RBS 2011 Annual Report Download - page 95

RBS Group 2011 93
Commentary on consolidated balance sheet - statutory
2010 compared with 2009
Total assets of £1,453.6 billion at 31 December 2010 were down £242.9
billion, 14%, compared with 31 December 2009. This principally reflects
the disposal of the RFS minority interest, the continuing planned disposal
of Non-Core assets, together with a reduction in the level of debt
securities and the mark-to-market value of derivatives.
Cash and balances at central banks were up £4.8 billion, 9%, to £57.0
billion principally due to an improvement in the Group's structural liquidity
position during 2010.
Loans and advances to banks increased by £8.8 billion, 10%, to £100.5
billion. Adjusting for the disposal of the RFS minority interest, the
increase was £16.6 billion, 20%. Reverse repurchase agreements and
stock borrowing (‘reverse repos’) were up £7.5 billion, 21% to £42.6
billion and bank placings rose £9.1 billion, 19%, to £57.9 billion, primarily
as a result of the investment of surplus liquidity in short-term assets.
Loans and advances to customers decreased £173.1 billion, 24%, to
£555.3 billion. Excluding the disposal of the RFS minority interest, lending
to customers was down £40.4 billion, 7%. Within this, reverse repurchase
agreements were up £11.5 billion, 28%, to £52.5 billion. Customer
lending decreased by £51.9 billion to £502.7 billion or £48.9 billion before
impairment provisions. This reflected planned reductions in Non-Core of
£39.7 billion along with declines in Global Banking & Markets, £16.7
billion, US Retail & Commercial, £2.6 billion and Ulster Bank, £2.0 billion.
These were partially offset by growth in UK Retail, £5.4 billion, Wealth,
£2.4 billion and Global Transaction Services, £1.7 billion, together with
the effect of exchange rate and other movements, £2.6 billion.
Debt securities were down £49.8 billion, 19%, to £217.5 billion, or £31.6
billion, 13%, adjusting for the disposal of the RFS minority interest, driven
mainly by reductions in Global Banking & Markets.
The value of derivative assets were down £14.4 billion, 3%, to £427.1
billion, primarily reflecting a decrease in interest contracts, movements in
five to ten year interest yields, and the combined effect of currency
movements, with Sterling weakening against the dollar but strengthening
against the Euro.
The reduction in assets and liabilities of disposal groups resulted from the
completion of disposals of certain of the Group’s Asian and Latin
American businesses, and substantially all of the RBS Sempra
Commodities JV business.
Deposits by banks declined £43.4 billion, 31%, to £98.8 billion or £66.1
billion, 36% following the disposal of the RFS minority interest, with
reduced inter-bank deposits, down £49.7 billion, 43%, to £66.1 billion and
lower repurchase agreements and stock lending (‘repos’), down £5.3
billion, 14%, to £32.7 billion.
Customer accounts decreased £103.5 billion, 17%, to £510.7 billion but
excluding the disposal of the RFS minority interest were up £28.1 billion,
6%. Within this, repos increased £13.7 billion, 20%, to £82.1 billion.
Excluding repos, customer deposits were up £14.3 billion, 3%, to £428.6
billion, reflecting growth in UK Corporate, £12.2 billion, Global
Transaction Services, £7.8 billion, UK Retail, £7.0 billion, Ulster Bank,
£1.7 billion and Wealth, £0.8 billion, together with exchange rate and
other movements of £3.0 billion. This was partially offset by decreases in
Global Banking & Markets, £8.3 billion, US Retail & Commercial, £4.0
billion and Non-Core, £5.9 billion.
Debt securities in issue were down £49.2 billion, 18%, to £218.4 billion.
Excluding the RFS minority interest disposal, they declined £28.0 billion,
11%, to £218.4 billion. Reductions in the level of certificates of deposit
and commercial paper in Global Banking & Markets were partially offset
by a programme of new term issuances totalling £38.4 billion.
Subordinated liabilities decreased by £10.6 billion, 28% to £27.1 billion or
£4.5 billion, 14% excluding the disposal of the RFS minority interest. This
reflected the redemption of £2.6 billion undated loan capital, debt
preference shares and trust preferred securities under the liability
management exercise completed in May, together with the conversion of
£0.8 billion US dollar and Sterling preference shares and the redemption
of £1.6 billion of other dated and undated loan capital, which were
partially offset by the effect of exchange rate movements and other
adjustments of £0.5 billion.
The Group’s non-controlling interests decreased by £15.2 billion,
primarily reflecting the disposal of the RFS minority interest, £14.4 billion,
the majority of the RBS Sempra Commodities JV business, £0.6 billion,
and the life assurance business, £0.2 billion.
Owner’s equity decreased by £2.6 billion, 3%, to £75.1 billion. This was
driven by the partial redemption of preference shares and paid-in equity,
£3.1 billion less related gains of £0.6 billion, the attributable loss for the
period, £1.1 billion, together with an increase in own shares held of £0.7
billion and higher losses in available-for-sale reserves, £0.3 billion.
Offsetting these reductions were the issue of £0.8 billion ordinary shares
on conversion of US dollar and Sterling non-cumulative preference
shares classified as debt and exchange rate and other movements, £1.2
billion.