RBS 2012 Annual Report Download - page 52

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Business review continued
Analysis of results
Net interest income
Managed Statutory
2012 2011 2010 2012 2011 2010
£m £m £m £m £m £m
Interest receivable (1,2,3,4,6,7,8) 18,845 21,425 22,693 18,538 21,044 22,279
Interest payable (1,2,5,6,7) (7,156) (8,735) (8,855) (7,142) (8,740) (8,859)
Net interest income 11,689 12,690 13,838 11,396 12,304 13,420
Yields, spreads and margins of the banking business % % % % % %
Gross yield on interest-earning assets of the banking business (9) 3.12 3.24 3.29 3.12 3.23 3.27
Cost of interest-bearing liabilities of the banking business (1.50) (1.63) (1.48) (1.50) (1.62) (1.48)
Interest spread of the banking business (10) 1.62 1.61 1.81 1.62 1.61 1.79
Benefit from interest-free funds 0.31 0.31 0.20 0.30 0.28 0.18
Net interest margin of the banking business (11) 1.93 1.92 2.01 1.92 1.89 1.97
Gross yield (9)
- Group 3.12 3.24 3.29 3.12 3.23 3.27
- UK 3.47 3.56 3.40 3.49 3.56 3.38
- Overseas 2.56 2.77 3.14 2.56 2.77 3.13
Interest spread (10)
- Group 1.62 1.61 1.81 1.62 1.61 1.79
- UK 1.81 1.87 2.04 1.84 1.87 2.02
- Overseas 1.41 1.26 1.50 1.40 1.26 1.49
Net interest margin (11)
- Group 1.93 1.92 2.01 1.92 1.89 1.97
- UK 2.00 2.05 2.19 1.98 2.01 2.14
- Overseas 1.83 1.73 1.76 1.82 1.72 1.75
The Royal Bank of Scotland plc base rate (average) 0.50 0.50 0.50 0.50 0.50 0.50
London inter-bank three month offered rates (average)
- Sterling 0.82 0.87 0.70 0.82 0.87 0.70
- Eurodollar 0.43 0.33 0.34 0.43 0.33 0.34
- Euro 0.53 1.36 0.75 0.53 1.36 0.75
Notes:
(1) Interest-earning assets and interest-bearing liabilities for 2010 exclude the Retail bancassurance long-term assets and liabilities attributable to policyholders, in view of their distinct nature. As a result,
interest receivable has been increased by £6 million.
(2) Interest receivable has been increased by £8 million (2011 - £8 million; 2010 - £11 million) and interest payable has been increased by £152 million (2011 - £150 million increase; 2010 - £30 million
decrease) to record interest on financial assets and liabilities designated as at fair value through profit or loss. Related interest-earning assets and interest-bearing liabilities have also been adjusted.
(3) Interest receivable was decreased by £90 million in 2010 in respect of a non-recurring receivable.
(4) Interest receivable was increased by £2 million in 2011 in respect of exceptional interest receivable.
(5) Interest payable has been decreased by £138 million in respect of non-recurring adjustments (2011 - £143 million decrease; 2010 - £319 million increase).
(6) Interest receivable has been increased by nil (2011 - £5 million increase; 2010 - £10 million decrease) and interest payable has been decreased by £15 million (2011 - £3 million; 2010 - £1 million) to
exclude RFS Holdings minority interest.
(7) Interest receivable has been increased by £307 million (2011 - £374 million; 2010 - £424 million) and interest payable has been increased by £29 million (2011 - £2 million decrease; 2010 - £3 million
decrease) to include the discontinued operations of Direct Line Group. Related interest-earning assets and interest-bearing liabilities have also been adjusted.
(8) Interest income includes £565 million (2011 - £627 million; 2010 - £588 million) in respect of loan fees forming part of the effective interest rate of loans and receivables.
(9) Gross yield is the interest earned on average interest-earning assets of the banking book.
(10) Interest spread is the difference between the gross yield and the interest rate paid on average interest-bearing liabilities of the banking business.
(11) Net interest margin is net interest income of the banking business as a percentage of average interest-earning assets of the banking business.
(12) The analysis into UK and overseas has been compiled on the basis of location of office.
(13) Interest receivable and interest payable on trading assets and liabilities are included in income from trading activities.
(14) Interest income includes amounts (unwind of discount) recognised on impaired loans and receivables. The average balances of such loans are included in average loans and advances to banks and
loans and advances to customers.