RBS 2014 Annual Report Download - page 61

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RBS – Interim Results 2015
Citizens Financial Group (US dollar)
Key points (continued)
H1 2015 compared with H1 2014 (continued)
• Average loans and advances were up 18% (8% on a US dollar basis) due to commercial loan growth
and retail loan growth driven by auto, residential mortgage and student loans partially offset by home
equity run-off.
• Average customer deposits were up 16% (6% on a US dollar basis), driven by growth in money
market, term deposits and checking accounts with interest.
Q2 2015 compared with Q1 2015
• Operating profit decreased by £28 million ($37 million), or 11% (10%), to £229 million ($352 million)
reflecting on a US dollar basis, higher expenses and impairments partially offset by higher income.
Adjusted operating profit was down £7 million ($7 million), or 3% (2%), to £256 million ($392 million)
with an increase in impairment losses largely offset by revenue growth and expense discipline.
• Total income remained stable at £797 million. On a US dollar basis total income increased by $16
million, or 1%, to $1,222 million. Net interest income was down £2 million to £551 million. On a US
dollar basis net interest income was up $8 million to $845 million, reflecting the benefit of loan growth
and an additional day in the quarter, muted by the continued downward impact of the rate environmen
t
on earning asset yields. Non-interest income remained stable at £246 million. On a US dollar basis
non-interest income increase of $8 million was driven by improvement across most categories partiall
y
offset by a gain on sale of mortgage loans in Q1 2015 of $10 million.
• Operating expenses, excluding restructuring costs, remained stable as the benefit of seasonally lowe
r
salary and benefits expense was offset by the effect of more normalised outside services costs.
• Impairment losses increased £13 million ($19 million), or 34% (33%), to £51 million ($77 million)
reflecting a return to more normalised net charge-off levels from the prior quarter, which benefited from
a large commercial real estate loan recovery.
Q2 2015 compared with Q2 2014
• Operating profit decreased by £48 million ($114 million), or 17% (24%), to £229 million ($352 million).
Excluding the impact of the Illinois franchise sale, £170 million ($283 million) net gain, restructuring
costs and the depreciation and amortisation change, operating profit was up £34 million ($23 million),
or 19% (8%), to £210 million ($321 million).
• Total income, excluding the Q2 2014 gain on the sale of the Illinois franchise, was up £77 million ($9
million), or 11% (1%), to £797 million ($1,222 million) despite an estimated £15 million ($25 million)
reduction related to the Illinois franchise sale. Drivers are consistent with H1 2015 compared with H1
2014.
• Operating expenses, excluding restructuring costs and the depreciation and amortisation change were
up £23 million, or 4%, to £536 million, reflecting the weakening of sterling against the US dollar with
the average exchange rate decreasing 9%. On a US dollar basis operating expenses were down $38
million, or 4%, to $824 million reflecting the decrease related to the impact of the Illinois franchise sale
and lower regulatory costs.
• Impairment losses increased £20 million ($24 million), or 65% (45%), to £51 million ($77 million) as the
benefit of underlying improvement in credit quality was more than offset by increases related to overall
loan growth.