RBS 2012 Annual Report Download - page 101

RBS GROUP 2012
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2011 compared with 2010
Total assets of £1,506.9 billion at 31 December 2011 were up £53.3
billion, 4%, compared with 31 December 2010. This principally reflects an
increase in cash and balances at central banks and the mark-to-market
value of derivatives in Markets, partly offset by decreases in debt
securities and equity shares and the continuing disposal and run-off of
Non-Core assets.
Cash and balances at central banks were up £22.3 billion, 39%, to £79.3
billion due to improvements in the Group’s structured liquidity position
during 2011.
Loans and advances to banks decreased by £17.2 billion, 17%, to £83.3
billion. Reverse repurchase agreements and stock borrowing (‘reverse
repos’) were down £3.2 billion, 7%, to £39.4 billion and bank placings
declined £14.0 billion, 24%, to £43.9 billion, primarily as a result of the
reduction in exposure to eurozone banks and lower cash collateral
requirements.
Loans and advances to customers were down £39.7 billion, 7%, to
£515.6 billion. Within this, reverse repurchase agreements were up £9.0
billion, 17%, to £61.5 billion. Customer lending decreased by £48.7
billion, 10%, to £454.1 billion or £46.9 billion, 9%, to £473.9 billion before
impairment provisions. This reflected the transfer to disposal groups of
£19.5 billion of customer balances relating to the UK branch-based
businesses. There were also planned reductions in Non-Core of £28.1
billion, together with declines in International Banking, £4.7 billion, UK
Corporate, £3.0 billion and Ulster Bank, £2.0 billion, together with the
effect of exchange rate and other movements, £1.9 billion. These were
partially offset by growth in Markets, £6.4 billion, Wealth, £0.8 billion, UK
Retail, £2.3 billion and US Retail & Commercial, £2.8 billion.
Debt securities were down £8.4 billion, 4%, to £209.1 billion driven mainly
by a reduction in holdings of government and financial institution bonds in
Markets and Group Treasury.
Equity shares decreased £7.0 billion, 32%, to £15.2 billion which largely
reflects the closure of positions to reduce the Group’s level of unsecured
funding requirements to mitigate the potential impact of unfavourable
market conditions.
Settlement balances declined £3.8 billion, 33% to £7.8 billion as a result
of decreased customer activity.
Movements in the value of derivative assets up £102.5 billion, 24%, to
£529.6 billion, and liabilities, up £100.0 billion, 24%, to £524.0 billion,
primarily reflect increases in interest rate contracts as a result of a
significant downward shift in interest rates across all major currencies,
together with increases in the mark-to-market value of credit derivatives
as a result of widening credit spreads and rising credit default swap
prices.
Property, plant and equipment declined £4.7 billion, 28%, to £11.9 billion,
primarily as a result of the transfer of RBS Aviation Capital’s operating
lease assets to disposal groups.
Deferred taxation was down £2.5 billion, 39%, to £3.9 billion, largely as a
result of the utilisation of brought forward tax losses in the UK.
The increase in assets and liabilities of disposal groups reflects the
reclassification of the UK branch-based businesses and RBS Aviation
Capital pending their disposal, partly offset by the completion of
disposals, primarily RBS Sempra Commodities JV and certain Non-Core
project finance assets.
Deposits by banks increased £10.0 billion, 10%, to £108.8 billion, with
higher repurchase agreements and stock lending (‘repos’), up £6.9 billion,
21%, to £39.7 billion and higher inter-bank deposits, up £3.1 billion, 5%,
to £69.1 billion.
Customer accounts fell £7.7 billion, 2%, to £503.0 billion. Within this,
repos increased £6.7 billion, 8%, to £88.8 billion. Excluding repos,
customer deposits were down £14.4 billion, 3%, to £414.1 billion,
reflecting the transfer to disposal groups of £21.8 billion of customer
accounts relating to the UK branch-based businesses. This was partly
offset by the net effect of growth in International Banking, £1.7 billion, UK
Corporate, £1.8 billion, UK Retail, £5.8 billion, US Retail & Commercial,
£0.5 billion and Wealth, £1.8 billion, together with exchange rate and
other movements of £0.5 billion and declines in Markets, £1.1 billion,
Ulster Bank, £0.8 billion and Non-Core, £2.9 billion.
Debt securities in issue were down £55.8billion, 26% to £162.6 billion
driven by reductions in the level of certificates of deposit and commercial
paper in Markets and Group Treasury.
Settlement balances declined £3.5 billion, 32%, to £7.5 billion and short
positions were down £2.1 billion, 5%, to £41.0 billion due to decreased
customer activity.
Subordinated liabilities were down £0.7 billion, 3%, to £26.3 billion,
primarily reflecting the redemption of £0.2 billion US dollar and £0.4
billion Euro denominated dated loan capital.
The Group’s non-controlling interests decreased by £0.5 billion, 28%, to
£1.2 billion, primarily due to the disposal of the majority of the RBS
Sempra Commodities JV business, £0.4 billion.
Owners’ equity decreased by £0.3 billion to £74.8 billion. This was driven
by the attributable loss for the year, £2.0 billion, together with the
recognition of actuarial losses in respect of the Group’s defined benefit
pension schemes, net of tax, £0.5 billion and exchange rate and other
movements of £0.3 billion. Offsetting these reductions were gains in
available-for-sale reserves, £1.1 billion and cashflow hedging reserves,
£1.0 billion and the issue of shares under employee share schemes, £0.4
billion.