RBS 2007 Annual Report Download - page 69

67
RBS Group • Annual Report and Accounts 2007
Business review
Overview of consolidated balance sheet
Total assets of £1,900.5 billion at 31 December 2007 were up
£1,029.1 billion compared with 31 December 2006, of which
£774.2 billion relates to the acquisition of ABN AMRO. Excluding
ABN AMRO, total assets were up £254.9 billion, 29% to £1,126.3
billion largely reflecting an increase in derivative assets, which
was accompanied by a corresponding increase in derivative
liabilities, and secured financing through reverse repos and
lending growth across all divisions.
Treasury and other eligible bills increased by £12.7 billion to £18.2
billion. Excluding ABN AMRO, treasury and other eligible bills
grew £11.0 billion to £16.5 billion due to increased trading activity.
Loans and advances to banks increased by £136.9 billion to
£219.5 billion with reverse repurchase agreements and stock
borrowing ("reverse repos") up by £121.8 billion to £175.9 billion.
Excluding ABN AMRO, loans and advances to banks increased
by £14.8 billion, 18%, to £97.4 billion of which reverse repos
increased by £13.5 billion, 25% to £67.6 billion and bank
placings increased by £1.3 billion, 5%, to £29.8 billion.
Loans and advances to customers rose by £362.4 billion to
£829.3 billion. Within this, reverse repos increased by £79.4
billion to £142.4 billion. Excluding ABN AMRO, loans and
advances to customers were up £76.9 billion, 16%, to £543.8
billion with reverse repos increasing by £16.1 billion, 26% to
£79.1 billion. Excluding reverse repos, lending rose by £60.8
billion, 15% to £464.7 billion, reflecting growth across all divisions.
Debt securities increased by £149.2 billion to £276.4 billion of
which £121.8 billion related to the acquisition of ABN AMRO.
Excluding ABN AMRO, debt securities increased by £27.4
billion, 22%, to £154.6 billion principally due to increased trading
book holdings in Corporate Markets.
Equity shares rose by £39.5 billion to £53.0 billion primarily
reflecting the acquisition of ABN AMRO, partially offset by a £0.8
billion reduction in the value of the Bank of China shareholding.
Intangible assets increased by £29.6 billion to £48.5 billion due
to the acquisition of ABN AMRO and represented goodwill of
£24.5 billion and other intangible assets of £5.1 billion.
Property, plant and equipment were up £0.3 billion, 2% to £18.8
billion. Excluding ABN AMRO, property, plant and equipment
were down £1.9 billion, 10% to £16.6 billion mainly as a result of
the sale of the Canary Wharf investment properties and sale
and leaseback transactions in the UK and US.
Settlement balances rose £9.2 billion to £16.6 billion. Excluding
ABN AMRO, settlement balances were down £2.1 billion, 28% to
£5.3 billion as a result of reduced customer activity.
Derivatives, assets and liabilities increased reflecting the
acquisition of ABN AMRO, growth in trading volumes and the
effects of interest and exchange rate movements amidst current
market conditions.
Prepayments, accrued income and other assets were up
£10.9 billion to £19.1 billion primarily reflecting the acquisition
of ABN AMRO.
Assets and liabilities of disposal groups comprise those
business units of ABN AMRO that were acquired exclusively with
a view to disposal, including Banca Antonveneta, Asset
Management and Private Equity.
Deposits by banks rose by £180.5 billion to £312.6 billion of
which repurchase agreements and stock lending (“repos”) were
up £86.7 billion to £163.0 billion. Excluding ABN AMRO, deposits
by banks rose by £10.7 billion, 8% to £142.8 billion. Inter-bank
deposits were up £11.9 billion, 21% at £67.7 billion, partially
offset by a reduction in repos down £1.2 billion, 2% to £75.1 billion.
Customer accounts were up £298.1 billion to £682.4 billion with
repos up £70.9 billion to £134.9 billion. Excluding ABN AMRO,
customer accounts were up £57.8 billion, 15% at £442.1 billion
with repos up £11.0 billion, 17% to £75.0 billion. Excluding
repos, deposits rose by £46.8 billion, 15%, to £367.1 billion with
good growth in all divisions.
Debt securities in issue have increased by £187.7 billion to
£273.6 billion. Excluding ABN AMRO, the increase was £58.7
billion, 68% to £144.7 billion.
Settlement balances and short positions were up £41.5 billion to
£91.0 billion. Excluding ABN AMRO, the increase in settlement
balances and short positions was £4.4 billion, 9% to £53.8 billion
reflecting growth in customer activity.
Accruals, deferred income and other liabilities increased
£18.4 billion to £34.0 billion largely reflecting the acquisition of
ABN AMRO.
Deferred taxation liabilities rose by £2.2 billion, 69% to £5.5
billion largely due to the acquisition of ABN AMRO.
Subordinated liabilities were up £10.3 billion, 37% to £38.0 billion.
Excluding ABN AMRO, subordinated liabilities were unchanged
at £27.7 billion. The issue of £1.0 billion dated loan capital and
£0.7 billion movement in exchange rates was offset by the
redemption of £0.7 billion dated loan capital, £0.4 billion undated
loan capital and £0.6 billion non-cumulative preference shares.
Equity minority interests increased by £33.1 billion to £38.4
billion reflecting £33.8 billion in respect of the acquisition of
ABN AMRO, partially offset by a reduction of £0.4 billion in the
value of the investment in Bank of China.
Owners’ equity increased by £12.8 billion, 32%, to £53.0 billion.
The profit for the year of £7.6 billion, issue of £2.7 billion of
ordinary share capital, £3.2 billion of non-cumulative fixed rate
equity preference shares and £1.1 billion of other paid-in equity
to fund the Group's investment in ABN AMRO, together with
other issues of £0.4 billion non-cumulative fixed rate equity
preference shares and £0.1 billion of ordinary shares in respect
of the exercise of share options, a £1.5 billion net decrease after
tax in the Group's pension liability and £0.4 billion resulting from
the effect of exchange rates, were partly offset by the payment
of the 2006 final ordinary dividend and the 2007 interim
dividend, £3.0 billion and preference dividends of £0.3 billion,
£0.5 billion reduction in available-for-sale reserves, and a £0.4
billion decrease in cash flow hedging reserve.