RBS 2010 Annual Report Download - page 147

Equity risk
The Group holds equity positions in order to achieve strategic objectives, support venture capital transactions or in respect of customer restructuring
arrangements. The Group is exposed to market risk on these banking book equity positions because they are measured at fair value. Fair values are
based on available market prices wherever possible. In the event that market prices are not available, fair value is based on appropriate valuation
techniques or management estimates.
The table below sets out the Group's banking book equity positions.
Listed Unlisted Total
2010 £m £m £m
Group 535 2,080 2,615
2009
Group before RFS MI 401 2,388 2,789
RFS MI 60 211 271
Group 461 2,599 3,060
2008
Group before RFS MI 4,211 2,759 6,970
RFS MI 56 259 315
Group 4,267 3,018 7,285
Note:
(1) The table above excludes equity exposures held-for-trading and those held by insurance/assurance entities.
Outlook for 2011*
Whilst there have been improvements in the state of the global economy over the course of 2010, the outlook for 2011 remains uncertain. In line with
meeting the objectives of the strategic plan, the Group is actively focusing on closing the customer funding gap, continuing to exit Non-Core businesses
and reducing undrawn and contingent commitments. These actions will result in a reduction in the need for short-term wholesale funding; the Group is
targeting £150 billion by 2013 compared with £157 billion at the end of 2010. The Group will continue to reduce reliance on government supported
schemes and be governed by the state of the markets and economies in which it operates. These strategies are aimed at insuring that the Group is
more resilient to any further disruptions in the market and better placed to take advantage of favourable trading conditions as they return.
145RBS Group 2010
Business review
Risk and balance sheet management