RBS 2008 Annual Report Download - page 49

RBS Group Annual Report and Accounts 200848
Business review continued
2008 compared with 2007 – pro forma
Credit impairment losses (excluding reclassified assets) increased to
£6,962 million in 2008, compared with £2,104 million in 2007. The Group
experienced a pronounced deterioration in impairments during the year,
as financial stress spread to a broad range of customers. The greatest
increase in impairments occurred in Global Banking & Markets.
However, the Regional Markets businesses in all geographies also
experienced a noticeable increase in impairments during the year,
particularly in the UK SME and US personal segments.
Total balance sheet provisions for impairment amounted to £9,451
million compared with £4,956 million in 2007.
Total provision coverage (the ratio of total balance sheet provisions for
impairment to total risk elements in lending) decreased from 60% to
50%. The ratio of total balance sheet provisions for impairment to total
risk elements in lending and potential problem loans also decreased to
50% compared with 59% in 2007.
2008 compared with 2007 – statutory
Credit impairment losses increased to £8,072 million in 2008, compared
with £1,968 million in 2007. The Group experienced a pronounced
deterioration in impairments during the year, as financial stress spread
to a broad range of customers. The greatest increase in impairments
occurred in Global Banking & Markets. However, the Regional Markets
businesses in all geographies also experienced a noticeable increase in
impairments during the year, particularly in the UK SME and US
personal segments.
Total balance sheet provisions for impairment amounted to £11,016
million compared with £6,452 million in 2007.
Total provision coverage (the ratio of total balance sheet provisions for
impairment to total risk elements in lending) decreased from 60% to
52%. The ratio of total balance sheet provisions for impairment to total
risk elements in lending and potential problem loans also decreased to
51% compared with 57% in 2007.
Impairment
Pro forma (1) Statutory
2008 2007 2008 2007
£m £m £m £m
New impairment 7,223 2,379 8,391 2,310
less: recoveries of amounts previously written-off (261) (275) (319) (342)
Charge to income statement 6,962 2,104 8,072 1,968
Comprising:
Loan impairment 6,478 2,082 7,091 1,946
Impairment of available-for-sale securities 484 22 981 22
Charge to income statement 6,962 2,104 8,072 1,968
Note:
(1) Pro forma excludes impairment losses on reclassified assets.