RBS 2012 Annual Report Download - page 429

RBS GROUP 2012
427
20 Discontinued operations and assets and liabilities of disposal groups
In October 2012, the Group completed the successful initial public offering of Direct Line Insurance Group plc (‘DLG’), selling 34.7% of its interest. The
Group’s plan is to cede control by 31 December 2013 and accordingly DLG is treated as a discontinued operation and its assets and liabilities are
included in disposal groups. Included within DLG discontinued operations are the managed basis divisional results of DLG, certain DLG related activities
in Central items and Non-Core; and related one-off and other items including write-down of goodwill, integration and restructuring costs and strategic
disposals.
(a) (Loss)/profit from discontinued operations, net of tax
2012 2011 2010
£m £m £m
Direct Line Group
Insurance premium income 4,044 4,526 5,192
Reinsurer’s share (326) (270)(178)
Net premium income 3,718 4,256 5,014
Fees and commissions (430)(493) (319)
Instalment income 126 145 194
Investment income 243 302 309
Other income 45 76 48
Total income 3,702 4,286 5,246
Staff costs (447) (322)(292)
Premises and equipment (118) (28) (22)
Other administrative expenses (395) (495) (424)
Depreciation and amortisation (52)(36) (25)
Goodwill and other intangible write-offs (394) (11) (9)
Operating expenses (1,406) (892)(772)
Profit before insurance net claims and impairment losses 2,296 3,394 4,474
Insurance net claims (2,427) (2,968) (4,698)
Impairment losses — (2)(21)
Operating (loss)/profit before tax (131)424 (245)
Tax (charge)/credit (53) (123) 69
(Loss)/profit after tax from discontinued general insurance business (184) 301 (176)
Other
Total income 29 42 1,433
Operating expenses (3) (5) (803)
Profit before insurance net claims and impairment losses 26 37 630
Insurance net claims — — (161)
Impairment losses (4) 8 (42)
Profit before tax 22 45 427
Gain on disposals before recycling of reserves — — 113
Recycled reserves — — (1,076)
Operating profit/(loss) before tax 22 45 (536)
Tax (8) (11)(92)
Profit/(loss) after tax 14 34 (628)
Businesses acquired exclusively with a view to disposal
(Loss)/profit after tax (2)13 (5)
Profit/(loss) from other discontinued operations, net of tax 12 47 (633)
Other discontinued operations reflect the results of RFS Holdings attributable to the State of the Netherlands and Santander following the legal
separation of ABN AMRO Bank N.V. on 1 April 2010. The (loss)/profit from discontinued operations includes a loss of £112 million (2011 - £42 million
profit; 2010 - £605 million loss) attributable to non-controlling interests.
(b) Cash flows attributable to discontinued operations
Included within the Group's cash flows are the following amounts attributable to discontinued operations:
2012 2011 2010
£m £m £m
Net cash flows from operating activities (839) (246) 2,988
Net cash flows from investing activities 1,724 (87) 855
Net cash flows from financing activities (775) (115) (243)
Net increase/(decrease) in cash and cash equivalents 108 (454) 3,600