RBS 2011 Annual Report Download - page 80

78 RBS Group 2011
Global Banking & Markets
2011 2010 2009
£m £m £m
Net interest income from banking activities 719 1,276 2,243
Net fees and commissions receivable 1,281 1,495 1,335
Income from trading activities 3,736 4,982 7,812
Other operating income (net of related funding costs) 205 159 (332)
Non-interest income 5,222 6,636 8,815
Total income 5,941 7,912 11,058
Direct expenses
- staff (2,454) (2,693) (2,904)
- other (928) (842) (777)
Indirect expenses (949) (862) (979)
(4,331) (4,397) (4,660)
Operating profit/(loss) before impairment losses 1,610 3,515 6,398
Impairment losses (49) (151) (640)
Operating profit 1,561 3,364 5,758
Analysis of income by product
Rates - money markets (212) 65 1,714
Rates - flow 1,668 1,985 3,142
Currencies 868 870 1,277
Credit and asset-backed markets 1,424 2,215 2,255
Fixed income & currencies 3,748 5,135 8,388
Portfolio management and origination 1,343 1,777 1,185
Equities 781 933 1,474
Total excluding fair value derivative liabilities 5,872 7,845 11,047
Fair value derivative liabilities 69 67 11
Total income 5,941 7,912 11,058
Analysis of impairments by sector
Manufacturing and infrastructure (139) 51 (91)
Property and construction (42) (74) (49)
Banks and financial institutions 54 (177) (348)
Other 78 49 (152)
Total impairment losses (49) (151) (640)
Loan impairment charge as % of gross customer loans and advances (excluding reverse repurchase
agreements) 0.1% 0.2% 0.6%
Performance ratios
Return on equity (1) 7.7% 16.6% 29.8%
Net interest margin 0.73% 1.05% 1.38%
Cost:income ratio 73% 56% 42%
Compensation ratio (2) 41% 34% 26%
Compensation ratio - continuing business 39% 32%
Notes:
(1) Divisional return on equity is based on divisional operating profit after tax divided by average notional equity (based on 10% of the monthly average of divisional RWAs, adjusted for capital
deductions).
(2) Compensation ratio is based on staff costs as a percentage of total income.
Business review continued