RBS 2014 Annual Report Download - page 101
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99
RBS – Interim Results 2015
Notes
14. Financial instruments (continued)
Fair value of financial instruments not carried at fair value
The following table shows the carrying value and fair value of financial instruments carried at amortised cost
on the balance sheet.
30 June 2015 31 December 2014
Carrying Carrying
value Fair value value Fair value
£bn £bn £bn £bn
Financial assets
Loans and advances to banks 15.0 15.0 12.8 12.8
Loans and advances to customers 297.3 291.5 312.1 303.5
Debt securities 7.8 7.8 7.6 7.5
Financial liabilities
Deposits by banks 7.4 7.4 6.4 6.4
Customer accounts 81.5 81.6 100.7 100.7
Debt securities in issue 29.8 31.0 33.6 35.0
Subordinated liabilities 18.9 19.0 22.0 22.5
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Quoted market values are used where
available; otherwise, fair values have been estimated based on discounted expected future cash flows and
other valuation techniques. These techniques involve uncertainties and require assumptions and judgments
covering prepayments, credit risk and discount rates. Furthermore, there is a wide range of potential
valuation techniques. Changes in these assumptions would affect estimated fair values. The fair values
reported would not necessarily be realised in an immediate sale or settlement.
For the following short-term financial instruments fair value approximates to carrying value: cash and
balances at central banks, items in the course of collection from and transmission to other banks, settlement
balances, demand deposits and notes in circulation. These are excluded from the table above.
15. Contingent liabilities and commitments
30 June 31 March 31 Decembe
r
2015 2015 2014
£m £m £m
Contingent liabilities
Guarantees and assets pledged as collateral security 14,452 16,161 16,721
Other 8,686 9,589 9,581
23,138 25,750 26,302
Commitments
Undrawn formal standby facilities, credit lines and other
commitments to lend 186,202 209,813 212,777
Other 1,339 1,524 2,107
187,541 211,337 214,884
Contingent liabilities and commitments 210,679 237,087 241,186
Additional contingent liabilities arise in the normal course of RBS’s business. It is not anticipated that any
material loss will arise from these transactions.