RBS 2014 Annual Report Download - page 167

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RBS – Interim Results 2015
Appendix 1 Capital and risk management
Key points*
UK PBB
• The UK PBB personal mortgage portfolio increased by 2.1% to £105.4 billion, of which £92.5 billion
(31 December 2014 - £91.6 billion) was owner occupied and £12.9 billion (31 December 2014 - £11.6
billion) was buy-to-let. Of the total portfolio approximately £26 billion related to properties in the south
east of England, while £19 billion related to properties in Greater London.
• Gross new mortgage lending amounted to £9.1 billion in H1 2015 with an average LTV by weighted
value of 70.4% (2014 - 70.5%). Lending to owner-occupiers during this period was £7.5 billion (2014 -
£16.6 billion) and had an average LTV by weighted value of 71.5% (2014 - 71.7%). Buy-to-let lending
was £1.6 billion (2014 - £3.1 billion) with an average LTV by weighted value of 65.1% (2014 - 63.9%).
• Based on the Halifax House Price Index at March 2015, the portfolio average indexed LTV by volume
was 50.4% (2014 - 50.4%) and 57.4% by weighted value of debt outstanding (2014 - 57.3%).
• Fixed interest rate products of varying time durations accounted for approximately 60% of the
mortgage portfolio with 3% a combination of fixed and variable rates and the remainder variable rate.
Approximately 17% of owner-occupied mortgages were on interest-only terms with a bullet repaymen
t
and 7% were on a combination of interest-only and capital and interest. The remainder were capital
and interest. 63% of the buy-to-let mortgages were on interest-only terms and 3% on a combination o
f
interest only and capital and interest.
• The arrears rate fell from 1.0% in December 2014 to 0.9% at the end of June 2015. The number o
f
properties repossessed in H1 2015 was also lower (338 compared with 472 in H2 2014). This reflected
improvements in the UK economy and underlying asset quality
• The flow of new forbearance was £315 million in H1 2015 compared with £367 million in H2 2014. The
value of mortgages subject to forbearance has decreased by 8% since the year end to £4.5 billion
(equivalent to 4.2% of the total mortgage book) as a result of improved market conditions and
methodology changes.
• There was an overall small release of impairment provision for personal mortgages in H1 2015
compared with a small charge in H1 2014. Reduced REIL balances and a fall in the instances o
f
forborne mortgages drove the release in latent and PD90 provisions as well as lower LGDs.
Ulster Bank
• Ulster Bank’s residential mortgage portfolio totalled £15.9 billion at 30 June 2015, with 86% in the
Republic of Ireland and 14% in Northern Ireland. Excluding the impact of exchange rate movements,
the portfolio decreased by 1.3% from 31 December 2014 as a result of amortisation a portion of which
related to the tracker mortgage portfolio. The volume of new business has increased reflecting
continuing market demand.
• The interest-rate product mix was approximately 63% of the mortgage portfolio on tracker-rate
products, 23% on variable-rate products and 14% on fixed rate. Interest-only represented 6% of the
total portfolio.
• The portfolio average indexed LTV decreased from 92% at 31 December 2014 to 89% at 30 June
2015 and reflected positive house price index trends over the last six months.
• At 30 June 2015, 22.3% of total mortgage assets (£3.6 billion) were subject to a forbearance
arrangement, a decrease of 8.3% (£0.3 billion) from 31 December 2014. Excluding the impact o
f
exchange rate movements, the value of mortgage assets subject to a forbearance arrangement has
decreased by £276 million (4.8%).
*Not within the scope of Deloitte LLP’s review report