rbs201305036k5.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 3, 2013
 
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 1
 
Income statement reconciliations and Segmental analysis
 
 
 
 
 
Appendix 1 Income statement reconciliations and Segmental analysis
 
 
 
Quarter ended 31 March 2013
 
Managed 
One-off items 
reallocation 
DLG results 
to 12/3/13 (1)
Statutory 
£m 
£m 
£m
£m 
         
Interest receivable
4,336 
- 
(57)
4,279 
Interest payable
(1,614)
(2)
7 
(1,609)
         
Net interest income
2,722 
(2)
(50)
2,670 
         
Fees and commissions receivable
1,317 
- 
(1)
1,316 
Fees and commissions payable
(284)
- 
74 
(210)
Income from trading activities
1,015 
99 
1 
1,115 
Loss on redemption of own debt
- 
(51)
- 
(51)
Other operating income (2)
381 
245 
(14)
612 
Insurance net premium income
699 
- 
(699)
- 
         
Non-interest income
3,128 
293 
(639)
2,782 
         
Total income
5,850 
291 
(689)
5,452 
         
Staff costs
(1,893)
(67)
73 
(1,887)
Premises and equipment
(580)
(10)
34 
(556)
Other administrative expenses
(731)
(86)
54 
(763)
Depreciation and amortisation
(339)
(58)
10 
(387)
         
Operating expenses
(3,543)
(221)
171 
(3,593)
         
Profit before insurance net claims and impairment losses
2,307 
70 
(518)
1,859 
Insurance net claims
(445)
- 
445 
- 
         
Operating profit before impairment losses
1,862 
70 
(73)
1,859 
Impairment losses
(1,033)
- 
- 
(1,033)
         
Operating profit
829 
70 
(73)
826 
 
For the notes to this table refer to the following page.
 
Appendix 1 Income statement reconciliations and Segmental analysis (continued)
 
 
 
Quarter ended 31 March 2013
 
Managed 
One-off items 
reallocation 
DLG results 
to 12/3/13 (1)
Statutory 
 
£m 
£m 
£m 
£m 
         
Operating profit
829 
70 
(73)
826 
Own credit adjustments (3)
249 
(249)
- 
- 
Interest Rate Hedging Products redress and related costs
(50)
50 
- 
- 
Integration and restructuring costs (4)
(131)
131 
- 
- 
Loss on redemption of own debt
(51)
51 
- 
- 
Amortisation of purchased intangible assets
(41)
41 
- 
- 
Strategic disposals
66 
(66)
- 
- 
RFS Holdings minority interest
100 
(100)
- 
- 
         
Profit including the results of Direct Line Group discontinued operations
971 
(72)
(73)
826 
Direct Line Group discontinued operations
(145)
72 
73 
- 
         
Profit before tax
826 
- 
- 
826 
Tax charge
(350)
- 
- 
(350)
         
Profit from continuing operations
476 
- 
- 
476 
         
Profit from discontinued operations, net of tax
        
  - Direct Line Group
127 
- 
- 
127 
  - Other
2 
- 
- 
2 
         
Profit from discontinued operations, net of tax
129 
- 
- 
129 
         
Profit for the period
605 
- 
- 
605 
Non-controlling interests
(131)
- 
- 
(131)
Preference share and other dividends
(81)
- 
- 
(81)
         
Profit attributable to ordinary and B shareholders
393 
- 
- 
393 
 
Notes:
 
(1)
The statutory results of Direct Line Group, which is classified as a discontinued operation.
(2)
Includes the Group's share of profit of Direct Line Group as an associated undertaking of £7 million from 13 March 2013.
(3)
Reallocation of £99 million gain to income from trading activities and £150 million gain to other operating income.
(4)
Includes £9 million in Direct Line Group.
 
 
Appendix 1 Income statement reconciliations and Segmental analysis
 
 
 
Quarter ended
 
31 December 2012
  
31 March 2012
 
Managed 
One-off items 
reallocation 
DLG (1)
Statutory 
  
Managed 
One-off items 
reallocation 
DLG (1)
Statutory 
 
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
£m 
                   
Interest receivable
4,517 
- 
(78)
4,439 
  
5,017 
- 
(83)
4,934 
Interest payable
(1,675)
(3)
12 
(1,666)
  
(2,010)
(8)
(1)
(2,019)
                   
Net interest income
2,842 
(3)
(66)
2,773 
  
3,007 
(8)
(84)
2,915 
                   
Fees and commissions receivable
1,375 
- 
(1)
1,374 
  
1,487 
- 
(2)
1,485 
Fees and commissions payable
(324)
(1)
80 
(245)
  
(290)
- 
111 
(179)
Income from trading activities
567 
(97)
4 
474 
  
1,264 
(1,052)
- 
212 
Gain on redemption of own debt
- 
- 
- 
- 
  
- 
577 
- 
577 
Other operating income
381 
(138)
(16)
227 
  
725 
(1,472)
(53)
(800)
Insurance net premium income
919 
- 
(919)
- 
  
938 
- 
(938)
- 
                   
Non-interest income
2,918 
(236)
(852)
1,830 
  
4,124 
(1,947)
(882)
1,295 
                   
Total income
5,760 
(239)
(918)
4,603 
  
7,131 
(1,955)
(966)
4,210 
                   
Staff costs
(1,467)
(312)
123 
(1,656)
  
(2,249)
(349)
90 
(2,508)
Premises and equipment
(573)
(73)
54 
(592)
  
(550)
(13)
1 
(562)
Other administrative expenses
(723)
(1,834)
51 
(2,506)
  
(819)
(197)
133 
(883)
Depreciation and amortisation
(384)
(138)
24 
(498)
  
(394)
(74)
11 
(457)
Write down of goodwill and other intangible assets
- 
(124)
- 
(124)
  
- 
- 
- 
- 
                   
Operating expenses
(3,147)
(2,481)
252 
(5,376)
  
(4,012)
(633)
235 
(4,410)
                   
Profit/(loss) before insurance net claims and impairment losses
2,613 
(2,720)
(666)
(773)
  
3,119 
(2,588)
(731)
(200)
Insurance net claims
(606)
- 
606 
- 
  
(649)
- 
649 
- 
                   
Operating profit/(loss) before impairment losses
2,007 
(2,720)
(60)
(773)
  
2,470 
(2,588)
(82)
(200)
Impairment losses
(1,454)
- 
- 
(1,454)
  
(1,314)
- 
- 
(1,314)
                   
Operating profit/(loss)
553 
(2,720)
(60)
(2,227)
  
1,156 
(2,588)
(82)
(1,514)
 
For the notes to this table refer to page 5.

 
Appendix 1 Income statement reconciliations and Segmental analysis (continued)
 
 
 
Quarter ended
 
31 December 2012
  
31 March 2012
 
Managed 
One-off items 
reallocation 
DLG (1)
Statutory 
  
Managed 
One-off items 
reallocation 
DLG (1)
Statutory 
 
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
£m 
                   
Operating profit/(loss)
553 
(2,720)
(60)
(2,227)
  
1,156 
(2,588)
(82)
(1,514)
Own credit adjustments (2)
(220)
220 
- 
- 
  
(2,456)
2,456 
- 
- 
Payment Protection Insurance costs
(450)
450 
- 
- 
  
(125)
125 
- 
- 
Interest Rate Hedging Products redress and related costs
(700)
700 
- 
- 
  
- 
- 
- 
- 
Regulatory fines
(381)
381 
- 
- 
  
- 
- 
- 
- 
Integration and restructuring costs
(620)
620 
- 
- 
  
(460)
460 
- 
- 
Gain on redemption of own debt
- 
- 
- 
- 
  
577 
(577)
- 
- 
Write-down of goodwill and other intangible assets
(518)
518 
- 
- 
  
- 
- 
- 
- 
Asset Protection Scheme (3)
- 
- 
- 
- 
  
(43)
43 
- 
- 
Amortisation of purchased intangible assets
(32)
32 
- 
- 
  
(48)
48 
- 
- 
Strategic disposals
(16)
16 
- 
- 
  
(8)
8 
- 
- 
Bank levy
(175)
175 
- 
- 
  
- 
- 
- 
- 
RFS Holdings minority interest
(2)
2 
- 
- 
  
(25)
25 
- 
- 
                   
Loss including the results of Direct Line Group discontinued operations
(2,561)
394 
(60)
(2,227)
  
(1,432)
- 
(82)
(1,514)
Direct Line Group discontinued operations
334 
(394)
60 
- 
  
(82)
- 
82 
- 
                   
Loss before tax
(2,227)
- 
- 
(2,227)
  
(1,514)
- 
- 
(1,514)
Tax charge
(39)
- 
- 
(39)
  
(138)
- 
- 
(138)
                   
Loss from continuing operations
(2,266)
- 
- 
(2,266)
  
(1,652)
- 
- 
(1,652)
 
For the notes to this table refer to page 5.


 
Appendix 1 Income statement reconciliations and Segmental analysis (continued)
 
 
 
Quarter ended
 
31 December 2012
  
31 March 2012
 
Managed 
One-off items 
reallocation 
DLG (1)
Statutory 
  
Managed 
One-off items 
reallocation 
DLG (1)
Statutory 
 
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
£m 
                   
(Loss)/profit from discontinued operations, net of tax
                  
  - Direct Line Group
(351)
- 
- 
(351)
  
88 
- 
- 
88 
  - Other
6 
- 
- 
6 
  
5 
- 
- 
5 
                   
(Loss)/profit from discontinued operations, net of tax
(345)
- 
- 
(345)
  
93 
- 
- 
93 
                   
Loss for the period
(2,611)
- 
- 
(2,611)
  
(1,559)
- 
- 
(1,559)
Non-controlling interests
108 
- 
- 
108 
  
14 
- 
- 
14 
Preference share and other dividends
(115)
- 
- 
(115)
  
- 
- 
- 
- 
                   
Loss attributable to ordinary and B shareholders
(2,618)
- 
- 
(2,618)
  
(1,545)
- 
- 
(1,545)
 
Notes:
 
(1)
The statutory results of Direct Line Group, which is classified as a discontinued operation.
(2)
Reallocation (Q4 2012 - £98 million loss; Q1 2012 - £1,009 million loss) to income from trading activities and (Q4 2012 - £122 million loss; Q1 2012 - £1,447 million loss) to other operating income.
(3)
Reallocation to income from trading activities.
 
 

 
 
Appendix 1 Income statement reconciliations and Segmental analysis (continued)
 
Segmental analysis
 
Analysis of divisional operating profit/(loss)
The following tables provide an analysis of divisional operating profit/(loss) by main income statement captions. The divisional income statements on pages 22 to 64 of the main announcement reflect certain presentational reallocations as described in the notes below. These do not affect the overall operating profit/(loss).
 
 
 
Net 
interest 
income 
Non- 
interest 
income 
Total 
income 
Operating 
expenses 
Insurance 
net claims 
Impairment 
losses 
Operating 
profit/(loss)
Quarter ended 31 March 2013
£m 
£m 
£m 
£m 
£m 
£m 
£m 
               
UK Retail
965 
226 
1,191 
(634)
- 
(80)
477 
UK Corporate 
706 
378 
1,084 
(541)
- 
(185)
358 
Wealth
169 
104 
273 
(212)
- 
(5)
56 
International Banking
197 
285 
482 
(333)
- 
(55)
94 
Ulster Bank
154 
54 
208 
(132)
- 
(240)
(164)
US Retail & Commercial
471 
292 
763 
(555)
- 
(19)
189 
Markets
30 
1,010 
1,040 
(746)
- 
(16)
278 
Direct Line Group (1)
49 
647 
696 
(162)
(445)
- 
89 
Central items
18 
2 
20 
(63)
- 
- 
(43)
               
Core
2,759 
2,998 
5,757 
(3,378)
(445)
(600)
1,334 
Non-Core (2)
(37)
130 
93 
(165)
- 
(433)
(505)
               
Managed basis
2,722 
3,128 
5,850 
(3,543)
(445)
(1,033)
829 
Reconciling items
              
Own credit adjustments (3)
- 
249 
249 
- 
- 
- 
249 
Interest Rate Hedging Products redress
  and related costs
- 
- 
- 
(50)
- 
- 
(50)
Integration and restructuring costs
- 
- 
- 
(131)
- 
- 
(131)
Loss on redemption of own debt
- 
(51)
(51)
- 
- 
- 
(51)
Amortisation of purchased intangible
  assets
- 
- 
- 
(41)
- 
- 
(41)
Strategic disposals
- 
66 
66 
- 
- 
- 
66 
RFS Holdings minority interest
(2)
101 
99 
1 
- 
- 
100 
               
Statutory basis including the results of
  Direct Line Group discontinued operations
2,720 
3,493 
6,213 
(3,764)
(445)
(1,033)
971 
Direct Line Group discontinued
  operations (4)
(50)
(711)
(761)
171 
445 
- 
(145)
               
Statutory basis
2,670 
2,782 
5,452 
(3,593)
- 
(1,033)
826 
 
Notes:
 
(1)
Total income includes £27 million of investment income, £25 million in net interest income and £2 million in non-interest income. Reallocation of £24 million between non-interest income and net interest income in respect of instalment income.
(2)
Reallocation of £9 million between net interest income and non-interest income in respect of funding costs of rental assets.
(3)
Comprises £99 million gain included in 'Income from trading activities' and £150 million gain included in 'Other operating income' on a statutory basis.
(4)
Included within Direct Line Group discontinued operations are the managed basis divisional results of Direct Line Group (DLG), certain DLG related activities in Central items, and related one-off and other items including integration and restructuring costs.


 
Appendix 1 Income statement reconciliations and Segmental analysis (continued)
 
Analysis of divisional operating profit/(loss) (continued)
 
 
 
Net 
interest 
income 
Non- 
interest 
income 
Total 
income 
Operating 
expenses 
Insurance 
net claims 
Impairment 
losses 
Operating 
profit/(loss)
Quarter ended 31 December 2012
£m 
£m 
£m 
£m 
£m 
£m 
£m 
               
UK Retail
1,011 
219 
1,230 
(624)
- 
(93)
513 
UK Corporate 
717 
456 
1,173 
(515)
- 
(234)
424 
Wealth
178 
107 
285 
(193)
- 
(16)
76 
International Banking
201 
283 
484 
(292)
- 
(37)
155 
Ulster Bank
161 
51 
212 
(137)
- 
(318)
(243)
US Retail & Commercial
465 
275 
740 
(517)
- 
(23)
200 
Markets (1)
49 
592 
641 
(480)
- 
(22)
139 
Direct Line Group (2)
67 
851 
918 
(199)
(606)
- 
113 
Central items
(60)
169 
109 
17 
- 
(8)
118 
               
Core
2,789 
3,003 
5,792 
(2,940)
(606)
(751)
1,495 
Non-Core (3)
53 
(85)
(32)
(207)
- 
(703)
(942)
               
Managed basis
2,842 
2,918 
5,760 
(3,147)
(606)
(1,454)
553 
Reconciling items
              
Own credit adjustments (4)
- 
(220)
(220)
- 
- 
- 
(220)
Payment Protection Insurance costs
- 
- 
- 
(450)
- 
- 
(450)
Interest Rate Hedging Products redress
  and related costs
- 
- 
- 
(700)
- 
- 
(700)
Regulatory fines
- 
- 
- 
(381)
- 
- 
(381)
Integration and restructuring costs
- 
- 
- 
(620)
- 
- 
(620)
Write-down of goodwill and other
  intangible assets
- 
- 
- 
(518)
- 
- 
(518)
Amortisation of purchased intangible
  assets
- 
- 
- 
(32)
- 
- 
(32)
Strategic disposals
- 
(16)
(16)
-
- 
- 
(16)
Bank levy
- 
- 
- 
(175)
- 
- 
(175)
RFS Holdings minority interest
(3)
- 
(3)
1 
- 
- 
(2)
               
Statutory basis including the results of
  Direct Line Group discontinued operations
2,839 
2,682 
5,521 
(6,022)
(606)
(1,454)
(2,561)
Direct Line Group discontinued
  operations (5)
(66)
(852)
(918)
646 
606 
- 
334 
               
Statutory basis
2,773 
1,830 
4,603 
(5,376)
- 
(1,454)
(2,227)
 
Notes:
 
(1)
Reallocation of £3 million between net interest income and non-interest income to record interest on financial assets and liabilities designated as at fair value through profit or loss.
(2)
Total income includes £32 million of investment income, £35 million in net interest income and £(3) million in non-interest income. Reallocation of £32 million between non-interest income and net interest income in respect of instalment income.
(3)
Reallocation of £6 million between net interest income and non-interest income in respect of funding costs of rental assets, £12 million, offset by £6 million to record interest on financial assets and liabilities designated as at fair value through profit or loss.
(4)
Comprises £98 million loss included in 'Income from trading activities' and £122 million loss included in 'Other operating income' on a statutory basis.
(5)
Included within Direct Line Group discontinued operations are the managed basis divisional results of Direct Line Group (DLG), certain DLG related activities in Central items; and related one-off and other items including write-down of goodwill, integration and restructuring costs and strategic disposals.


 
Appendix 1 Income statement reconciliations and Segmental analysis (continued)
 
Analysis of divisional operating profit/(loss) (continued)
 
 
 
Net 
interest 
income 
Non- 
interest 
income 
Total 
income 
Operating 
expenses 
Insurance 
net claims 
Impairment 
losses 
Operating 
profit/(loss)
Quarter ended 31 March 2012
£m 
£m 
£m 
£m 
£m 
£m 
£m 
               
UK Retail
1,001 
266 
1,267 
(635)
- 
(155)
477 
UK Corporate 
756 
445 
1,201 
(533)
- 
(176)
492 
Wealth
179 
111 
290 
(237)
- 
(10)
43 
International Banking (1)
251 
291 
542 
(410)
- 
(35)
97 
Ulster Bank
165 
49 
214 
(130)
- 
(394)
(310)
US Retail & Commercial
491 
265 
756 
(635)
- 
(19)
102 
Markets (2)
16 
1,718 
1,734 
(908)
- 
(2)
824 
Direct Line Group (3)
84 
882 
966 
(233)
(649)
- 
84 
Central items
- 
(108)
(108)
(28)
- 
(34)
(170)
               
Core
2,943 
3,919 
6,862 
(3,749)
(649)
(825)
1,639 
Non-Core (4)
64 
205 
269 
(263)
- 
(489)
(483)
               
Managed basis
3,007 
4,124 
7,131 
(4,012)
(649)
(1,314)
1,156 
Reconciling items
              
Own credit adjustments (5)
- 
(2,456)
(2,456)
- 
- 
- 
(2,456)
Payment Protection Insurance costs
- 
- 
- 
(125)
- 
- 
(125)
Integration and restructuring costs
- 
- 
- 
(460)
- 
- 
(460)
Gain on redemption of own debt
- 
577 
577 
- 
- 
- 
577 
Asset Protection Scheme (6)
- 
(43)
(43)
- 
- 
- 
(43)
Amortisation of purchased intangible assets
- 
- 
- 
(48)
- 
- 
(48)
Strategic disposals
- 
(8)
(8)
- 
- 
- 
(8)
RFS Holdings minority interest
(8)
(17)
(25)
- 
- 
- 
(25)
               
Statutory basis including the results of
  Direct Line Group discontinued operations
2,999 
2,177 
5,176 
(4,645)
(649)
(1,314)
(1,432)
Direct Line Group discontinued
  operations (7)
(84)
(882)
(966)
235 
649 
- 
(82)
               
Statutory basis
2,915 
1,295 
4,210 
(4,410)
- 
(1,314)
(1,514)
 
Notes:
 
(1)
Reallocation of £9 million between net interest income and non-interest income in respect of funding costs of rental assets.
(2)
Reallocation of £8 million between net interest income and non-interest income to record interest on financial assets and liabilities designated as at fair value through profit or loss.
(3)
Total income includes £90 million of investment income, £53 million in net interest income and £37 million in non-interest income. Reallocation of £31 million between non-interest income and net interest income in respect of instalment income.
(4)
Reallocation of £51 million between net interest income and non-interest income in respect of funding costs of rental assets.
(5)
Comprises £1,009 million loss included in 'Income from trading activities' and £1,447 million loss included in 'Other operating income' on a statutory basis.
(6)
Included in 'Income from trading activities' on a statutory basis.
(7)
Included within Direct Line Group discontinued operations are the managed basis divisional results of Direct Line Group (DLG), certain DLG related activities in Central items; and related one-off and other items including integration and restructuring costs and strategic disposals.
 
 
 
 
 
 
 
 
 
Appendix 2
 
Analysis of balance sheet
pre and post disposal groups
 
 

Appendix 2 Analysis of balance sheet pre and post disposal groups
 
In accordance with IFRS 5 assets and liabilities of disposal groups are presented as a single line on the face of the balance sheet. As allowed by IFRS, disposal groups are included within risk measures.
 
 
 
31 March 2013
  
31 December 2012
 
Balance 
sheet 
Disposal 
groups (1)
Gross of 
disposal 
groups 
  
Balance 
sheet 
Disposal 
groups (2)
Gross of 
disposal 
groups 
 
£m 
£m 
£m 
  
£m 
£m 
£m 
               
Assets
              
Cash and balances at central banks
86,718 
16 
86,734 
  
79,290 
18 
79,308 
Net loans and advances to banks
34,025 
105 
34,130 
  
29,168 
2,112 
31,280 
Reverse repurchase agreements and stock borrowing
43,678 
- 
43,678 
  
34,783 
- 
34,783 
Loans and advances to banks
77,703 
105 
77,808 
  
63,951 
2,112 
66,063 
Net loans and advances to customers
432,360 
1,058 
433,418 
  
430,088 
1,863 
431,951 
Reverse repurchase agreements and stock borrowing
59,427 
- 
59,427 
  
70,047 
- 
70,047 
Loans and advances to customers
491,787 
1,058 
492,845 
  
500,135 
1,863 
501,998 
Debt securities
153,248 
33 
153,281 
  
157,438 
7,186 
164,624 
Equity shares
11,861 
6 
11,867 
  
15,232 
5 
15,237 
Settlement balances
15,805 
- 
15,805 
  
5,741 
- 
5,741 
Derivatives
432,435 
2 
432,437 
  
441,903 
15 
441,918 
Intangible assets
13,928 
- 
13,928 
  
13,545 
750 
14,295 
Property, plant and equipment
9,482 
121 
9,603 
  
9,784 
223 
10,007 
Deferred tax
3,280 
- 
3,280 
  
3,443 
- 
3,443 
Other financial assets
- 
- 
- 
  
- 
924 
924 
Prepayments, accrued income and other assets
10,200 
221 
10,421 
  
7,820 
742 
8,562 
Assets of disposal groups (3)
1,726 
(1,562)
164 
  
14,013 
(13,838)
175 
               
Total assets
1,308,173 
- 
1,308,173 
  
1,312,295 
- 
1,312,295 
 
For the notes to this table refer to page 3.

 
Appendix 2 Analysis of balance sheet pre and post disposal groups (continued)
 
 
 
31 March 2013
  
31 December 2012
 
Balance 
sheet 
Disposal 
groups (1)
Gross of 
disposal 
groups 
  
Balance 
sheet 
Disposal 
groups (2)
Gross of 
disposal 
groups 
 
£m 
£m 
£m 
  
£m 
£m 
£m 
               
Liabilities
              
Bank deposits
54,536 
- 
54,536 
  
57,073 
1 
57,074 
Repurchase agreements and stock lending
39,575 
- 
39,575 
  
44,332 
- 
44,332 
Deposits by banks
94,111 
- 
94,111 
  
101,405 
1 
101,406 
Customer deposits
437,437 
800 
438,237 
  
433,239 
753 
433,992 
Repurchase agreements and stock lending
88,658 
- 
88,658 
  
88,040 
- 
88,040 
Customer accounts
526,095 
800 
526,895 
  
521,279 
753 
522,032 
Debt securities in issue
92,740 
- 
92,740 
  
94,592 
- 
94,592 
Settlement balances
14,640 
- 
14,640 
  
5,878 
- 
5,878 
Short positions
30,610 
- 
30,610 
  
27,591 
- 
27,591 
Derivatives
429,881 
2 
429,883 
  
434,333 
7 
434,340 
Accruals, deferred income and other liabilities
15,630 
158 
15,788 
  
14,801 
2,679 
17,480 
Retirement benefit liabilities
3,533 
- 
3,533 
  
3,884 
- 
3,884 
Deferred tax
1,019 
- 
1,019 
  
1,141 
- 
1,141 
Insurance liabilities
- 
- 
- 
  
- 
6,193 
6,193 
Subordinated liabilities
27,788 
- 
27,788 
  
26,773 
529 
27,302 
Liabilities of disposal groups (3)
961 
(960)
1 
  
10,170 
(10,162)
8 
               
Total liabilities
1,237,008 
- 
1,237,008 
  
1,241,847 
- 
1,241,847 
 
For the notes to this table refer to page 3.

 
Appendix 2 Analysis of balance sheet pre and post disposal groups (continued)
 
 
 
31 March 2013
  
31 December 2012
 
Balance 
sheet 
Disposal 
groups (1)
Gross of 
disposal 
groups 
  
Balance 
sheet 
Disposal 
groups (2)
Gross of 
disposal 
groups 
 
£m 
£m 
£m 
  
£m 
£m 
£m 
               
Selected financial data
              
Gross loans and advances to customers
453,735 
1,070 
454,805 
  
451,224 
1,875 
453,099 
Customer loan impairment provisions
(21,375)
(12)
(21,387)
  
(21,136)
(12)
(21,148)
Net loans and advances to customers
432,360 
1,058 
433,418 
  
430,088 
1,863 
431,951 
               
Gross loans and advances to banks
34,144 
105 
34,249 
  
29,282 
2,112 
31,394 
Bank loan impairment provisions
(119)
- 
(119)
  
(114)
- 
(114)
Net loans and advances to banks
34,025 
105 
34,130 
  
29,168 
2,112 
31,280 
               
Total loan impairment provisions
(21,494)
(12)
(21,506)
  
(21,250)
(12)
(21,262)
               
Customer REIL
40,890 
13 
40,903 
  
40,993 
13 
41,006 
Bank REIL
139 
- 
139 
  
134 
- 
134 
Total REIL
41,029 
13 
41,042 
  
41,127 
13 
41,140 
               
Gross unrealised gains on debt securities
3,640 
- 
3,640 
  
3,946 
230 
4,176 
Gross unrealised losses on debt securities
(1,523)
- 
(1,523)
  
(1,832)
(15)
(1,847)
 
Notes:
 
(1)
Disposal groups at 31 March 2013 primarily comprise a number of RBS NV businesses.
(2)
Disposal groups at 31 December 2012 primarily comprised Direct Line Group (DLG). To comply with EC state aid requirements, the Group agreed to cede control of DLG by the end of 2013 and divest completely by the end of 2014. Following the successful initial public offering in Q4 2012, in which the Group sold 34.7% of its shareholding, DLG was classified as a disposal group and discontinued operation on 31 December 2012. On 13 March 2013, the Group sold a further 16.8% of the share capital of DLG and now holds 48.5% of the issued ordinary share capital in DLG. Consequently, the minority share of DLG still held by the Group is recognised as an associated undertaking and no longer as either a disposal group or discontinued operation at 31 March 2013. The Group recognised a gain on disposal of £72 million in Q1 2013. This gain is recorded in other income within discontinued operations. On initial classification as held-for-sale, disposal groups are required to be measured at the lower of carrying amount and fair value less costs to sell. Accordingly, at 31 December 2012, DLG's carrying amount exceeded its fair value less costs to sell (based on the quoted price for DLG shares on 31 December 2012) by £394 million and goodwill attributable to DLG was written down by this amount. The write down was recorded in other expenses within discontinued operations in Q4 2012.
(3)
Residual assets and liabilities of disposal groups relate to businesses acquired as part of the ABN AMRO acquisition in 2007 with a view to disposal rather than use.
 
 
 
 
 
 
 
Appendix 3
 
Risk management supplement
 
 
 

 

Appendix 3 Risk management supplement
 
 
 
Page 
   
Credit risk
2 
Loans and related credit metrics
2 
  Loans, REIL, provisions and impairments
2 
  Sector and geographical regional analyses
2 
  REIL flow statement
8 
  Impairment provisions flow statement
9 
  Impairment charge analysis
11 
Wholesale renegotiations
13 
Retail forbearance
14 
Key loan portfolios
15 
  Commercial real estate
15 
  Ulster Bank Group (Core and Non-Core)
17 
Debt securities: AFS reserves by issuer
19 
Country risk
20 
  Overview
20 
  Eurozone periphery by country
22 
  - Ireland
22 
  - Spain
23 
  - Italy
24 
  - Portugal
25 
  - Greece
26 
  - Cyprus
27 
 

 
Appendix 3 Risk management supplement (continued)
 
Credit risk
 
Loans and related credit metrics: Loans, REIL, provisions and impairments 
Sector and geographical regional analyses - Group
The tables below analyse gross loans and advances to banks and customers (excluding reverse repos) and related credit metrics by sector and geography (by location of lending office) for the Group, Core and Non-Core.
 
       
Credit metrics
    
31 March 2013
Gross 
loans 
£m 
REIL 
£m 
Provisions 
£m 
REIL as a 
% of 
gross loans 
% 
Provisions 
as a % 
of REIL 
% 
Provisions 
as a % of 
gross loans 
% 
Impairment 
charge 
£m 
Amounts 
written-off 
£m 
                 
Government (1)
10,272 
- 
- 
- 
- 
- 
- 
- 
Finance
42,726 
651 
354 
1.5 
54 
0.8 
30 
- 
Personal
- mortgages
151,281 
6,871 
1,973 
4.5 
29 
1.3 
176 
76 
 
- unsecured
30,884 
2,876 
2,370 
9.3 
82 
7.7 
138 
198 
Property
70,537 
20,598 
9,936 
29.2 
48 
14.1 
384 
464 
Construction
8,368 
1,437 
711 
17.2 
49 
8.5 
95 
37 
Manufacturing
24,115 
749 
374 
3.1 
50 
1.6 
30 
13 
Finance leases (2)
13,990 
320 
219 
2.3 
68 
1.6 
(2)
68 
Retail, wholesale and repairs
22,225 
1,147 
642 
5.2 
56 
2.9 
28 
40 
Transport and storage
18,671 
934 
230 
5.0 
25 
1.2 
24 
145 
Health, education and leisure
17,045 
1,232 
567 
7.2 
46 
3.3 
41 
13 
Hotels and restaurants
8,562 
1,667 
740 
19.5 
44 
8.6 
30 
29 
Utilities
6,464 
253 
98 
3.9 
39 
1.5 
42 
- 
Other
29,665 
2,168 
1,216 
7.3 
56 
4.1 
71 
73 
Latent
- 
- 
1,957 
- 
- 
- 
(51)
- 
                 
 
454,805 
40,903 
21,387 
9.0 
52 
4.7 
1,036 
1,156 
                 
of which:
                
UK
                
  - residential mortgages
110,212 
2,374 
458 
2.2 
19 
0.4 
16 
5 
  - personal lending
18,770 
2,414 
2,103 
12.9 
87 
11.2 
94 
145 
  - property
51,745 
9,519 
3,932 
18.4 
41 
7.6 
178 
442 
  - construction
6,532 
1,070 
511 
16.4 
48 
7.8 
61 
37 
  - other
123,766 
3,648 
2,521 
2.9 
69 
2.0 
82 
135 
Europe
                
  - residential mortgages
18,362 
3,372 
1,300 
18.4 
39 
7.1 
116 
3 
  - personal lending
1,614 
232 
213 
14.4 
92 
13.2 
9 
11 
  - property
14,584 
10,741 
5,851 
73.6 
54 
40.1 
213 
18 
  - construction
1,411 
320 
170 
22.7 
53 
12.0 
11 
- 
  - other
26,621 
4,742 
3,046 
17.8 
64 
11.4 
166 
235 
US
                
  - residential mortgages
22,387 
1,098 
207 
4.9 
19 
0.9 
44 
68 
  - personal lending
9,358 
230 
54 
2.5 
23 
0.6 
35 
41 
  - property
3,832 
153 
30 
4.0 
20 
0.8 
(7)
4 
  - construction
385 
41 
25 
10.6 
61 
6.5 
23 
- 
  - other
30,415 
433 
660 
1.4 
152 
2.2 
2 
10 
RoW
                
  - residential mortgages
320 
27 
8 
8.4 
30 
2.5 
- 
- 
  - personal lending
1,142 
- 
- 
- 
- 
- 
- 
1 
  - property
376 
185 
123 
49.2 
66 
32.7 
- 
- 
  - construction
40 
6 
5 
15.0 
83 
12.5 
- 
- 
  - other
12,933 
298 
170 
2.3 
57 
1.3 
(7)
1 
                 
 
454,805 
40,903 
21,387 
9.0 
52 
4.7 
1,036 
1,156 
                 
Banks
34,249 
139 
119 
0.4 
86 
0.3 
- 
- 
 
For the notes to this table refer to page 7


Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
Sector and geographical regional analyses - Group (continued)
 
 
       
Credit metrics
    
31 December 2012
Gross 
loans 
£m 
REIL 
£m 
Provisions 
£m 
REIL as a 
% of 
gross loans 
% 
Provisions 
as a % 
of REIL 
% 
Provisions 
as a % of 
gross loans 
% 
Impairment 
charge 
£m 
Amounts 
written-off 
£m 
                 
Government (1)
9,853 
- 
- 
- 
- 
- 
- 
- 
Finance
42,198 
592 
317 
1.4 
54 
0.8 
64 
175 
Personal
- mortgages
149,625 
6,549 
1,824 
4.4 
28 
1.2 
163 
91 
 
- unsecured
32,212 
2,903 
2,409 
9.0 
83 
7.5 
168 
199 
Property
72,219 
21,223 
9,859 
29.4 
46 
13.7 
624 
237 
Construction
8,049 
1,483 
640 
18.4 
43 
8.0 
- 
30 
Manufacturing
23,787 
755 
357 
3.2 
47 
1.5 
54 
67 
Finance leases (2)
13,609 
442 
294 
3.2 
67 
2.2 
- 
116 
Retail, wholesale and repairs
21,936 
1,143 
644 
5.2 
56 
2.9 
70 
100 
Transport and storage
18,341 
834 
336 
4.5 
40 
1.8 
89 
65 
Health, education and leisure
16,705 
1,190 
521 
7.1 
44 
3.1 
21 
32 
Hotels and restaurants
7,877 
1,597 
726 
20.3 
45 
9.2 
33 
54 
Utilities
6,631 
118 
21 
1.8 
18 
0.3 
- 
- 
Other
30,057 
2,177 
1,240 
7.2 
57 
4.1 
37 
251 
Latent
- 
- 
1,960 
- 
- 
- 
80 
- 
                 
 
453,099 
41,006 
21,148 
9.1 
52 
4.7 
1,403 
1,417 
                 
of which:
                
UK
                
  - residential mortgages
109,530 
2,440 
457 
2.2 
19 
0.4 
31 
10 
  - personal lending
20,498 
2,477 
2,152 
12.1 
87 
10.5 
89 
121 
  - property
53,730 
10,521 
3,944 
19.6 
37 
7.3 
356 
120 
  - construction
6,507 
1,165 
483 
17.9 
41 
7.4 
(17)
19 
  - other
122,029 
3,729 
2,611 
3.1 
70 
2.1 
291 
453 
Europe
                
  - residential mortgages
17,836 
3,092 
1,151 
17.3 
37 
6.5 
103 
42 
  - personal lending
1,905 
226 
208 
11.9 
92 
10.9 
9 
- 
  - property
14,634 
10,347 
5,766 
70.7 
56 
39.4 
273 
61 
  - construction
1,132 
289 
146 
25.5 
51 
12.9 
18 
10 
  - other
27,424 
4,451 
2,996 
16.2 
67 
10.9 
186 
208 
US
                
  - residential mortgages
21,929 
990 
208 
4.5 
21 
0.9 
27 
39 
  - personal lending
8,748 
199 
48 
2.3 
24 
0.5 
67 
76 
  - property
3,343 
170 
29 
5.1 
17 
0.9 
(3)
28 
  - construction
388 
8 
1 
2.1 
13 
0.3 
(1)
1 
  - other
29,354 
352 
630 
1.2 
179 
2.1 
(15)
26 
RoW
                
  - residential mortgages
330 
27 
8 
8.2 
30 
2.4 
2 
- 
  - personal lending
1,061 
1 
1 
0.1 
100 
0.1 
3 
2 
  - property
512 
185 
120 
36.1 
65 
23.4 
(2)
28 
  - construction
22 
21 
10 
95.5 
48 
45.5 
- 
- 
  - other
12,187 
316 
179 
2.6 
57 
1.5 
(14)
173 
                 
 
453,099 
41,006 
21,148 
9.1 
52 
4.7 
1,403 
1,417 
                 
Banks
31,394 
134 
114 
0.4 
85 
0.4 
(1)
4 
 
For notes to this table refer to page 7.


 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
Sector and geographical regional analyses - Core
 
 
       
Credit metrics
    
31 March 2013
Gross 
loans 
£m 
REIL 
£m 
Provisions 
£m 
REIL as a 
% of 
gross loans 
% 
Provisions 
as a % 
of REIL 
% 
Provisions 
as a % of 
gross loans 
% 
Impairment 
charge 
£m 
Amounts 
written-off 
£m 
                 
Government (1)
8,855 
- 
- 
- 
- 
- 
- 
- 
Finance
40,827 
205 
165 
0.5 
80 
0.4 
17 
- 
Personal
- mortgages
148,436 
6,549 
1,839 
4.4 
28 
1.2 
152 
40 
 
- unsecured
29,910 
2,670 
2,262 
8.9 
85 
7.6 
124 
182 
Property
43,457 
4,545 
1,650 
10.5 
36 
3.8 
89 
142 
Construction
6,322 
760 
406 
12.0 
53 
6.4 
72 
16 
Manufacturing
22,726 
498 
225 
2.2 
45 
1.0 
22 
11 
Finance leases (2)
9,542 
131 
89 
1.4 
68 
0.9 
(1)
7 
Retail, wholesale and repairs
21,280 
777 
433 
3.7 
56 
2.0 
27 
37 
Transport and storage
14,800 
545 
87 
3.7 
16 
0.6 
7 
38 
Health, education and leisure
16,187 
779 
334 
4.8 
43 
2.1 
42 
10 
Hotels and restaurants
7,623 
1,113 
480 
14.6 
43 
6.3 
22 
22 
Utilities
5,040 
143 
47 
2.8 
33 
0.9 
42 
- 
Other
26,877 
1,433 
840 
5.3 
59 
3.1 
48 
24 
Latent
- 
- 
1,291 
- 
- 
- 
(64)
- 
                 
 
401,882 
20,148 
10,148 
5.0 
50 
2.5 
599 
529 
                 
of which:
                
UK
                
  - residential mortgages
110,212 
2,374 
458 
2.2 
19 
0.4 
16 
5 
  - personal lending
18,724 
2,385 
2,081 
12.7 
87 
11.1 
91 
144 
  - property
34,980 
2,659 
814 
7.6 
31 
2.3 
60 
140 
  - construction
5,153 
652 
333 
12.7 
51 
6.5 
45 
17 
  - other
111,929 
2,634 
1,673 
2.4 
64 
1.5 
76 
101 
Europe
                
  - residential mortgages
17,976 
3,339 
1,272 
18.6 
38 
7.1 
116 
3 
  - personal lending
1,246 
146 
141 
11.7 
97 
11.3 
7 
9 
  - property
4,850 
1,655 
742 
34.1 
45 
15.3 
37 
- 
  - construction
747 
63 
43 
8.4 
68 
5.8 
3 
- 
  - other
21,882 
2,596 
1,823 
11.9 
70 
8.3 
89 
41 
US
                
  - residential mortgages
19,928 
809 
101 
4.1 
12 
0.5 
20 
32 
  - personal lending
8,804 
139 
40 
1.6 
29 
0.5 
26 
29 
  - property
3,406 
92 
12 
2.7 
13 
0.4 
(8)
2 
  - construction
382 
39 
25 
10.2 
64 
6.5 
24 
- 
  - other
29,298 
336 
446 
1.1 
133 
1.5 
(3)
6 
RoW
                
  - residential mortgages
320 
27 
8 
8.4 
30 
2.5 
- 
- 
  - personal lending
1,136 
- 
- 
0.0 
- 
- 
- 
- 
  - property
221 
139 
82 
62.9 
59 
37.1 
- 
- 
  - construction
40 
6 
5 
15.0 
83 
12.5 
- 
(1)
  - other
10,648 
58 
49 
0.5 
84 
0.5 
- 
1 
                 
 
401,882 
20,148 
10,148 
5.0 
50 
2.5 
599 
529 
                 
Banks
33,855 
138 
118 
0.4 
86 
0.3 
- 
- 
 
For the notes to this table refer to page 7.


Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
Sector and geographical regional analyses - Core (continued)
 
 
       
Credit metrics
    
31 December 2012
Gross 
loans 
£m 
REIL 
£m 
Provisions 
£m 
REIL as a 
% of 
gross loans 
% 
Provisions 
as a % 
of REIL 
% 
Provisions 
as a % of 
gross loans 
% 
Impairment 
charge 
£m 
Amounts 
written-off 
£m 
                 
Government (1)
8,485 
- 
- 
- 
- 
- 
- 
- 
Finance
39,658 
185 
149 
0.5 
81 
0.4 
36 
153 
Personal
- mortgages
146,770 
6,229 
1,691 
4.2 
27 
1.2 
149 
43 
 
- unsecured
31,247 
2,717 
2,306 
8.7 
85 
7.4 
137 
174 
Property
43,602 
4,672 
1,674 
10.7 
36 
3.8 
226 
44 
Construction
6,020 
757 
350 
12.6 
46 
5.8 
21 
18 
Manufacturing
22,234 
496 
225 
2.2 
45 
1.0 
50 
35 
Finance leases (2)
9,201 
159 
107 
1.7 
67 
1.2 
8 
8 
Retail, wholesale and repairs
20,842 
791 
439 
3.8 
55 
2.1 
51 
68 
Transport and storage
14,590 
440 
112 
3.0 
25 
0.8 
45 
13 
Health, education and leisure
15,770 
761 
299 
4.8 
39 
1.9 
20 
14 
Hotels and restaurants
6,891 
1,042 
473 
15.1 
45 
6.9 
40 
32 
Utilities
5,131 
10 
5 
0.2 
50 
0.1 
- 
- 
Other
26,315 
1,374 
794 
5.2 
58 
3.0 
(4)
82 
Latent
- 
- 
1,325 
- 
- 
- 
(49)
- 
                 
 
396,756 
19,633 
9,949 
4.9 
51 
2.5 
730 
684 
                 
of which:
                
UK
                
  - residential mortgages
109,511 
2,440 
457 
2.2 
19 
0.4 
31 
10 
  - personal lending
20,443 
2,454 
2,133 
12.0 
87 
10.4 
89 
121 
  - property
35,532 
2,777 
896 
7.8 
32 
2.5 
72 
34 
  - construction
5,101 
671 
301 
13.2 
45 
5.9 
23 
9 
  - other
108,713 
2,662 
1,737 
2.4 
65 
1.6 
208 
149 
Europe
                
  - residential mortgages
17,446 
3,060 
1,124 
17.5 
37 
6.4 
104 
17 
  - personal lending
1,540 
143 
138 
9.3 
97 
9.0 
6 
(1)
  - property
4,896 
1,652 
685 
33.7 
41 
14.0 
157 
5 
  - construction
513 
60 
39 
11.7 
65 
7.6 
(2)
9 
  - other
22,218 
2,280 
1,711 
10.3 
75 
7.7 
16 
86 
US
                
  - residential mortgages
19,483 
702 
102 
3.6 
15 
0.5 
12 
16 
  - personal lending
8,209 
119 
34 
1.4 
29 
0.4 
42 
53 
  - property
2,847 
112 
13 
3.9 
12 
0.5 
(3)
5 
  - construction
384 
5 
- 
1.3 
- 
- 
- 
- 
  - other
28,267 
252 
432 
0.9 
171 
1.5 
(19)
20 
RoW
                
  - residential mortgages
330 
27 
8 
8.2 
30 
2.4 
2 
- 
  - personal lending
1,055 
1 
1 
0.1 
100 
0.1 
- 
1 
  - property
327 
131 
80 
40.1 
61 
24.5 
- 
- 
  - construction
22 
21 
10 
95.5 
48 
45.5 
- 
- 
  - other
9,919 
64 
48 
0.6 
75 
0.5 
(8)
150 
                 
 
396,756 
19,633 
9,949 
4.9 
51 
2.5 
730 
684 
                 
Banks
30,917 
133 
113 
0.4 
85 
0.4 
(1)
4 
 
For the notes to this table refer to page 7.


 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
Sector and geographical regional analyses - Non-Core
 
 
       
Credit metrics
    
31 March 2013
Gross 
loans 
£m 
REIL 
£m 
Provisions 
£m 
REIL as a 
% of 
gross loans 
% 
Provisions 
as a % 
of REIL 
% 
Provisions 
as a % of 
gross loans 
% 
Impairment 
charge 
£m 
 
Amounts 
written-off 
£m 
                 
Government (1)
1,417 
- 
- 
- 
- 
- 
- 
- 
Finance
1,899 
446 
189 
23.5 
42 
10.0 
13 
- 
Personal
- mortgages
2,845 
322 
134 
11.3 
42 
4.7 
24 
36 
 
- unsecured
974 
206 
108 
21.1 
52 
11.1 
14 
16 
Property
27,080 
16,053 
8,286 
59.3 
52 
30.6 
295 
322 
Construction
2,046 
677 
305 
33.1 
45 
14.9 
23 
21 
Manufacturing
1,389 
251 
149 
18.1 
59 
10.7 
8 
2 
Finance leases (2)
4,448 
189 
130 
4.2 
69 
2.9 
(1)
61 
Retail, wholesale and repairs
945 
370 
209 
39.2 
56 
22.1 
1 
3 
Transport and storage
3,871 
389 
143 
10.0 
37 
3.7 
17 
107 
Health, education and leisure
858 
453 
233 
52.8 
51 
27.2 
(1)
3 
Hotels and restaurants
939 
554 
260 
59.0 
47 
27.7 
8 
7 
Utilities
1,424 
110 
51 
7.7 
46 
3.6 
- 
- 
Other
2,788 
735 
376 
26.4 
51 
13.5 
23 
49 
Latent
- 
- 
666 
- 
- 
- 
13 
- 
                 
 
52,923 
20,755 
11,239 
39.2 
54 
21.2 
437 
627 
                 
of which:
                
UK
                
  - personal lending
46 
29 
22 
63.0 
76 
47.8 
3 
1 
  - property
16,765 
6,860 
3,118 
40.9 
45 
18.6 
118 
302 
  - construction
1,379 
418 
178 
30.3 
43 
12.9 
16 
20 
  - other
11,837 
1,014 
848 
8.6 
84 
7.2 
6 
34 
Europe
                
  - residential mortgages
386 
33 
28 
8.5 
85 
7.3 
- 
- 
  - personal lending
368 
86 
72 
23.4 
84 
19.6 
2 
2 
  - property
9,734 
9,086 
5,109 
93.3 
56 
52.5 
176 
18 
  - construction
664 
257 
127 
38.7 
49 
19.1 
8 
- 
  - other
4,739 
2,146 
1,223 
45.3 
57 
25.8 
77 
194 
US
                
  - residential mortgages
2,459 
289 
106 
11.8 
37 
4.3 
24 
36 
  - personal lending
554 
91 
14 
16.4 
15 
2.5 
9 
12 
  - property
426 
61 
18 
14.3 
30 
4.2 
1 
2 
  - construction
3 
2 
- 
66.7 
- 
- 
(1)
- 
  - other
1,117 
97 
214 
8.7 
221 
19.2 
5 
4 
RoW
                
  - personal lending
6 
- 
- 
- 
- 
- 
- 
1 
  - property
155 
46 
41 
29.7 
89 
26.5 
- 
- 
  - construction
- 
- 
- 
- 
- 
- 
- 
1 
  - other
2,285 
240 
121 
10.5 
50 
5.3 
(7)
- 
                 
 
52,923 
20,755 
11,239 
39.2 
54 
21.2 
437 
627 
                 
Banks
394 
1 
1 
0.3 
100 
0.3 
- 
- 
 
For the notes to this table refer to page 7.

 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
Sector and geographical regional analyses - Non-Core (continued)
 
 
       
Credit metrics
    
31 December 2012
Gross 
loans 
£m 
REIL 
£m 
Provisions 
£m 
REIL as a 
% of 
gross loans 
% 
Provisions 
as a % 
of REIL 
% 
Provisions 
as a % of 
gross loans 
% 
Impairment 
charge 
£m 
Amounts 
written-off 
£m 
                 
Government (1)
1,368 
- 
- 
- 
- 
- 
- 
- 
Finance
2,540 
407 
168 
16.0 
41 
6.6 
28 
22 
Personal
- mortgages
2,855 
320 
133 
11.2 
42 
4.7 
14 
48 
 
- unsecured
965 
186 
103 
19.3 
55 
10.7 
31 
25 
Property
28,617 
16,551 
8,185 
57.8 
49 
28.6 
398 
193 
Construction
2,029 
726 
290 
35.8 
40 
14.3 
(21)
12 
Manufacturing
1,553 
259 
132 
16.7 
51 
8.5 
4 
32 
Finance leases (2)
4,408 
283 
187 
6.4 
66 
4.2 
(8)
108 
Retail, wholesale and repairs
1,094 
352 
205 
32.2 
58 
18.7 
19 
32 
Transport and storage
3,751 
394 
224 
10.5 
57 
6.0 
44 
52 
Health, education and leisure
935 
429 
222 
45.9 
52 
23.7 
1 
18 
Hotels and restaurants
986 
555 
253 
56.3 
46 
25.7 
(7)
22 
Utilities
1,500 
108 
16 
7.2 
15 
1.1 
- 
- 
Other
3,742 
803 
446 
21.5 
56 
11.9 
41 
169 
Latent
- 
- 
635 
- 
- 
- 
129 
- 
                 
 
56,343 
21,373 
11,199 
37.9 
52 
19.9 
673 
733 
                 
of which:
                
UK
                
  - residential mortgages
19 
- 
- 
- 
- 
- 
- 
- 
  - personal lending
55 
23 
19 
41.8 
83 
34.5 
- 
- 
  - property
18,198 
7,744 
3,048 
42.6 
39 
16.7 
284 
86 
  - construction
1,406 
494 
182 
35.1 
37 
12.9 
(40)
10 
  - other
13,316 
1,067 
874 
8.0 
82 
6.6 
83 
304 
Europe
                
  - residential mortgages
390 
32 
27 
8.2 
84 
6.9 
(1)
25 
  - personal lending
365 
83 
70 
22.7 
84 
19.2 
3 
1 
  - property
9,738 
8,695 
5,081 
89.3 
58 
52.2 
116 
56 
  - construction
619 
229 
107 
37.0 
47 
17.3 
20 
1 
  - other
5,206 
2,171 
1,285 
41.7 
59 
24.7 
170 
122 
US
                
  - residential mortgages
2,446 
288 
106 
11.8 
37 
4.3 
15 
23 
  - personal lending
539 
80 
14 
14.8 
18 
2.6 
25 
23 
  - property
496 
58 
16 
11.7 
28 
3.2 
- 
23 
  - construction
4 
3 
1 
75.0 
33 
25.0 
(1)
1 
  - other
1,087 
100 
198 
9.2 
198 
18.2 
4 
6 
RoW
                
  - personal lending
6 
- 
- 
- 
- 
- 
3 
1 
  - property
185 
54 
40 
29.2 
74 
21.6 
(2)
28 
  - other
2,268 
252 
131 
11.1 
52 
5.8 
(6)
23 
                 
 
56,343 
21,373 
11,199 
37.9 
52 
19.9 
673 
733 
                 
Banks
477 
1 
1 
0.2 
100 
0.2 
- 
- 
 
Notes:
 
(1)
Includes central and local government.
(2)
Includes instalment credit.
 
 

 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
REIL flow statement
REIL are stated without giving effect to any security held that could reduce the eventual loss should it occur or to any provisions marked.
 
 
 
UK 
Retail 
UK 
Corporate 
Wealth 
International 
Banking 
Ulster 
Bank 
US Retail & 
Commercial 
Markets 
Other 
Core 
Non- 
Core 
Total 
 
£m 
£m 
£m 
£m 
£m 
£m 
£m 
£m 
£m 
£m 
£m 
                       
At 1 January 2013
4,569 
5,452 
248 
422 
7,533 
1,146 
396 
- 
19,766 
21,374 
41,140 
Currency translation
- 
5 
3 
24 
254 
76 
14 
- 
376 
528 
904 
Additions
267 
935 
50 
179 
518 
139 
8 
1 
2,097 
939 
3,036 
Transfers (1)
(44)
26 
- 
107 
- 
- 
- 
- 
89 
31 
120 
Transfers to performing book
- 
(40)
(1)
- 
- 
- 
- 
- 
(41)
(33)
(74)
Repayments
(222)
(821)
(40)
(28)
(326)
(29)
(6)
- 
(1,472)
(1,456)
(2,928)
Amounts written-off
(142)
(228)
(1)
(62)
(27)
(69)
- 
- 
(529)
(627)
(1,156)
                       
At 31 March 2013
4,428 
5,329 
259 
642 
7,952 
1,263 
412 
1 
20,286 
20,756 
41,042 
 
 
 
Non-Core (by donating division)
 
UK 
Corporate 
International 
Banking 
Ulster 
Bank 
US Retail & 
Commercial 
Other 
Total 
 
£m 
£m 
£m 
£m 
£m 
£m 
             
At 1 January 2013
2,622 
6,907 
11,399 
418 
28 
21,374 
Currency translation
3 
162 
336 
27 
- 
528 
Additions
416 
115 
362 
45 
1 
939 
Transfers (1)
31 
- 
- 
- 
- 
31 
Transfers to performing book
(31)
- 
(2)
- 
- 
(33)
Repayments
(451)
(782)
(212)
(10)
(1)
(1,456)
Amounts written-off
(137)
(375)
(62)
(51)
(2)
(627)
             
At 31 March 2013
2,453 
6,027 
11,821 
429 
26 
20,756 
 
Note:
 
(1)
Represents transfers to/from REIL from/to potential problem loans.


 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
Impairment provisions flow statement
The movement in loan impairment provisions by division is shown in the table below.
 
 
 
UK 
Retail 
UK 
Corporate 
Wealth 
International 
Banking 
Ulster 
Bank 
US 
R&C (1)
  
Total 
R&C (1)
Markets 
Other 
  
Total 
Core 
Non-Core 
Group 
£m 
£m 
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
  
£m 
£m 
£m 
                             
At 1 January 2013
2,629 
2,432 
109 
391 
3,910 
285 
  
9,756 
305 
1 
  
10,062 
11,200 
21,262 
Currency translation
- 
2 
- 
(4)
124 
20 
  
142 
(6)
- 
  
136 
266 
402 
Amounts written-off
(142)
(228)
(1)
(62)
(27)
(69)
  
(529)
- 
- 
  
(529)
(627)
(1,156)
Recoveries of amounts
  previously written-off
11 
4 
- 
5 
- 
29 
  
49 
- 
- 
  
49 
16 
65 
Charged to income statement
80 
185 
5 
55 
240 
19 
  
584 
15 
- 
  
599 
437 
1,036 
Unwind of discount (2)
(20)
(8)
(1)
(1)
(21)
- 
  
(51)
- 
- 
  
(51)
(52)
(103)
                             
At 31 March 2013
2,558 
2,387 
112 
384 
4,226 
284 
  
9,951 
314 
1 
  
10,266 
11,240 
21,506 
                             
Individually assessed
                            
  - banks
- 
- 
- 
7 
- 
- 
  
7 
111 
- 
  
118 
1 
119 
  - customers
- 
986 
99 
259 
1,322 
57 
  
2,723 
196 
1 
  
2,920 
9,860 
12,780 
Collectively assessed
2,382 
1,105 
- 
- 
2,328 
122 
  
5,937 
- 
- 
  
5,937 
713 
6,650 
Latent
176 
296 
13 
118 
576 
105 
  
1,284 
7 
- 
  
1,291 
666 
1,957 
                             
 
2,558 
2,387 
112 
384 
4,226 
284 
  
9,951 
314 
1 
  
10,266 
11,240 
21,506 
 
For the notes to this table refer to the following page.
 
 
 

 
 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
Impairment provisions flow statement (continued)
 
 
Non-Core (by donating division)
 
UK 
Corporate 
International 
Banking 
Ulster 
Bank 
US 
R&C (1)
Other 
Total 
£m 
£m 
£m 
£m 
£m 
£m 
             
At 1 January 2013
1,167 
2,815 
6,933 
257 
28 
11,200 
Currency translation
11 
58 
180 
17 
- 
266 
Amounts written-off
(137)
(375)
(62)
(51)
(2)
(627)
Recoveries of amounts previously written-off
3 
2 
- 
10 
1 
16 
Charged to income statement
72 
85 
242 
39 
(1)
437 
Unwind of discount (2)
(4)
(12)
(36)
- 
- 
(52)
             
At 31 March 2013
1,112 
2,573 
7,257 
272 
26 
11,240 
             
Individually assessed
            
  - banks
- 
1 
- 
- 
- 
1 
  - customers
686 
2,361 
6,781 
23 
9 
9,860 
Collectively assessed
368 
- 
238 
90 
17 
713 
Latent
58 
211 
238 
159 
- 
666 
             
 
1,112 
2,573 
7,257 
272 
26 
11,240 
 
Notes:
 
(1)
Retail & Commercial.
(2)
Recognised in interest income.
 
 
 
 

 
 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
Impairment charge analysis
The table below analyses the impairment charge for loans and securities.
 
 
Quarter ended 31 March 2013
UK 
Retail 
UK 
Corporate 
Wealth 
International 
Banking 
Ulster 
Bank 
US 
R&C (1)
  
Total 
R&C (1)
Markets 
Central 
items 
  
Total 
Core 
Non-Core 
Group 
£m 
£m 
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
  
£m 
£m 
£m 
                             
Individually assessed
- 
113 
5 
53 
89 
(3)
  
257 
17 
- 
  
274 
372 
646 
Collectively assessed
94 
73 
- 
- 
182 
40 
  
389 
- 
- 
  
389 
52 
441 
Latent loss
(14)
(1)
- 
2 
(31)
(18)
  
(62)
(2)
- 
  
(64)
13 
(51)
                             
Loans to customers
80 
185 
5 
55 
240 
19 
  
584 
15 
- 
  
599 
437 
1,036 
Securities
- 
- 
- 
- 
- 
- 
  
- 
1 
- 
  
1 
(4)
(3)
                             
Charge to income statement
80 
185 
5 
55 
240 
19 
  
584 
16 
- 
  
600 
433 
1,033 
 
 
Quarter ended 31 December 2012
                            
                             
Individually assessed
- 
164 
15 
86 
61 
(4)
  
322 
16 
1 
  
339 
479 
818 
Collectively assessed
114 
72 
- 
(1)
195 
60 
  
440 
- 
- 
  
440 
65 
505 
Latent loss
(21)
(4)
1 
(47)
62 
(37)
  
(46)
(3)
- 
  
(49)
129 
80 
                             
Loans to customers
93 
232 
16 
38 
318 
19 
  
716 
13 
1 
  
730 
673 
1,403 
Loans to banks
- 
- 
- 
(1)
- 
- 
  
(1)
- 
- 
  
(1)
- 
(1)
Securities
- 
2 
- 
- 
- 
4 
  
6 
9 
7 
  
22 
30 
52 
                             
Charge to income statement
93 
234 
16 
37 
318 
23 
  
721 
22 
8 
  
751 
703 
1,454 
 
Note:
 
(1)
Retail & Commercial.
 
 

Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Loans, REIL, provisions and impairments (continued)
 
Impairment charge analysis (continued)
 
 
Quarter ended 31 March 2013
Non-Core (by donating division)
UK 
Corporate 
International 
Banking 
Ulster 
Bank 
US 
R&C (1)
Other 
Total 
£m 
£m 
£m 
£m 
£m 
£m 
             
Individually assessed
61 
84 
229 
(2)
- 
372 
Collectively assessed
11 
- 
9 
32 
- 
52 
Latent loss
- 
- 
4 
9 
- 
13 
             
Loans to customers
72 
84 
242 
39 
- 
437 
Securities
- 
(4)
- 
- 
- 
(4)
             
Charge to income statement
72 
80 
242 
39 
- 
433 
 
 
Quarter ended 31 December 2012
            
             
Individually assessed
40 
207 
226 
5 
1 
479 
Collectively assessed
16 
- 
17 
32 
- 
65 
Latent loss
- 
1 
121 
7 
- 
129 
             
Loans to customers
56 
208 
364 
44 
1 
673 
Securities
- 
30 
- 
- 
- 
30 
             
Charge to income statement
56 
238 
364 
44 
1 
703 
 
Note:
 
(1)
Retail & Commercial.
 


 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics(continued)
 
For a description of the Group's early problem debt identification and problem debt management refer to pages 172 to 180 of the Group's 2012 Annual Report and Accounts.
 
Wholesale renegotiations
The data presented below include loans where renegotiations were completed during the period. Thresholds for inclusion are set at divisional level and range from nil to £10 million. The vast majority of wholesale loan renegotiations take place within the Global Restructuring Group (GRG). Comparison and analysis of renegotiated loans may be skewed by the impact of individual material cases reaching legal completion during a given period, as well as being subject to seasonality.
 
 
 
Quarter ended 31 March 2013
  
Year ended 31 December 2012
Sector
Performing 
£m 
Non- 
performing 
£m 
Provision 
 coverage 
% 
  
Performing 
£m 
Non- 
performing 
£m 
Provision 
 coverage 
% 
               
Property
507 
216 
18 
  
1,954 
3,288 
18 
Transport
52 
100 
18 
  
832 
99 
23 
Telecommunications, media
  and technology
16 
27 
- 
  
237 
341 
46 
Retail and leisure
64 
40 
- 
  
487 
111 
34 
Other
111 
41 
- 
  
792 
245 
28 
               
 
750 
424 
14 
  
4,302 
4,084 
22 
 
Key points
 
●
Renegotiations completed in Q1 2013, were £1.2 billion (year ended 31 December 2012 - £8.4 billion). Renegotiations continue at a high level as difficult economic conditions persist in the UK and Ireland, particularly in the real estate markets, and the Group continues its active problem debt management.
   
●
Renegotiations are likely to remain significant: at 31 March 2013, loans totalling £13.8 billion (31 December 2012 - £13.7 billion) were in the process of being renegotiated but had not yet reached legal completion (they are not included in the table above). 62% of completed and 92% of "in progress" renegotiated cases in Q1 2013 were managed by GRG.
   
●
Renegotiated loans above may have been subject to one or more covenant waivers or modifications. In addition, loans totalling £0.7 billion were granted financial covenant concessions only during the period. These loans are not included in the table above.



 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics (continued)
 
Retail forbearance
The mortgage arrears information for retail accounts in forbearance and related provision are shown in the tables below.
 
 
 
No missed
payments
  
1-3 months
in arrears
  
>3 months
in arrears
  
Total
 
Balance 
Provision 
  
Balance 
Provision 
  
Balance 
Provision 
  
Balance 
Provision 
Forborne 
balances 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
  
£m 
£m 
% 
                         
31 March 2013
                        
UK Retail (1,2)
4,159 
21 
  
416 
18 
  
452 
61 
  
5,027 
100 
5.1 
Ulster Bank (1,2)
950 
104 
  
528 
58 
  
545 
205 
  
2,023 
367 
10.3 
RBS Citizens
- 
- 
  
183 
22 
  
181 
14 
  
364 
36 
1.6 
Wealth
48 
- 
  
- 
- 
  
23 
1 
  
71 
1 
0.8 
                         
 
5,157 
125 
  
1,127 
98 
  
1,201 
281 
  
7,485 
504 
5.0 
                         
31 December 2012
                        
                         
UK Retail (1,2)
4,006 
20 
  
388 
16 
  
450 
64 
  
4,844 
100 
4.9 
Ulster Bank (1,2)
915 
100 
  
546 
60 
  
527 
194 
  
1,988 
354 
10.4 
RBS Citizens
- 
- 
  
179 
25 
  
160 
10 
  
339 
35 
1.6 
Wealth
38 
- 
  
- 
- 
  
7 
- 
  
45 
- 
0.5 
                         
 
4,959 
120 
  
1,113 
101 
  
1,144 
268 
  
7,216 
489 
4.9 
 
Notes:
 
(1)
Includes all forbearance arrangements whether relating to the customer's lifestyle changes or financial difficulty.
(2)
Includes the current stock position of forbearance deals agreed since early 2008 for UK Retail and early 2009 for Ulster Bank.
 
Key points
 
UK Retail
 
●
The UK Retail definition of forbearance is broad and includes mortgages where customers have made changes to contractual terms, including those where customers are up-to-date on payments and are not necessarily evidencing signs of financial stress. The reported figures above include stock dating back to 1 January 2008. The forbearance stock continues to grow, influenced by the fixed start date and the permanent nature of certain changes to contractual terms, for example, term extensions, historic interest only conversions and capitalisations.
   
●
At 31 March 2013, stock levels of £5.0 billion represented 5% of the total mortgage assets, a 4% increase in Q1 2013. The flow of new forbearance in the quarter (£463 million) was slightly lower than the average of the preceding four quarters (£498 million).
   
●
Approximately 83% of assets subject to forbearance were up-to-date with payments (compared with approximately 97% of the assets not subject to forbearance activity). The provision cover on assets subject to forbearance was around 4.5 times that on assets not subject to forbearance.
   
●
Of the total stock of assets subject to historic or current forbearance treatment, 44% were term extensions (31 December 2012 - 47%), 25% interest-only conversions (31 December 2012 - 25%) and 18% capitalisations of arrears (31 December 2012 - 19%). The stock of cases subject to interest-only conversions reflects legacy policy; conversions to interest-only loans are no longer permitted on residential mortgages.


 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Loans and related credit metrics: Retail forbearance (continued)
 
Key points
 
Ulster Bank
 
●
The Ulster Bank definition of forbearance is broad and includes mortgages where customers have made changes to contractual terms, including those where customers are up-to-date on payments and are not necessarily evidencing signs of financial stress. The reported figures include stock dating back to early 2009.
   
●
At 31 March 2013, 10.3% of total mortgage assets (£2.0 billion) were subject to a forbearance arrangement (31 December 2012 - 10.4%, £2.0 billion). The majority of these forbearance arrangements were in the performing book (73%) and not 90 days past due. The flow of new forbearance in the quarter (£609 million) was lower than the average of the preceding four quarters (£794 million).
   
●
The majority of the forbearance arrangements offered by Ulster Bank are currently short term, accounting for 83% of assets subject to forbearance at 31 March 2013. These are offered for periods of one to three years and are based on the customer's ability to pay. Additional treatment options recently developed by Ulster Bank will lead to a shift to more long term arrangements over time where customer circumstances require it.
   
●
Of these short term forbearance types, the largest category at 31 March 2013 was interest-only conversions, accounting for 43% of total assets subject to forbearance. The other categories of temporary forbearance were payment concessions: positive and negative amortisation agreements (27% and 8% of the total, respectively); and payment holidays (5%).
   
●
The provision cover on performing assets subject to forbearance was approximately eight times higher than that on performing assets not subject to forbearance.
 
Key loan portfolios
Commercial real estate
The commercial real estate sector comprises exposures to entities involved in the development of, or investment in, commercial and residential properties (including housebuilders). The analysis of lending utilisations below excludes rate risk management and contingent obligations.
 
 
 
31 March 2013
  
31 December 2012
 
Investment 
Development 
Total 
  
Investment 
Development 
Total 
By division (1)
£m 
£m 
£m 
  
£m 
£m 
£m 
               
Core
              
UK Corporate
22,300 
3,904 
26,204 
  
22,504 
4,091 
26,595 
Ulster Bank
3,620 
746 
4,366 
  
3,575 
729 
4,304 
US Retail & Commercial
3,964 
3 
3,967 
  
3,857 
3 
3,860 
International Banking
815 
301 
1,116 
  
849 
315 
1,164 
Markets
172 
35 
207 
  
630 
57 
687 
               
 
30,871 
4,989 
35,860 
  
31,415 
5,195 
36,610 
               
Non-Core
              
UK Corporate
2,504 
885 
3,389 
  
2,651 
983 
3,634 
Ulster Bank
3,451 
7,574 
11,025 
  
3,383 
7,607 
10,990 
US Retail & Commercial
360 
- 
360 
  
392 
- 
392 
International Banking
9,709 
122 
9,831 
  
11,260 
154 
11,414 
               
 
16,024 
8,581 
24,605 
  
17,686 
8,744 
26,430 
               
Total
46,895 
13,570 
60,465 
  
49,101 
13,939 
63,040 
 
For the notes to this table refer to the following page.



Appendix 3 Risk management supplement (continued)
 
Credit risk: Key loan portfolios: Commercial real estate (continued)
 
 
By geography (1)
Investment
 
Development
    
Commercial 
Residential 
Total 
  
Commercial 
Residential 
Total 
  
Total 
£m 
£m 
£m 
  
£m 
£m 
£m 
  
£m 
                   
31 March 2013
                  
UK (excluding NI) (2)
24,380 
5,544 
29,924 
  
813 
4,362 
5,175 
  
35,099 
Ireland (ROI and NI) (2)
4,704 
1,010 
5,714 
  
2,240 
5,789 
8,029 
  
13,743 
Western Europe (other)
5,797 
364 
6,161 
  
24 
42 
66 
  
6,227 
US
3,779 
994 
4,773 
  
- 
4 
4 
  
4,777 
RoW (2)
323 
- 
323 
  
69 
227 
296 
  
619 
                   
 
38,983 
7,912 
46,895 
  
3,146 
10,424 
13,570 
  
60,465 
                   
31 December 2012
                  
                   
UK (excluding NI) (2)
25,864 
5,567 
31,431 
  
839 
4,777 
5,616 
  
37,047 
Ireland (ROI and NI) (2)
4,651 
989 
5,640 
  
2,234 
5,712 
7,946 
  
13,586 
Western Europe (other)
5,995 
370 
6,365 
  
22 
33 
55 
  
6,420 
US
4,230 
981 
5,211 
  
- 
15 
15 
  
5,226 
RoW (2)
454 
- 
454 
  
65 
242 
307 
  
761 
                   
 
41,194 
7,907 
49,101 
  
3,160 
10,779 
13,939 
  
63,040 
 
Notes:
 
(1)
Excludes commercial real estate lending in Wealth as these loans are generally supported by personal guarantees in addition to collateral. This portfolio, which totalled £1.3 billion at 31 March 2013 (31 December 2012 - £1.4 billion), continues to perform in line with expectations and requires minimal provisions.
(2)
ROI: Republic of Ireland; NI: Northern Ireland; RoW: Rest of World.
 
Key points
 
·
In line with Group strategy, the overall exposure to commercial real estate fell by 4% during the first quarter. Most of the decrease was in Non-Core and was the result of repayments, asset sales and write-offs. The Non-Core portfolio totalled £24.6 billion (41% of the portfolio) at 31 March 2013 (31 December 2012 - £26.4 billion or 42% of the portfolio).
   
·
The reduction in Markets was caused by a decrease in the inventory of US commercial real estate earmarked for securitisation, following successful issuances.
   
·
The average interest coverage ratios for UK Corporate (Core and Non-Core), International Banking (Non-Core) were 3.05x and 1.29x, respectively, at 31 March 2013 (31 December 2012 - 2.96x and 1.30x). The US Retail & Commercial portfolio is managed on the basis of debt service coverage, which includes scheduled principal amortisation. The average debt service coverage for this portfolio (Core and Non-Core) was 1.45x at 31 March 2013 (31 December 2012 - 1.34x). As a number of different approaches are used within the Group and across geographies to calculate interest coverage ratios, they may not be comparable for different portfolio types and organisations.
 


 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Key loan portfolios: Commercial real estate (continued)
Credit quality metrics relating to commercial real estate lending were as follows:
 
 
 
Total
  
Non-Core
 
31 March 
2013 
31 December 
2012 
  
31 March 
2013 
31 December 
2012 
           
Lending (gross)
£60.5bn 
£63.0bn 
  
£24.6bn 
£26.4bn 
Of which REIL
£21.4bn 
£22.1bn 
  
£16.5bn 
£17.1bn 
Provisions
£10.2bn 
£10.1bn 
  
£8.4bn 
£8.3bn 
REIL as a % of gross loans to customers
35.4% 
35.1% 
  
67.1% 
64.8% 
Provisions as a % of REIL
48% 
46% 
  
51% 
49% 
 
Note:
 
(1)
Excludes property related lending to customers in other sectors managed by Real Estate Finance.
 
Ulster Bank is a significant contributor to Non-Core commercial real estate lending. For further information refer to the section on Ulster Bank Group (Core and Non-Core) below.
 
Ulster Bank Group (Core and Non-Core)
The table below analyses the Ulster Bank Group's loans, REIL and impairments by sector.
 
 
       
Credit metrics
  
 
Gross 
loans 
REIL 
Provisions 
REIL as a 
% of gross 
loans 
Provisions 
as a % of 
REIL 
Provisions 
as a % of 
gross loans 
Impairment 
charge 
Amounts 
written-off 
Sector analysis
£m 
£m 
£m 
% 
% 
% 
£m 
£m 
                 
31 March 2013
                
Core
                
Mortgages
19,672 
3,432 
1,659 
17.4 
48 
8.4 
90 
5 
Commercial real estate
                
  - investment
3,620 
1,543 
649 
42.6 
42 
17.9 
46 
- 
  - development
746 
384 
213 
51.5 
55 
28.6 
14 
- 
Other corporate
7,792 
2,384 
1,499 
30.6 
63 
19.2 
75 
8 
Other lending
1,270 
209 
206 
16.5 
99 
16.2 
15 
14 
                 
 
33,100 
7,952 
4,226 
24.0 
53 
12.8 
240 
27 
                 
Non-Core
                
Commercial real estate
                
  - investment
3,451 
3,039 
1,489 
88.1 
49 
43.1 
47 
10 
  - development 
7,574 
7,437 
4,918 
98.2 
66 
64.9 
155 
46 
Other corporate
1,621 
1,259 
777 
77.7 
62 
47.9 
38 
1 
                 
 
12,646 
11,735 
7,184 
92.8 
61 
56.8 
240 
57 
                 
Ulster Bank Group
                
Mortgages
19,672 
3,432 
1,659 
17.4 
48 
8.4 
90 
5 
Commercial real estate
                
  - investment
7,071 
4,582 
2,138 
64.8 
47 
30.2 
93 
10 
  - development
8,320 
7,821 
5,131 
94.0 
66 
61.7 
169 
46 
Other corporate
9,413 
3,643 
2,276 
38.7 
62 
24.2 
113 
9 
Other lending
1,270 
209 
206 
16.5 
99 
16.2 
15 
14 
                 
 
45,746 
19,687 
11,410 
43.0 
58 
24.9 
480 
84 
 


Appendix 3 Risk management supplement (continued)
 
Credit risk: Key loan portfolios: Ulster Bank Group (Core and Non-Core) (continued)
 
 
       
Credit metrics
  
 
Gross 
loans 
REIL 
Provisions 
REIL as a 
% of gross 
loans 
Provisions 
as a % of 
REIL 
Provisions 
as a % of 
gross loans 
Impairment 
charge 
Amounts 
written-off 
Sector analysis
£m 
£m 
£m 
% 
% 
% 
£m 
£m 
                 
31 December 2012
                
Core
                
Mortgages
19,162 
3,147 
1,525 
16.4 
48 
8.0 
135 
13 
Commercial real estate
                
  - investment
3,575 
1,551 
593 
43.4 
38 
16.6 
52 
- 
  - development
729 
369 
197 
50.6 
53 
27.0 
17 
- 
Other corporate
7,772 
2,259 
1,394 
29.1 
62 
17.9 
97 
7 
Other lending
1,414 
207 
201 
14.6 
97 
14.2 
17 
8 
                 
 
32,652 
7,533 
3,910 
23.1 
52 
12.0 
318 
28 
                 
Non-Core
                
Commercial real estate
                
  - investment
3,383 
2,800 
1,433 
82.8 
51 
42.4 
91 
12 
  - development
7,607 
7,286 
4,720 
95.8 
65 
62.0 
256 
30 
Other corporate
1,570 
1,230 
711 
78.3 
58 
45.3 
16 
16 
                 
 
12,560 
11,316 
6,864 
90.1 
61 
54.6 
363 
58 
                 
Ulster Bank Group
                
Mortgages
19,162 
3,147 
1,525 
16.4 
48 
8.0 
135 
13 
Commercial real estate
                
  - investment
6,958 
4,351 
2,026 
62.5 
47 
29.1 
143 
12 
  - development
8,336 
7,655 
4,917 
91.8 
64 
59.0 
273 
30 
Other corporate
9,342 
3,489 
2,105 
37.3 
60 
22.5 
113 
23 
Other lending
1,414 
207 
201 
14.6 
97 
14.2 
17 
8 
                 
 
45,212 
18,849 
10,774 
41.7 
57 
23.8 
681 
86 
 
Key points
 
·
At 31 March 2013, Ulster Bank Group accounted for 10% of the Group's total gross loans to customers (31 December 2012 - 10%) and 8% of the Group's Core gross loans to customers (31 December 2012 - 8%). Ulster Bank's financial performance continues to be influenced by the challenging economic climate in Ireland, with impairments remaining elevated as high unemployment, coupled with higher taxation and limited liquidity in the economy, all continue to depress the property market and domestic spending. However, there has been some modest improvement in the outlook with key economic indicators such as tax revenue, house price indices and GDP growth forecast stabilising.
   
·
The impairment charge of £480 million for Q1 2013 (Q4 2012 - £681 million) was driven by a combination of new defaulting customers and higher provisions on existing defaulted cases due primarily to deteriorating security values.
   
·
Provisions as a percentage of REIL increased marginally from 57% at the year end, to 58% in Q1 2013, principally as a result of the deterioration in the value of the commercial real estate development portfolio. Ulster Bank impairment provisions take into account recovery strategies for its commercial real estate portfolio, reflecting limited liquidity in Irish commercial and development property.


 
Appendix 3 Risk management supplement (continued)
 
Credit risk: Key loan portfolios: Ulster Bank Group (Core and Non-Core) (continued)
 
Key points (continued)
 
·
The Core impairment charge for Q1 2013 was £240 million (Q4 2012 - £318 million) with a quarterly decrease driven by lower defaults on mortgage and other corporate portfolios.
   
·
The Non-Core impairment charge for Q1 2013 was £240 million, a decrease of £123 million from Q4 2012. The commercial real estate sector accounted for £202 million (84%) of the total Non-Core Q1 2013 impairment charge.
 
Debt securities: AFS reserves by issuer
The table below analyses available-for-sale (AFS) debt securities and related reserves, gross of tax.
 
 
 
31 March 2013
  
31 December 2012
 
UK 
US 
Other (1)
Total 
  
UK 
US 
Other (1)
Total 
 
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
£m 
                   
Government (2)
8,273 
19,097 
13,313 
40,683 
  
9,774 
19,046 
16,155 
44,975 
Banks
583 
106 
6,435 
7,124 
  
1,085 
357 
7,419 
8,861 
Other financial institutions
2,601 
9,399 
9,518 
21,518 
  
2,861 
10,613 
10,416 
23,890 
Corporate
27 
12 
176 
215 
  
1,318 
719 
1,130 
3,167 
                   
Total
11,484 
28,614 
29,442 
69,540 
  
15,038 
30,735 
35,120 
80,893 
                   
Of which ABS
2,942 
13,762 
12,713 
29,417 
  
3,558 
14,209 
12,976 
30,743 
                   
AFS reserves (gross)
618 
629 
(849)
398 
  
667 
763 
(1,277)
153 
 
Notes:
 
(1)
Includes eurozone countries as detailed on the following page.
(2)
Includes central and local government.
 
 
Appendix 3 Risk management supplement (continued)
 
Country risk: Overview
Countries shown on page 96 are those in which the Group's balance sheet exposure to counterparties incorporated within them exceeded £1 billion and which had external ratings of A+ or below from Standard and Poor's, Moody's or Fitch at 31 March 2013. Selected eurozone countries are also included. The numbers are stated before taking into account mitigants, such as collateral (with the exception of reverse repos), insurance or guarantees, which may have been taken to reduce or eliminate exposure to country risk events. Exposures relating to ocean-going vessels are not included. For a description of the governance, monitoring and management of the Group's country risk framework and definitions, refer to pages 254 and 255 of the Group's 2012 Annual Report and Accounts.
 
Key points
 
·
At 31 March 2013, sterling had depreciated 6.2% against the US dollar and 3.6% against the euro, compared with 31 December 2012. This resulted in exposures denominated in these currencies (and in other currencies linked to the same) increasing in sterling terms.
   
·
Balance sheet and off-balance sheet exposures to many countries shown in the table on page 96 continued to decline during Q1 2013, as the Group maintained a cautious stance and many clients reduced debt levels. In Ireland and a few Asian countries, exposure increased, largely owing to exchange rate movements. Reductions were seen notably in derivatives and repos. Non-Core lending exposure declined further in most countries as the Group continued to execute its disposal strategy.
   
·
Most of the Group's country risk exposure is in International Banking (primarily trade facilities, other lending and off-balance sheet exposure to corporates), Markets (mostly derivatives and repos with financial institutions, and HFT debt securities), Ulster Bank (mostly lending exposure to corporates and consumers in Ireland) and Group Treasury (cash balances at central banks and AFS debt securities including Spanish covered bonds).
   
·
Eurozone - Balance sheet exposure declined with reductions in most countries. This reflected a drop in liquidity held with the Bundesbank, lending write-offs, active exposure management and debt reduction efforts by bank clients.
   
·
Eurozone periphery - Balance sheet exposure was broadly stable, but with an increase in Ireland reflecting exchange rate movements offset by reductions in Italy and Portugal.
   
 
○
Ireland - Lending and off-balance sheet exposure increased by £0.8 billion and £0.2 billion, respectively, but declined on a constant currency basis. Repo exposure to banks declined by £0.4 billion.
 
○
Spain - Lending exposure decreased primarily in the telecommunications and commercial real estate sectors. The fair value of AFS debt securities increased by £0.5 billion due to favourable market sentiment for Spanish bonds.
 
○
Italy - AFS debt securities decreased by £0.3 billion due to redemptions.
 
○
Portugal - Modest further reductions took place in lending exposure to the commercial real estate sector, off-balance sheet exposure to the oil and gas sector and derivatives exposure to banks.
 
○
Greece - Derivatives exposure to banks and off-balance sheet exposure increased slightly because of exchange rate movements.
 
○
Cyprus - Balance sheet exposure to Cyprus amounted to £0.3 billion at 31 March 2013, comprising mainly lending exposure to special purpose vehicles incorporated in Cyprus but with assets and cash flows largely elsewhere.


 
Appendix 3 Risk management supplement (continued)
 
Country risk: Overview (continued)
 
Key points (continued)
 
·
Germany - The Group holds significant short-term surplus liquidity with the central bank because of credit risk and capital considerations, and limited alternative investment opportunities. This exposure also fluctuates as part of the Group's asset and liability management. German AFS bond positions in Group Treasury decreased by £2.1 billion in line with internal liquidity management strategies. Net HFT positions in German bonds in Markets increased by £1.2 billion during Q1 2013, driven by market opportunities.
   
·
France - During Q1 2013, the Group reduced its holdings in bonds, both AFS in Group Treasury and HFT in Markets. Derivatives exposure, mostly to banks, decreased by £1.2 billion.
   
·
Japan - Exposure decreased by £4.0 billion in Q1 2013, reflecting sales and maturities of debt securities of £3.2 billion, mostly in the HFT portfolio. Derivatives exposure to banks and deposits with the central bank also fell.
   
·
India - Lending exposure to corporates increased by £0.5 billion, largely reflecting higher lending to the oil and gas sector.
 
Redenomination risk
 
·
The Group's focus continues to be on reducing its asset exposures and funding mismatches in the eurozone periphery countries. The estimated funding mismatch at risk of redenomination was £8.5 billion (31 December 2012 - £9.0 billion) for Ireland, £4.0 billion (31 December 2012 - £4.5 billion) for Spain, and £1.0 billion (31 December 2012 - £1.0 billion) for Italy at 31 March 2013. These numbers can fluctuate owing to volatility in trading book positions and changes in bond prices. The net positions for Greece, Portugal and Cyprus were all minimal. For more information on redenomination risk considerations, refer to page 254 of the Group's 2012 Annual Report and Accounts.
 
 
 
 


Appendix 3 Risk management supplement (continued)
 
Country risk: Eurozone periphery by country: Ireland
 
 
 
Lending 
REIL 
Provisions 
  
AFS and 
LAR debt 
securities 
AFS 
reserves 
  
HFT
debt securities
  
Total debt 
securities 
  
Net
  
Balance 
sheet 
  
Off-balance 
 sheet 
  
Gross
Long 
Short 
Derivatives 
Repos 
Derivatives 
Repos 
31 March 2013
£m 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
£m 
£m 
£m 
  
£m 
  
£m 
  
£m 
£m 
                                           
Government
44 
- 
- 
  
138 
(17)
  
96 
46 
  
188 
  
33 
- 
  
265 
  
2 
  
38 
- 
Central bank
44 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
44 
  
- 
  
- 
- 
Other banks
99 
- 
- 
  
184 
(3)
  
18 
3 
  
199 
  
692 
90 
  
1,080 
  
- 
  
15,238 
3,836 
Other FI
522 
- 
- 
  
99 
- 
  
175 
2 
  
272 
  
546 
89 
  
1,429 
  
705 
  
1,259 
3,081 
Corporate
18,235 
11,449 
6,721 
  
- 
- 
  
201 
3 
  
198 
  
356 
- 
  
18,789 
  
1,900 
  
378 
169 
Personal
18,393 
3,538 
1,799 
  
- 
- 
  
- 
- 
  
- 
  
1 
- 
  
18,394 
  
528 
  
1 
- 
                                           
 
37,337 
14,987 
8,520 
  
421 
(20)
  
490 
54 
  
857 
  
1,628 
179 
  
40,001 
  
3,135 
  
16,914 
7,086 
                                           
31 December 2012
                                          
                                           
Government
42 
- 
- 
  
127 
(23)
  
79 
56 
  
150 
  
2 
- 
  
194 
  
2 
  
6 
- 
Central bank
73 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
73 
  
- 
  
- 
- 
Other banks
98 
- 
- 
  
191 
(6)
  
18 
1 
  
208 
  
695 
476 
  
1,477 
  
- 
  
15,258 
3,547 
Other FI
532 
- 
- 
  
46 
- 
  
325 
2 
  
369 
  
583 
103 
  
1,587 
  
601 
  
1,365 
4,121 
Corporate
17,921 
11,058 
6,226 
  
60 
- 
  
- 
- 
  
60 
  
411 
- 
  
18,392 
  
1,840 
  
436 
326 
Personal
17,893 
3,286 
1,686 
  
- 
- 
  
- 
- 
  
- 
  
1 
- 
  
17,894 
  
515 
  
1 
- 
                                           
 
36,559 
14,344 
7,912 
  
424 
(29)
  
422 
59 
  
787 
  
1,692 
579 
  
39,617 
  
2,958 
  
17,066 
7,994 
 
 
 
31 March 2013
  
31 December 2012
 
Notional
  
Fair value
  
Notional
  
Fair value
 
Bought 
Sold 
  
Bought  
Sold 
  
Bought 
Sold 
  
Bought 
Sold 
CDS by reference entity
£m 
£m 
  
£m  
£m 
  
£m 
£m 
  
£m 
£m 
                       
Government
2,632 
2,615 
  
48  
(48)
  
2,486 
2,525 
  
72 
(71)
Other banks
30 
18 
  
5  
(5)
  
43 
32 
  
1 
(2)
Other FI
451 
385 
  
3  
(16)
  
759 
677 
  
21 
(33)
Corporate
218 
154 
  
(14) 
14 
  
236 
165 
  
(17)
17 
                       
 
3,331 
3,172 
  
42  
(55)
  
3,524 
3,399 
  
77 
(89)
 
 


Appendix 3 Risk management supplement (continued)
 
Country risk: Eurozone periphery by country: Spain
 
 
 
Lending 
REIL 
Provisions 
  
AFS and 
LAR debt 
securities 
AFS 
reserves 
  
HFT
debt securities
  
Total debt 
securities 
  
Net
  
Balance 
sheet 
  
Off-balance 
 sheet 
  
Gross
Long 
Short 
Derivatives 
Repos 
Derivatives 
Repos 
31 March 2013
£m 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
£m 
£m 
£m 
  
£m 
  
£m 
  
£m 
£m 
                                           
Government
- 
- 
- 
  
41 
(8)
  
573 
391 
  
223 
  
4 
- 
  
227 
  
15 
  
35 
- 
Central bank
8 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
8 
  
- 
  
- 
- 
Other banks
49 
- 
- 
  
3,475 
(423)
  
73 
100 
  
3,448 
  
1,120 
- 
  
4,617 
  
44 
  
4,877 
2,279 
Other FI
54 
- 
- 
  
1,837 
(416)
  
61 
16 
  
1,882 
  
28 
- 
  
1,964 
  
144 
  
51 
- 
Corporate
4,202 
689 
348 
  
- 
- 
  
38 
40 
  
(2)
  
430 
- 
  
4,630 
  
1,594 
  
455 
- 
Personal
347 
55 
23 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
347 
  
57 
  
- 
- 
                                           
 
4,660 
744 
371 
  
5,353 
(847)
  
745 
547 
  
5,551 
  
1,582 
- 
  
11,793 
  
1,854 
  
5,418 
2,279 
                                           
31 December 2012
                                          
                                           
Government
- 
- 
- 
  
37 
(10)
  
786 
403 
  
420 
  
18 
- 
  
438 
  
14 
  
56 
- 
Central bank
6 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
6 
  
- 
  
- 
- 
Other banks
1 
- 
- 
  
3,169 
(634)
  
100 
76 
  
3,193 
  
1,254 
- 
  
4,448 
  
42 
  
5,116 
610 
Other FI
59 
- 
- 
  
1,661 
(540)
  
96 
18 
  
1,739 
  
26 
- 
  
1,824 
  
139 
  
50 
- 
Corporate
4,260 
601 
246 
  
4 
- 
  
36 
18 
  
22 
  
456 
- 
  
4,738 
  
1,373 
  
472 
- 
Personal
340 
61 
27 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
340 
  
56 
  
- 
- 
                                           
 
4,666 
662 
273 
  
4,871 
(1,184)
  
1,018 
515 
  
5,374 
  
1,754 
- 
  
11,794 
  
1,624 
  
5,694 
610 
 
 
 
31 March 2013
  
31 December 2012
 
Notional
  
Fair value
  
Notional
  
Fair value
 
Bought 
Sold 
  
Bought 
Sold 
  
Bought 
Sold 
  
Bought 
Sold 
CDS by reference entity
£m 
£m 
  
£m 
£m 
  
£m 
£m 
  
£m 
£m 
                       
Government
5,934 
5,923 
  
358 
(361)
  
5,934 
5,905 
  
361 
(359)
Other banks
1,514 
1,560 
  
50 
(45)
  
1,583 
1,609 
  
34 
(30)
Other FI
1,267 
1,123 
  
55 
(37)
  
1,209 
1,061 
  
47 
(28)
Corporate
2,247 
1,967 
  
21 
(16)
  
2,263 
2,011 
  
7 
(4)
                       
 
10,962 
10,573 
  
484 
(459)
  
10,989 
10,586 
  
449 
(421)



Appendix 3 Risk management supplement (continued)
Country risk: Eurozone periphery by country: Italy
 
 
 
Lending 
REIL 
Provisions 
  
AFS and 
LAR debt 
securities 
AFS 
reserves 
  
HFT
debt securities
  
Total debt 
securities 
  
Net
  
Balance 
sheet 
  
Off-balance 
 sheet 
  
Gross
Long 
Short 
Derivatives 
Repos 
Derivatives 
Repos 
31 March 2013
£m 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
£m 
£m 
£m 
  
£m 
  
£m 
  
£m 
£m 
                                           
Government
10 
- 
- 
  
417 
(76)
  
2,365 
1,671 
  
1,111 
  
79 
- 
  
1,200 
  
- 
  
130 
- 
Central bank
22 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
22 
  
- 
  
- 
- 
Other banks
145 
- 
- 
  
- 
- 
  
11 
53 
  
(42)
  
1,509 
- 
  
1,612 
  
37 
  
8,431 
2 
Other FI
103 
- 
- 
  
200 
(1)
  
54 
17 
  
237 
  
120 
- 
  
460 
  
679 
  
120 
- 
Corporate
1,425 
57 
16 
  
34 
- 
  
54 
66 
  
22 
  
582 
- 
  
2,029 
  
1,812 
  
865 
86 
Personal
24 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
24 
  
12 
  
- 
- 
                                           
 
1,729 
57 
16 
  
651 
(77)
  
2,484 
1,807 
  
1,328 
  
2,290 
- 
  
5,347 
  
2,540 
  
9,546 
88 
                                           
31 December 2012
                                          
                                           
Government
9 
- 
- 
  
408 
(81)
  
2,781 
2,224 
  
965 
  
80 
- 
  
1,054 
  
- 
  
131 
- 
Central bank
21 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
21 
  
- 
  
- 
- 
Other banks
200 
- 
- 
  
125 
(8)
  
42 
54 
  
113 
  
1,454 
- 
  
1,767 
  
33 
  
8,428 
3 
Other FI
218 
- 
- 
  
357 
(1)
  
23 
1 
  
379 
  
99 
- 
  
696 
  
671 
  
100 
- 
Corporate
1,392 
34 
5 
  
87 
2 
  
85 
22 
  
150 
  
664 
- 
  
2,206 
  
1,900 
  
938 
- 
Personal
23 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
23 
  
12 
  
- 
- 
                                           
 
1,863 
34 
5 
  
977 
(88)
  
2,931 
2,301 
  
1,607 
  
2,297 
- 
  
5,767 
  
2,616 
  
9,597 
3 
 
 
 
31 March 2013
  
31 December 2012
 
Notional
  
Fair value
  
Notional
  
Fair value
 
Bought 
Sold 
  
Bought 
Sold 
  
Bought 
Sold 
  
Bought 
Sold 
CDS by reference entity
£m 
£m 
  
£m 
£m 
  
£m 
£m 
  
£m 
£m 
                       
Government
14,255 
14,144 
  
846 
(885)
  
13,181 
13,034 
  
717 
(754)
Other banks
3,202 
3,327 
  
272 
(244)
  
3,537 
3,488 
  
163 
(139)
Other FI
581 
573 
  
24 
(21)
  
616 
607 
  
8 
(5)
Corporate
2,643 
2,251 
  
61 
(51)
  
2,580 
2,295 
  
28 
(20)
                       
 
20,681 
20,295 
  
1,203 
(1,201)
  
19,914 
19,424 
  
916 
(918)



Appendix 3 Risk management supplement (continued)
 
Country risk: Eurozone periphery by country: Portugal
 
 
 
Lending 
REIL 
Provisions 
  
AFS and 
LAR debt 
securities 
AFS 
reserves 
  
HFT
debt securities
  
Total debt 
securities 
  
Net
  
Balance 
sheet 
  
Off-balance 
 sheet 
  
Gross
Long 
Short 
Derivatives 
Repos 
Derivatives 
Repos 
31 March 2013
£m 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
£m 
£m 
£m 
  
£m 
  
£m 
  
£m 
£m 
                                           
Government
- 
- 
- 
  
78 
(16)
  
58 
17 
  
119 
  
16 
- 
  
135 
  
- 
  
16 
- 
Other banks
1 
- 
- 
  
72 
(9)
  
1 
2 
  
71 
  
350 
- 
  
422 
  
- 
  
456 
695 
Other FI
- 
- 
- 
  
1 
- 
  
24 
13 
  
12 
  
41 
- 
  
53 
  
- 
  
41 
- 
Corporate
257 
161 
98 
  
42 
- 
  
11 
9 
  
44 
  
79 
- 
  
380 
  
226 
  
79 
- 
Personal
7 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
7 
  
8 
  
- 
- 
                                           
 
265 
161 
98 
  
193 
(25)
  
94 
41 
  
246 
  
486 
- 
  
997 
  
234 
  
592 
695 
                                           
31 December 2012
                                          
                                           
Government
- 
- 
- 
  
72 
(18)
  
28 
15 
  
85 
  
17 
- 
  
102 
  
- 
  
17 
- 
Other banks
- 
- 
- 
  
66 
(12)
  
5 
- 
  
71 
  
380 
- 
  
451 
  
- 
  
481 
26 
Other FI
- 
- 
- 
  
1 
- 
  
21 
11 
  
11 
  
38 
- 
  
49 
  
3 
  
38 
- 
Corporate
336 
253 
188 
  
41 
- 
  
7 
- 
  
48 
  
79 
- 
  
463 
  
247 
  
82 
- 
Personal
7 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
7 
  
8 
  
- 
- 
                                           
 
343 
253 
188 
  
180 
(30)
  
61 
26 
  
215 
  
514 
- 
  
1,072 
  
258 
  
618 
26 
 
 
 
31 March 2013
  
31 December 2012
 
Notional
  
Fair value
  
Notional
  
Fair value
 
Bought 
Sold 
  
Bought 
Sold 
  
Bought 
Sold 
  
Bought 
Sold 
CDS by reference entity
£m 
£m 
  
£m 
£m 
  
£m 
£m 
  
£m 
£m 
                       
Government
3,486 
3,435 
  
287 
(264)
  
3,182 
3,134 
  
302 
(275)
Other banks
786 
772 
  
40 
(39)
  
856 
863 
  
31 
(30)
Other FI
8 
5 
  
- 
(1)
  
8 
5 
  
- 
(1)
Corporate
592 
510 
  
4 
(7)
  
426 
353 
  
3 
(7)
                       
 
4,872 
4,722 
  
331 
(311)
  
4,472 
4,355 
  
336 
(313)


 
Appendix 3 Risk management supplement (continued)
 
Country risk: Eurozone periphery by country: Greece
 
 
 
Lending 
REIL 
Provisions 
  
AFS and 
LAR debt 
securities 
AFS 
reserves 
  
HFT
debt securities
  
Total debt 
securities 
  
Net
  
Balance 
sheet 
  
Off-balance 
 sheet 
  
Gross
Long 
Short 
Derivatives 
Repos 
Derivatives 
Repos 
31 March 2013
£m 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
£m 
£m 
£m 
  
£m 
  
£m 
  
£m 
£m 
                                           
Government
- 
- 
- 
  
- 
- 
  
8 
8 
  
- 
  
17 
- 
  
17 
  
- 
  
156 
- 
Other banks
1 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
313 
- 
  
314 
  
- 
  
413 
- 
Other FI
1 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
1 
  
- 
  
- 
- 
Corporate
181 
31 
21 
  
- 
- 
  
- 
- 
  
- 
  
42 
- 
  
223 
  
25 
  
42 
- 
Personal
14 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
14 
  
9 
  
- 
- 
                                           
 
197 
31 
21 
  
- 
- 
  
8 
8 
  
- 
  
372 
- 
  
569 
  
34 
  
611 
- 
                                           
31 December 2012
                                          
                                           
Government
- 
- 
- 
  
- 
- 
  
9 
- 
  
9 
  
17 
- 
  
26 
  
- 
  
151 
- 
Central bank
7 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
7 
  
- 
  
- 
- 
Other banks
- 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
299 
- 
  
299 
  
- 
  
411 
- 
Other FI
1 
- 
- 
  
- 
- 
  
- 
8 
  
(8)
  
- 
- 
  
(7)
  
- 
  
- 
- 
Corporate
179 
38 
38 
  
- 
- 
  
- 
- 
  
- 
  
44 
- 
  
223 
  
18 
  
61 
- 
Personal
14 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
14 
  
9 
  
- 
- 
                                           
 
201 
38 
38 
  
- 
- 
  
9 
8 
  
1 
  
360 
- 
  
562 
  
27 
  
623 
- 
 
 
 
31 March 2013
  
31 December 2012
 
Notional
  
Fair value
  
Notional
  
Fair value
 
Bought 
Sold 
  
Bought 
Sold 
  
Bought 
Sold 
  
Bought 
Sold 
CDS by reference entity
£m 
£m 
  
£m 
£m 
  
£m 
£m 
  
£m 
£m 
                       
Other banks
4 
4 
  
1 
(1)
  
4 
4 
  
1 
(1)
Corporate
271 
274 
  
23 
(24)
  
319 
317 
  
31 
(33)
                       
 
275 
278 
  
24 
(25)
  
323 
321 
  
32 
(34)



Appendix 3 Risk management supplement (continued)
 
Country risk: Eurozone periphery by country: Cyprus
 
 
 
Lending 
REIL 
Provisions 
  
AFS and 
LAR debt 
securities 
AFS 
reserves 
  
HFT
debt securities
  
Total debt 
securities 
  
Net
  
Balance 
sheet 
  
Off-balance 
 sheet 
  
Gross
Long 
Short 
Derivatives 
Repos 
Derivatives 
Repos 
31 March 2013
£m 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
£m 
£m 
£m 
  
£m 
  
£m 
  
£m 
£m 
                                           
Government
- 
- 
- 
  
- 
- 
  
1 
- 
  
1 
  
- 
- 
  
1 
  
- 
  
- 
- 
Other banks
- 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
10 
- 
  
10 
  
- 
  
11 
- 
Other FI
- 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
- 
  
1 
  
13 
14 
Corporate
289 
168 
56 
  
- 
- 
  
- 
1 
  
(1)
  
24 
- 
  
312 
  
29 
  
24 
- 
Personal
14 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
14 
  
11 
  
- 
- 
                                           
 
303 
168 
56 
  
- 
- 
  
1 
1 
  
- 
  
34 
- 
  
337 
  
41 
  
48 
14 
                                           
31 December 2012
                                          
                                           
Government
- 
- 
- 
  
- 
- 
  
3 
- 
  
3 
  
- 
- 
  
3 
  
- 
  
- 
- 
Other banks
- 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
11 
- 
  
11 
  
- 
  
12 
- 
Other FI
2 
- 
- 
  
- 
- 
  
1 
- 
  
1 
  
- 
- 
  
3 
  
- 
  
4 
15 
Corporate
274 
162 
54 
  
- 
- 
  
- 
- 
  
- 
  
24 
- 
  
298 
  
36 
  
38 
- 
Personal
15 
- 
- 
  
- 
- 
  
- 
- 
  
- 
  
- 
- 
  
15 
  
11 
  
- 
- 
                                           
 
291 
162 
54 
  
- 
- 
  
4 
- 
  
4 
  
35 
- 
  
330 
  
47 
  
54 
15 
 
 
 
 
 
 

 
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: 3 May 2013
 
 
THE ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
 
 
 
By:
/s/ Jan Cargill
 
 
Name:
Title:
Jan Cargill
Deputy Secretary