RBS 2008 Annual Report Download - page 41

RBS Group Annual Report and Accounts 200840
Business review continued
Analysis of results
Net interest income
Pro forma Statutory
2008 2007 2008 2007
£m £m £m £m
Interest receivable (1, 2) 41,942 37,634 49,938 32,650
Interest payable (1, 2) (26,447) (25,390) (31,707) (20,719)
Net interest income (1, 2) 15,495 12,244 18,231 11,931
%%%%
Gross yield on interest-earning assets of the banking business (3) 5.69 6.16 5.63 6.21
Cost of interest-bearing liabilities of the banking business (3.83) (4.55) (3.81) (4.36)
Interest spread of the banking business (4) 1.86 1.61 1.82 1.85
Benefit from interest-free funds 0.24 0.39 0.23 0.42
Net interest margin of the banking business (5) 2.10 2.00 2.05 2.27
Yields, spreads and margins of the banking business %%%%
Gross yield (3)
Group 5.69 6.16 5.63 6.21
UK 5.71 6.71 5.73 6.72
Overseas 5.66 5.57 5.56 5.52
Interest spread (4)
Group 1.86 1.61 1.82 1.85
UK 1.93 2.31 1.90 2.31
Overseas 1.79 0.85 1.77 1.22
Net interest margin (5)
Group 2.10 2.00 2.05 2.27
UK 2.33 2.43 2.30 2.46
Overseas 1.87 1.55 1.89 2.01
The Royal Bank of Scotland plc base rate (average) 4.67 5.51 4.67 5.51
London inter-bank three month offered rates (average):
Sterling 5.51 6.00 5.51 6.00
Eurodollar 2.92 5.29 2.92 5.29
Euro 4.63 4.28 4.63 4.28
Notes:
(1) Interest-earning assets and interest-bearing liabilities exclude the Retail bancassurance assets and liabilities attributable to policyholders, in view of their distinct nature. As a result, net interest
income has been adjusted by £84 million (2007 – £85 million).
(2) Interest income has been adjusted by £332 million (2007 – £313 million) and interest expense by £860 million (2007 – £536 million) to record interest on financial assets and liabilities designated as
at fair value through profit or loss. Related interest-earning assets and interest-bearing liabilities have also been adjusted.
(3) Gross yield is the interest rate earned on average interest-earning assets of the banking business.
(4) Interest spread is the difference between the gross yield and the interest rate paid on average interest-bearing liabilities of the banking business.
(5) Net interest margin is net interest income of the banking business as a percentage of average interest-earning assets of the banking business.