RBS 2011 Annual Report Download - page 429

RBS Group 2011 427
6Derivatives
The following table shows the notional amounts and fair values of the company's derivatives.
2011 2010 2009
Notional Notional Notional
amount Assets Liabilities amount Assets Liabilities amount Assets Liabilities
£bn £m £m £bn £m £m £bn £m £m
Exchange rate contracts 7 1,182 26 6 1,195 231 10 875 422
Interest rate contracts 4 320 — 4 280 — 4 294 24
Credit derivatives 10 — 53 —— — — ——
1,502 79 1,475 231 1,169 446
Included above are derivatives held for hedging purposes as follows:
2011 2010 2009
Fair value hedging Assets
£m
Liabilities
£m
Assets
£m
Liabilities
£m
Assets
£m
Liabilities
£m
Interest rate contracts 279 — 252 — 239 14
7Debt securities
The company holds debt securities issued by a Group undertaking of £1,568 million (2010 - £1,454 million; 2009 - £1,286 million) classified as loans and
receivables.
8Investments in Group undertakings
Investments in Group undertakings are carried at cost less impairment. Movements during the year were as follows:
2011 2010 2009
£m £m £m
At 1 January 49,125 64,766 42,196
Currency translation and other adjustments (2) (49) (566)
Additional investments in Group undertakings 4,607 1,884 36,202
Additions 761 — —
Redemption of investments in Group undertakings (50) (12,346) (7,908)
Disposals —(6) (19)
Impairment of investments (570) (5,124) (5,139)
At 31 December 53,871 49,125 64,766
The principal subsidiary undertakings of the company are shown below. Their capital consists of ordinary and preference shares which are unlisted with
the exception of certain preference shares issued by NatWest and RBS Holdings N.V..
The Royal Bank of Scotland plc, Direct Line Insurance Group plc (formerly RBS Insurance Group Limited) and RFS Holdings B.V. are directly owned by
the company, and all of the other subsidiary undertakings are owned directly, or indirectly through intermediate holding companies, by these companies.
All of these subsidiaries are included in the Group's consolidated financial statements and have an accounting reference date of 31 December.
Nature of business
Country of incorporation and
principal area of operation Group interest
The Royal Bank of Scotland plc Banking Great Britain 100%
National Westminster Bank Plc (1) Banking Great Britain 100%
Citizens Financial Group, Inc. Banking US 100%
Coutts & Company (2) Private banking Great Britain 100%
RBS Securities Inc. Broker deale
r
US 100%
Direct Line Insurance Group plc Insurance Great Britain 100%
Ulster Bank Limited (3) Banking Northern Ireland 100%
RBS Holdings N.V. (4) Banking The Netherlands 98%
Notes:
(1) The company does not hold any of the NatWest preference shares in issue.
(2) Coutts & Company is incorporated with unlimited liability. Its registered office is 440 Strand, London WC2R 0QS.
(3) Ulster Bank Limited and its subsidiaries also operate in the Republic of Ireland.
(4) RFS Holdings B.V. (RFS) owns 100% of the outstanding shares of RBS Holdings N.V. (ABN AMRO Holding N.V. prior to 1 April 2010). RBS Holdings N.V. has one direct subsidiary, The Royal Bank
of Scotland N.V. (RBS N.V.), a fully operational bank within the Group. RBS N.V. is independently rated and regulated by the Dutch Central Bank. On the division of an entity by demerger, Dutch law
establishes a cross liability between surviving entities in respect of the creditors at the time of the demerger. RBS N.V.’s cross liability is limited by law to the lower of its equity and the debts of ABN
AMRO Bank N.V. on 1 April 2010. The likelihood of any cross liability crystallising is considered remote.
The above information is provided in relation to the principal related undertakings as permitted by Section 410(2) of the Companies Act 2006. Full
information on all related undertakings is included in the Annual Return delivered to the Registrar of Companies for Scotland.