RBS 2009 Annual Report Download - page 78

RBS Group Annual Report and Accounts 200976
Analysis of results
Net interest income Pro forma Statutory
2009 2008 2009 2008
£m £m £m £m
Interest receivable (1, 2) 26,390 42,197 33,902 49,938
Interest payable (1, 2) (13,107) (26,877) (17,682) (31,707)
Net interest income (1, 2) 13,283 15,320 16,220 18,231
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Gross yield on interest-earning assets of the banking business (3) 3.50 5.72 3.75 5.63
Cost of interest-bearing liabilities of the banking business (1.95) (3.88) (2.16) (3.81)
Interest spread of the banking business (4) 1.55 1.84 1.59 1.82
Benefit from interest-free funds 0.21 0.24 0.20 0.23
Net interest margin of the banking business (5) 1.76 2.08 1.79 2.05
Yields, spreads and margins of the banking business %%%%
Gross yield (3)
Group 3.50 5.72 3.75 5.63
UK 3.33 5.77 3.36 5.72
Overseas 3.71 5.66 4.08 5.56
Interest spread (4)
Group 1.55 1.84 1.59 1.82
UK 1.48 1.88 1.48 1.89
Overseas 1.66 1.79 1.70 1.77
Net interest margin (5)
Group 1.76 2.08 1.79 2.05
UK 1.74 2.28 1.73 2.29
Overseas 1.80 1.86 1.85 1.88
The Royal Bank of Scotland plc base rate (average) 0.64 4.67 0.64 4.67
London inter-bank three month offered rates (average):
Sterling 1.21 5.51 1.21 5.51
Eurodollar 0.69 2.92 0.69 2.92
Euro 1.21 4.63 1.21 4.63
Notes:
(1) Interest-earning assets and interest-bearing liabilities exclude the Retail bancassurance assets and liabilities attributable to policyholders, in view of their distinct nature. As a result, net interest
income has been increased by £20 million (2008 – £84 million).
(2) Interest income has been increased by £46 million (2008 – £332 million) and interest expense by £350 million (2008 – £860 million) to record interest on financial assets and liabilities designated
as at fair value through profit or loss. Related interest-earning assets and interest-bearing liabilities have also been adjusted.
(3) Gross yield is the interest rate earned on average interest-earning assets of the banking business.
(4) Interest spread is the difference between the gross yield and the interest rate paid on average interest-bearing liabilities of the banking business.
(5) Net interest margin is net interest income of the banking business as a percentage of average interest-earning assets of the banking business.
Business review continued