RBS 2010 Annual Report Download - page 183

REIL, provisions and reserves
All the disclosures in this section (pages 181 to 192) are audited.
The Group classifies impaired assets as either risk elements in lending
(REIL) or potential problem loans (PPL). REIL represents impaired loans,
and loans that are accruing but are past due 90 days. PPL represents
impaired assets which are not included in REIL, but where information
about possible credit problems cause management to have serious
doubts about the future ability of the borrower to comply with loan
repayment terms.
Both REIL and PPL are reported gross and take no account of the value
of any security held which could reduce the eventual loss should it occur,
nor of any provision marked. Therefore impaired assets which are highly
collateralised, such as mortgages, will have a low coverage ratio of
provisions held against the reported impaired balance.
The analysis of risk elements in lending and impairments below, form a
key part of the data provided to senior management on the credit
performance of the Group's portfolios.
The table below analyses the Group's REIL and PPL and takes no
account of the value of any security held which could reduce the eventual
loss should it occur, nor of any provisions.
2010 2009 2008
Core Non-Core Group Core Non-Core
Group
before
RFS MI RFS MI Group
Group
before
RFS MI Group
£m £m £m £m £m £m £m £m £m £m
Impaired loans (1)
UK 7,903 7,835 15,738 6,558 7,311 13,869 3 13,872 8,724 8,733
Overseas 5,608 14,355 19,963 4,173 13,769 17,942 3,211 21,153 8,358 10,746
13,511 22,190 35,701 10,731 21,080 31,811 3,214 35,025 17,082 19,479
Accruing loans past due 90 days
or more (2)
UK 1,434 939 2,373 1,146 1,089 2,235 — 2,235 1,201 1,201
Overseas 262 262 524 212 731 943 46 989 508 581
1,696 1,201 2,897 1,358 1,820 3,178 46 3,224 1,709 1,782
Total REIL 15,207 23,391 38,598 12,089 22,900 34,989 3,260 38,249 18,791 21,261
Potential problem loans (3) 473 160 633 272 652 924 85 1,009 226 226
Total REIL and PPL 15,680 23,551 39,231 12,361 23,552 35,913 3,345 39,258 19,017 21,487
REIL as a % of gross loans to
customers (4) 3.7% 20.7% 7.3%
2.8% 15.1% 6.1% 2.4% 5.4% 2.7% 2.5%
REIL and PPL as a % of gross loans
to customers (4) 3.8% 20.8% 7.4%
2.9% 15.5% 6.2% 2.5% 5.5% 2.7% 2.5%
Closing provision for impairment as a
% of total REIL 51% 44% 47% 56% 37% 44% 65% 46% 50% 52%
Closing provision for impairment as a
% of total REIL and PPL 49% 44% 46% 55% 36% 43% 63% 45% 50% 51%
Notes:
(1) All loans against which an impairment provisions is held.
(2) Loans where an impairment event has taken place but no impairment recognised. This category is used for fully collateralised non-revolving credit facilities.
(3) Loans for which an impairment event has occurred but no impairment provision is necessary. This category is used for advances and revolving credit facilities where the past due concept is not
applicable.
(4) Includes gross loans relating to disposal groups but excludes reverse repos.
181RBS Group 2010
Business review
Risk and balance sheet management