RBS 2012 Annual Report Download - page 456

454
Notes on the consolidated accounts continued
32 Memorandum items continued
Contractual obligations for future expenditure not provided for in the accounts
The following table shows contractual obligations for future expenditure not provided for in the accounts at the year end.
2012
£m
2011
£m
2010
£m
Operating leases
Minimum rentals payable under non-cancellable leases (1)
- within 1 year 399 468 497
- after 1 year but within 5 years 1,253 1,453 1,515
- after 5 years 2,286 2,714 2,892
3,938 4,635 4,904
Property, plant and equipment
Contracts to buy, enhance or maintain investment properties — — 2
Contracts to buy assets to be leased under operating leases (2,3) —
2,607 2,585
Other capital expenditure 37 35 150
37 2,642 2,737
Contracts to purchase goods or services (4) 959 1,130 950
4,934 8,407 8,591
Notes:
(1) Predominantly property leases.
(2) Of which due within 1 year: nil (2011 - £486 million; 2010 - £263 million).
(3) At 31 December 2011, £2,607 million related to the RBS Aviation Capital business which was sold in 2012.
(4) Of which due within 1 year: £444 million (2011 - £483 million; 2010 - £440 million).
Trustee and other fiduciary activities
In its capacity as trustee or other fiduciary role, the Group may hold or
place assets on behalf of individuals, trusts, companies, pension
schemes and others. The assets and their income are not included in the
Group's financial statements. The Group earned fee income of £476
million (2011 - £502 million; 2010 - £629 million) from these activities.
The Financial Services Compensation Scheme
The Financial Services Compensation Scheme (FSCS), the UK's
statutory fund of last resort for customers of authorised financial services
firms, pays compensation if a firm is unable to meet its obligations. The
FSCS funds compensation for customers by raising management
expenses levies and compensation levies on the industry. In relation to
protected deposits, each deposit-taking institution contributes towards
these levies in proportion to their share of total protected deposits on 31
December of the year preceding the scheme year (which runs from 1
April to 31 March), subject to annual maxima set by the Financial
Services Authority. In addition, the FSCS has the power to raise levies on
a firm that has ceased to participate in the scheme and is in the process
of ceasing to be authorised for the costs that it would have been liable to
pay had the FSCS made a levy in the financial year it ceased to be a
participant in the scheme.
The FSCS has borrowed from HM Treasury to fund compensation costs
associated with the failure of Bradford & Bingley, Heritable Bank,
Kaupthing Singer & Friedlander, Landsbanki ‘Icesave’ and London
Scottish Bank plc. The interest rate on these borrowings increased from
12 month LIBOR plus 30 basis points to 12 month LIBOR plus 100 basis
points from April 2012. The FSCS and HM Treasury have agreed that the
period of these loans will reflect the expected timetable for recoveries
from the estates of Bradford & Bingley and the other failed banks. The
FSCS expects to levy the deposit taking sector for the balance of the
principal on the non-Bradford & Bingley loans over three scheme years to
repay the principal by March 2016 with a first instalment of £363 million in
the 2013/14 scheme year.
The Group has accrued £119 million for its share of estimated FSCS
levies for the 2012/13 and 2013/14 scheme years.