RBS 2012 Annual Report Download - page 273

RBS GROUP 2012
271
Key points*
x The Group’s exposure to Greece decreased further in 2012, largely
as a result of the restructuring and sale of Greek government debt
and a corporate write-off. The remainder of the exposure is actively
managed, in line with the Group’s de-risking strategy that has been
in place since early 2010. Much of the remaining exposure is
collateralised or guaranteed. The remaining Greek exposure at 31
December 2012 was £0.6 billion. The majority of this was derivative
exposure to banks (itself in part collateralised). The rest was mostly
corporate lending including exposure to local subsidiaries of
international companies.
Government and central bank
x The Group participated in the restructuring of Greek government
debt in March 2012, which resulted in the issuance of new bonds
that were sold in March and April, and £0.3 billion of AFS bonds
issued by the European Financial Stability Facility incorporated in
Luxembourg. The Group no longer holds any AFS bonds issued by
the Greek government. A small HFT position, resulting from the
sovereign debt restructuring in March, has been retained to enable
the Group to quote prices and stay relevant to key clients.
Financial institutions
x Activity with Greek financial institutions is largely collateralised
derivative and repo exposure, and remains under close scrutiny.
Corporate
x Lending exposure fell by £0.2 billion to £0.2 billion, largely due to a
single name write-off in the first half of 2012.
x The Group’s focus is on short-term trade facilities to the domestic
subsidiaries of international clients, increasingly supported by
parental guarantees.
Non-Core (included above)
x Non-Core lending exposure to Greece was £0.1 billion at 31
December 2012, a slight reduction from 31 December 2011. The
remaining lending portfolio primarily consisted of the following
sectors: commercial real estate (44%), construction (26%) and other
services (12%).
*unaudited