RBS 2009 Annual Report Download - page 349

347RBS Group Annual Report and Accounts 2009
Financial statements
Notes on the accounts
2009 2008
£000 £000
Loans and advances to customers 11,196 4,217
Customer accounts 11,713 9,572
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 and key management
(a) At 31 December 2009, the amounts outstanding in relation to
transactions, arrangements and agreements entered into by
authorised institutions in the Group, as defined in UK legislation,
were £3,596,978 in respect of loans to 15 persons who were
directors of the company 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 Management Committee. The captions in the Group’s
primary financial statements include the following amounts
attributable, in aggregate, to key management:
41 Related parties
UK Government
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 principal transactions during 2009 were: in April
2009, the redemption of its non-cumulative sterling preference shares
and the placing and open offer underwritten by HM Treasury and in
December 2009 the issue of B shares to HM Treasury (see Note 27); as
well as the Asset Protection Scheme, Bank of England facilities and the
issue of debt guaranteed by the UK Government described below.
Other transactions include the payment of: taxes including UK
corporation tax and value added tax; national insurance contributions;
local authority rates; and regulatory fees and levies; together with
banking transactions such as loans and deposits undertaken in the
normal course of banker-customer relationships. The volume and
diversity of these transactions are such that disclosure of their amounts
is impractical.
As at 31 December 2009 and 2008 balances with the UK Government and UK Government controlled bodies were:
2009 2008
Central Banks, financial Central Banks, financial
government corporations government corporations
(including the Local and public 2009 (including the Local and public 2008
Bank of England) government corporations Total Bank of England) government corporations Total
£m £m £m £m £m £m £m £m
Assets
Balances at central banks 16,617 — — 16,617 393 — — 393
Loans and advances to banks — — 664 664 — — 1,081 1,081
Loans and advances to customers 53 1,231 340 1,624 5 721 468 1,194
Debt securities 19,681 — 100 19,781 21,628 — 113 21,741
Derivatives 204 62 7 273 1,286 64 17 1,367
Other 4,514 — 3 4,517 249 — — 249
Liabilities
Deposits by banks — — 436 436 26,541 — 633 27,174
Customer accounts 1,480 3,646 668 5,794 1,536 3,320 598 5,454
Derivatives 156 39 628 823 276 78 29 383
Other 118 — — 118 176 — — 176
No impairment losses were recognised by the Group in 2009 or 2008 in respect of balances with UK Government and UK Government controlled
bodies.
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.