RBS 2011 Annual Report Download - page 162

160 RBS Group 2011
Risk management: Credit risk continued
Key credit portfolios*: Ulster Bank Group (Core and Non-Core) continued
Commercial real estate
The commercial real estate lending portfolio for Ulster Bank Group totalled £17.1 billion at 31 December 2011, of which £12.3 billion or 72% is Non-
Core. The geographic split of the total Ulster Bank Group commercial real estate portfolio remained similar to 2010, with 26% in Northern Ireland, 63%
in the Republic of Ireland and 11% in the UK.
Development Investment
Exposure by geography Commercial
£m
Residential
£m
Commercial
£m
Residential
£m
Total
£m
2011
Ireland (ROI & NI) 2,591 6,317 5,097 1,132 15,137
UK (excluding NI) 95 336 1,371 111 1,913
RoW — 32 27 4 63
2,686 6,685 6,495 1,247 17,113
2010
Ireland (ROI & NI) 2,785 6,578 5,032 1,098 15,493
UK (excluding NI) 110 359 1,869 115 2,453
RoW — 18 23 1 42
2,895 6,955 6,924 1,214 17,988
2009
Ireland (ROI & NI) 3,075 5,961 5,314 1,031 15,381
UK (excluding NI) 217 849 1,692 132 2,890
RoW — 7 20 3 30
3,292 6,817 7,026 1,166 18,301
Key points
xCommercial real estate remains the primary driver of the increase in
the defaulted loan book for Ulster Bank Group. The outlook remains
challenging, with limited liquidity in the marketplace to support sales
or refinancing. The decrease in asset valuations has placed
pressure on the portfolio.
xWithin its early problem management framework, Ulster Bank may
agree various remedial measures with customers whose loans are
performing but who are experiencing temporary financial difficulties.
During 2011, commercial real estate loans amounting to £0.8 billion
(exposures greater than £10 million) benefited from such measures.
xDuring 2011, impaired commercial real estate loans amounting to £1
billion (exposures greater than £10 million) were restructured and
remain in the non-performing book.
*unaudited
Business review Risk and balance sheet management continued