RBS 2011 Annual Report Download - page 161

RBS Group 2011 159
Key points
xREIL increased by £3.5 billion during the year, which reflects
continuing difficult conditions in both the commercial and residential
sectors in Ireland. Growth moderated in the last two quarters of
2011 as default trends for corporate portfolios declined.
xAt 31 December 2011, 68% of REIL was in Non-Core (2010 - 74%;
2009 - 75%). The majority of the Non-Core commercial real estate
development portfolio (89%) is REIL with a 57% provision coverage.
Residential mortgages
The tables belowshow how the continued decrease in property values has affected the distribution of residential mortgages by indexed LTV. LTV is
based upon gross loan amounts and whilst including defaulted loans, does not take account of provisions made.
LTV distribution calculated on a volume basis*
2011
%
2010
%
2009
%
<= 70% 45.0 50.3 59.2
>70% and <= 90% 11.4 13.0 12.0
>90% and <= 110% 12.0 14.5 13.4
> 110% and <= 130% 10.9 13.5 11.3
> 130% 20.7 8.7 4.1
Total portfolio average LTV at 31 December 81.0 71.2 62.5
Average LTV on new originations during the year 67.0 75.9 72.8
LTV distribution calculated on a value basis 2011
£m
2010
£m
2009
£m
<= 70% 4,526 5,928 7,393
>70% and <= 90% 2,501 3,291 3,830
>90% and <= 110% 3,086 4,256 4,907
> 110% and <= 130% 3,072 4,391 4,491
> 130% 6,517 2,958 1,681
Total portfolio average LTV at 31 December 106.1% 91.7% 86.2%
Average LTV on new originations during the year 73.9% 78.9% 78.5%
Key points
xThe residential mortgage portfolio across Ulster Bank Group totalled
£20 billion at 31 December 2011, with 89% in the Republic of Ireland
and 11% in Northern Ireland. At constant exchange rates the
portfolio decreased by 4% from 2010, as a result of natural
amortisation and limited growth due to low market demand.
xThe mortgage REIL continued to increase as a result of the
continued challenging economic environment. At 31 December 2011,
REIL as a percentage of gross mortgages was 10.9% (by value)
compared with 7.4% in 2010. The impairment charge for 2011 was
£570 million compared with £336 million for 2010. Repossession
levels were higher than in 2010, with a total of 161 properties
repossessed during 2011 (compared with 76 during 2010). 76% of
repossessions during 2011 were through voluntary surrender or
abandonment of the property.
xUlster Bank is assisting customers in this difficult environment.
Mortgage forbearance policies which are deployed through the ǥFlex’
initiative are aimed at assisting customers in financial difficulty. At 31
December 2011, 9.1% (by value) of the mortgage book (£1.8 billion)
was on a forbearance arrangement compared with 5.8% (£1.2 billion)
at 31 December 2010. The majority of these forbearance
arrangements are in the performing book (77%) and not 90 days
past due.