RBS 2012 Annual Report Download - page 78

76
Business review continued
International Banking continued
2012
£bn
2011
£bn
2010
£bn
Capital and balance sheet
Loans and advances to customers (gross) (1) 42.2 57.7 62.9
Loan impairment provisions (0.4) (0.8) (0.8)
Net loans and advances to customers 41.8 56.9 62.1
Loans and advances to banks 4.7 3.4 3.9
Securities 2.6 6.0 6.8
Cash and eligible bills 0.5 0.3 0.7
Other 3.4 3.3 4.4
Total third party assets (excluding derivatives mark-to-market) 53.0 69.9 77.9
Risk elements in lending 0.4 1.6 1.5
Provision coverage (2) 93% 52% 58%
Customer deposits (excluding repos) 46.2 45.1 43.7
Bank deposits (excluding repos) 5.6 11.4 7.3
Loan:deposit ratio (excluding repos and conduits) 85% 103% 112%
Risk-weighted assets 51.9 43.2 51.7
£m £m £m
Run-off businesses (1)
Total income 23 75 88
Direct expenses (31) (93) (125)
Operating loss (8) (18) (37)
Notes:
(1) Excludes disposal groups.
(2) Provision coverage percentage represents loan impairment provisions as a percentage of risk elements in lending.
(3) Run-off businesses consist of the exited corporate finance businesses.
International Banking was formed in January 2012 to create an
integrated, client-focused business which serves RBS’s large global
customers’ financing, risk management, trade finance, payments and
cash management needs internationally.
Since its formation, the division has made significant progress in
strengthening its balance sheet and making efficient use of resources.
The loan portfolio decreased significantly due to strategic reduction
initiatives and disciplined capital allocation. The division’s liability
composition also improved, with additional customer deposits raised in
the final quarter and the strategic run-off of commercial paper and short-
term bank deposits.
Performance in 2012 was restricted by macroeconomic pressures and
additional regulatory requirements across the industry. Given these
constraints, International Banking kept its focus on cost control
throughout the year.
Despite these headwinds, the division was recognised externally for its
efforts in serving its customers’ needs, helping RBS Group gain awards
such as:
x Top European investment grade corporate bond bookrunner
(Dealogic).
x Number one cash management manager in the UK and number two
in Europe (Euromoney Cash Management Survey).
x Quality Leader in Large Corporate Trade Finance in the UK, and
number one for Large Corporate Trade Finance Penetration in the
UK (Greenwich).