RBS 2010 Annual Report Download - page 129

Capital resources - proportional
In addition to the fully consolidated basis monitored by the FSA for regulatory purposes, the Group also monitors its regulatory capital resources on a
proportional consolidation basis reflecting only those businesses of RBS N.V that are retained by RBS. The Group’s regulatory capital resources on a
proportional consolidation basis, in accordance with the FSA definitions, were as follows:
Composition of regulatory capital - proportional* 2010
£m
2009
£m
2008
£m
Tier 1
Ordinary and B shareholders' equity 70,388 69,890 45,525
Non-controlling interests 1,424 2,227 5,436
Adjustments for:
-goodwill and other intangible assets - continuing businesses (14,448) (14,786) (16,386)
- goodwill and other intangible assets - discontinued businesses —(238) —
- unrealised losses on available-for-sale (AFS) debt securities 2,061 1,888 3,687
- reserves arising on revaluation of property and unrealised gains on AFS equities (25) (207) (984)
- reallocation of preference shares and innovative securities (548) (656) (1,813)
- other regulatory adjustments (1) (1,097) (950) 9
Less excess of expected losses over provisions net of tax (1,900) (2,558) (770)
Less securitisation positions (2,321) (1,353) (663)
Less APS first loss (4,225) (5,106) —
Core Tier 1 capital 49,309 48,151 34,041
Preference shares 5,410 11,265 16,655
Innovative Tier 1 securities 4,662 2,772 6,436
Tax on the excess of expected losses over provisions 758 1,020 308
Less material holdings (310) (310) (316)
Total Tier 1 capital 59,829 62,898 57,124
Tier 2
Reserves arising on revaluation of property and unrealised gains on AFS equities 25 207 984
Collective impairment provisions 764 796 666
Perpetual subordinated debt 1,852 4,200 9,079
Term subordinated debt 16,681 18,120 20,282
Non-controlling and other interests in Tier 2 capital 11 11 11
Less excess of expected losses over provisions (2,658) (3,578) (1,076)
Less securitisation positions (2,321) (1,353) (663)
Less material holdings (310) (310) (316)
Less APS first loss (4,225) (5,106) —
Total Tier 2 capital 9,819 12,987 28,967
Tier 3 —— 260
Supervisory deductions
Unconsolidated investments
- RBS Insurance (3,962) (4,068) (3,628)
- other investments (318) (404) (416)
Other deductions (452) (93) (111)
Deductions from total capital (4,732) (4,565) (4,155)
Total regulatory capital 64,916 71,320 82,196
Note:
(1) Includes reduction for own liabilities carried at fair value (1,182) (1,057) (1,159)
127RBS Group 2010
Business review
Risk and balance sheet management