rbs201105066k10.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 May 6, 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 3
 
Businesses outlined for disposal
 
 
Appendix 3 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'). The disposals of Global Merchant Services and RBS Sempra Commodities JV businesses have now effectively been completed.
 
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 and HMRC clearances were received during Q4 2010. The separation and transfer process is underway, and a joint transition plan is being developed.
 
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 and the process of separation is proceeding on plan. However, the business continues to be managed and reported as a separate core division.
 
The table below shows Total income and Operating profit of RBS Insurance, and the UK branch-based businesses.
 
 
Total income
  
Operating profit/(loss)
before impairments
  
Operating profit/(loss)
 
 Q1 2011 
FY 2010 
  
Q1 2011 
FY 2010 
  
Q1 2011 
FY 2010 
 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
                 
RBS Insurance (1)
1,070 
4,369 
  
67 
(295)
  
67 
(295)
UK branch-based businesses (2)
241 
902 
  
128 
439 
  
129 
160 
                 
Total
1,311 
5,271 
  
195 
144 
  
196 
(135)
 
The table below shows the estimated risk-weighted assets, total assets and capital of the businesses identified for disposal.
 
 
RWAs
  
Total assets
  
Capital
 
31 March 
2011 
31 December 
2010 
  
31 March 
2011 
31 December 
2010 
  
31 March 
2011 
31 December 
2010 
 
£bn 
£bn 
  
£bn 
£bn 
  
£bn 
£bn 
                 
RBS Insurance (1)
n/m 
n/m 
  
12.5 
12.4 
  
4.0 
4.0 
UK branch-based businesses (2)
11.5 
13.2 
  
19.9 
19.9 
  
1.0 
1.2 
                 
Total
11.5 
13.2 
  
32.4 
32.3 
  
5.0 
5.2 
 
Notes:
(1)
As reported in the 2011 Q1 IMS and Annual Results for the year ended 31 December 2010 and excluding Non-Core business. Estimated capital includes approximately £1.0 billion of goodwill.
(2)
All data are estimated; notional equity based upon 9% of RWAs.
 

 
 
Appendix 3 Businesses outlined for disposal
Further estimated information on the UK branch-based business by division is shown in the tables below:
 
 
Division
  
Total
 
UK 
Retail 
UK 
Corporate 
  
Q1 2011 
FY 2010 
 
£m 
£m 
  
£m 
£m 
           
Income statement
          
Net interest income
71 
107 
  
178 
656 
Non-interest income
26 
37 
  
63 
246 
           
Total income
97 
144 
  
241 
902 
           
Direct expenses
          
  - staff
(19)
(20)
  
(39)
(176)
  - other
(20)
(19)
  
(39)
(144)
Indirect expenses
(22)
(13)
  
(35)
(143)
           
 
(61)
(52)
  
(113)
(463)
           
Operating profit before impairment losses
36 
92 
  
128 
439 
Impairment losses (1)
(20)
21 
  
1 
(279)
           
Operating profit
16 
113 
  
129 
160 
           
Analysis of income by product
          
Loans & advances
35 
96 
  
131 
445 
Deposits
26 
33 
  
59 
261 
Mortgages
31 
- 
  
31 
120 
Other
5 
15 
  
20 
76 
           
Total income
97 
144 
  
241 
902 
           
Net interest margin
4.51% 
3.30% 
  
3.69% 
3.24% 
Employee numbers (full time equivalents rounded to the
  nearest hundred)
3,000 
1,400 
  
4,400 
4,400 
 
 
 
Division
  
Total
 
UK 
Retail 
UK 
Corporate 
Global 
Banking 
& Markets 
  
31 March 
2011 
31 December 
2010 
 
£bn 
£bn 
£bn 
  
£bn 
£bn 
             
Capital and balance sheet
            
Total third party assets
6.8 
13.9 
- 
  
20.7 
20.7 
Loans and advances to customers (gross)
6.8 
13.9 
- 
  
20.7 
20.7 
Customer deposits
8.8 
14.7 
- 
  
23.5 
24.0 
Derivative assets
- 
- 
0.4 
  
0.4 
n/a 
Derivative liabilities
- 
- 
0.1 
  
0.1 
n/a 
Risk elements in lending
0.5 
1.2 
- 
  
1.7 
1.7 
Loan:deposit ratio
77% 
95% 
- 
  
88% 
86% 
Risk-weighted assets
3.2 
8.3 
- 
  
11.5 
13.2 
 
Note:
(1)
Q1 2011 impairment losses benefited from £54 million of latent and other provision releases.


 
 
 

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