rbs201102246k11.htm
 
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
 
 
Report of Foreign Private Issuer
 
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
 
For February 24, 2011
 
Commission File Number: 001-10306
 
The Royal Bank of Scotland Group plc
 
RBS, Gogarburn, PO Box 1000
Edinburgh EH12 1HQ
 
(Address of principal executive offices)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F X
  
Form 40-F ___
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):_________
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):_________

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes
   ___
No X
 
 
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________
 
 
The following information was issued as a Company announcement in London, England and is furnished pursuant to General Instruction B to the General Instructions to Form 6-K:
 
 
 

Appendix 2


Businesses outlined for disposal



 

RBS Group – Annual Results 2010

 
 
 


Appendix 2 Businesses outlined for disposal

To comply with EC State Aid requirements the Group agreed to make a series of divestments by the end of 2013: the sale of RBS Insurance, Global Merchant Services and its interest in RBS Sempra Commodities JV. The Group also agreed to dispose of its RBS England and Wales and NatWest Scotland branch-based businesses, along with certain SME and corporate activities across the UK (‘UK branch-based businesses’).

By 31 December 2010, the Group had completed the disposal of 80.01% of the GMS business and substantially all of the RBS Sempra Commodities JV and had agreed the sale of UK branch based businesses, demonstrating solid progress towards the achievement of its divestment commitments.

GMS was sold to a consortium of Advent International and Bain Capital; the sale was announced on 6 August 2010 and closed on 30 November 2010. RBS continues to hold a minority stake in the resulting entity.

On 4 August 2010, the Group announced its agreement to sell 318 branches and associated assets and liabilities to Santander UK plc for a premium of £350 million to net assets at closing. The consideration will be paid in cash and is subject to certain closing adjustments. The transaction includes 311 Royal Bank of Scotland branches in England and Wales; seven NatWest branches in Scotland; the retail and SME customer accounts attached to these branches; the Direct SME business; and certain mid-corporate businesses. EC/UK merger control clearance was received on 15 October 2010 and HMRC clearance was also received during the fourth quarter. The separation and transfer process is underway. The long stop contractual date is 31 March 2012.

By 31 December 2010, sale agreements had been reached for substantially all the assets of the RBS Sempra Commodities JV. On 1 July 2010, the Group completed the sale of RBS Sempra Commodities’ metals, oil and European energy business lines to J.P.Morgan for a total cash consideration of $1.6 billion, while the sale of Sempra Energy Solutions to Noble Americas Gas & Power Corp was announced in September and the sale of Sempra North America Power and Gas to J.P.Morgan was announced on 7 October 2010. Both the sales of Sempra Energy Solutions and Sempra North American Power and Gas closed during Q4 2010. A further sale of residual information technology, intellectual property and other infrastructure assets to Societe Generale was announced early in 2011.

Preparations for the disposal of RBS Insurance, by way of a trade sale or public flotation targeted for the second half of 2012, continue. External advisors were appointed during Q4 2010. However, the business continues to be managed and reported as a separate core division.

 

RBS Group – Annual Results 2010

 
 
 


Appendix 2 Businesses outlined for disposal

The table below shows the estimated total income and operating profit of RBS Insurance, Global Merchant Services, RBS Sempra Commodities JV and the UK branch-based businesses.

 
Total income
  
Operating (loss)/profit
before impairments
  
Operating (loss)/profit
 
 2010
2009 
  
2010 
2009 
  
2010 
2009 
 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
                 
RBS Insurance (1)
4,369 
4,460 
  
(295)
66 
  
(295)
58 
UK branch-based businesses (5)
902 
925 
  
439 
451 
  
160 
(55)
                 
 
5,271 
5,385 
  
144 
517 
  
(135)
3 
Global Merchant Services (2)
482 
527 
  
209 
249 
  
209 
249 
RBS Sempra Commodities JV (3)
                
  - Businesses sold (4)
374 
755 
  
- 
163 
  
- 
163 
  - To be sold
15 
(9)
  
(3)
(111)
  
(3)
(111)
                 
Total
6,142 
6,658 
  
350 
818 
  
71 
304 

The table below shows the estimated risk-weighted assets, total assets and capital of the businesses identified for disposal.

 
RWAs
  
Total assets
  
Capital
 
2010 
2009 
  
2010 
2009 
  
2010 
2009 
 
£bn 
£bn 
  
£bn 
£bn 
  
£bn 
£bn 
                 
RBS Insurance (1)
n/m 
n/m 
  
12.4 
11.8 
  
4.0 
4.1 
UK branch-based businesses (5)
13.2 
15.2 
  
19.9 
21.5 
  
1.2 
1.4 
                 
 
13.2 
15.2 
  
32.3 
33.3 
  
5.2 
5.5 
Global Merchant Services (2)
- 
1.8 
  
- 
1.1 
  
- 
0.2 
RBS Sempra Commodities JV (3)
                
  - Businesses sold (4)
- 
8.4 
  
- 
13.7 
  
- 
0.8 
  - To be sold
1.8 
1.8 
  
1.4 
0.5 
  
0.2 
0.2 
                 
Total
15.0 
27.2 
  
33.7 
48.6 
  
5.4 
6.7 

Notes:
(1)
As reported in the Annual Results for the years ended 31 December 2010 and 31 December 2009 and excluding non-core business. Estimated capital includes approximately £1.0 billion of goodwill.
(2)
Global Merchant Services business units are reported principally within Global Transaction Services. The sale to a consortium of Advent International and Bain Capital completed on 1 December 2010. Refer to page 4 for the impact of the sale of Global Merchant Services on the Global Transaction Services results.
(3)
The figures shown, other than total income, are net of the non-controlling interest attributable to RBS Sempra Commodities JV for the years ended 31 December 2010 and 31 December 2009. Estimated capital is based on the Group’s cost of its 51% interest.
(4)
The sale of the Oil, Metals and European Gas & Power businesses of RBS Sempra Commodities JV to J.P. Morgan completed on 1 July 2010.
 
The sale of Sempra Energy Solutions to Noble Americas Gas & Power Corp completed on 1 November 2010.
 
The sale of Sempra North American Power and Gas to J.P.Morgan completed on 1 December 2010.
(5)
Capital is calculated using an estimated notional equity based upon 9% of RWAs.
 
 

 

RBS Group – Annual Results 2010

 
 
 


Appendix 2 Businesses outlined for disposal

The tables below show the impact of the sale of Global Merchant Services on the reported results of Global Transaction Services.

 
2010
  
2009
 
As 
 published 
Global 
 Merchant 
 Services 
Ongoing 
  
As 
published 
Global 
 Merchant 
 Services 
Ongoing 
Global Transaction Services
£m 
£m 
£m 
  
£m 
£m 
£m 
               
Income statement
              
Net interest income
974 
10 
964 
  
912 
12 
900 
Non-interest income
1,587 
441 
1,146 
  
1,575 
493 
1,082 
               
Total income
2,561 
451 
2,110 
  
2,487 
505 
1,982 
               
Direct expenses
              
  - staff
(411)
(68)
(343)
  
(371)
(71)
(300)
  - other
(159)
(43)
(116)
  
(161)
(37)
(124)
Indirect expenses
(894)
(133)
(761)
  
(943)
(141)
(802)
               
 
(1,464)
(244)
(1,220)
  
(1,475)
(249)
(1,226)
               
Operating profit before impairment
  losses
1,097 
207 
890 
  
1,012 
 
256 
756 
Impairment losses
(9)
- 
(9)
  
(39)
- 
(39)
               
Operating profit
1,088 
207 
881 
  
973 
256 
717 

 
31 December 2009
 
As 
published 
Global 
 Merchant 
 Services 
Ongoing 
 
£bn 
£bn 
£bn 
       
Capital and balance sheet
      
Total third party assets
18.4 
1.1 
17.3 
Loans and advances
12.7 
0.3 
12.4 
Customer deposits
61.8 
0.6 
61.2 
Risk elements in lending
0.2 
- 
0.2 
Loan:deposit ratio (excluding repos)
21% 
44%
20%
Risk-weighted assets
19.1 
1.8 
17.3 


 

RBS Group – Annual Results 2010

 
 
 


 
Signatures

 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 

 
 
Date: 24 February 2011
 
 
THE ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
 
 
 
By:
/s/ Jan Cargill
 
 
Name:
Title:
Jan Cargill
Deputy Secretary
 

 

 

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