RBS 2012 Annual Report Download - page 134

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Business review Risk and balance sheet management continued
*unaudited
Capital management: Capital resources continued
Reconciliation between accounting equity and regulatory capital*
The table below provides a reconciliation of shareholders’ equity per accounting balance sheet to the regulatory capital.
2012
£m
2011
£m
2010
£m
Shareholders’ equity (excluding non-controlling interests)
Called-up share capital 6,582 15,318 15,125
Paid-in equity 431 431 431
Share premium 24,361 24,001 23,922
Retained earnings 10,596 18,929 21,239
AFS reserve - debt securities (409) (1,065) (2,061)
AFS reserve - equity shares 63 108 25
Cash flow hedging reserve 1,666 879 (140)
Other reserves 24,840 16,218 16,591
68,130 74,819 75,132
Less: innovative securities transferred to other Tier 1 capital (431)(431) (431)
Less: preference shares transferred to other Tier 1 capital (4,313) (4,313) (4,313)
Non-controlling interests 2,318 1,234 1,719
Less: innovative securities transferred to other Tier 1 capital (548) (548) (548)
Less: minority interest deconsolidated (1,367) (259) (259)
Regulatory adjustments and deductions
Own credit 691 (2,634) (1,182)
Defined benefit pension adjustment 913 — —
Unrealised losses on AFS debt securities 409 1,065 2,061
Unrealised gains on AFS equity shares (63) (108) (25)
Cash flow hedging reserve (1,666) (879) 140
Other adjustments for regulatory purposes (197) 571 204
Goodwill and other intangible assets (13,545) (14,858) (14,448)
50% of expected loss (13,954) (15,316) (12,827)
Less: 50% of internal rating based impairment allowances 11,432 11,865 10,169
Less: tax on 50% of expected loss over impairment provisions 618 915 758
50% securitisation positions (1,107) (2,019) (2,321)
50% of APS first loss — (2,763) (4,225)
(16,469) (24,161)(21,696)
Core Tier 1 capital 47,320 46,341 49,604
Other Tier 1 capital
Preference shares - equity transferred from shareholders’ equity 4,313 4,313 4,313
Preference shares - debt transferred from subordinated liabilities 1,054 1,094 1,097
Innovative securities transferred from shareholders’ equity 431 431 431
Innovative securities transferred from non-controlling interests 548 548 548
Innovative/hybrid securities transferred from subordinated liabilities 3,146 3,688 3,683
9,492 10,074 10,072
Tier 1 deductions
50% material holdings (295) (340)(310)
Tax on excess of expected losses over impairment provisions 618 915 758
323 575 448
Total Tier 1 capital 57,135 56,990 60,124