RBS 2009 Annual Report Download - page 123

Business review
Risk, capital and liquidity management
The Group’s regulatory capital resources on a proportional consolidation basis at 31 December 2009 and in accordance with the FSA definitions
were as follows:
2009 2008
Composition of regulatory capital (proportional) £m £m
Tier 1
Ordinary and B shareholders' equity 69,890 45,525
Minority interests 2,227 5,436
Adjustments for:
– Goodwill and other intangible assets – continuing (14,786) (16,386)
– Goodwill and other intangible assets of discontinued businesses (238) —
– Unrealised losses on available-for-sale debt securities 1,888 3,687
– Reserves arising on revaluation of property and unrealised gains on available-for-sale equities (207) (984)
– Reallocation of preference shares and innovative securities (656) (1,813)
– Other regulatory adjustments (950) 9
Less excess of expected losses over provisions net of tax (2,558) (770)
Less securitisation positions (1,353) (663)
Less APS first loss (5,106) —
Core Tier 1 capital 48,151 34,041
Preference shares 11,265 16,655
Innovative Tier 1 securities 2,772 6,436
Tax on the excess of expected losses over provisions 1,020 308
Less deductions from Tier 1 capital (310) (316)
Total Tier 1 capital 62,898 57,124
Tier 2
Reserves arising on revaluation of property and unrealised gains on available-for-sale equities 207 984
Collective impairment allowances 796 666
Perpetual subordinated debt 4,200 9,079
Term subordinated debt 18,120 20,282
Minority and other interests in Tier 2 capital 11 11
Less deductions from Tier 2 capital (5,241) (2,055)
Less APS first loss (5,106) —
Total Tier 2 capital 12,987 28,967
Tier 3 —260
Supervisory deductions
Unconsolidated investments
– RBS Insurance (4,068) (3,628)
– Other investments (404) (416)
Other (93) (111)
Deductions from total capital (4,565) (4,155)
Total regulatory capital 71,320 82,196
Risk weighted assets
Credit risk 410,400 433,400
Counterparty risk 56,500 61,100
Market risk 65,000 46,500
Operational risk 33,900 36,800
565,800 577,800
APS relief (127,600) —
438,200 577,800
Risk asset ratio
Core Tier 1 11.0% 5.9%
Tier 1 14.4% 9.9%
Total 16.3% 14.2%
121RBS Group Annual Report and Accounts 2009