RBS 2009 Annual Report Download - page 52

RBS Group Annual Report and Accounts 2009
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In the Report and Accounts, and unless specified otherwise, the term
‘company’ means The Royal Bank of Scotland Group plc, ‘RBS’ or the
‘Group’ means the company and its subsidiaries, ‘the Royal Bank’
means The Royal Bank of Scotland plc and ‘NatWest’ means National
Westminster Bank Plc.
The company publishes its financial statements in pounds sterling (‘£’ or
‘sterling’). The abbreviations ‘£m’ and ‘£bn’ represent millions and
thousands of millions of pounds sterling, respectively, and references to
‘pence’ represent pence in the United Kingdom (‘UK’). Reference to
‘dollars’ or ‘$’ are to United States of America (‘US’) dollars. The
abbreviations ‘$m’ and ‘$bn’ represent millions and thousands of
millions of dollars, respectively, and references to ‘cents’ represent
cents in the US. The abbreviation ‘€’ represents the ‘euro’, the European
single currency, and the abbreviations ‘€m’ and ‘€bn’ represent millions
and thousands of millions of euros, respectively.
Certain information in this report is presented separately for domestic
and foreign activities. Domestic activities primarily consist of the UK
domestic transactions of the Group. Foreign activities comprise the
Group’s transactions conducted through those offices in the UK
specifically organised to service international banking transactions and
transactions conducted through offices outside the UK.
The geographic analysis in the average balance sheet and interest
rates, changes in net interest income and average interest rates, yields,
spreads and margins in this report have been compiled on the basis of
location of office – UK and overseas. Management believes that this
presentation provides more useful information on the Group’s yields,
spreads and margins of the Group’s activities than would be provided
by presentation on the basis of the domestic and foreign activities
analysis used elsewhere in this report as it more closely reflects the
basis on which the Group is managed. ‘UK’ in this context includes
domestic transactions and transactions conducted through the offices in
the UK which service international banking transactions.
The results, assets and liabilities of individual business units are
classified as trading or non-trading based on their predominant activity.
Although this method may result in some non-trading activity being
classified as trading, and vice versa, the Group believes that any
resulting misclassification is not material.
International Financial Reporting Standards
As required by the Companies Act 2006 and Article 4 of the European
Union IAS Regulation, the consolidated financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards issued by the International Accounting Standards
Board (IASB) and interpretations issued by the International Financial
Reporting Interpretations Committee of the IASB (together ‘IFRS’) as
adopted by the European Union. They also comply with IFRS as issued
by the IASB.
Acquisition of ABN AMRO
On 17 October 2007, RFS Holdings B.V. (‘RFS Holdings’), a company
jointly owned by RBS, Fortis Bank Nederland (Holding) N.V. (‘Fortis’)
and Banco Santander S.A. (‘Santander’) (together the ‘Consortium
Members’) and controlled by RBS, completed the acquisition of ABN
AMRO Holding N.V. (‘ABN AMRO’).
On 3 October 2008, the State of the Netherlands acquired Fortis Bank
Nederland (Holding) N.V. including the Fortis participation in RFS
Holdings that represents the acquired activities of ABN AMRO and their
participation in Dutch insurance activities.
RFS Holdings is implementing an orderly separation of the business
units of ABN AMRO with RBS retaining the following ABN AMRO
business units:
•Continuing businesses of Business Unit North America;
•Business Unit Global Clients and wholesale clients in the
Netherlands (including former Dutch wholesale clients) and Latin
America (excluding Brazil);
•Business Unit Asia (excluding Saudi Hollandi); and
•Business Unit Europe (excluding Antonveneta).
Certain other assets will continue to be shared by the Consortium
Members.
In preparation for the divestment of the ABN AMRO businesses to be
acquired by the Dutch State, on 6 February 2010, these businesses
were legally demerged from the RBS acquired businesses. As a result,
there are now two separate banks within ABN AMRO Holding N.V.: The
Royal Bank of Scotland N.V. and a new entity named ABN AMRO Bank
N.V., each licensed separately by the Dutch Central Bank. Both banks
continue to be governed by the current managing and supervisory
boards of ABN AMRO Holding N.V. until the legal separation of the new
ABN AMRO Bank N.V. from ABN AMRO Holding N.V..
Presentation of information