RBS 2012 Annual Report Download - page 242

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Business review Risk and balance sheet management continued
Balance sheet analysis: REIL, provisions and AFS reserves continued
The tables below analyses the impairment charge for loans and securities.
2012 2011 2010
Core Non-Core Total Core Non-Core Total Core Non-Core Total
£m £m £m £m £m £m £m £m £m
Individually assessed 1,233 1,936 3,169 1,580 3,615 5,195 1,489 4,719 6,208
Collectively assessed 1,884 312 2,196 2,075 516 2,591 2,258 812 3,070
Latent loss (145)72 (73)(252)(293)(545)(5)(116)(121)
Loans to customers 2,972 2,320 5,292 3,403 3,838 7,241 3,742 5,415 9,157
Loans to banks 23 — 23 — — — (5)(8)(13)
Securities - sovereign debt (1) — — — 1,268 — 1,268 — — —
- other 61 (97)(36)117 83 200 44 68 112
Charge to income statement 3,056 2,223 5,279 4,788 3,921 8,709 3,781 5,475 9,256
Charge as a % of gross loans (1) 0.7% 4.2% 1.2% 0.8% 4.8% 1.5% 0.9% 4.8% 1.7%
Notes:
(1) Includes related interest rate hedge adjustments.
(2) Customer loan impairment charge as a percentage of gross loans and advances to customers including assets of disposal groups and excluding reverse repurchase agreements.
2012 2011 2010
Core Non-Core Total Core Non-Core Total Core Non-Core Total
£m £m £m £m £m £m £m £m £m
Loan impairment losses
- customers 2,972 2,320 5,292 3,403 3,838 7,241 3,742 5,415 9,157
- banks 23 — 23 — — — (5)(8)(13)
2,995 2,320 5,315 3,403 3,838 7,241 3,737 5,407 9,144
Impairment losses on securities
- debt securities 47 (114)(67)1,381 52 1,433 40 41 81
- equity securities 14 17 31 4 31 35 4 27 31
61 (97)(36)1,385 83 1,468 44 68 112
Charge to income statement 3,056 2,223 5,279 4,788 3,921 8,709 3,781 5,475 9,256
Potential problem loans
Potential problem loans (PPL) are loans for which an impairment event has taken place but no impairment loss is expected. This category is used for
advances which are not past due 90 days or revolving credit facilities where identification as 90 days overdue is not feasible.
2012 2011 2010
£m £m £m
Potential problem loans 807 739 633
Both REIL and PPL are reported gross and take no account of the value of any security held which could reduce the eventual loss should it occur, nor of
any provision marked. Therefore impaired assets which are highly collateralised, such as mortgages, will have a low coverage ratio of provisions held
against the reported impaired balance.
AFS reserves
The table below analyses available-for-sale debt securities and related reserves, gross of tax.
2012 2011 2010
UK US Other (1) Total UK US Other (1) Total UK US Other (1) Total
£m £m £m £m £m £m £m £m £m £m £m £m
Central and local government 9,774 19,046 16,155 44,975 13,436 20,848 25,552 59,836 8,377 22,244 32,865 63,486
Banks 1,085 357 7,419 8,861 1,391376 11,408 13,175 4,297 704 11,981 16,982
Other financial institutions 2,861 10,613 10,416 23,890 3,100 17,453 11,199 31,752 1,662 15,973 11,513 29,148
Corporate 1,318 719 1,130 3,167 1,105 131 1,299 2,535 438 65 1,011 1,514
Total 15,038 30,735 35,120 80,893 19,032 38,808 49,458 107,298 14,774 38,986 57,370 111,130
Of which ABS 3,558 14,209 12,976 30,743 3,659 20,256 16,820 40,735 4,002 20,872 17,641 42,515
AFS reserves (gross) 667 763 (1,277)153 845 486 (1,815)(484)158 (304)(2,559)(2,705)
Note:
(1) Includes eurozone countries as detailed in the Country risk section (page 252).
Refer to Country risk section for additional analysis on eurozone country by country AFS reserves.