RBS 2008 Annual Report Download - page 71

RBS Group Annual Report and Accounts 200870
Business review continued
Overview of condensed consolidated balance sheet – pro forma
Total assets of £2,218.7 billion at 31 December 2008 were up £623.6
billion, 39%, compared with 31 December 2007. At constant exchange
rates the increase was £313 billion or 16%.
Loans and advances to banks decreased by £81.6 billion, 39%, to
£129.4 billion. Reverse repurchase agreements and stock borrowing
(‘reverse repos’) were down by £115.7 billion, 66% to £58.8 billion.
Excluding reverse repos, bank placings increased by £34.1 billion,
93%, to £70.6 billion.
Loans and advances to customers were up £31.0 billion, 4%, at £731.2
billion. Within this, reverse repos decreased by 72%, £102.8 billion to
£39.3 billion. Excluding reverse repos, lending rose by £133.8 billion,
24% to £691.9 billion reflecting both organic growth of £44.8 billion, 7%
and the effect of exchange rate movements of £89.0 billion following the
weakening of sterling during the second half of 2008.
Debt securities increased by £12.3 billion, 5%, to £253.1 billion and
equity shares decreased by £24.6 billion, 53%, to £22.1 billion
principally due to changes in Global Banking & Markets.
Movements in the value of derivatives, assets and liabilities, primarily
reflect changes in interest and exchange rates, together with an 7%
growth in trading volumes on a constant currency basis.
Intangible assets declined by £11.2 billion, 41% to £16.4 billion,
reflecting an impairment of £16.9 billion partially offset by exchange
rate movements of £5.7 billion and goodwill of £0.2 billion arising on the
Sempra joint venture.
Deferred tax assets increased £3.7 billion, to £5.4 billion principally due
to carried forward trading losses.
Prepayments, accrued income and other assets were up £4.1 billion,
25% to £20.7 billion.
Deposits by banks declined by £41.6 billion, 14% to £261.9 billion. This
reflected decreased repurchase agreements and stock lending
(‘repos’), down £78.2 billion, 48% to £83.7 billion partly offset by
increased inter-bank deposits, up £36.6 billion, 26% to £178.3 billion.
Customer accounts were down £38.7 billion, 7% to £518.5 billion. Within
this, repos decreased £61.9 billion, 52% to £58.1 billion. Excluding
repos, deposits rose by £23.3 billion, 5%, to £460.3 billion.
Settlement balances and short positions were down £35.6 billion, 40%,
to £54.3 billion reflecting reduced customer activity.
Accruals, deferred income and other liabilities decreased £4.4 billion,
16%, to £23.5 billion.
Retirement benefit liabilities increased £1.3 billion to £1.5 billion due to
reduced asset values only partly offset by the effect of increased
discount rates.
Deferred taxation liabilities decreased by £0.8 billion, 21% to £2.9 billion
due in part to the sale of Angel Trains.
Subordinated liabilities were up £15.6 billion, 56% to £43.7 billion
reflecting the issue of £2.0 billion dated loan capital, the allocation of
£6.5 billion ABN AMRO subordinated liabilities from consortium shared
assets, and the effect of exchange rate and other adjustments, £8.1 billion,
partially offset by the redemption of £1.0 billion of dated loan capital.
Equity minority interests increased by 1% to £5.4 billion. Attributable
profits of £0.4 billion, £0.8 billion equity raised as part of the Sempra
joint venture and other equity raised, £0.3 billion, and the effect of
exchange rate movements of £1.2 billion were partially offset by equity
withdrawals of £0.9 billion, reductions in the market value of available-
for-sale securities of £1.3 billion in respect of the investment in Bank
of China attributable to minority shareholders, and dividends paid of
£0.3 billion.
Owners’ equity increased by £5.8 billion, 11% to £58.9 billion. Net
proceeds of £12.0 billion from the rights issue, and net proceeds of
£19.7 billion from the placing and open offer, together with exchange
rate movements of £6.8 billion were partially offset by the attributable
loss for the period of £23.5 billion, a £4.6 billion decrease in available-
for-sale reserves, net of tax, reflecting £1.0 billion in the Group’s share
in the investment in Bank of China and £3.6 billion in other securities,
the majority of which related to Global Banking & Markets, actuarial
losses net of tax of £1.3 billion, the payment of the 2007 final ordinary
dividend of £2.3 billion and other dividends of £0.6 billion, and a
reduction in the cash flow hedging reserve of £0.3 billion.
Overview of consolidated balance sheet – statutory
Total assets of £2,401.7 billion at 31 December 2008 were up £560.8
billion, 30%, compared with 31 December 2007.
Loans and advances to banks decreased by £81.3 billion, 37%, to
£138.2 billion. Reverse repurchase agreements and stock borrowing
(‘reverse repos’) were down by £117.2 billion, 67% to £58.8 billion.
Excluding reverse repos, bank placings increased by £35.9 billion,
83%, to £79.4 billion.
Loans and advances to customers were up £46.2 billion, 6%, at £874.7
billion or £68.0 billion, 8% following the disposal of the Banco Real and
other businesses to Santander and Tesco Personal Finance. Within this,
reverse repos decreased by 72%, £103.0 billion to £39.3 billion.
Excluding reverse repos, lending rose by £149.2 billion, 22% to £835.4
billion reflecting both organic growth and the effect of exchange rate
movements following the weakening of sterling during the second half
of 2008.
Debt securities decreased by £27.1 billion, 9%, to £267.5 billion and
equity shares decreased by £26.7 billion, 50%, to £26.3 billion
principally due to lower holdings in Global Banking & Markets.