RBS 2004 Annual Report Download - page 95

section
01
Operating and
financial review
93
Annual Report and Accounts 2004
Operating and financial review
Overview of consolidated balance sheet
Total assets of £583.5 billion at 31 December 2004 were up
£129.0 billion, 28%, compared with 31 December 2003,
reflecting business growth and acquisitions.
Treasury bills and other eligible bills increased by £1.3 billion,
26%, to £6.1 billion, reflecting trading activity.
Loans and advances to banks rose £6.4 billion, 12%, to £58.3
billion. Bank placings were up £2.9 billion, 11% to £28.3 billion,
and reverse repurchase agreements and stock borrowing
(“reverse repos”), were up £3.5 billion, 13%, to £30.0 billion.
Loans and advances to customers were up £92.9 billion, 37%,
to £345.5 billion. Within this, reverse repos increased by £28.1
billion to £52.2 billion reflecting growth in trading activities.
Excluding reverse repos, lending increased by £64.8 billion,
28% to £293.3 billion reflecting organic growth across all
divisions and £23.4 billion arising from acquisitions, principally
Charter One, £18.0 billion, First Active, £4.1 billion, and the
People's Bank credit card business, £1.0 billion. In $ terms,
Citizens grew US$39.5 billion, 92%, including US$32.7 billion
related to acquisitions.
Debt securities increased by £11.3 billion, 14%, to £91.2 billion,
principally due to increased holdings in Financial Markets and
the acquisition of First Active.
Equity shares were up £0.7 billion, 29%, to £3.0 billion, mainly
due to the acquisition of Charter One and growth in Financial
Markets trading activity.
Intangible fixed assets increased by £4.4 billion, 34% to £17.6
billion. Goodwill arising on the acquisitions made during 2004
amounted to £5.9 billion, including £4.7 billion in respect of
Charter One. This was partially offset by goodwill amortisation,
£0.9 billion and the adverse effect of exchange rate
movements, £0.5 billion.
Tangible fixed assets were up £2.4 billion, 17% to £16.3 billion,
mainly reflecting growth in operating lease assets, up £1.4 billion,
22% to £7.8 billion.
Settlement balances increased by £2.8 billion to £5.7 billion as
a result of increased levels of customer activity.
Other assets rose by £4.4 billion, 25% to £22.3 billion, mainly
due to an increase in the mark-to-market value of trading
derivatives and acquisitions.
Deposits by banks increased by £31.8 billion, 47% to £99.1 billion
to fund business growth, with repurchase agreements and
stock lending (“repos”) up £16.3 billion, 60%, to £43.3 billion
and inter-bank deposits up £15.5 billion, 38% to £55.8 billion.
Customer accounts were up £48.1 billion, 20% at £285.1
billion. Within this, repos were up £15.1 billion, 56% to £42.1
billion reflecting growth in trading activities. Excluding repos,
deposits rose by £33.0 billion, 16%, to £243.0 billion with
growth in CBFM, £6.3 billion, Retail Banking, £4.1 billion,
Wealth Management, £2.7 billion, Citizens, £15.8 billion,
including the acquisition of Charter One and Ulster Bank, £3.8
billion, including First Active. In $ terms, Citizens grew US$36.4
billion, 58%, including US$29.1 billion related to acquisitions.
Debt securities in issue increased by £17.9 billion, 44%, to
£59.0 billion primarily to meet the Group's funding requirements.
The increase in settlement balances and short positions
reflected growth in customer activity.
Other liabilities rose by £5.6 billion, 27% to £26.2 billion,
principally due to an increase in the mark-to-market value of
trading derivatives.
Accruals and deferred income increased by £2.4 billion, 18%
to £15.6 billion.
Post-retirement benefit liabilities, recognised on the adoption of
FRS 17, were up £0.5 billion, 32% to £1.9 billion with actuarial
losses, net of deferred tax, up £1.1 billion, mainly due to changes
in actuarial assumptions, partially offset by asset growth and a
£750 million payment to the RBS Group Pension Fund.
Provisions for liabilities and charges increased £0.8 billion, 37%
to £3.1 billion principally due to higher provisions for deferred tax.
Subordinated liabilities were up £3.4 billion, 20% to £20.4 billion.
This reflected the issue of £1.3 billion (US$2,425 million), £0.7
billion (1,000 million) and £0.4 billion (AUD1,000 million)
dated loan capital, and £1.1 billion (£1,100 million), £1.0 billion
(1,500 million) and £0.1 billion (JPY25 billion) undated loan
capital, together with £0.1 billion of dated and undated loan
capital arising from the acquisition of First Active and £0.2 billion
dated loan capital arising from the acquisition of Charter One.
This was partially offset by the redemption of dated loan
capital, £0.7 billion (US$1,050 million and £140 million), the
conversion of £0.5 billion (US$850 million) undated loan capital
into US$ preference shares and the effect of exchange rate
movements, £0.4 billion.
Non-equity minority interests were up £0.9 billion, 35% to £3.7
billion mainly reflecting the issues by subsidiaries of the Group
of US$950 million (£0.5 billion) non-cumulative trust preferred
securities in August 2004 and US$1,000 million (£0.6 billion) non-
cumulative trust preferred securities in August/September 2004.
Shareholders' funds increased by £5.8 billion, 22% to £31.9
billion including £2.6 billion from the placing of 165 million
ordinary shares in connection with the acquisition of Charter
One, the issue of £1.3 billion preference share capital and
conversion of £0.5 billion (US$850 million) undated loan capital
into US$ preference shares. The remainder reflects retentions
of £2.4 billion and the issue of £0.6 billion of ordinary shares
in respect of scrip dividends and the exercise of share options
and revaluation of premises, £0.1 billion, which were partly
offset by £1.1 billion actuarial losses, net of deferred tax,
recognised in post-retirement benefit schemes and the
adverse effect of exchange rate movements on share premium
account, £0.2 billion and profit and loss account, £0.4 billion.