RBS 2013 Annual Report Download - page 262
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Business review Risk and balance sheet management
260
Credit risk continued
Key loan portfolios* continued
Ulster Bank
• Ulster Bank’s residential mortgage portfolio was £19.0 billion at 31
December 2013, with 88% in the Republic of Ireland and 12% in
Northern Ireland. At constant exchange rates, the portfolio
decreased 2.5% from 31 December 2012 as a result of amortisation
and limited growth due to low market demand.
• The assets included £2.2 billion (12%) of residential buy-to-let loans.
The interest rate product mix was approximately 68% on tracker rate
products, 23% on variable rate products and 9% on fixed rate.
Interest only represented 11% of the total portfolio.
• The average individual LTV on new originations was 73% in 2013,
(2012 - 74%); the volume of new business remained very low. The
maximum LTV available to Ulster Bank customers was 90% with the
exception of a specific Northern Ireland scheme which permits LTVs
of up to 95% (although Ulster Bank’s exposure is capped at 85%
LTV).
• The portfolio average indexed LTV fell 4% during 2013 and reflected
positive house price index trends over the last 12 months.
• Refer to the Ulster Bank Group (Core and Non-Core) section on
pages 265 to 267 for commentary on mortgage REIL and
impairments.
*unaudited
RBS Citizens
• RBS Citizens residential real estate portfolio was £19.6 billion at 31
December 2013 (2012 - £21.5 billion). The Core business comprised
91% of the portfolio. The real estate portfolio consisted of £5.9 billion
(£5.6 billion Core vs. £0.3 billion Non-Core) of first lien residential
mortgages (1% in second lien position) and £13.5 billion (£12.0
billion Core vs. £1.5 billion Non-Core) of home equity loans and lines
(first and second liens). Home equity Core consisted of 49% in first
lien position while Non-Core consisted of 95% in second lien
position.
• RBS Citizens continued to focus on its ‘footprint states’ of New
England, Mid Atlantic and Mid West regions. At 31 December 2013,
the portfolio consisted of £16.4 billion (84% of the total portfolio)
within footprint.
• Of the total real estate portfolio of £1.8 billion in Non-Core, the
serviced-by-others (SBO) element was the largest component
(76%). The SBO book decreased from £1.8 billion at 31 December
2012 to £1.4 billion at 31 December 2013 and was closed to new
purchases in the third quarter of 2007. The arrears rate of the SBO
portfolio decreased from 1.9% at 31 December 2012 to 1.6% at 31
December 2013 reflecting portfolio liquidation as well as more
effective account servicing and collections. The charge-off rate also
continued to decrease (4.4% annualised at the fourth quarter of
2013 compared to 7.4% in 2012).
• The weighted average LTV of the portfolio decreased from 75% at
31 December 2012 to 67% at 31 December 2013, driven by
increases in the Case-Shiller Home Price Index from the third
quarter of 2012 to the fourth quarter of 2013. The weighted average
LTV of the portfolio, excluding SBO, was 64%.