RBS 2013 Annual Report Download - page 205
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Business review Risk and balance sheet management
203
The table below analyses RWA movements by division during the year.
US
UK Retail UK Corporate Wealth IB (1) Ulster Bank R&C (1) Markets Other Core Non-Core RFS MI Total
Total RWAs £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn
A
t 1 January 2013 45.7 86.3 12.3 51.9 36.1 56.5 101.3 5.8 395.9 60.4 3.3 459.6
Business and market
movements (1.8) (9.6) (0.3) (6.0) (5.7) (0.4) (35.1) 2.7 (56.2) (22.2) 0.6 (77.8)
Disposals — — — — — — — — — (8.6) — (8.6)
Model updates — 9.4 — 3.1 0.3 —(1.7) 1.6 12.7 (0.4) — 12.3
A
t 31 December 2013 43.9 86.1 12.0 49.0 30.7 56.1 64.5 10.1 352.4 29.2 3.9 385.5
Note:
(1) IB: International Banking; R&C: Retail & Commercial.
Key points
• RWAs were down £74.1 billion or 16% overall, of which £57.8 billion
related to credit risk, £12.3 billion to market risk and £4.0 billion to
operational risk.
• Credit risk RWAs were down £57.8 billion or 16% to £313.4 billion
despite absorbing £13.8 billion of higher RWAs due to model
updates.
° Non-counterparty RWAs were down £32.1 billion or 10% to
£291.1 billion: in Non-Core (£24.1 billion) due to run-off and
disposals in commercial real estate, shipping and leveraged
finance portfolios; and in Retail & Commercial (£10.0 billion)
due to loans migrating into default, risk parameter changes and
balance sheet reduction.
*unaudited
° Counterparty RWAs were down £25.7 billion or 54% to £22.3
billion in Markets (£17.2 billion) and Non-Core (£7.8 billion).
Methodology changes, significantly all in Markets, reflected
extension of product coverage improvements in models and
reduction in weighting applied for exposure at default. This was
partially offset by the impact of higher loss given defaults for
hedge funds.
• Market risk RWAs were down £12.3 billion or 29% to £30.3 billion
significantly all in Markets reflecting balance sheet and risk reduction
£9.0 billion and model changes of £1.5 billion.
• Operational risk RWAs were down £4.0 billion or 9% to £41.8 billion
primarily due to reductions in Markets.
For additional analyses on RWAs by sector and related density see
pages 207 and 208.