RBS 2012 Annual Report Download - page 171

RBS GROUP 2012
169
Commercial real estate
The table below analyses commercial real estate (Core and Non-Core) lending by loan-to-value (LTV) which represents loan value before provisions.
Due to market conditions in Ireland and to a lesser extent in the UK, there is a shortage of market-based data. In the absence of external valuations, the
Group deploys a range of alternative approaches to assess property values, including internal expert judgement and indexation.
Ulster Bank Rest of the Group Group
Loan-to-value Performing
£m
Non-performing
£m
Total
£m
Performing
£m
Non-performing
£m
Total
£m
Performing
£m
Non-performing
£m
Total
£m
2012
<= 50% 183 24 2077,210 281 7,491 7,393 305 7,698
> 50% and <= 70% 326 102 42812,161996 13,157 12,487 1,098 13,585
> 70% and <= 90% 462 250 712 6,438 1,042 7,480 6,900 1,292 8,192
> 90% and <= 100% 466 141 6071,5422,145 3,687 2,008 2,286 4,294
> 100% and <= 110% 103 596 699 1,0191,449 2,468 1,122 2,045 3,167
> 110% and <= 130% 326 630 956 901 1,069 1,970 1,227 1,699 2,926
> 130% and <= 150% 274 878 1,152322 913 1,235 596 1,791 2,387
> 150% 963 7,290 8,253 595 1,962 2,557 1,558 9,252 10,810
Total with LTVs 3,103 9,911 13,01430,188 9,857 40,045 33,291 19,768 53,059
Minimal security (1) 7 1,461 1,468 3 13 16 10 1,474 1,484
Other (2) 97 715 812 6,494 1,191 7,685 6,591 1,906 8,497
Total 3,207 12,087 15,294 36,685 11,061 47,746 39,892 23,148 63,040
Total portfolio average LTV (3) 131% 286% 249% 65% 125% 80% 71% 206% 122%
2011
<= 50% 272 32 3047,091332 7,423 7,363 364 7,727
> 50% and <= 70% 479 127 60614,105 984 15,089 14,584 1,111 15,695
> 70% and <= 90% 808 332 1,14010,0421,191 11,233 10,850 1,523 12,373
> 90% and <= 100% 438 201 639 2,6161,679 4,295 3,054 1,880 4,934
> 100% and <= 110% 474 390 864 1,5241,928 3,452 1,998 2,318 4,316
> 110% and <= 130% 527 1,101 1,628 698 1,039 1,737 1,225 2,140 3,365
> 130% and <= 150% 506 1,066 1,572239 912 1,151 745 1,978 2,723
> 150% 912 7,472 8,384 433 2,082 2,515 1,345 9,554 10,899
Total with LTVs 4,416 10,721 15,137 36,748 10,147 46,895 41,164 20,868 62,032
Minimal security (1) 72 1,086 1,158 — — — 72 1,086 1,158
Other (2) 193 625 818 8,994 1,844 10,838 9,187 2,469 11,656
Total 4,681 12,432 17,113 45,74211,991 57,733 50,423 24,423 74,846
Total portfolio average LTV (3) 120% 264% 222% 69% 129% 82% 75% 203% 116%
Notes:
(1) In 2012, the Group reclassified loans with limited or non-physical security (defined as LTV>1,000%) as minimal security, for which a majority are commercial real estate development loans in Ulster
Bank. Total portfolio average LTV is quoted net of loans with minimal security given that the anticipated recovery rate is less than 10%. Provisions are marked against these loans where required to
reflect asset quality and recovery profile. 2011 presentation has been revised.
(2) Other performing loans of £6.6 billion (2011 - £9.2 billion) include general corporate lending, typically unsecured, to commercial real estate companies, and major UK homebuilders. The credit quality
of these exposures is consistent with that of the performing portfolio overall. Other non-performing loans of £1.9 billion (2011 - £2.5 billion) are subject to the Group’s standard provisioning policies.
(3) Weighted average by exposure.
Other corporate
2012 2011 2010
Corporate risk elements in lending and potential problem loans
(excluding commercial real estate) Loans
£m
Provisions
£m
Loans
£m
Provisions
£m
Loans
£m
Provisions
£m
Secured 9,936 4,704 7,782 3,369 6,526 2,564
Unsecured 1,894 1,170 2,712 1,836 2,769 1,762