RBS 2010 Annual Report Download - page 64

Analysis of results
Net interest income
Pro forma Statutory
2010 2009 2008
2010 2009 2008
£m £m £m
£m £m £m
Interest receivable (1,2,6) 22,693 26,390 42,197 22,703 26,377 42,606
Interest payable (1,2,7) (8,855) (13,107) (26,877) (8,856) (13,273) (27,568)
Net interest income 13,838 13,283 15,320 13,847 13,104 15,038
%% % %% %
Gross yield on interest-earning assets of the banking business (3) 3.29 3.50 5.72
3.29 3.51 5.63
Cost of interest-bearing liabilities of the banking business (1.48) (1.95) (3.88) (1.48) (1.96) (3.84)
Interest spread of the banking business (4) 1.81 1.55 1.84
1.81 1.55 1.79
Benefit from interest-free funds 0.20 0.21 0.24
0.19 0.19 0.20
Net interest margin of the banking business (5) 2.01 1.76 2.08
2.00 1.74 1.99
Yields, spreads and margins of the banking business %% % %% %
Gross yield (3)
- Group 3.29 3.50 5.72 3.29 3.51 5.63
- UK 3.40 3.33 5.77 3.40 3.33 5.72
- Overseas 3.14 3.71 5.66 3.13 3.71 5.55
Interest spread (4)
- Group 1.81 1.55 1.84 1.81 1.55 1.79
- UK 2.04 1.48 1.88 2.04 1.48 1.94
- Overseas 1.50 1.66 1.79 1.49 1.62 1.64
Net interest margin (5)
- Group 2.01 1.76 2.08 2.00 1.74 1.99
- UK 2.19 1.74 2.28 2.19 1.73 2.34
- Overseas 1.76 1.80 1.86 1.75 1.75 1.64
The Royal Bank of Scotland plc base rate (average) 0.50 0.64 4.67 0.50 0.64 4.67
London inter-bank three month offered rates (average)
- Sterling 0.70 1.21 5.51 0.70 1.21 5.51
- Eurodollar 0.34 0.69 2.92 0.34 0.69 2.92
- Euro 0.75 1.21 4.63 0.75 1.21 4.63
Notes:
(1) Interest-earning assets and interest-bearing liabilities exclude the Retail bancassurance long-term assets and liabilities attributable to policyholders, in view of their distinct nature. As a result, net
interest receivable has been increased by £6 million (2009 - £20 million; 2008 - £84 million).
(2) Interest receivable has been increased by £11 million (2009 - £46 million; 2008 - £332 million) and interest payable has been decreased by £30 million (2009 - £350 million increase; 2008 - £860
million increase) 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.
(6) Interest receivable has been decreased by £90 million in respect of a non-recurring receivable (2009 - nil; 2008 - nil).
(7) Interest payable has been increased by £319 million in respect of non-recurring adjustments (2009 - nil; 2008 - nil).
RBS Group 201062
Business review continued