RBS 2011 Annual Report Download - page 48

46 RBS Group 2011
Analysis of results
Net interest income
Managed Statutory
2011 2010 2009 2011 2010 2009
£m £m £m
£m £m £m
Interest receivable (1,2,3) 21,425 22,693 26,390 21,418 22,703 26,377
Interest payable (1,2,4) (8,735) (8,855) (13,107) (8,738) (8,856) (13,273)
Net interest income 12,690 13,838 13,283 12,680 13,847 13,104
%% % %% %
Gross yield on interest-earning assets of the banking business (5) 3.24 3.29 3.50
3.23 3.29 3.51
Cost of interest-bearing liabilities of the banking business (1.63) (1.48) (1.95) (1.63) (1.48) (1.96)
Interest spread of the banking business (6) 1.61
1.81 1.55
1.60 1.81 1.55
Benefit from interest-free funds 0.31 0.20 0.21
0.32 0.19 0.19
Net interest margin of the banking business (7) 1.92
2.01 1.76
1.92 2.00 1.74
Yields, spreads and margins of the banking business %% % %% %
Gross yield (5)
-Group 3.24 3.29 3.50 3.23 3.29 3.51
- UK 3.56 3.40 3.33 3.56 3.40 3.33
- Overseas 2.77 3.14 3.71 2.77 3.13 3.71
Interest spread (6)
-Group 1.61
1.81 1.55 1.60 1.81 1.55
- UK 1.87 2.04 1.48 1.87 2.04 1.48
- Overseas 1.26 1.50 1.66 1.26 1.49 1.62
Net interest margin (7)
-Group 1.92
2.01 1.76 1.92 2.00 1.74
- UK 2.05 2.19 1.74 2.05 2.19 1.73
- Overseas 1.73 1.76 1.80 1.72 1.75 1.75
The Royal Bank of Scotland plc base rate (average) 0.50 0.50 0.64 0.50 0.50 0.64
London inter-bank three month offered rates (average)
-Sterling 0.87 0.70 1.21 0.87 0.70 1.21
- Eurodollar 0.33 0.34 0.69 0.33 0.34 0.69
- Euro 1.36 0.75 1.21 1.36 0.75 1.21
Notes:
(1) Interest-earning assets and interest-bearing liabilities for 2010 and 2009 exclude the Retail bancassurance long-term assets and liabilities attributable to policyholders, in view of their distinct nature.
As a result, interest receivable has been increased by £6 million for 2010 and £20 million for 2009.
(2) Interest receivable has been increased by £8 million (2010 - £11 million; 2009 - £46 million) and interest payable has been increased by £150 million (2010 - £30 million decrease; 2009 - £350 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) Interest receivable has been decreased by £90 million in 2010 in respect of a non-recurring receivable.
(4) Interest payable has been decreased by £143 million in respect of non-recurring adjustments (2010 - £319 million increase; 2009 - nil).
(5) Gross yield is the interest earned on average interest-earning assets of the banking book.
(6) Interest spread is the difference between the gross yield and the interest rate paid on average interest-bearing liabilities of the banking business.
(7) Net interest margin is net interest income of the banking business as a percentage of average interest-earning assets of the banking business.
(8) The analysis into UK and overseas has been compiled on the basis of location of office.
(9) Interest receivable and interest payable on trading assets and liabilities are included in income from trading activities.
Business review continued