65)
|
(588)
|
(1,128)
|
-
other costs
|
(59)
|
(19)
|
|
(55)
|
(9)
|
(5)
|
|
(7)
|
(17)
|
(13)
|
(705)
|
(889)
|
Indirect expenses
|
(491)
|
(45)
|
|
(265)
|
(62)
|
(24)
|
|
(274)
|
(139)
|
(21)
|
1,321
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - adjusted (4)
|
(718)
|
(117)
|
|
(447)
|
(109)
|
(40)
|
|
(342)
|
(173)
|
(99)
|
28
|
(2,017)
|
Restructuring costs - direct
|
1
|
(8)
|
|
(12)
|
-
|
-
|
|
(6)
|
(23)
|
(12)
|
(409)
|
(469)
|
-
indirect
|
(26)
|
(3)
|
|
(9)
|
(3)
|
-
|
|
(27)
|
(10)
|
-
|
78
|
-
|
Litigation and conduct costs
|
1
|
(3)
|
|
(6)
|
-
|
1
|
|
(6)
|
(231)
|
-
|
(181)
|
(425)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
(742)
|
(131)
|
|
(474)
|
(112)
|
(39)
|
|
(381)
|
(437)
|
(111)
|
(484)
|
(2,911)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before impairment (losses)/releases
|
594
|
15
|
|
375
|
53
|
54
|
|
90
|
(334)
|
98
|
(546)
|
399
|
Impairment (losses)/releases
|
(27)
|
39
|
|
(20)
|
(3)
|
-
|
|
-
|
(120)
|
(14)
|
1
|
(144)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
567
|
54
|
|
355
|
50
|
54
|
|
90
|
(454)
|
84
|
(545)
|
255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) - adjusted (3,4)
|
591
|
68
|
|
382
|
53
|
53
|
|
184
|
(118)
|
96
|
24
|
1,333
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
27.1%
|
7.8%
|
|
9.5%
|
11.1%
|
15.4%
|
|
3.1%
|
nm
|
nm
|
nm
|
(4.8%)
|
Return on equity - adjusted (3,4,5)
|
28.3%
|
9.9%
|
|
10.4%
|
11.8%
|
15.1%
|
|
8.0%
|
nm
|
nm
|
nm
|
4.6%
|
Cost:income ratio
|
56%
|
90%
|
|
56%
|
68%
|
42%
|
|
81%
|
nm
|
53%
|
nm
|
88%
|
Cost:income ratio - adjusted (3,4)
|
54%
|
80%
|
|
53%
|
66%
|
43%
|
|
65%
|
99%
|
47%
|
nm
|
58%
|
Total assets (£bn)
|
155.4
|
25.3
|
|
152.6
|
18.2
|
26.9
|
|
249.7
|
176.7
|
25.7
|
21.9
|
852.4
|
Funded assets (£bn) (6)
|
155.4
|
25.2
|
|
152.6
|
18.1
|
26.9
|
|
112.5
|
34.9
|
25.7
|
18.0
|
569.3
|
Net loans and advances to customers (£bn)
|
129.6
|
19.5
|
|
99.8
|
11.8
|
8.7
|
|
19.9
|
16.7
|
20.6
|
0.1
|
326.7
|
Risk elements in lending (£bn)
|
2.1
|
4.8
|
|
2.1
|
0.1
|
0.1
|
|
-
|
2.9
|
0.4
|
0.1
|
12.6
|
Impairment provisions (£bn)
|
(1.4)
|
(2.3)
|
|
(1.0)
|
-
|
-
|
|
-
|
(1.2)
|
(0.2)
|
-
|
(6.1)
|
Customer deposits (£bn)
|
143.7
|
15.1
|
|
98.1
|
25.3
|
25.5
|
|
9.7
|
16.8
|
24.0
|
0.6
|
358.8
|
Risk-weighted assets (RWAs) (£bn)
|
31.9
|
21.4
|
|
77.6
|
8.2
|
9.6
|
|
36.6
|
38.6
|
9.7
|
1.6
|
235.2
|
RWA equivalent (£bn) (5)
|
35.4
|
22.8
|
|
82.3
|
8.2
|
9.6
|
|
37.2
|
39.8
|
10.2
|
1.9
|
247.4
|
Employee numbers (FTEs - thousands)
|
18.7
|
3.2
|
|
5.8
|
1.8
|
0.8
|
|
1.3
|
0.7
|
5.0
|
45.2
|
82.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to this table refer to following page. nm = not
meaningful.
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended 31 December 2015
|
|||||||||||
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
Capital
|
Williams
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
Resolution
|
& Glyn (1)
|
other (2)
|
RBS
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
1,030
|
85
|
|
512
|
108
|
78
|
|
28
|
6
|
165
|
150
|
2,162
|
Other non-interest income
|
224
|
31
|
|
285
|
50
|
17
|
|
224
|
(239)
|
43
|
87
|
722
|
Total income - adjusted (3)
|
1,254
|
116
|
|
797
|
158
|
95
|
|
252
|
(233)
|
208
|
237
|
2,884
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
(66)
|
(5)
|
-
|
(44)
|
(115)
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(263)
|
(263)
|
Strategic disposal
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
(24)
|
-
|
2
|
(22)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
1,254
|
116
|
|
797
|
158
|
95
|
|
186
|
(262)
|
208
|
(68)
|
2,484
|
Direct expenses - staff costs
|
(199)
|
(40)
|
|
(124)
|
(43)
|
(12)
|
|
(63)
|
(54)
|
(61)
|
(476)
|
(1,072)
|
-
other costs
|
(82)
|
(28)
|
|
(80)
|
(7)
|
(5)
|
|
(50)
|
(54)
|
(24)
|
(1,123)
|
(1,453)
|
Indirect expenses
|
(596)
|
(49)
|
|
(380)
|
(109)
|
(24)
|
|
(251)
|
(286)
|
(22)
|
1,717
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - adjusted (4)
|
(877)
|
(117)
|
|
(584)
|
(159)
|
(41)
|
|
(364)
|
(394)
|
(107)
|
118
|
(2,525)
|
Restructuring costs - direct
|
(31)
|
7
|
|
(40)
|
(7)
|
-
|
|
-
|
(21)
|
(28)
|
(494)
|
(614)
|
-
indirect
|
(56)
|
(1)
|
|
(14)
|
12
|
1
|
|
(62)
|
(83)
|
-
|
203
|
-
|
Litigation and conduct costs
|
(607)
|
4
|
|
8
|
(10)
|
-
|
|
(5)
|
(1,498)
|
-
|
(16)
|
(2,124)
|
Write down of goodwill
|
-
|
-
|
|
-
|
(498)
|
-
|
|
-
|
-
|
-
|
-
|
(498)
|
Operating expenses
|
(1,571)
|
(107)
|
|
(630)
|
(662)
|
(40)
|
|
(431)
|
(1,996)
|
(135)
|
(189)
|
(5,761)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit before impairment releases/(losses)
|
(317)
|
9
|
|
167
|
(504)
|
55
|
|
(245)
|
(2,258)
|
73
|
(257)
|
(3,277)
|
Impairment releases/(losses)
|
27
|
10
|
|
(27)
|
(12)
|
-
|
|
-
|
356
|
(20)
|
(7)
|
327
|
Operating (loss)/profit
|
(290)
|
19
|
|
140
|
(516)
|
55
|
|
(245)
|
(1,902)
|
53
|
(264)
|
(2,950)
|
Operating profit/(loss) - adjusted (3,4)
|
404
|
9
|
|
186
|
(13)
|
54
|
|
(112)
|
(271)
|
81
|
348
|
686
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (5)
|
(16.8%)
|
3.0%
|
|
3.1%
|
(118.9%)
|
19.1%
|
|
(15.1%)
|
nm
|
nm
|
nm
|
(26.5%)
|
Return on equity - adjusted (3,4,5)
|
19.8%
|
1.4%
|
|
4.6%
|
(4.4%)
|
18.7%
|
|
(7.6%)
|
nm
|
nm
|
nm
|
6.6%
|
Cost:income ratio
|
125%
|
92%
|
|
79%
|
419%
|
42%
|
|
232%
|
nm
|
65%
|
nm
|
232%
|
Cost:income ratio - adjusted (3,4)
|
70%
|
101%
|
|
73%
|
101%
|
43%
|
|
144%
|
nm
|
51%
|
nm
|
88%
|
Total assets (£bn)
|
143.9
|
21.3
|
|
133.5
|
17.0
|
23.1
|
|
215.3
|
201.5
|
24.1
|
35.7
|
815.4
|
Funded assets (£bn) (6)
|
143.9
|
21.2
|
|
133.5
|
17.0
|
23.1
|
|
103.3
|
53.4
|
24.1
|
33.4
|
552.9
|
Net loans and advances to customers (£bn)
|
119.8
|
16.7
|
|
91.3
|
11.2
|
7.3
|
|
16.1
|
23.6
|
20.0
|
2.0
|
308.0
|
Risk elements in lending (£bn)
|
2.7
|
3.5
|
|
1.9
|
0.1
|
0.1
|
|
-
|
3.4
|
0.5
|
-
|
12.2
|
Impairment provisions (£bn)
|
(1.8)
|
(1.9)
|
|
(0.7)
|
-
|
(0.1)
|
|
-
|
(2.3)
|
(0.3)
|
-
|
(7.1)
|
Customer deposits (£bn)
|
137.8
|
13.1
|
|
88.9
|
23.1
|
21.3
|
|
5.7
|
26.0
|
24.1
|
6.0
|
346.0
|
Risk-weighted assets (RWAs) (£bn)
|
33.3
|
19.4
|
|
72.3
|
8.7
|
8.3
|
|
33.1
|
49.0
|
9.9
|
8.6
|
242.6
|
RWA equivalent (£bn) (5)
|
35.5
|
20.4
|
|
77.6
|
8.7
|
8.3
|
|
33.4
|
50.3
|
10.4
|
8.8
|
253.4
|
Employee numbers (FTEs - thousands)
|
22.4
|
2.5
|
|
5.8
|
1.9
|
0.7
|
|
1.3
|
1.4
|
5.1
|
50.4
|
91.5
|
(1)
|
Williams &
Glyn refers to the business formerly intended to be divested as a
separate legal entity and comprises RBS England and Wales
branch-based businesses, along with certain small and medium
enterprises and corporate activities across the UK. During the
period presented W&G has not operated as a separate legal
entity.
|
(2)
|
Central items
include unallocated transactions which principally comprise
volatile items under IFRS and balances in relation to Citizens for
periods prior to HY 2015 and International private banking for
periods from Q1 2015 to Q1 2016.
|
(3)
|
Excluding own
credit adjustments, (loss)/gain on redemption of own debt and
strategic disposals.
|
(4)
|
Excluding
restructuring costs, litigation and conduct costs and write down of
goodwill.
|
(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 notional equity allocated at
different rates of 11% (Commercial Banking and Ulster Bank RoI),
12% (RBS International) and 15% for all other segments, of the
monthly average of segmental risk-weighted assets incorporating the
effect capital deductions (RWAes). RBS Return on equity is
calculated using profit for the period attributable to ordinary
shareholders.
|
(6)
|
Funded assets
exclude derivative assets.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
Total income by segment
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
UK PBB
|
|
|
|
|
|
|
Personal advances
|
845
|
747
|
|
215
|
216
|
177
|
Personal deposits
|
731
|
747
|
|
184
|
186
|
181
|
Mortgages
|
2,331
|
2,305
|
|
598
|
596
|
569
|
Cards
|
614
|
621
|
|
150
|
148
|
140
|
Business banking
|
732
|
726
|
|
188
|
188
|
180
|
Other
|
37
|
54
|
|
4
|
2
|
7
|
Total
|
5,290
|
5,200
|
|
1,339
|
1,336
|
1,254
|
|
|
|
|
|
|
|
Ulster Bank RoI
|
|
|
|
|
|
|
Corporate
|
176
|
147
|
|
34
|
43
|
38
|
Retail
|
392
|
321
|
|
101
|
96
|
75
|
Other
|
8
|
82
|
|
2
|
7
|
3
|
|
|
|
|
|
|
|
Total
|
576
|
550
|
|
137
|
146
|
116
|
|
|
|
|
|
|
|
Commercial Banking
|
|
|
|
|
|
|
Commercial lending
|
1,875
|
1,634
|
|
503
|
472
|
411
|
Deposits
|
474
|
477
|
|
109
|
116
|
125
|
Asset and invoice finance
|
712
|
710
|
|
175
|
181
|
168
|
Other
|
354
|
433
|
|
80
|
80
|
93
|
Total
|
3,415
|
3,254
|
|
867
|
849
|
797
|
|
|
|
|
|
|
|
Private Banking
|
|
|
|
|
|
|
Investments
|
97
|
86
|
|
23
|
24
|
21
|
Banking
|
560
|
558
|
|
138
|
141
|
137
|
Total
|
657
|
644
|
|
161
|
165
|
158
|
|
|
|
|
|
|
|
RBS International
|
374
|
367
|
|
96
|
93
|
95
|
|
|
|
|
|
|
|
NatWest Markets
|
|
|
|
|
|
|
Rates
|
868
|
725
|
|
129
|
354
|
145
|
Currencies
|
551
|
390
|
|
157
|
128
|
95
|
Financing
|
246
|
273
|
|
66
|
78
|
22
|
Other
|
(144)
|
(79)
|
|
(38)
|
(34)
|
(10)
|
Total excluding own credit adjustments
|
1,521
|
1,309
|
|
314
|
526
|
252
|
Own credit adjustments
|
53
|
120
|
|
(29)
|
(55)
|
(66)
|
Businesses transferred to Commercial Banking
|
-
|
98
|
|
-
|
-
|
-
|
Total
|
1,574
|
1,527
|
|
285
|
471
|
186
|
|
|
|
|
|
|
|
Capital Resolution
|
|
|
|
|
|
|
APAC portfolio (1)
|
(6)
|
74
|
|
(3)
|
(5)
|
6
|
Americas portfolio
|
13
|
60
|
|
2
|
1
|
8
|
EMEA portfolio (2)
|
39
|
76
|
|
12
|
8
|
14
|
Legacy loan portfolio
|
(1)
|
129
|
|
7
|
31
|
(26)
|
Shipping
|
43
|
80
|
|
6
|
6
|
14
|
Markets
|
(171)
|
180
|
|
6
|
212
|
(32)
|
Global Transaction Services
|
123
|
346
|
|
16
|
24
|
69
|
Other
|
36
|
(214)
|
|
(6)
|
11
|
(130)
|
Total excluding disposals and own credit adjustments
|
76
|
731
|
|
40
|
288
|
(77)
|
Disposal losses
|
(572)
|
(367)
|
|
(325)
|
(143)
|
(180)
|
Own credit adjustments
|
134
|
175
|
|
(8)
|
(42)
|
(5)
|
Total
|
(362)
|
539
|
|
(293)
|
103
|
(262)
|
|
|
|
|
|
|
|
Williams & Glyn
(3)
|
|
|
|
|
|
|
Retail
|
480
|
472
|
|
129
|
120
|
117
|
Commercial
|
357
|
361
|
|
88
|
89
|
91
|
Total
|
837
|
833
|
|
217
|
209
|
208
|
|
|
|
|
|
|
|
Central items
|
229
|
9
|
|
407
|
(62)
|
(68)
|
Total RBS
|
12,590
|
12,923
|
|
3,216
|
3,310
|
2,484
|
(1)
|
Asia-Pacific
portfolio.
|
(2)
|
European,
the Middle East and African portfolio.
|
(3)
|
Williams
& Glyn refers to the business formerly intended to be divested
as a separate legal entity and comprises RBS England and Wales
branch-based businesses, along with certain small and medium
enterprises and corporate activities across the UK. During the
period presented W&G has not operated as a separate legal
entity.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
Impairment losses/(releases) by segment
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
UK PBB
|
|
|
|
|
|
|
Personal advances
|
84
|
69
|
|
38
|
26
|
13
|
Mortgages
|
(22)
|
4
|
|
(39)
|
(1)
|
5
|
Business banking
|
(10)
|
(79)
|
|
(3)
|
(8)
|
(24)
|
Cards
|
31
|
10
|
|
20
|
10
|
(1)
|
Other
|
-
|
(11)
|
|
-
|
-
|
(20)
|
Total
|
83
|
(7)
|
|
16
|
27
|
(27)
|
|
|
|
|
|
|
|
Ulster Bank RoI
|
|
|
|
|
|
|
Mortgages
|
29
|
(73)
|
|
(30)
|
60
|
21
|
Commercial real estate
|
|
|
|
|
|
|
- investment
|
(24)
|
5
|
|
(1)
|
(18)
|
3
|
- development
|
(20)
|
(1)
|
|
(1)
|
(12)
|
(2)
|
Other lending
|
(98)
|
(72)
|
|
(15)
|
(69)
|
(32)
|
Total
|
(113)
|
(141)
|
|
(47)
|
(39)
|
(10)
|
|
|
|
|
|
|
|
Commercial Banking
|
|
|
|
|
|
|
Commercial real estate
|
4
|
18
|
|
8
|
(6)
|
8
|
Asset and invoice finance
|
35
|
9
|
|
21
|
1
|
8
|
Private sector services (education, health etc)
|
8
|
9
|
|
7
|
-
|
4
|
Banks & financial institutions
|
2
|
-
|
|
-
|
1
|
(1)
|
Wholesale and retail trade repairs
|
15
|
3
|
|
6
|
10
|
-
|
Hotels and restaurants
|
27
|
(2)
|
|
7
|
21
|
(2)
|
Manufacturing
|
3
|
1
|
|
1
|
-
|
-
|
Construction
|
18
|
6
|
|
13
|
-
|
1
|
Other (1)
|
94
|
25
|
|
20
|
(7)
|
9
|
Total
|
206
|
69
|
|
83
|
20
|
27
|
|
|
|
|
|
|
|
Private Banking
|
(3)
|
13
|
|
(8)
|
3
|
12
|
|
|
|
|
|
|
|
RBS International
|
10
|
-
|
|
(1)
|
-
|
-
|
|
|
|
|
|
|
|
NatWest Markets
|
-
|
(5)
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Capital Resolution
|
253
|
(725)
|
|
(130)
|
120
|
(356)
|
|
|
|
|
|
|
|
Williams & Glyn
(2)
|
|
|
|
|
|
|
Retail
|
28
|
16
|
|
7
|
11
|
1
|
Commercial
|
14
|
(1)
|
|
4
|
3
|
19
|
Total
|
42
|
15
|
|
11
|
14
|
20
|
|
|
|
|
|
|
|
Central items
|
-
|
54
|
|
1
|
(1)
|
7
|
Total RBS
|
478
|
(727)
|
|
(75)
|
144
|
(327)
|
|
|
|
|
|
|
|
|
|
|
|
31 December
|
30 September
|
31 December
|
|
|
|
|
2016
|
2016
|
2015
|
Analysis of Capital Resolution RWAs by portfolio
|
|
|
£bn
|
£bn
|
£bn
|
|
APAC portfolio (3)
|
|
|
|
0.1
|
0.1
|
0.5
|
Americas portfolio
|
|
|
|
0.2
|
0.3
|
1.0
|
EMEA portfolio (4)
|
|
|
|
1.0
|
1.2
|
1.2
|
Legacy loan portfolio
|
|
|
|
1.4
|
2.0
|
3.7
|
Shipping
|
|
|
|
2.8
|
3.5
|
4.5
|
Markets
|
|
|
|
15.8
|
17.1
|
20.7
|
Global Transaction Services
|
|
|
|
0.5
|
1.8
|
3.6
|
Alawwal Bank
|
|
|
|
7.9
|
7.9
|
6.9
|
Other
|
|
|
|
2.0
|
1.9
|
2.9
|
Total credit and market risk RWAs
|
|
|
|
31.7
|
35.8
|
45.0
|
Operational risk
|
|
|
|
2.8
|
2.8
|
4.0
|
Total RWAs
|
|
|
|
34.5
|
38.6
|
49.0
|
(1)
|
Includes
a single name charge taken in respect of the oil and gas
portfolio.
|
(2)
|
Williams
& Glyn refers to the business formerly intended to be divested
as a separate legal entity and comprises RBS England and Wales
branch-based businesses, along with certain small and medium
enterprises and corporate activities across the UK. During the
period presented W&G has not operated as a separate legal
entity.
|
(3)
|
Asia-Pacific
portfolio.
|
(4)
|
European,
the Middle East and Africa portfolio.
|
|
31 December
|
30 September
|
31 December
|
|
2016
|
2016
|
2015
|
Loans and advances to customers
(gross) by segment (1)
|
£bn
|
£bn
|
£bn
|
UK PBB
|
|
|
|
Personal advances
|
6.0
|
6.0
|
6.0
|
Mortgages
|
117.1
|
114.7
|
104.8
|
Business banking
|
6.4
|
6.4
|
5.3
|
Cards
|
3.9
|
3.9
|
4.1
|
Other
|
-
|
-
|
1.4
|
Total
|
133.4
|
131.0
|
121.6
|
|
|
|
|
Ulster Bank RoI
|
|
|
|
Mortgages
|
15.3
|
16.0
|
13.8
|
Commercial real estate
|
|
|
|
- investment
|
0.7
|
1.0
|
0.7
|
- development
|
0.2
|
0.4
|
0.2
|
- other lending
|
3.9
|
4.4
|
3.9
|
Total
|
20.1
|
21.8
|
18.6
|
|
|
|
|
Commercial Banking
|
|
|
|
Commercial real estate
|
16.9
|
17.5
|
16.7
|
Asset and invoice finance
|
14.1
|
15.0
|
14.4
|
Private sector services (education, health etc)
|
6.9
|
6.9
|
6.7
|
Banks & financial institutions
|
8.9
|
8.9
|
7.1
|
Wholesale and retail trade repairs
|
8.4
|
8.2
|
7.5
|
Hotels and restaurants
|
3.7
|
3.6
|
3.3
|
Manufacturing
|
6.6
|
6.4
|
5.3
|
Construction
|
2.1
|
2.0
|
2.1
|
Other
|
33.3
|
32.3
|
28.9
|
Total
|
100.9
|
100.8
|
92.0
|
|
|
|
|
Private Banking
|
|
|
|
Personal advances
|
2.3
|
2.3
|
2.7
|
Mortgages
|
7.0
|
6.7
|
6.5
|
Other
|
2.9
|
2.8
|
2.0
|
Total
|
12.2
|
11.8
|
11.2
|
|
|
|
|
RBS International
|
|
|
|
Corporate
|
6.2
|
6.1
|
4.5
|
Mortgages
|
2.6
|
2.6
|
2.5
|
Other
|
-
|
-
|
0.4
|
Total
|
8.8
|
8.7
|
7.4
|
|
|
|
|
Capital Resolution
|
13.6
|
17.9
|
25.9
|
|
|
|
|
Williams & Glyn
(2)
|
|
|
|
Retail
|
12.3
|
12.2
|
11.6
|
Commercial
|
8.5
|
8.6
|
8.7
|
Total
|
20.8
|
20.8
|
20.3
|
|
|
|
|
Central items
|
0.3
|
0.1
|
2.0
|
|
|
|
|
Balance sheet
|
|
|
|
NatWest Markets
|
|
|
|
Loans and advances to customer (excluding reverse
repos)
|
17.4
|
19.9
|
16.1
|
Loans and advances to banks (excluding reverse repos)
(3)
|
3.3
|
5.9
|
5.7
|
Reverse repos
|
38.6
|
42.7
|
38.6
|
Securities
|
22.0
|
26.4
|
23.7
|
Cash and eligible bills
|
13.4
|
6.4
|
14.3
|
Other
|
6.2
|
11.2
|
4.9
|
Total funded assets
|
100.9
|
112.5
|
103.3
|
(1)
|
Excludes
reverse repurchase agreements and includes disposal
groups.
|
(2)
|
Williams
& Glyn refers to the business formerly intended to be divested
as a separate legal entity and comprises RBS England and Wales
branch-based businesses, along with certain small and medium
enterprises and corporate activities across the UK. During the
period presented W&G has not operated as a separate legal
entity.
|
(3)
|
Excludes
disposal groups.
|
2016 compared with 2015
|
|
●
|
Operating
profit was £1,381 million, compared with £1,030 million
in 2015, and included a £634 million litigation and conduct
charge, principally in respect of additional PPI provisions.
Adjusted operating profit of £2,202 million was £33
million, or 2%, higher than 2015 principally reflecting increased
net interest income combined with lower costs, partially offset by
a higher impairment charge.
|
●
|
Total
income of £5,290 million increased by £90 million, or 2%,
compared with 2015, despite the lower rate environment depressing
earnings on current accounts and the impact of regulatory changes
impacting interchange fees. Net interest income was robust,
increasing by £135 million, or 3%, reflecting continued strong
asset growth combined with the active repricing of our deposit
book. This more than offset the impact of lower current account
hedge returns and lower mortgage margins. Net interest margin
declined by 17 basis points to 3.01% reflecting the change in the
overall portfolio mix and reduced mortgage margins. During the
second half of 2016 mortgage SVR balances stabilised at
approximately 12%, broadly in line with historical
levels.
|
●
|
Non-interest
income reduced by £45 million, or 4%, principally reflecting
lower credit card interchange fees, following regulatory changes
introduced in 2015. In addition, cash back payments on the Reward
account have impacted fee income, however, we have seen increased
levels of customer engagement. Partially offsetting, we recognised
a £19 million debt sale gain in 2016.
|
●
|
Adjusted
operating expenses decreased by £33 million, or 1%, to
£3,005 million. Direct staff costs were £111 million, or
14%, lower driven by an 18% reduction in headcount reflecting the
continued movement to digital channels, exiting of business lines
with returns below required levels and some centralisation of
administrative activities. This was partially offset by additional
investment costs of £102 million, including one-off intangible
asset write-downs of £56 million in 2016, together with a
£21 million increase in regulatory charges.
|
●
|
The net
impairment charge of £83 million reflects continued benign
credit conditions and compared with a £7 million release in
2015, with the increase principally reflecting reduced portfolio
provision releases. The default driven charge was 13% lower than
2015 with REIL 26% lower and provision coverage remaining strong at
65%.
|
●
|
Net
loans and advances of £132.1 billion increased by £12.3
billion, or 10%, compared with 2015 principally driven by mortgage
growth of 12%. We continue to see positive momentum across business
and personal unsecured lending, up by 6%, excluding
transfers(1), and 7%
respectively.
|
●
|
We
continue to build on our strong mortgage market position with gross
balances increasing by 12% to £117.1 billion compared with 3%
growth for the overall mortgage market. Gross new lending in 2016
was £29.8 billion, representing a market share of
approximately 12% compared with a stock share of approximately 8.8%
at 31 December 2016, up from 8.2% in 2015. New business margins
were stable over 2016 whilst margins on existing customers
remortgaging have improved. Gross new business lending to small and
medium-sized enterprises of £1.6 billion was up 43% compared
with 2015. Personal loan gross new lending of £2.3 billion was
up 24% supported by the launch of functionality for a customer to
apply via the mobile app combined with improvements to customer
experience. We have continued to take a cautionary risk approach to
personal unsecured lending. As a result, personal unsecured cards
and overdrafts balances have decreased by £0.3 billion, or 5%,
compared with 2015, and margins have widened.
|
(1)
|
The
business transfers included: net loans and advances to customers of
£0.8 billion as at 31 December 2016.
|
●
|
Deposit
balances performed strongly, increasing by £8.0 billion, or
6%, to £145.8 billion driven by 13% growth in personal current
account balances. Personal savings balances increased 3% despite
re-pricing activity.
|
●
|
RWAs
decreased by £0.6 billion, or 2%, to £32.7 billion due to
asset mix benefits and overall improved credit quality, largely
reflecting the current benign credit conditions, partly offset by
increased lending.
|
Q4 2016 compared with Q3 2016
|
|
●
|
Operating
profit decreased by £286 million to £281 million.
Adjusted operating profit of £546 million was £45 million
lower than Q3 2016 primarily reflecting £35 million of
intangible asset write downs and the annual UK bank levy charge of
£34 million.
|
●
|
Income
was broadly stable in the quarter. Net interest income continued to
build momentum, increasing by £8 million driven by further
strong lending growth across mortgages, business lending and
personal loans, with NIM broadly stable at 2.94%. As mortgage SVR
balances and margins begin to stabilise, we have seen mortgage
income growth for the fourth consecutive quarter. Non interest
income declined by £5 million, or 2%, reflecting lower
seasonal credit card interchange fees and increased Reward
cash-back payments, partially offset by a £15 million gain
following the re-commencement of debt sales in our non-performing
loans book.
|
●
|
Adjusted
operating expenses increased £59 million, or 8%, principally
due to intangible asset write downs of £35 million and the
annual UK bank levy charge of £34 million. Excluding these
items, adjusted operating expenses reduced by £10 million, or
1%, due to further improvements in digital and process automation
delivering lower headcount and staff costs.
|
●
|
Net
loans and advances grew by £2.5 billion to £132.1 billion
with gross mortgage balances up £2.4 billion.
|
●
|
Deposits
grew by £2.1 billion to £145.8 billion driven by strong
growth in current account balances, £1.4 billion.
|
|
|
Q4 2016 compared with Q4 2015
|
|
●
|
Operating
profit increased by £571 million to £281 million,
predominantly driven by lower litigation and conduct charges.
Adjusted operating profit increased by £142 million to
£546 million reflecting an £85 million increase in income
and a £100 million reduction in adjusted operating expenses
partially offset by a £43 million increase in
impairments.
|
●
|
Total
income increased by £85 million, or 7%, to £1,339
million. Net interest income increased by £63 million, or 6%,
to £1,093 million reflecting mortgage volume growth, partially
offset by a 9 basis point reduction in net interest margin to
2.94%.
|
●
|
Adjusted
operating expenses reduced by £100 million, or 11%, primarily
driven by lower headcount.
|
●
|
A net
impairment loss of £16 million compared with a £27
million release in Q4 2015.
|
2016 compared with 2015
|
|
●
|
Operating
profit decreased by €338 million to €24 million
compared with 2015 primarily due to an increase in litigation and
conduct costs of €229 million and a €56 million
reduction in net impairment releases. Adjusted operating profit of
€280 million was €85 million, or 23%, lower than prior
year as a reduction in adjusted operating expenses was more than
offset by the non recurrence of one-off income benefits in 2015 and
lower impairment releases.
|
●
|
Net
interest income was stable year on year. Net interest margin
increased by 5 basis points to 1.62%, compared with 2015, driven by
a continued reduction in the cost of deposits and a reduced volume
of low yielding liquid assets, partly offset by reduced income on
free funds.
|
●
|
Non
interest income decreased by €52 million, or 20%, principally
reflecting a one-off €33 million gain realised on the closure
of a foreign exchange exposure in 2015 and a €13 million
interim adjustment to the pricing of FX transactions between Ulster
Bank RoI and NatWest Markets in 2016, pending completion of a
detailed pricing review.
|
●
|
Adjusted
operating expenses reduced by €28 million, or 5%, to
€559 million reflecting a combination of progress made on
cost saving initiatives, the non recurrence of one off costs in
2015 and one off accrual releases in 2016.
|
●
|
A
realignment of costs within direct expenses contributed to an
increase in staff costs in 2016 with an offsetting reduction in
other costs. This reflects the reallocation of 660 staff from UK
PBB to align with current management responsibilities following the
separation of the Northern Ireland and Republic of Ireland
businesses. Excluding the reallocation from UK PBB and staff
supporting the tracker mortgage examination and asset disposal
programmes, headcount decreased by 9% year on year.
|
●
|
Litigation
and conduct costs of €211 million principally reflects a
provision for remediation and programme costs associated with an
industry wide examination of tracker mortgages. Restructuring costs
increased by €27 million to €48 million, primarily
driven by costs associated with asset disposal
activity.
|
●
|
A net
impairment release of €138 million comprised write-backs
associated with asset disposals and benefited from improved
macroeconomic conditions.
|
●
|
The
sale of a portfolio of loans contributed to a €0.6 billion,
or 13%, reduction in risk elements in lending in 2016 to €4.1
billion. This was partially offset by a widening of the definition
of loans which are considered to be impaired to include multiple
forbearance arrangements and probationary mortgages. The provision
coverage ratio reduced from 55% in 2015 to 34% in 2016 largely
reflecting a further de-risking of the balance sheet following
recent asset sales of largely non-performing loans.
|
●
|
Whilst
gross new lending increased 31% in 2016, net loans and advances to
customers decreased €0.6 billion, or 3%, as new lending was
offset by asset disposals and repayments. The low yielding tracker
mortgage portfolio declined by €1.0 billion, or 9%, to
€10.8 billion at 31 December 2016 supported by repayments and
asset disposals.
|
●
|
RWAs
reduced by €5.3 billion or 20% during 2016 to €21.1
billion driven by the sale of a portfolio of loans combined with
adjustments to the mortgage modelling approach and an improvement
in the macro economic environment. RWAs on the tracker mortgage
portfolio reduced by €3.3 billion, or 31%, during 2016 to
€7.4 billion.
|
●
|
Loan:deposit
ratio decreased 10 percentage points to 117% in 2016 supported by a
€1.0 billion growth in deposits and reduced net loans
following recent asset sales.
|
Q4 2016 compared with Q3 2016
|
|
●
|
Adjusted
operating profit of €44 million was €37 million lower
than Q3 2016. Adjusted operating expenses increased by €31
million driven by an impairment of intangible assets and a
reduction in costs recharged to other business segments. In
addition, non-interest income reduced by €12 million
principally reflecting an interim adjustment to the pricing of FX
transactions between Ulster Bank RoI and NatWest Markets pending
completion of a detailed pricing review.
|
●
|
Litigation
and conduct costs increased €93 million primarily reflecting
a further provision in respect of remediation and programme costs
associated with an industry wide examination of tracker
mortgages.
|
●
|
The
recent sale of a portfolio of loans contributed to a €0.5
billion reduction in net loans and advances and a €1.5
billion reduction in risk elements in lending.
|
●
|
Risk
weighted assets decreased by €3.6 billion in the quarter to
€21.1 billion largely reflecting the sale of a portfolio of
loans combined with enhancements to mortgage models and an
improvement in the macro economic environment.
|
Q4 2016 compared with Q4 2015
|
|
●
|
Adjusted
operating profit of €44 million was €28 million higher
than Q4 2015 primarily driven by increased net impairment
releases.
|
●
|
Net
interest margin increased by 14 basis points to 1.59% primarily
driven by one-off movements in income recognised on non performing
loans in both Q4 2015 and Q4 2016.
|
2016 compared with 2015
|
|
●
|
Operating
profit was £742 million compared with £1,264 million in
2015 and included a £423 million litigation and conduct
charge, principally relating to a provision in respect of the FCA
review of RBS’s treatment of SMEs. Adjusted operating profit
of £1,273 million was £111 million, or 8%, lower than
2015, mainly reflecting increased impairments, partially offset by
increased income.
|
●
|
Total
income increased by £161 million to £3,415 million.
Excluding the impact of transfers(1), income increased by £21 million, or
1%, reflecting higher asset and deposit volumes. Net interest
margin fell by 12 basis points to 1.76% driven by asset margin
pressure in a competitive market and low rate
environment.
|
●
|
Adjusted
operating expenses of £1,936 million were £135 million
higher than 2015. Excluding business transfers, adjusted operating
expenses increased by £51 million reflecting a £25
million intangible asset write-down and increased investment
spend.
|
●
|
Net
impairment losses increased by £137 million to £206
million primarily reflecting a single name charge taken in respect
of the oil and gas portfolio.
|
●
|
Net
loans and advances of £100.1 billion increased by £8.8
billion, or 10%, compared with 2015 reflecting increased borrowing
across a number of sectors.
|
●
|
RWAs
were £78.5 billion, an increase of £6.2 billion compared
with 2015 reflecting asset growth partially offset by reduced RWA
intensity.
|
(1)
|
The
business transfers included impact of: total income of £218
million (2015 - £79 million; Q4 2016 - £48 million; Q4
2015 - £51 million; Q3 2016 - £58 million); operating
expenses of £109 million (2015 - £25 million; Q4 2016 -
£29 million; Q4 2015 - £19 million; Q3 2016 - £28
million); impairment losses of £50 million (2015 - £1
million recoveries; Q4 2016 - nil; Q4 2015 - nil; Q3 2016 - £7
million recoveries) net loans and advances to customers of
£6.2 billion (31 December 2015 - £5.0 billion; 30
September 2016 - £6.7 billion); customer deposits of £0.4
billion (31 December 2015 - nil; 30 September 2016 - £0.6
billion); and RWAs of £9.3 billion (31 December 2015 -
£8.4 billion; 30 September 2016 - £7.4
billion).
|
Q4 2016 compared with Q3 2016
|
|
●
|
An
operating loss of £225 million compared with an operating
profit of £355 million in Q3 2016 reflecting increased
litigation and conduct charges. Adjusted operating profit of
£228 million was £154 million lower than Q3 2016 driven
by increased adjusted operating expenses and increased
impairments.
|
●
|
Adjusted
operating expenses increased by £109 million principally due
to the annual UK bank levy charge, £90 million.
|
●
|
Net
impairment losses of £83 million increased by £63 million
compared with Q3 2016 largely reflecting single name charges in the
quarter.
|
●
|
Net
loans and advances continued to grow in the quarter, up £0.3
billion, similar to the growth achieved in Q3 2016, but at a slower
rate than in H1 2016.
|
|
|
Q4 2016 compared with Q4 2015
|
|
●
|
An
operating loss of £225 million compared with an operating
profit of £140 million in Q4 2015 reflecting increased
litigation and conduct charges. Adjusted operating profit increased
by £42 million to £228 million driven by higher income
and lower adjusted operating expenses.
|
●
|
Total
income increased by £70 million, or 9%, principally reflecting
higher asset and deposit volumes, partially offset by asset margin
pressure.
|
●
|
Adjusted
operating expenses reduced by £28 million reflecting cost
efficiencies and a lower bank levy.
|
2016 compared with 2015
|
|
●
|
An
operating profit of £111 million compared with an operating
loss of £470 million in 2015 which included a goodwill
impairment of £498 million. Adjusted operating profit of
£149 million was £36 million, or 32%, higher than 2015
reflecting increased income, lower adjusted operating expenses and
lower impairments.
|
●
|
Total
income increased by £13 million to £657 million primarily
reflecting higher asset volumes. Net interest margin fell by 9
basis points to 2.66% reflecting asset margin
pressures.
|
●
|
Adjusted
operating expenses of £511 million were £7 million, or
1%, lower than 2015 driven by reductions in the direct cost base,
with employee numbers down 10%, partially offset by increased
infrastructure costs absorbed following the sale of the
international business.
|
●
|
Net
loans and advances of £12.2 billion increased by £1.0
billion compared with 2015 driven by mortgages. Assets under
management of £17.0 billion were £3.1 billion higher
compared with 2015 reflecting underlying growth and equity index
inflation. In addition, investment cash balances were included in
assets under management for the first time in Q3 2016, excluding
this, growth was £2.0 billion.
|
Q4 2016 compared with Q3 2016
|
|
●
|
Operating
profit decreased by £40 million to £10 million. Adjusted
operating profit of £23 million was £30 million lower
than Q3 2016 driven by increased adjusted operating expenses
partially offset by a net impairment release in Q4
2016.
|
●
|
Adjusted
operating expenses increased by £37 million due to the annual
UK bank levy charge, £19 million, and a £13 million VAT
recovery in Q3 2016.
|
●
|
Net
loans and advances increased by £0.4 billion to £12.2
billion due to increased mortgage lending. Assets under management
increased by £0.5 billion to £17.0 billion driven by
market movements.
|
Q4 2016 compared with Q4 2015
|
|
●
|
An
operating profit of £10 million compared with an operating
loss of £516 million in Q4 2015 which included a goodwill
impairment of £498 million. An adjusted operating profit of
£23 million compared with a loss of £13 million in Q4
2015 reflecting lower adjusted operating expenses and a net
impairment release in Q4 2016.
|
●
|
Income
increased by £3 million, or 2%, principally reflecting higher
asset volumes, partially offset by asset margin
pressure.
|
●
|
Adjusted
operating expenses reduced by £13 million, or 8%, reflecting
cost efficiencies, with headcount down 10%.
|
2016 compared with 2015
|
|
●
|
Operating
profit decreased by £17 million to £190 million
principally reflecting increased impairment losses and operating
expenses. Adjusted operating profit of £195 million was
£16 million lower than 2015.
|
●
|
Total
income increased by £7 million to £374 million primarily
reflecting higher asset volumes. Net interest margin fell by 12
basis points to 1.36% reflecting asset margin
pressures.
|
●
|
Adjusted
operating expenses of £169 million were £13 million, or
8%, higher than 2015, reflecting a number of one-off
charges.
|
●
|
A net
impairment loss of £10 million was reported in
2016.
|
●
|
Net
loans and advances of £8.8 billion increased by £1.5
billion compared with 2015 reflecting balance draw-downs in the
corporate lending portfolio, mainly within the Funds
sector.
|
●
|
Customer
deposits of £25.2 billion grew by £3.9 billion compared
with 2015 principally reflecting the transfer of the Luxembourg
branch into RBSI from Capital Resolution during Q2
2016.
|
●
|
RWAs
were £9.5 billion, an increase of £1.2 billion compared
with 2015 reflecting asset growth.
|
Q4 2016 compared with Q3 2016
|
|
●
|
Operating
profit decreased by £21 million to £33 million. Adjusted
operating profit of £36 million was £17 million lower
than Q3 2016 primarily driven by increased adjusted operating
expenses.
|
●
|
Adjusted
operating expenses increased by £21 million, or 53%,
principally due to the annual UK bank levy charge, £19
million.
|
●
|
Net
loans and advances were broadly stable compared with Q3
2016.
|
Q4 2016 compared with Q4 2015
|
|
●
|
Operating
profit decreased by £22 million to £33 million. Adjusted
operating profit decreased by £18 million to £36 million
primarily driven by increased adjusted expenses.
|
●
|
Adjusted
operating expenses increased by £20 million, or 49%,
reflecting an increased bank levy and a number of one-off
charges.
|
2016 compared with 2015
|
|
●
|
An
operating loss of £386 million compared with an operating loss
of £837 million in 2015 and included litigation and conduct
costs of £528 million. The adjusted operating profit was
£201 million compared with a loss of £55 million in 2015.
The increase was driven by lower adjusted operating expenses and
increased income.
|
●
|
Total
income increased by £47 million to £1,574 million.
Excluding the impact of transfers(1), adjusted income
increased by £212 million, or 16%, to £1,521 million. The
increase was driven by Rates and Currencies, reflecting sustained
customer activity throughout the year and favourable market
conditions following the EU referendum and subsequent central bank
actions.
|
●
|
Operating
expenses decreased from £2,369 million to £1,960 million
in 2016, driven by lower restructuring costs and lower adjusted
expenses. Excluding business transfers(1), adjusted expenses
reduced by £116 million, or 8%, reflecting c.£250 million
of cost reductions partially offset by higher investment
spend.
|
●
|
NatWest
Markets are currently in the middle of a substantial investment
programme which will equip the franchise for new regulatory
requirements and provide opportunity to reduce back office support
costs. We expect that NatWest Markets adjusted operating expenses
will reduce by around £500 million over the next four
years.
|
●
|
Funded
assets decreased by £2.4 billion compared with 2015 to
£100.9 billion, as the business continues to work through
re-shaping, despite the headwind from foreign exchange movements
following the EU referendum and the substantial weakening of
sterling.
|
●
|
RWAs
increased by £2.1 billion compared with 2015 to £35.2
billion principally due to business movements and the impact of the
weakening of sterling.
|
Q4 2016 compared with Q3 2016
|
|
●
|
An
operating loss of £565 million compared with an operating
profit of £90 million in Q3 2016 reflecting increased
litigation and conduct charges. Adjusted operating loss of £24
million compared with an adjusted operating profit of £184
million in Q3 2016 primarily driven by lower income.
|
●
|
Total
income decreased by £186 million to £285 million.
Adjusted income reduced by £212 million to £314 million
following a particularly strong Q3 2016, which benefitted from
sustained customer activity and favourable market conditions
following the EU referendum and subsequent central bank actions, in
Rates.
|
●
|
Operating
expenses increased by £469 million to £850 million.
Adjusted operating expenses reduced by £4 million as lower
investment spend, following the elevated Q3 2016 charge, more than
offset the annual UK bank levy charge of £13
million.
|
●
|
Funded
assets decreased by £11.6 billion to £100.9 billion in
the quarter reflecting seasonally low levels of activity at the end
of the year.
|
Q4 2016 compared with Q4 2015
|
|
●
|
An
operating loss of £565 million compared with a loss of
£245 million in Q4 2015 reflecting increased litigation and
conduct charges. An adjusted operating loss of £24 million
compared with a loss of £112 million in Q4 2015 reflecting
higher income and lower adjusted operating expenses.
|
●
|
Total
income increased by £99 million to £285 million. Adjusted
income increased by £62 million, or 25%, principally
reflecting Currencies driven by heightened levels of customer
activity around the US election.
|
●
|
Operating
expenses increased by £419 million to £850 million.
Adjusted expenses decreased by £26 million principally due to
lower staff costs and legal expenditure.
|
(1)
|
NatWest
Markets results include the following financials for businesses
subsequently transferred to Commercial Banking for 2015: total
income of £98 million and operating expenses of £31
million.
|
2016 compared with 2015
|
|
●
|
RWAs
decreased by £14.5 billion, or 30%, to £34.5 billion
reflecting disposal activity partially offset by an increase due to
the weakening of sterling. Since the end of 2014, RWAs have reduced
by £60.6 billion, or 64%.
|
●
|
Funded
assets decreased by £25.8 billion to £27.6 billion with
the most significant reductions across Markets and
GTS.
|
●
|
An
operating loss of £4,870 million compared with a loss of
£3,687 million in 2015 and included litigation and conduct
costs of £3,413 million. The adjusted operating loss was
£1,432 million compared with £412 million in
2015.
|
●
|
Income
disposal losses were £572 million, £205 million higher
than 2015, and included £259 million in respect of the
shipping portfolio. In addition, a funding valuation adjustment
charge of £170 million was incurred in 2016.
|
●
|
Operating
expenses decreased from £4,951 million to £4,255 million
in 2016 principally driven by lower adjusted operating expenses and
lower restructuring costs. Adjusted expenses decreased by £775
million, or 50%, to £764 million, principally reflecting a
1,000 reduction in headcount.
|
●
|
A net
impairment loss of £253 million compared with a net impairment
release of £725 million in 2015 and principally comprised
charges relating to a number of shipping assets (£424
million).
|
Q4 2016 compared with Q3 2016
|
|
●
|
RWAs
decreased by £4.1 billion to £34.5 billion reflecting
disposal activity partially offset by an increase due to the
weakening of sterling.
|
●
|
Funded
assets decreased by £7.3 billion to £27.6 billion with
the most significant reductions across Markets and
GTS.
|
●
|
An
operating loss of £3,503 million compared with an operating
loss of £454 million in Q3 2016 and included litigation and
conduct costs of £3,156 million. The adjusted operating loss
was £331 million compared with £118 million in Q3 2016,
with the increase primarily reflecting increased disposal
losses.
|
●
|
Adjusted
expenses increased by £3 million to £176 million and
included the annual UK bank levy charge of £22
million.
|
Q4 2016 compared with Q4 2015
|
|
●
|
An
operating loss of £3,503 million compared with an operating
loss of £1,902 million in Q4 2015 and included litigation and
conduct costs of £3,156 million. The adjusted operating loss
was £331 million compared with a loss of £271 million in
Q4 2015.
|
●
|
Adjusted
expenses decreased by £218 million, or 55%, to £176
million principally reflecting a 1,000 reduction in
headcount.
|
2016 compared with 2015
|
|
●
|
An
operating profit of £345 million compared with £431
million in 2015. Adjusted operating profit of £402 million was
£57 million lower than 2015 reflecting higher adjusted
operating expenses and increased impairments.
|
●
|
Total
income increased by £4 million to £837 million as the
benefit of increased volumes was mainly offset by margin pressure
from the impact of the competitive lending environment and a
further reduction in interest rates. Net interest margin reduced by
16 basis points to 2.71%.
|
●
|
Operating
expenses of £450 million increased by £63 million, or
16%, and included a £29 million increase in restructuring
costs. Adjusted operating expenses increased by £34 million,
or 9%, to £393 million reflecting activity undertaken in H1 to
create a standalone bank, partially offset by the benefit of the
commercial business restructuring which was announced in Q4 2015.
Following the announcement to discontinue the programme to create a
cloned banking platform, a further restructuring programme
commenced in Q4 2016 resulting in an additional reduction in
headcount.
|
●
|
Net
impairment losses remained low at £42 million compared with a
loss of £15 million in 2015. The 2015 charge benefited from a
number of releases, totalling £28 million, in the commercial
business.
|
●
|
Net
loans and advances increased by £0.6 billion, or 3%, to
£20.6 billion principally reflecting growth in mortgages of
£0.4 billion, or 4%.
|
●
|
Customer
deposits were broadly stable at £24.2 billion, a £1.2
billion increase in retail deposits was offset by a £1.1
billion reduction in commercial deposits.
|
Q4 2016 compared with Q3 2016
|
|
●
|
Operating
profit increased by £25 million to £109 million driven by
a £14 million reduction in operating expenses and a £8
million increase in income.
|
●
|
Total
income increased by £8 million to £217 million driven by
an improvement in net interest margin with volumes remaining
stable.
|
●
|
Adjusted
operating expenses reduced by £2 million to £97 million
reflecting the restructuring activities following the announcement
to discontinue the programme to create a cloned banking platform.
Operating expenses reduced by £14 million principally due to
there being no restructuring costs incurred in Q4 2016 compared
with £12 million in Q3 2016.
|
Q4 2016 compared with Q4 2015
|
|
●
|
Operating
profit increased by £56 million to £109 million
reflecting a £10 million reduction in adjusted operating
expenses, a £9 million reduction in impairments and a £9
million increase in income driven by increased volumes. In
addition, operating expenses in Q4 2015 included a restructuring
charge of £28 million in commercial banking.
|
2016 compared with 2015
|
|
●
|
Central items not allocated represented a charge of £1,615
million in 2016, compared with a £903 million charge in 2015,
and included restructuring costs of £1,482 million and
litigation and conduct costs of £697 million. Restructuring
costs included a £750 million provision in respect of the 17
February 2017 update on RBS’s remaining State Aid obligation
regarding Williams & Glyn. Treasury funding costs were a charge
of £94 million, compared with a gain of £169 million in
2015, and included a £510 million charge for volatile items
under IFRS, due to reductions in long term interest rates, and a
£349 million foreign exchange gain, principally associated
with the weakening of sterling against the US dollar. In addition,
there was a £126 million loss on redemption of own debt in
2016. These were partially offset by a VAT recovery of £227
million and a £246 million gain on the sale of the stake in
VISA Europe.
|
Q4 2016 compared with Q3 2016
|
|
●
|
Central items not allocated represented a charge of £161
million in the quarter, compared with a £545 million charge in
Q3 2016, and included restructuring costs of £836 million and
a net credit of £192 million for litigation and conduct costs.
Q4 2016 Treasury funding costs were a gain of £465 million
(compared with a charge of £177 million in Q3 2016) and
included a £308 million IFRS volatility gain and a foreign
exchange gain of £140 million. Partially offsetting this was a
£77 million own credit adjustment charge as spreads tightened.
|
Q4 2016 compared with Q4 2015
|
|
●
|
Central items not allocated represented a charge of £161
million in the quarter, compared with a £264 million charge in
Q4 2015, and included restructuring costs of £836 million and
a net credit of £192 million for litigation and conduct costs.
Q4 2016 Treasury funding costs were a gain of £465 million
(compared with a gain of £193 million in Q4 2015) which
included a £308 million IFRS volatility gain and a foreign
exchange gain of £140 million. Partially offsetting this was a
£77 million own credit adjustments charge as spreads
tightened.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Interest receivable
|
11,258
|
11,925
|
|
2,770
|
2,796
|
2,855
|
Interest payable
|
(2,550)
|
(3,158)
|
|
(562)
|
(629)
|
(693)
|
|
|
|
|
|
|
|
Net interest income
(1)
|
8,708
|
8,767
|
|
2,208
|
2,167
|
2,162
|
|
|
|
|
|
|
|
Fees and commissions receivable
|
3,340
|
3,742
|
|
821
|
843
|
904
|
Fees and commissions payable
|
(805)
|
(809)
|
|
(213)
|
(200)
|
(251)
|
Income from trading activities
|
974
|
1,060
|
|
590
|
401
|
15
|
(Loss)/gain on redemption of own debt
|
(126)
|
(263)
|
|
1
|
3
|
(263)
|
Other operating income
|
499
|
426
|
|
(191)
|
96
|
(83)
|
|
|
|
|
|
|
|
Non-interest income
|
3,882
|
4,156
|
|
1,008
|
1,143
|
322
|
|
|
|
|
|
|
|
Total income
|
12,590
|
12,923
|
|
3,216
|
3,310
|
2,484
|
|
|
|
|
|
|
|
Staff costs
|
(5,124)
|
(5,726)
|
|
(1,142)
|
(1,287)
|
(1,277)
|
Premises and equipment
|
(1,388)
|
(1,827)
|
|
(382)
|
(354)
|
(447)
|
Other administrative expenses
|
(8,745)
|
(6,288)
|
|
(5,511)
|
(1,095)
|
(3,192)
|
Depreciation and amortisation
|
(778)
|
(1,180)
|
|
(249)
|
(175)
|
(186)
|
Write down of goodwill and other intangible assets
|
(159)
|
(1,332)
|
|
(70)
|
-
|
(659)
|
|
|
|
|
|
|
|
Operating expenses
|
(16,194)
|
(16,353)
|
|
(7,354)
|
(2,911)
|
(5,761)
|
|
|
|
|
|
|
|
(Loss)/profit before impairment (losses)/releases
|
(3,604)
|
(3,430)
|
|
(4,138)
|
399
|
(3,277)
|
Impairment (losses)/releases
|
(478)
|
727
|
|
75
|
(144)
|
327
|
|
|
|
|
|
|
|
Operating (loss)/profit before tax
|
(4,082)
|
(2,703)
|
|
(4,063)
|
255
|
(2,950)
|
Tax (charge)/credit
|
(1,166)
|
(23)
|
|
(244)
|
(582)
|
261
|
|
|
|
|
|
|
|
Loss from continuing operations
|
(5,248)
|
(2,726)
|
|
(4,307)
|
(327)
|
(2,689)
|
Profit from discontinued operations, net of tax
|
-
|
1,541
|
|
-
|
-
|
90
|
|
|
|
|
|
|
|
Loss for the period
|
(5,248)
|
(1,185)
|
|
(4,307)
|
(327)
|
(2,599)
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
Non-controlling interests
|
10
|
409
|
|
(27)
|
7
|
20
|
Preference share and other dividends
|
504
|
385
|
|
161
|
135
|
121
|
Dividend access share
|
1,193
|
-
|
|
-
|
-
|
-
|
Ordinary shareholders
|
(6,955)
|
(1,979)
|
|
(4,441)
|
(469)
|
(2,740)
|
|
|
|
|
|
|
|
(Loss)/earnings per ordinary share (EPS)
|
|
|
|
|
|
|
Basic EPS from continuing and discontinued operations
|
(59.5p)
|
(17.2p)
|
|
(37.7p)
|
(3.9p)
|
(23.6p)
|
Basic EPS from continuing operations
|
(59.5p)
|
(27.7p)
|
|
(37.7p)
|
(3.9p)
|
(24.5p)
|
(1)
|
Negative
interest on loans and advances is classed as interest
payable.
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Loss for the period
|
(5,248)
|
(1,185)
|
|
(4,307)
|
(327)
|
(2,599)
|
Items that do not qualify for reclassification
|
|
|
|
|
|
|
Loss on remeasurement of retirement benefit schemes
|
(1,049)
|
(73)
|
|
(2)
|
(52)
|
(93)
|
Tax
|
288
|
306
|
|
3
|
12
|
310
|
|
(761)
|
233
|
|
1
|
(40)
|
217
|
Items that do qualify for reclassification
|
|
|
|
|
|
|
Available-for-sale financial assets
|
(94)
|
44
|
|
68
|
(67)
|
139
|
Cash flow hedges
|
765
|
(700)
|
|
(750)
|
(66)
|
(398)
|
Currency translation
|
1,263
|
(1,181)
|
|
(13)
|
205
|
(4)
|
Tax
|
(106)
|
108
|
|
191
|
63
|
2
|
|
1,828
|
(1,729)
|
|
(504)
|
135
|
(261)
|
Other comprehensive income/(loss) after tax
|
1,067
|
(1,496)
|
|
(503)
|
95
|
(44)
|
|
|
|
|
|
|
|
Total comprehensive loss for the period
|
(4,181)
|
(2,681)
|
|
(4,810)
|
(232)
|
(2,643)
|
|
|
|
|
|
|
|
Total comprehensive income/(loss) is attributable to:
|
|
|
|
|
|
|
Non-controlling interests
|
121
|
370
|
|
(36)
|
32
|
13
|
Preference shareholders
|
260
|
297
|
|
68
|
79
|
74
|
Paid-in equity holders
|
244
|
88
|
|
93
|
56
|
47
|
Dividend access share
|
1,193
|
-
|
|
-
|
-
|
-
|
Ordinary shareholders
|
(5,999)
|
(3,436)
|
|
(4,935)
|
(399)
|
(2,777)
|
|
(4,181)
|
(2,681)
|
|
(4,810)
|
(232)
|
(2,643)
|
|
31 December
|
30 September
|
31 December
|
2016
|
2016
|
2015
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
Assets
|
|
|
|
Cash and balances at central banks
|
74,250
|
69,254
|
79,404
|
Net loans and advances to banks
|
17,278
|
19,741
|
18,361
|
Reverse repurchase agreements and stock borrowing
|
12,860
|
12,251
|
12,285
|
Loans and advances to banks
|
30,138
|
31,992
|
30,646
|
Net loans and advances to customers
|
323,023
|
326,736
|
306,334
|
Reverse repurchase agreements and stock borrowing
|
28,927
|
33,704
|
27,558
|
Loans and advances to customers
|
351,950
|
360,440
|
333,892
|
Debt securities
|
72,522
|
79,784
|
82,097
|
Equity shares
|
703
|
728
|
1,361
|
Settlement balances
|
5,526
|
10,298
|
4,116
|
Derivatives
|
246,981
|
283,049
|
262,514
|
Intangible assets
|
6,480
|
6,506
|
6,537
|
Property, plant and equipment
|
4,590
|
4,490
|
4,482
|
Deferred tax
|
1,803
|
1,684
|
2,631
|
Prepayments, accrued income and other assets
|
3,700
|
4,140
|
4,242
|
Assets of disposal groups
|
13
|
13
|
3,486
|
|
|
|
|
Total assets
|
798,656
|
852,378
|
815,408
|
|
|
|
|
Liabilities
|
|
|
|
Bank deposits
|
33,317
|
32,172
|
28,030
|
Repurchase agreements and stock lending
|
5,239
|
6,557
|
10,266
|
Deposits by banks
|
38,556
|
38,729
|
38,296
|
Customer deposits
|
353,872
|
358,844
|
343,186
|
Repurchase agreements and stock lending
|
27,096
|
29,851
|
27,112
|
Customer accounts
|
380,968
|
388,695
|
370,298
|
Debt securities in issue
|
27,245
|
28,357
|
31,150
|
Settlement balances
|
3,645
|
10,719
|
3,390
|
Short positions
|
22,077
|
19,882
|
20,809
|
Derivatives
|
236,475
|
275,364
|
254,705
|
Provisions for liabilities and charges
|
12,836
|
9,021
|
7,366
|
Accruals and other liabilities
|
6,991
|
6,933
|
7,749
|
Retirement benefit liabilities
|
363
|
526
|
3,789
|
Deferred tax
|
662
|
647
|
882
|
Subordinated liabilities
|
19,419
|
19,162
|
19,847
|
Liabilities of disposal groups
|
15
|
15
|
2,980
|
|
|
|
|
Total liabilities
|
749,252
|
798,050
|
761,261
|
|
|
|
|
Equity
|
|
|
|
Non-controlling interests
|
795
|
853
|
716
|
Owners’ equity*
|
|
|
|
Called up share capital
|
11,823
|
11,792
|
11,625
|
Reserves
|
36,786
|
41,683
|
41,806
|
|
|
|
|
Total equity
|
49,404
|
54,328
|
54,147
|
|
|
|
|
Total liabilities and equity
|
798,656
|
852,378
|
815,408
|
|
|
|
|
*Owners’ equity attributable to:
|
|
|
|
Ordinary shareholders
|
41,462
|
46,328
|
47,480
|
Other equity owners
|
7,147
|
7,147
|
5,951
|
|
|
|
|
|
48,609
|
53,475
|
53,431
|
|
Year ended
|
Quarter ended
|
|||||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
||
£m
|
£m
|
|
£m
|
£m
|
£m
|
||
|
|
|
|
|
|
|
|
Called-up share capital
|
|
|
|
|
|
|
|
At beginning of period
|
11,625
|
6,877
|
|
11,792
|
11,756
|
6,984
|
|
Ordinary shares issued
|
198
|
159
|
|
31
|
36
|
51
|
|
Conversion of B shares (1)
|
-
|
4,590
|
|
-
|
-
|
4,590
|
|
Preference shares redeemed (2)
|
-
|
(1)
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
At end of period
|
11,823
|
11,625
|
|
11,823
|
11,792
|
11,625
|
|
|
|
|
|
|
|
|
|
Paid-in equity
|
|
|
|
|
|
|
|
At beginning of period
|
2,646
|
784
|
|
4,582
|
2,536
|
2,646
|
|
Redeemed/reclassified (3)
|
(110)
|
(150)
|
|
-
|
-
|
-
|
|
Additional Tier 1 capital notes issued (4)
|
2,046
|
2,012
|
|
-
|
2,046
|
-
|
|
|
|
|
|
|
|
|
|
At end of period
|
4,582
|
2,646
|
|
4,582
|
4,582
|
2,646
|
|
|
|
|
|
|
|
|
|
Share premium account
|
|
|
|
|
|
|
|
At beginning of period
|
25,425
|
25,052
|
|
25,663
|
25,628
|
25,315
|
|
Ordinary shares issued
|
268
|
373
|
|
30
|
35
|
110
|
|
|
|
|
|
|
|
|
|
At end of period
|
25,693
|
25,425
|
|
25,693
|
25,663
|
25,425
|
|
|
|
|
|
|
|
|
|
Merger reserve
|
|
|
|
|
|
|
|
At beginning of period
|
10,881
|
13,222
|
|
10,881
|
10,881
|
13,222
|
|
Transfer to retained earnings
|
-
|
(2,341)
|
|
-
|
-
|
(2,341)
|
|
At end of period
|
|
10,881
|
10,881
|
|
10,881
|
10,881
|
10,881
|
|
|
|
|
|
|
|
|
Available-for-sale reserve
|
|
|
|
|
|
|
|
At beginning of period
|
307
|
299
|
|
188
|
232
|
210
|
|
Unrealised gains
|
282
|
31
|
|
69
|
24
|
139
|
|
Realised (gains)/losses
|
(376)
|
27
|
|
(1)
|
(91)
|
2
|
|
Tax
|
25
|
(16)
|
|
(18)
|
23
|
(44)
|
|
Recycled to profit or loss on ceding control of Citizens
(5)
|
-
|
9
|
|
-
|
-
|
-
|
|
Transfer to retained earnings
|
-
|
(43)
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
At end of period
|
238
|
307
|
|
238
|
188
|
307
|
|
|
|
|
|
|
|
|
|
Cash flow hedging reserve
|
|
|
|
|
|
|
|
At beginning of period
|
458
|
1,029
|
|
1,565
|
1,603
|
810
|
|
Amount recognised in equity
|
1,867
|
712
|
|
(471)
|
199
|
(65)
|
|
Amount transferred from equity to earnings
|
(1,102)
|
(1,354)
|
|
(279)
|
(265)
|
(333)
|
|
Tax
|
(193)
|
98
|
|
215
|
28
|
46
|
|
Recycled to profit or loss on ceding control of Citizens
(6)
|
-
|
(36)
|
|
-
|
-
|
-
|
|
Transfer to retained earnings
|
-
|
9
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
At end of period
|
1,030
|
458
|
|
1,030
|
1,565
|
458
|
|
|
|
|
|
|
|
|
|
Foreign exchange reserve
|
|
|
|
|
|
|
|
At beginning of period
|
1,674
|
3,483
|
|
2,898
|
2,706
|
1,679
|
|
Retranslation of net assets
|
1,470
|
(22)
|
|
(40)
|
278
|
17
|
|
Foreign currency (losses)/gains on hedges of net
assets
|
(278)
|
(176)
|
|
35
|
(36)
|
(26)
|
|
Tax
|
62
|
(11)
|
|
(6)
|
12
|
-
|
|
Transfer to retained earnings
|
-
|
(642)
|
|
-
|
-
|
-
|
|
Recycled to profit or loss on disposal of businesses
(7)
|
(40)
|
4
|
|
1
|
(62)
|
4
|
|
Recycled to profit or loss on ceding control of Citizens
(7)
|
-
|
(962)
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
At end of period
|
2,888
|
1,674
|
|
2,888
|
2,898
|
1,674
|
|
|
|
|
|
|
|
|
|
Capital redemption reserve
|
|
|
|
|
|
|
|
At beginning of period
|
4,542
|
9,131
|
|
4,542
|
4,542
|
9,132
|
|
Conversion of B shares (1)
|
-
|
(4,590)
|
|
-
|
-
|
(4,590)
|
|
Preference shares redeemed (2)
|
-
|
1
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
At end of period
|
4,542
|
4,542
|
|
4,542
|
4,542
|
4,542
|
|
|
|
|
|
|
|
|
|
Refer to page 53 for footnotes.
|
|
|
|
|
|
|
|
Year ended
|
Quarter ended
|
||||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Retained earnings
|
|
|
|
|
|
|
At beginning of period
|
(4,020)
|
(4,001)
|
|
(8,500)
|
(6,841)
|
(3,851)
|
(Loss)/profit attributable to ordinary shareholders
|
|
|
|
|
|
|
and other equity owners
|
|
|
|
|
|
|
- continuing operations
|
(5,258)
|
(2,801)
|
|
(4,280)
|
(334)
|
(2,709)
|
- discontinued operations
|
-
|
1,207
|
|
-
|
-
|
90
|
Equity preference dividends paid
|
(260)
|
(297)
|
|
(68)
|
(79)
|
(74)
|
Paid-in equity dividends paid, net of tax
|
(244)
|
(88)
|
|
(93)
|
(56)
|
(47)
|
Dividend access share dividend
|
(1,193)
|
-
|
|
-
|
-
|
-
|
Transfer from available-for-sale reserve
|
-
|
43
|
|
-
|
-
|
-
|
Transfer from cash flow hedging reserve
|
-
|
(9)
|
|
-
|
-
|
-
|
Transfer from foreign exchange reserve
|
-
|
642
|
|
-
|
-
|
-
|
Transfer from merger reserve
|
-
|
2,341
|
|
-
|
-
|
2,341
|
Costs of placing Citizens equity
|
-
|
(29)
|
|
-
|
-
|
-
|
Redemption of equity preference shares (2)
|
(1,160)
|
(1,214)
|
|
-
|
(1,160)
|
-
|
Loss on remeasurement of retirement benefit schemes
|
|
|
|
|
|
|
- gross
|
(1,049)
|
(67)
|
|
(2)
|
(52)
|
(87)
|
- tax
|
288
|
306
|
|
3
|
12
|
310
|
Shares issued under employee share schemes
|
(10)
|
(58)
|
|
-
|
(3)
|
(1)
|
Share-based payments
|
|
|
|
|
|
|
- gross
|
(9)
|
36
|
|
4
|
13
|
12
|
- tax
|
-
|
(4)
|
|
-
|
-
|
(4)
|
Redemption/reclassification of paid-in equity
|
(21)
|
(27)
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
At end of period
|
(12,936)
|
(4,020)
|
|
(12,936)
|
(8,500)
|
(4,020)
|
|
|
|
|
|
|
|
Own shares held
|
|
|
|
|
|
|
At beginning of period
|
(107)
|
(113)
|
|
(136)
|
(136)
|
(108)
|
Disposal of own shares
|
-
|
6
|
|
-
|
-
|
1
|
Shares issued under employee share schemes
|
41
|
-
|
|
7
|
-
|
-
|
Own shares acquired
|
(66)
|
-
|
|
(3)
|
-
|
-
|
|
|
|
|
|
|
|
At end of period
|
(132)
|
(107)
|
|
(132)
|
(136)
|
(107)
|
|
|
|
|
|
|
|
Owners’ equity at end of period
|
48,609
|
53,431
|
|
48,609
|
53,475
|
53,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to the following page for footnotes.
|
|
|
|
|
|
|
|
Year ended
|
|
Quarter ended
|
|||
|
31 December
|
31 December
|
|
31 December
|
30 September
|
31 December
|
|
2016
|
2015
|
|
2016
|
2016
|
2015
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Non-controlling interests
|
|
|
|
|
|
|
At beginning of period
|
716
|
2,946
|
|
853
|
820
|
703
|
Currency translation adjustments and other movements
|
111
|
3
|
|
(9)
|
25
|
1
|
Profit/(loss) attributable to non-controlling
interests
|
|
|
|
|
|
|
- continuing operations
|
10
|
75
|
|
(27)
|
7
|
20
|
- discontinued operations
|
-
|
334
|
|
-
|
-
|
-
|
Dividends paid
|
-
|
(31)
|
|
-
|
-
|
-
|
Movements in available-for-sale securities
|
|
|
|
|
|
|
- unrealised gains/(losses)
|
-
|
22
|
|
-
|
-
|
(2)
|
- realised gains
|
-
|
(6)
|
|
-
|
-
|
-
|
- tax
|
-
|
(5)
|
|
-
|
-
|
-
|
Movements in cash flow hedging reserve
|
|
|
|
|
|
|
- amount recognised in equity
|
-
|
32
|
|
-
|
-
|
-
|
- tax
|
-
|
(4)
|
|
-
|
-
|
-
|
Actuarial losses recognised in retirement benefit
schemes
|
|
|
|
|
|
|
- gross
|
-
|
(6)
|
|
-
|
-
|
(6)
|
Equity raised (8)
|
-
|
2,537
|
|
-
|
-
|
-
|
Equity withdrawn and disposals
|
(42)
|
(24)
|
|
(22)
|
1
|
-
|
Loss of control of Citizens
|
-
|
(5,157)
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
At end of period
|
795
|
716
|
|
795
|
853
|
716
|
|
|
|
|
|
|
|
Total equity at end of period
|
49,404
|
54,147
|
|
49,404
|
54,328
|
54,147
|
|
|
|
|
|
|
|
Total equity is attributable to:
|
|
|
|
|
|
|
Non-controlling interests
|
795
|
716
|
|
795
|
853
|
716
|
Preference shareholders
|
2,565
|
3,305
|
|
2,565
|
2,565
|
3,305
|
Paid-in equity holders
|
4,582
|
2,646
|
|
4,582
|
4,582
|
2,646
|
Ordinary shareholders
|
41,462
|
47,480
|
|
41,462
|
46,328
|
47,480
|
|
|
|
|
|
|
|
|
49,404
|
54,147
|
|
49,404
|
54,328
|
54,147
|
(1)
|
In
October 2015, all B shares were converted into ordinary shares of
£1 each.
|
(2)
|
In
September 2016, non-cumulative US dollar preference shares were
redeemed at their original issue price of US$1.5 billon (2015 -
$1.9 billion). The nominal value of £0.3 million (2015 -
£1 million) was transferred from share capital to capital
redemption reserve and ordinary owners’ equity was reduced by
£0.4 billion (2015 - £0.2 billion) in respect of the
movement in exchange rates since issue.
|
(3)
|
Paid-in
equity reclassified to liabilities as a result of the call of RBS
Capital Trust C in May 2016 (redeemed in July 2016) and the call of
RBS capital Trust IV in January 2015 (redeemed in March
2015).
|
(4)
|
AT1
capital notes totalling £2.0 billion issued in August
2016.
|
(5)
|
Year
ended 31 December 2015 net of tax - £6 million
charge.
|
(6)
|
Year
ended 31 December 2015 net of tax - £16 million
credit.
|
(7)
|
No tax
impact.
|
(8)
|
Includes
£2,491 million relating to the secondary offering of Citizens
in March 2015.
|
|
Year ended
|
|
|
31 December
|
31 December
|
|
2016
|
2015
|
|
£m
|
£m
|
|
|
|
Operating activities
|
|
|
Operating loss before tax on continuing operations
|
(4,082)
|
(2,703)
|
Operating profit before tax on discontinued operations
|
-
|
1,766
|
Adjustments for non-cash items
|
(7,810)
|
(6,661)
|
|
|
|
Net cash outflow from trading activities
|
(11,892)
|
(7,598)
|
Changes in operating assets and liabilities
|
8,413
|
8,589
|
|
|
|
Net cash flows from operating activities before tax
|
(3,479)
|
991
|
Income taxes paid
|
(171)
|
(73)
|
|
|
|
Net cash flows from operating activities
|
(3,650)
|
918
|
|
|
|
Net cash flows from investing activities
|
(4,359)
|
(4,866)
|
|
|
|
Net cash flows from financing activities
|
(5,107)
|
(940)
|
|
|
|
Effects of exchange rate changes on cash and cash
equivalents
|
8,094
|
576
|
|
|
|
Net decrease in cash and cash equivalents
|
(5,022)
|
(4,312)
|
Cash and cash equivalents at beginning of year
|
103,592
|
107,904
|
|
|
|
Cash and cash equivalents at end of year
|
98,570
|
103,592
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Payment
|
Other
|
Residential
|
Litigation
|
|
|
|
protection
|
customer
|
mortgage
|
and other
|
Property
|
|
|
insurance
|
redress (1)
|
backed securities
|
regulatory
|
and other
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
At 1 January 2016
|
996
|
821
|
3,772
|
519
|
1,258
|
7,366
|
Transfer from accruals and other liabilities
|
-
|
-
|
-
|
-
|
19
|
19
|
Transfer
|
-
|
21
|
-
|
50
|
(71)
|
-
|
Currency translation and other movements
|
-
|
-
|
118
|
18
|
28
|
164
|
Charge to income statement
|
-
|
11
|
-
|
34
|
79
|
124
|
Releases to income statement
|
-
|
(8)
|
-
|
(1)
|
(19)
|
(28)
|
Provisions utilised
|
(85)
|
(104)
|
(16)
|
(8)
|
(69)
|
(282)
|
At 31 March 2016
|
911
|
741
|
3,874
|
612
|
1,225
|
7,363
|
Transfer from accruals and other liabilities
|
-
|
35
|
-
|
5
|
14
|
54
|
Transfer
|
50
|
(50)
|
105
|
(105)
|
-
|
-
|
Currency translation and other movements
|
-
|
8
|
329
|
30
|
20
|
387
|
Charge to income statement
|
400
|
117
|
-
|
779
|
233
|
1,529
|
Releases to income statement
|
-
|
(5)
|
-
|
(12)
|
(95)
|
(112)
|
Provisions utilised
|
(114)
|
(80)
|
(72)
|
(69)
|
(146)
|
(481)
|
At 30 June 2016
|
1,247
|
766
|
4,236
|
1,240
|
1,251
|
8,740
|
Transfer from accruals and other liabilities
|
-
|
-
|
17
|
-
|
-
|
17
|
Currency translation and other movements
|
-
|
-
|
92
|
7
|
19
|
118
|
Charge to income statement
|
-
|
16
|
271
|
198
|
191
|
676
|
Releases to income statement
|
-
|
(12)
|
(22)
|
(26)
|
(8)
|
(68)
|
Provisions utilised
|
(102)
|
(79)
|
(78)
|
(27)
|
(176)
|
(462)
|
At 30 September 2016
|
1,145
|
691
|
4,516
|
1,392
|
1,277
|
9,021
|
Transfer from accruals and other liabilities
|
-
|
2
|
-
|
12
|
3
|
17
|
Transfer
|
-
|
2
|
-
|
(19)
|
17
|
-
|
Currency translation and other movements
|
-
|
1
|
147
|
6
|
23
|
177
|
Charge to income statement
|
201
|
484
|
3,120
|
612
|
1,017
|
5,434
|
Releases to income statement
|
-
|
(4)
|
(69)
|
(34)
|
(232)
|
(339)
|
Provisions utilised
|
(93)
|
(71)
|
(962)
|
(51)
|
(297)
|
(1,474)
|
At 31 December 2016
|
1,253
|
1,105
|
6,752
|
1,918
|
1,808
|
12,836
|
(1)
|
Closing
provision predominantly relates to investment advice, packaged
accounts (including costs) and tracker mortgages.
|
●
|
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
|
Sandy
Crombie
Frank
Dangeard
Alison
Davis
Morten
Friis
Robert
Gillespie
Penny
Hughes
Brendan
Nelson
Baroness
Noakes
Mike
Rogers
|
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
Capital
|
Williams
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
Resolution
|
& Glyn
|
other
|
RBS
|
Year ended 31 December 2016
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
5,290
|
576
|
|
3,415
|
657
|
374
|
|
1,574
|
(362)
|
837
|
229
|
12,590
|
Own credit adjustments
|
-
|
(3)
|
|
-
|
-
|
-
|
|
(53)
|
(134)
|
-
|
10
|
(180)
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
126
|
126
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
81
|
-
|
(245)
|
(164)
|
Total income - adjusted
|
5,290
|
573
|
|
3,415
|
657
|
374
|
|
1,521
|
(415)
|
837
|
120
|
12,372
|
Operating expenses - statutory
|
(3,826)
|
(669)
|
|
(2,467)
|
(549)
|
(174)
|
|
(1,960)
|
(4,255)
|
(450)
|
(1,844)
|
(16,194)
|
Restructuring costs - direct
|
51
|
38
|
|
25
|
7
|
2
|
|
19
|
56
|
57
|
1,851
|
2,106
|
-
indirect
|
136
|
2
|
|
83
|
30
|
3
|
|
93
|
22
|
-
|
(369)
|
-
|
Litigation and conduct costs
|
634
|
172
|
|
423
|
1
|
-
|
|
528
|
3,413
|
-
|
697
|
5,868
|
Operating expenses - adjusted
|
(3,005)
|
(457)
|
|
(1,936)
|
(511)
|
(169)
|
|
(1,320)
|
(764)
|
(393)
|
335
|
(8,220)
|
Impairment (losses)/releases
|
(83)
|
113
|
|
(206)
|
3
|
(10)
|
|
-
|
(253)
|
(42)
|
-
|
(478)
|
Operating profit/(loss) - adjusted
|
2,202
|
229
|
|
1,273
|
149
|
195
|
|
201
|
(1,432)
|
402
|
455
|
3,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
16.2%
|
0.7%
|
|
4.1%
|
5.6%
|
13.8%
|
|
(6.6%)
|
nm
|
nm
|
nm
|
(17.9%)
|
Return on equity - adjusted (1,2)
|
26.8%
|
8.4%
|
|
8.4%
|
7.8%
|
14.2%
|
|
1.1%
|
nm
|
nm
|
nm
|
1.6%
|
Cost income ratio
|
72%
|
116%
|
|
72%
|
84%
|
47%
|
|
125%
|
nm
|
54%
|
nm
|
129%
|
Cost income ratio - adjusted (2)
|
57%
|
80%
|
|
57%
|
78%
|
45%
|
|
87%
|
nm
|
47%
|
nm
|
66%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended 31 December 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
5,200
|
550
|
|
3,254
|
644
|
367
|
|
1,527
|
539
|
833
|
9
|
12,923
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
(120)
|
(175)
|
-
|
(14)
|
(309)
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
263
|
263
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
38
|
-
|
119
|
157
|
Total income - adjusted
|
5,200
|
550
|
|
3,254
|
644
|
367
|
|
1,407
|
402
|
833
|
377
|
13,034
|
Operating expenses - statutory
|
(4,177)
|
(429)
|
|
(1,921)
|
(1,101)
|
(160)
|
|
(2,369)
|
(4,951)
|
(387)
|
(858)
|
(16,353)
|
Restructuring costs - direct
|
38
|
12
|
|
52
|
7
|
-
|
|
44
|
380
|
28
|
2,370
|
2,931
|
-
indirect
|
129
|
3
|
|
17
|
66
|
4
|
|
480
|
927
|
-
|
(1,626)
|
-
|
Litigation and conduct costs
|
972
|
(13)
|
|
51
|
12
|
-
|
|
378
|
2,105
|
-
|
63
|
3,568
|
Write down of goodwill
|
-
|
-
|
|
-
|
498
|
-
|
|
-
|
-
|
-
|
-
|
498
|
Operating expenses - adjusted
|
(3,038)
|
(427)
|
|
(1,801)
|
(518)
|
(156)
|
|
(1,467)
|
(1,539)
|
(359)
|
(51)
|
(9,356)
|
Impairment releases/(losses)
|
7
|
141
|
|
(69)
|
(13)
|
-
|
|
5
|
725
|
(15)
|
(54)
|
727
|
Operating profit/(loss) - adjusted
|
2,169
|
264
|
|
1,384
|
113
|
211
|
|
(55)
|
(412)
|
459
|
272
|
4,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
11.7%
|
10.6%
|
|
9.8%
|
(27.7%)
|
18.5%
|
|
(11.1%)
|
nm
|
nm
|
nm
|
(4.7%)
|
Return on equity - adjusted (1,2)
|
26.2%
|
10.6%
|
|
10.9%
|
4.9%
|
18.9%
|
|
(2.0%)
|
nm
|
nm
|
nm
|
11.0%
|
Cost income ratio
|
80%
|
78%
|
|
59%
|
171%
|
44%
|
|
155%
|
nm
|
46%
|
nm
|
127%
|
Cost income ratio - adjusted (2)
|
58%
|
78%
|
|
55%
|
80%
|
43%
|
|
104%
|
nm
|
43%
|
nm
|
72%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to this table refer to page 3.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
Capital
|
Williams
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
Resolution
|
& Glyn
|
other
|
RBS
|
Quarter ended 31 December 2016
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
1,339
|
137
|
|
867
|
161
|
96
|
|
285
|
(293)
|
217
|
407
|
3,216
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
29
|
8
|
-
|
77
|
114
|
Gain on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(1)
|
(1)
|
Total income - adjusted
|
1,339
|
137
|
|
867
|
161
|
96
|
|
314
|
(285)
|
217
|
483
|
3,329
|
Operating expenses - statutory
|
(1,042)
|
(226)
|
|
(1,009)
|
(159)
|
(64)
|
|
(850)
|
(3,340)
|
(97)
|
(567)
|
(7,354)
|
Restructuring costs - direct
|
1
|
6
|
|
12
|
6
|
1
|
|
3
|
21
|
-
|
957
|
1,007
|
- indirect
|
50
|
(2)
|
|
34
|
8
|
1
|
|
43
|
(13)
|
-
|
(121)
|
-
|
Litigation and conduct costs
|
214
|
77
|
|
407
|
(1)
|
1
|
|
466
|
3,156
|
-
|
(192)
|
4,128
|
Operating expenses - adjusted
|
(777)
|
(145)
|
|
(556)
|
(146)
|
(61)
|
|
(338)
|
(176)
|
(97)
|
77
|
(2,219)
|
Impairment (losses)/releases
|
(16)
|
47
|
|
(83)
|
8
|
1
|
|
-
|
130
|
(11)
|
(1)
|
75
|
Operating profit/(loss) - adjusted
|
546
|
39
|
|
228
|
23
|
36
|
|
(24)
|
(331)
|
109
|
559
|
1,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
13.5%
|
(5.8%)
|
|
(9.1%)
|
1.6%
|
8.8%
|
|
(30.2%)
|
nm
|
nm
|
nm
|
(48.2%)
|
Return on equity - adjusted (1,2)
|
27.8%
|
5.4%
|
|
5.3%
|
4.5%
|
9.8%
|
|
(2.7%)
|
nm
|
nm
|
nm
|
8.6%
|
Cost income ratio
|
78%
|
165%
|
|
116%
|
99%
|
67%
|
|
nm
|
nm
|
45%
|
nm
|
229%
|
Cost income ratio - adjusted (2)
|
58%
|
106%
|
|
64%
|
91%
|
64%
|
|
108%
|
nm
|
45%
|
nm
|
67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended 30 September 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
1,336
|
146
|
|
849
|
165
|
93
|
|
471
|
103
|
209
|
(62)
|
3,310
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
55
|
42
|
-
|
59
|
156
|
Gain on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(3)
|
(3)
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
30
|
-
|
1
|
31
|
Total income - adjusted
|
1,336
|
146
|
|
849
|
165
|
93
|
|
526
|
175
|
209
|
(5)
|
3,494
|
Operating expenses - statutory
|
(742)
|
(131)
|
|
(474)
|
(112)
|
(39)
|
|
(381)
|
(437)
|
(111)
|
(484)
|
(2,911)
|
Restructuring costs - direct
|
(1)
|
8
|
|
12
|
-
|
-
|
|
6
|
23
|
12
|
409
|
469
|
- indirect
|
26
|
3
|
|
9
|
3
|
-
|
|
27
|
10
|
-
|
(78)
|
-
|
Litigation and conduct costs
|
(1)
|
3
|
|
6
|
-
|
(1)
|
|
6
|
231
|
-
|
181
|
425
|
Operating expenses - adjusted
|
(718)
|
(117)
|
|
(447)
|
(109)
|
(40)
|
|
(342)
|
(173)
|
(99)
|
28
|
(2,017)
|
Impairment (losses)/releases
|
(27)
|
39
|
|
(20)
|
(3)
|
-
|
|
-
|
(120)
|
(14)
|
1
|
(144)
|
Operating profit/(loss) - adjusted
|
591
|
68
|
|
382
|
53
|
53
|
|
184
|
(118)
|
96
|
24
|
1,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
27.1%
|
7.8%
|
|
9.5%
|
11.1%
|
15.4%
|
|
3.1%
|
nm
|
nm
|
nm
|
(4.8%)
|
Return on equity - adjusted (1,2)
|
28.3%
|
9.9%
|
|
10.4%
|
11.8%
|
15.1%
|
|
8.0%
|
nm
|
nm
|
nm
|
4.6%
|
Cost income ratio
|
56%
|
90%
|
|
56%
|
68%
|
42%
|
|
81%
|
nm
|
53%
|
nm
|
88%
|
Cost income ratio - adjusted (2)
|
54%
|
80%
|
|
53%
|
66%
|
43%
|
|
65%
|
99%
|
47%
|
nm
|
58%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the notes to this table refer to page 3.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBB
|
|
CPB
|
|
|
|
|
Central
|
|
|||
|
|
Ulster
|
|
Commercial
|
Private
|
RBS
|
|
NatWest
|
Capital
|
Williams
|
items &
|
Total
|
|
UK PBB
|
Bank RoI
|
|
Banking
|
Banking
|
International
|
|
Markets
|
Resolution
|
& Glyn
|
other
|
RBS
|
Quarter ended 31 December 2015
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income - statutory
|
1,254
|
116
|
|
797
|
158
|
95
|
|
186
|
(262)
|
208
|
(68)
|
2,484
|
Own credit adjustments
|
-
|
-
|
|
-
|
-
|
-
|
|
66
|
5
|
-
|
44
|
115
|
Loss on redemption of own debt
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
263
|
263
|
Strategic disposals
|
-
|
-
|
|
-
|
-
|
-
|
|
-
|
24
|
-
|
(2)
|
22
|
Total income - adjusted
|
1,254
|
116
|
|
797
|
158
|
95
|
|
252
|
(233)
|
208
|
237
|
2,884
|
Operating expenses - statutory
|
(1,571)
|
(107)
|
|
(630)
|
(662)
|
(40)
|
|
(431)
|
(1,996)
|
(135)
|
(189)
|
(5,761)
|
Restructuring costs - direct
|
31
|
(7)
|
|
40
|
7
|
-
|
|
-
|
21
|
28
|
494
|
614
|
-
indirect
|
56
|
1
|
|
14
|
(12)
|
(1)
|
|
62
|
83
|
-
|
(203)
|
-
|
Litigation and conduct costs
|
607
|
(4)
|
|
(8)
|
10
|
-
|
|
5
|
1,498
|
-
|
16
|
2,124
|
Write down of goodwill
|
-
|
-
|
|
-
|
498
|
-
|
|
-
|
-
|
-
|
-
|
498
|
Operating expenses - adjusted
|
(877)
|
(117)
|
|
(584)
|
(159)
|
(41)
|
|
(364)
|
(394)
|
(107)
|
118
|
(2,525)
|
Impairment (losses)/releases
|
27
|
10
|
|
(27)
|
(12)
|
-
|
|
-
|
356
|
(20)
|
(7)
|
327
|
Operating profit/(loss) - adjusted
|
404
|
9
|
|
186
|
(13)
|
54
|
|
(112)
|
(271)
|
81
|
348
|
686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (1)
|
(16.8%)
|
3.0%
|
|
3.1%
|
(118.9%)
|
19.1%
|
|
(15.1%)
|
nm
|
nm
|
nm
|
(26.5%)
|
Return on equity - adjusted (1,2)
|
19.8%
|
1.4%
|
|
4.6%
|
(4.4%)
|
18.7%
|
|
(7.6%)
|
nm
|
nm
|
nm
|
6.6%
|
Cost income ratio
|
125%
|
92%
|
|
79%
|
419%
|
42%
|
|
232%
|
nm
|
65%
|
nm
|
232%
|
Cost income ratio - adjusted (2)
|
70%
|
101%
|
|
73%
|
101%
|
43%
|
|
144%
|
nm
|
51%
|
nm
|
88%
|
(1)
|
RBS’s
CET 1 target is 13% but for the purposes of computing segmental
return on equity (ROE), to better reflect the differential drivers
of capital usage, segmental operating profit after tax and adjusted
for preference dividends is divided by notional equity allocated at
different rates of 11% (Commercial Banking and Ulster Bank RoI),
12% (RBS International) and 15% for all other segments, of the
monthly average of segmental risk-weighted assets incorporating the
effect capital deductions (RWAes). RBS Return on equity is
calculated using profit for the period attributable to ordinary
shareholders.
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(2)
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Excluding
own credit adjustments, (loss)/gain on redemption of own debt,
strategic disposals, restructuring costs, litigation and conduct
costs and write down of goodwill.
Legal
Entity Identifier No: 2138005O9XJIJN4JPN90
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THE
ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
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By: /s/
Jan Cargill
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Name:
Jan Cargill
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Title:
Deputy Secretary
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