RBS 2007 Annual Report Download - page 205

RBS Group • Annual Report and Accounts 2007 203
Financial statements
Pre-acquisition Provisional Recognised
carrying Disposal fair value acquisition
amounts groups (1) adjustments (2) values (2)
£m £m £m £m
Cash and balances at central banks 7,263 (186) — 7,077
Loans and advances to banks 120,120 (3,646) — 116,474
Loans and advances to customers 314,287 (26,158) (1,843) 286,286
Treasury and other eligible bills and debt and equity securities 166,018 (3,804) — 162,214
Derivatives 86,695 (322) — 86,373
Intangible assets 4,239 (3,522) 4,282 4,999
Property, plant and equipment 2,062 (747) 175 1,490
Other assets 32,710 (7) 1,357 34,060
Assets of disposal groups (1) 2,987 38,392 787 42,166
Deposits by banks (160,906) 2,808 (321) (158,419)
Customer accounts (253,583) 13,786 (152) (239,949)
Debt securities in issue (134,630) 5,937 776 (127,917)
Settlement balances and short positions (44,748) 36 — (44,712)
Derivatives (85,491) 417 — (85,074)
Subordinated liabilities (11,748) 868 685 (10,195)
Other liabilities (21,268) 271 (1,814) (22,811)
Liabilities of disposal groups (1) (2,377) (24,123) — (26,500)
Net identifiable assets and liabilities 21,630 — 3,932 25,562
Minority interests (242)
Goodwill on acquisition (3) 23,255
Consideration 48,575
Satisfied by:
Issue of 531 million ordinary shares of the company (4) 2,719
Cash 45,786
Fees and expenses relating to the acquisition 70
Consideration 48,575
Net cash:
Cash consideration 45,856
Cash acquired (60,093)
14,237
Notes:
(1) Following an agreement between Santander and Banca Monte dei Paschi di Siena S.p.A., it was announced on 10 November 2007 that Banca Antonveneta SpA., excluding its
subsidiary Interbanca will be sold by ABN AMRO to Banca Monte dei Paschi di Siena S.p.A. for consideration of 9 billion (£6.6 billion). The sale of ABN AMRO’s asset
management business to Fortis received approval from the Managing Board of ABN AMRO on 23 November 2007. These businesses and ABN AMRO’s private equity business
have been classified as disposal groups on the acquisition of ABN AMRO. In addition, under the terms of the Consortium and Shareholders’ Agreement, consortium members
other than the Group have agreed to acquire, in due course, various ABN AMRO businesses including operations in Brazil, the commercial and retail businesses in the Netherlands,
the private clients business and Interbanca.
(2) The initial accounting for the acquisition has been determined provisionally because of its complexity and the limited time available between the acquisition and the preparation
of these financial statements.
(3) Goodwill arising on the acquisition is attributable to anticipated cost and revenue synergies and long-term earnings potential of the acquired businesses.
(4) Valued at an average price of 512p per ordinary 25p share based on the closing price on the trading day immediately prior to the date of exchange.
(5) ABN AMRO made a loss for the period since its acquisition of £123 million, of which £136 million was attributable to discontinued operations.
35 Analysis of the net investment in business interests
and intangible assets
(a) Acquisition of ABN AMRO
On 17 October 2007, the Group, through its subsidiary RFS
Holdings B.V. (‘RFS’), acquired 99% of the ordinary shares of
ABN AMRO Holding N.V., the holding company of a major
European banking group based in the Netherlands with
subsidiaries that undertake commercial banking operations,
investment banking and other related financial activities. The
provisional fair values of ABN AMRO’s assets and liabilities at
the date of acquisition and the consideration paid were as
follows: