RBS 2013 Annual Report Download - page 110
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Business review
108
Risk factors continued
• The Group is highly dependent on its information technology
systems and has been and will continue to be subject to cyber
attacks which expose the Group to loss of customer data or other
sensitive information, and combined with other failures of the
Group’s information technology systems, hinder its ability to service
its clients which could result in long-term damage to the Group’s
business and brand.
• The Group or any of its UK bank subsidiaries may face the risk of
full nationalisation or other resolution procedures, including
recapitalisation of the Group or any of its UK bank subsidiaries,
through bail-in which has been introduced by the Financial Services
(Banking Reform) Act 2013 and will come into force on a date
stipulated by HM Treasury. These various actions could be taken by
or on behalf of the UK Government, including actions in relation to
any securities issued, new or existing contractual arrangements and
transfers of part or all of the Group’s businesses.
• As a result of the UK Government’s majority shareholding in the
Group it may be able to exercise a significant degree of influence
over the Group including on dividend policy, the election of directors
or appointment of senior management or limiting the Group’s
operations. The offer or sale by the UK Government of all or a
portion of its shareholding in the company could affect the market
price of the equity shares and other securities and acquisitions of
ordinary shares by the UK Government (including through
conversions of other securities or further purchases of shares) may
result in the delisting of the Group from the Official List.
• The actual or perceived failure or worsening credit of the Group’s
counterparties or borrowers, including sovereigns in the Eurozone,
and depressed asset valuations resulting from poor market
conditions have led the Group to realise and recognise significant
impairment charges and write-downs which have adversely affected
the Group and could continue to adversely affect the Group if, due to
a deterioration in economic and financial market conditions or
continuing weak economic growth, it were to recognise or realise
further write-downs or impairment charges.
• The value of certain financial instruments recorded at fair value is
determined using financial models incorporating assumptions,
judgements and estimates that may change over time or may
ultimately not turn out to be accurate.
• Recent developments in regulatory or tax legislation and any further
significant developments could have an effect on how the Group
conducts its business and on its results of operations and financial
condition, and the recoverability of certain deferred tax assets
recognised by the Group is subject to uncertainty.
• The Group is required to make planned contributions to its pension
schemes and to compensation schemes in respect of certain
financial institutions, either of which, independently or in conjunction
with additional or increased contribution requirements may have an
adverse impact on the Group’s results of operations, cash flow and
financial condition.