RBS 2008 Annual Report Download - page 266

265RBS Group Annual Report and Accounts 2008
2008 2007
£000 £000
Loans and advances to customers 4,217 2,023
Customer accounts 9,572 13,309
Key management have banking relationships with Group entities which are entered into in the normal course of business and on substantially the
same terms, including interest rates and security, as for comparable transactions with other persons of a similar standing or, where applicable, with
other employees. These transactions did not involve more than the normal risk of repayment or present other unfavourable features.
Key management had no reportable transactions or balances with the company except for dividends.
40 Transactions with directors, officers and others
(a) At 31 December 2008, the amounts outstanding in relation to
transactions, arrangements and agreements entered into by
authorised institutions in the Group, as defined in UK legislation,
were £117,847 in respect of loans to 27 persons who were directors
of the company (or persons connected with them) at any time during
the financial period.
(b) For the purposes of IAS 24 ‘Related Party Disclosures’, key
management comprise directors of the company and members of
the Group Executive Management Committee. The captions in the
Group’s primary financial statements include the following amounts
attributable, in aggregate, to key management:
41 Related parties
(a) In their roles as providers of finance, Group companies provide
development and other types of capital support to businesses. These
investments are made in the normal course of business and on
arm’s-length terms. In some instances, the investment may extend to
ownership or control over 20% or more of the voting rights of the
investee company. However, these investments are not considered to
give rise to transactions of a materiality requiring disclosure under
IAS 24.
(b) The Group recharges The Royal Bank of Scotland Group Pension
Fund with the cost of administration services incurred by it. The
amounts involved are not material to the Group.
(c) In accordance with IAS 24, transactions or balances between Group
entities that have been eliminated on consolidation are not reported.
(d) The captions in the primary financial statements of the parent
company include amounts attributable to subsidiaries. These
amounts have been disclosed in aggregate in the relevant notes to
the financial statements.
(e) On 1 December 2008, the UK Government through HM Treasury
became the ultimate controlling party of The Royal Bank of Scotland
Group plc. The UK Government’s shareholding is managed by UK
Financial Investments Limited, a company wholly owned by the UK
Government. As a result the UK Government and UK Government
controlled bodies became related parties of the Group. The Group
enters into transactions with many of these bodies on an arms'
length basis. The volume and diversity of such transaction are such
that disclosure of their amounts in the period 1 December 2008 to
31 December 2008 is impractical.
As at 31 December 2008 balances with the UK Government and UK Government controlled bodies were:
Central Banks, financial
government corporations
(including the Local and public 2008
Bank of England) government corporations Total
£m £m £m £m
Assets
Balances at central banks 393 ——393
Loans and advances to banks ——1,081 1,081
Loans and advances to customers 5 721 468 1,194
Debt securities 21,628 – 113 21,741
Derivatives 1,286 64 17 1,367
Other 249 ——249
Liabilities
Deposits by banks 26,541 — 633 27,174
Customer accounts 1,536 3,320 598 5,454
Derivatives 276 78 29 383
Other 176 ——176
Notes:
(1) In addition to UK Government’s shareholding in the Group, the UK Government and UK Government controlled bodies may hold debt securities, subordinated liabilities and other liabilities or
shares issued by the Group in the normal course of their business. It is not practicable to ascertain and disclose these amounts.
(2) Certain of the liability balances are secured.