RBS 2014 Annual Report Download - page 123

121
RBS – Interim Results 2015
Notes
17. Related party (continued)
Other related parties
(a) In their roles as providers of finance, Group companies provide development and other types of capital
support to businesses. These investments are made in the normal course of business and on arm's length
terms. In some instances, the investment may extend to ownership or control over 20% or more of the voting
rights of the investee company. However, these investments are not considered to give rise to transactions
of a materiality requiring disclosure under IAS 24.
(b) The Group recharges The Royal Bank of Scotland Group Pension Fund with the cost of administration
services incurred by it. The amounts involved are not material to the Group.
Full details of the Group’s related party transactions for the year ended 31 December 2014 are included in
the 2014 Annual Report and Accounts.
18. Rating agencies
During the first half of 2015, Moody’s Investors Service (‘Moody’s’), Fitch Ratings (‘Fitch’) and Standard &
Poor’s Rating Services (‘S&P’s’) concluded their review of RBS and certain other UK and international banks
in response to changes in banking regulation. As a consequence of these reviews, the rating agencies:
● Noted a reduced likelihood of sovereign support for banks operating in countries with well-advanced
and effective resolution regimes; and
● Implemented new methodologies that take into consideration additional loss-absorbing capital which
the new regulation requires banks to build.
The resulting changes in ratings for The Royal Bank of Scotland Group plc (RBSG plc) and its subsidiaries
are set out in the table below:
Moody’s Standards and poor’s Fitch
Current rating Previous rating Current rating Previous rating Current rating Previous rating
Long
term
Short
term
Long
term
Short
term
Long
term
Short
term
Long
term
Short
term
Long
term
Short
term
Long
term
Short
term
The Royal Bank of
Scotland Group plc (1) Ba1 NP Baa2 P-2 BBB- A-3 BBB- A-3 BBB+ F2 AF1
The Royal Bank of
Scotland plc A3 P-2 Baa1 P-2 BBB+ A-2 A- A-2 BBB+ F2 AF1
National Westminster
Bank Plc A3 P-2 Baa1 P-2 BBB+ A-2 A- A-2 BBB+ F2 AF1
Royal Bank of Scotland
N.V. A3 P-2 Baa1 P-2 BBB+ A-2 A- A-2 BBB+ F2 AF1
Citizens Bank, N.A. (2) Baa1 P-2 A3 P-2 A- A-2 A- A-2 BBB+ F2 BBB+ F2
RBS Securities Inc. - - - -BBB+ A-2 A- A-2 BBB+ F2 A- F1
Ulster Bank Ltd A3 P-2 Baa3 P-3 BBB A-2 BBB+ A-2 BBB+ F2 A- F1
Ulster Bank Ireland Ltd (3) Ba1 P-3 Baa3 P-3 BBB A-2 BBB+ A-2 BBB F2 BBB+ F2
Notes:
(1) Moody’s ratings for The Royal Bank of Scotland Group plc are considered to be below investment grade.
(2) The table shows Moody’s short-term and long-term senior unsecured debt ratings (Baa1/P-2). Moody’s short-term and long-term deposit ratings are A1 and P-1
respectively.
(3) The table shows Moody’s short-term and long-term senior unsecured debt ratings (Ba1 and p-3, below investment grade). Moody’s short-term and long-term deposit
ratings are Baa3 and P-3 respectively (investment grade).
Following these changes Moody’s, Fitch and S&P’s have changed their outlook for RBSG plc and its
subsidiaries to ‘Stable’.