RBS 2013 Annual Report Download - page 178
Download and view the complete annual report
Please find page 178 of the 2013 RBS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1
-
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
-
183
-
184
-
185
-
186
-
187
-
188
-
189
-
190
-
191
-
192
-
193
-
194
-
195
-
196
-
197
-
198
-
199
-
200
-
201
-
202
-
203
-
204
-
205
-
206
-
207
-
208
-
209
-
210
-
211
-
212
-
213
-
214
-
215
-
216
-
217
-
218
-
219
-
220
-
221
-
222
-
223
-
224
-
225
-
226
-
227
-
228
-
229
-
230
-
231
-
232
-
233
-
234
-
235
-
236
-
237
-
238
-
239
-
240
-
241
-
242
-
243
-
244
-
245
-
246
-
247
-
248
-
249
-
250
-
251
-
252
-
253
-
254
-
255
-
256
-
257
-
258
-
259
-
260
-
261
-
262
-
263
-
264
-
265
-
266
-
267
-
268
-
269
-
270
-
271
-
272
-
273
-
274
-
275
-
276
-
277
-
278
-
279
-
280
-
281
-
282
-
283
-
284
-
285
-
286
-
287
-
288
-
289
-
290
-
291
-
292
-
293
-
294
-
295
-
296
-
297
-
298
-
299
-
300
-
301
-
302
-
303
-
304
-
305
-
306
-
307
-
308
-
309
-
310
-
311
-
312
-
313
-
314
-
315
-
316
-
317
-
318
-
319
-
320
-
321
-
322
-
323
-
324
-
325
-
326
-
327
-
328
-
329
-
330
-
331
-
332
-
333
-
334
-
335
-
336
-
337
-
338
-
339
-
340
-
341
-
342
-
343
-
344
-
345
-
346
-
347
-
348
-
349
-
350
-
351
-
352
-
353
-
354
-
355
-
356
-
357
-
358
-
359
-
360
-
361
-
362
-
363
-
364
-
365
-
366
-
367
-
368
-
369
-
370
-
371
-
372
-
373
-
374
-
375
-
376
-
377
-
378
-
379
-
380
-
381
-
382
-
383
-
384
-
385
-
386
-
387
-
388
-
389
-
390
-
391
-
392
-
393
-
394
-
395
-
396
-
397
-
398
-
399
-
400
-
401
-
402
-
403
-
404
-
405
-
406
-
407
-
408
-
409
-
410
-
411
-
412
-
413
-
414
-
415
-
416
-
417
-
418
-
419
-
420
-
421
-
422
-
423
-
424
-
425
-
426
-
427
-
428
-
429
-
430
-
431
-
432
-
433
-
434
-
435
-
436
-
437
-
438
-
439
-
440
-
441
-
442
-
443
-
444
-
445
-
446
-
447
-
448
-
449
-
450
-
451
-
452
-
453
-
454
-
455
-
456
-
457
-
458
-
459
-
460
-
461
-
462
-
463
-
464
-
465
-
466
-
467
-
468
-
469
-
470
-
471
-
472
-
473
-
474
-
475
-
476
-
477
-
478
-
479
-
480
-
481
-
482
-
483
-
484
-
485
-
486
-
487
-
488
-
489
-
490
-
491
-
492
-
493
-
494
-
495
-
496
-
497
-
498
-
499
-
500
-
501
-
502
-
503
-
504
-
505
-
506
-
507
-
508
-
509
-
510
-
511
-
512
-
513
-
514
-
515
-
516
-
517
-
518
-
519
-
520
-
521
-
522
-
523
-
524
-
525
-
526
-
527
-
528
-
529
-
530
-
531
-
532
-
533
-
534
-
535
-
536
-
537
-
538
-
539
-
540
-
541
-
542
-
543
-
544
-
545
-
546
-
547
-
548
-
549
-
550
-
551
-
552
-
553
-
554
-
555
-
556
-
557
-
558
-
559
-
560
-
561
-
562
-
563
-
564
Business review Risk and balance sheet management
176
Presentation of information
Except as otherwise indicated by an asterisk (*), information in the Risk
and balance sheet management section (pages 174 to 364) is within the
scope of the Independent auditor’s report. Disclosures in this section
include disposal groups in relevant exposures unless otherwise indicated.
Refer to pages 172 and 173 for the Analysis of balance sheet pre and
post disposal groups.
Risk governance*
Governance structure
The Group is committed to achieving the highest standards of corporate
governance in every aspect of the business, including risk management.
A key aspect of the Group Board’s responsibility as the main decision-
making body at Group level is the setting of Group risk appetite to ensure
that the levels of risk the Group is willing to accept in the attainment of its
strategic business and financial objectives are clearly understood.
The day-to-day management of risk in the Group is carried out through
two independent risk management functions: RBS Risk Management and
Group Conduct and Regulatory Affairs, which manage risk through
independent oversight and challenge of both the customer-facing
businesses and the support functions. These risk management functions
provide an overarching risk control framework linked to the risk appetite
of the Group. For further detail on risk appetite, refer to page 183.
To enable the Group Board to carry out its objectives, it delegates
authority to various committees as required and appropriate. A number of
key committees specifically consider risk across the Group:
Group Board - Sets and owns the Group’s risk appetite, which is
cascaded across its divisions, functions and material legal entities. The
Group Board also sets the Group’s strategic direction and carries out
regular assessments to ensure that strategic plans are consistent with
risk appetite.
Board Risk Committee - Provides oversight and advice on current and
potential risk exposures, risk strategy and tolerance. The Committee also
promotes a risk awareness culture within the Group.
Group Executive Committee - Operates under delegated authority from
the Group Board and considers emerging issues material to both the
Group’s strategy and risk exposures. The Group Executive Committee
also oversees control frameworks.
Executive Risk Forum - Provides executive input to the Group Board and
the Group Executive Committee on risk management issues such as risk
appetite, risk policies and risk management strategies. It has full authority
to act on all material and/or enterprise-wide risk and control matters
across the Group and implements Group Board and Group Executive
Committee risk management decisions.
*unaudited
Group Audit Committee - Reviews accounting policies, financial reporting
and regulatory compliance practices of the Group, as well as its systems
and standards of internal controls. It monitors the Group’s processes for
internal audit and external audit and relationships with regulatory
authorities. It operates under delegated authority from the Group Board.
Group Risk Committee - Oversees and acts on material and enterprise-
wide risk and control matters across the Group. It reviews and challenges
risks and limits across the functional areas. It reviews risks and issues on
both a thematic and specific basis, focusing on forward-looking, emerging
risks. It considers the overall risk profile across the Group and identifies
any key issues for escalation to the Executive Risk Forum. It operates
under delegated authority from the Executive Risk Forum.
In addition, functional risk committees ensure that effective risk control
frameworks are in place and that limits are consistent with the Group’s
risk appetite. Divisional executive committees develop, own and manage
divisional risk appetites, ensuring that these are consistent with the
Group’s targets.
Risk management
The Group Chief Risk Officer leads RBS Risk Management through the
strategic setting and execution of its responsibilities. The Group Chief
Risk Officer reports directly to the Group Chief Executive and the Board
Risk Committee, with a right of access to the Chairman of the Board Risk
Committee.
RBS Risk Management is designed to align as closely as possible with
the customer-facing businesses and support functions while maintaining
an appropriate level of independence. This underpins the Group’s
approach to risk management and is reinforced through the Group by
reporting lines from divisions to RBS Risk Management and from RBS
Risk Management to senior executives, Boards and Committees.
In RBS Risk Management, the following Group risk functional heads
report directly to the Group Chief Risk Officer and are responsible for
Group-wide risk appetite and standards under their respective disciplines:
• Group Head of Operational Risk;
• Group Chief Credit Officer;
• Head of Enterprise Risk Management;
• Head of Global Country Risk; and
• Chief Operating Officer, RBS Risk Management.
Risk management in divisions focuses on all material risks including
credit, market, operational, regulatory, country and business risk (refer to
pages 188 to 191 for further detail of these risks). Liquidity risk and the
day-to-day management of liquidity and funding of the Group’s assets is
Group Treasury’s responsibility (refer to page 210). Oversight of risk in
divisions is the responsibility of the relevant divisional Chief Risk Officer
(CRO), with input from the relevant Group risk function heads.