RBS 2012 Annual Report Download - page 87

RBS GROUP 2012
85
2012 2011 2010
£bn £bn £bn
Capital and balance sheet (ongoing businesses)
Loans and advances to customers (gross) 29.8 31.5 24.4
Loan impairment provisions (0.2) (0.2) (0.2)
Net loans and advances to customers 29.6 31.3 24.2
Loans and advances to banks 16.6 29.9 44.4
Reverse repos 103.8 100.4 94.7
Securities 92.4 108.1 115.8
Cash and eligible bills 30.2 28.1 38.8
Other 11.8 14.8 20.1
Total third party assets (excluding derivatives mark-to-market) 284.4 312.6 338.0
Net derivative assets (after netting) 21.9 37.0 37.4
Provision coverage (1) 77% 75% 86%
Customer deposits (excluding repos) 26.3 36.8 37.4
Bank deposits (excluding repos) 45.4 48.2 50.6
Risk-weighted assets 101.3 120.3 110.3
Run-off businesses (2) £m £m £m
Total income 7 185 256
Direct expenses (62) (229) (275)
Operating loss (55) (44) (19)
Balance sheet - run-off businesses (2) £bn £bn £bn
Total third party assets (excluding derivatives mark-to-market) 0.1 1.3 2.4
Notes:
(1) Provision coverage percentage represents loan impairment provisions as a percentage of risk elements in lending.
(2) Run-off businesses consist of the exited cash equities, corporate banking and equity capital market operations.
During 2012, the economic environment was dominated by weak
prospects for global growth and the uncertain outlook for Eurozone
sovereign debt. However, positive central bank activity and a more stable
credit environment resulted in marginally improved trading opportunities.
Against this backdrop, the division continued to focus on its strengths and
client offering. In January 2012 RBS announced the creation of the
Markets division and, at the same time, the exit of the cash equities and
mergers & acquisitions businesses. Following further review in Q4 2012,
the remaining Investor Products and Equity Derivatives (IPED) operation
was moved into Rates to form a Derivative Product Solutions (DPS)
business. In addition, Markets has also developed a range of measures
to enhance its culture and control environment, focusing on improving
both supervision and behaviours. Taken together, these actions reinforce
Markets’ commitment to put the client at the centre of everything we do
and to focus resources on meeting client needs.