RBS 2010 Annual Report Download - page 167

Commercial real estate
The Commercial real estate lending portfolio for Ulster Bank Group
totalled £18 billion at 31 December 2010 and decreased by 2% during the
year. The Non-Core portion of the portfolio totalled £12.6 billion (70% of
the portfolio). Of the total Ulster commercial real estate portfolio, 24% is
in Northern Ireland, 63% is in the Republic of Ireland and 13% is in the
UK.
The definition of commercial real estate was revised during 2010 to
include commercial investment properties, residential investment
properties, commercial development properties and residential
development properties which include house builders.
Development Investment
Exposure by geography Commercial
£m
Residential
£m
Commercial
£m
Residential
£m
Total
£m
2010
Island of Ireland 2,785 6,578 5,072 1,098 15,533
UK (excluding Northern Ireland) 110 359 1,831 115 2,415
Other — 17 22 1 40
2,895 6,954 6,925 1,214 17,988
2009
Island of Ireland 3,404 6,305 5,453 1,047 16,209
UK (excluding Northern Ireland) 240 153 1,586 83 2,062
Other — 7 1 22 30
3,644 6,465 7,040 1,152 18,301
Property remains the primary driver of growth in the defaulted loan
book for Ulster Bank Group. The outlook remains challenging with
limited liquidity in the marketplace to support refinancing. The
decrease in asset valuations has placed pressure on the portfolio with
more clients seeking renegotiation of terms in the context of granting
structural enhancements.
Within its early problem management framework, Ulster Bank Group
may agree various remedial measures with customers in the
performing book that are experiencing temporary financial difficulties.
During 2010, customers with loans amounting to £0.4 billion
(exposures greater than £5 million) benefited from such measures.
During 2010, impaired loans amounting to £2.1 billion (exposures
greater than £5 million) were restructured and remain in the non-
performing book.
165RBS Group 2010
Business review
Risk and balance sheet management