Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Disclosure of classes of share capital [line items] | |
Entity Registrant Name | ROYAL BANK OF SCOTLAND GROUP PLC |
Entity Central Index Key | 844,150 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
Ordinary shares | |
Disclosure of classes of share capital [line items] | |
Entity Common Stock, Shares Outstanding | 11,964,564,553 |
11% Cumulative Preference Shares | |
Disclosure of classes of share capital [line items] | |
Entity Common Stock, Shares Outstanding | 500,000 |
5 1/2% Cumulative Preference Shares | |
Disclosure of classes of share capital [line items] | |
Entity Common Stock, Shares Outstanding | 400,000 |
Non-cumulative preference shares of US$0.01 | |
Disclosure of classes of share capital [line items] | |
Entity Common Stock, Shares Outstanding | 26,549,170 |
Non-cumulative preference shares of 0.01 | |
Disclosure of classes of share capital [line items] | |
Entity Common Stock, Shares Outstanding | 2,044,418 |
Non-cumulative preference shares of 1 | |
Disclosure of classes of share capital [line items] | |
Entity Common Stock, Shares Outstanding | 54,442 |
Consolidated income statement
Consolidated income statement - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated income statement | |||
Interest receivable | £ 11,034 | £ 11,258 | £ 11,925 |
Interest payable | (2,047) | (2,550) | (3,158) |
Net interest income | 8,987 | 8,708 | 8,767 |
Fees and commissions receivable | 3,338 | 3,340 | 3,742 |
Fees and commissions payable | (883) | (805) | (809) |
Income from trading activities | 634 | 974 | 1,060 |
Loss on redemption of own debt | (7) | (126) | (263) |
Other operating income | 1,064 | 499 | 426 |
Non-interest income | 4,146 | 3,882 | 4,156 |
Total income | 13,133 | 12,590 | 12,923 |
Staff costs | (4,676) | (5,124) | (5,726) |
Premises and equipment | (1,565) | (1,388) | (1,827) |
Other administrative expenses | (3,323) | (8,745) | (6,288) |
Depreciation and amortisation | (808) | (778) | (1,180) |
Write down of goodwill and other intangible assets | (29) | (159) | (1,332) |
Operating expenses | (10,401) | (16,194) | (16,353) |
Profit/(loss) before impairment (losses)/releases | 2,732 | (3,604) | (3,430) |
Impairment (losses)/releases | (493) | (478) | 727 |
Operating profit/(loss) before tax | 2,239 | (4,082) | (2,703) |
Tax charge | (824) | (1,166) | (23) |
Profit/(loss) from continuing operations | 1,415 | (5,248) | (2,726) |
Profit from discontinued operations, net of tax | 1,541 | ||
Profit/(loss) for the year | 1,415 | (5,248) | (1,185) |
Attributable to: | |||
Non-controlling interests | 35 | 10 | 409 |
Preference shareholders | 234 | 260 | 297 |
Paid-in equity holders | 394 | 244 | 88 |
Dividend access share | 1,193 | ||
Ordinary shareholders | 752 | (6,955) | (1,979) |
Profit/(loss) for the year | £ 1,415 | £ (5,248) | £ (1,185) |
Per ordinary share | |||
Basic and diluted earnings/(loss) from continuing and discontinued operations | £ 6.3 | £ (59.5) | £ (27.7) |
Basic and diluted earnings/(loss) from continuing operations | £ 6.3 | £ (59.5) | £ (17.2) |
Consolidated statement of compr
Consolidated statement of comprehensive income - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated statement of comprehensive income | |||
Profit/(loss) for the year | £ 1,415 | £ (5,248) | £ (1,185) |
Items that do not qualify for reclassification | |||
Profit/(loss) on remeasurement of retirement benefit schemes | 90 | (1,049) | (73) |
Loss on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk | (126) | ||
Tax | (10) | 288 | 306 |
Total - Items that do not qualify for reclassification | (46) | (761) | 233 |
Items that do qualify for reclassification | |||
Available-for-sale financial assets | 26 | (94) | 44 |
Cash flow hedges | (1,069) | 765 | (700) |
Currency translation | 100 | 1,263 | (1,181) |
Tax | 256 | (106) | 108 |
Total - Items that do qualify for reclassification | (687) | 1,828 | (1,729) |
Other comprehensive (loss)/income after tax | (733) | 1,067 | (1,496) |
Total comprehensive income/(loss) for the year | 682 | (4,181) | (2,681) |
Attributable to: | |||
Non-controlling interests | 52 | 121 | 370 |
Preference shareholders | 234 | 260 | 297 |
Paid-in equity holders | 394 | 244 | 88 |
Dividend access share | 1,193 | ||
Ordinary shareholders | 2 | (5,999) | (3,436) |
Total comprehensive income/(loss) for the year | £ 682 | £ (4,181) | £ (2,681) |
Consolidated balance sheet
Consolidated balance sheet - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and balances at central banks | £ 98,337 | £ 74,250 |
Loans and advances to banks | 30,251 | 30,138 |
Loans and advances to customers | 349,919 | 351,950 |
Debt securities subject to repurchase agreements | 23,781 | 18,107 |
Other debt securities | 55,152 | 54,415 |
Debt securities | 78,933 | 72,522 |
Equity shares | 450 | 703 |
Settlement balances | 2,517 | 5,526 |
Derivatives | 160,843 | 246,981 |
Intangible assets | 6,543 | 6,480 |
Property, plant and equipment | 4,602 | 4,590 |
Deferred tax | 1,740 | 1,803 |
Prepayments, accrued income and other assets | 3,726 | 3,700 |
Assets of disposal groups | 195 | 13 |
Total assets | 738,056 | 798,656 |
Liabilities | ||
Deposits by banks | 46,898 | 38,556 |
Customer accounts | 398,036 | 380,968 |
Debt securities in issue | 30,559 | 27,245 |
Settlement balances | 2,844 | 3,645 |
Short positions | 28,527 | 22,077 |
Derivatives | 154,506 | 236,475 |
Provisions for liabilities and charges | 7,757 | 12,836 |
Accruals and other liabilities | 6,392 | 6,991 |
Retirement benefit liabilities | 129 | 363 |
Deferred tax | 583 | 662 |
Subordinated liabilities | 12,722 | 19,419 |
Liabilities of disposal groups | 10 | 15 |
Total liabilities | 688,963 | 749,252 |
Non-controlling interests | 763 | 795 |
Owners' equity | 48,330 | 48,609 |
Total equity | 49,093 | 49,404 |
Total liabilities and equity | £ 738,056 | £ 798,656 |
Consolidated statement of chang
Consolidated statement of changes in equity - GBP (£) £ in Millions | Called-up share capital | Paid-in equity | Share premium account | Merger reserve | Available-for-sale reserve | Cash flow hedging reserve | Foreign exchange reserve | Capital redemption reserve | Retained earnings | Own shares held | Shareholders' equity | Non-controlling interests | Preference shareholders | Ordinary shareholders | Total |
At 1 January at Dec. 31, 2014 | £ 6,877 | £ 784 | £ 25,052 | £ 13,222 | £ 299 | £ 1,029 | £ 3,483 | £ 9,131 | £ (4,001) | £ (113) | £ 2,946 | ||||
Ordinary shares issued | 159 | 373 | 2,537 | ||||||||||||
Conversion of B shares | 4,590 | (4,590) | |||||||||||||
Preference shares redeemed | (1) | 1 | (1,214) | ||||||||||||
Redeemed/reclassified | (150) | (27) | |||||||||||||
Additional Tier 1 capital notes issued | 2,012 | ||||||||||||||
Capital reduction | (24) | ||||||||||||||
Unrealized gains | 31 | 22 | |||||||||||||
Realized gains | 27 | (6) | |||||||||||||
Tax | (16) | (5) | |||||||||||||
Recycled to profit or loss on disposal of businesses | 4 | ||||||||||||||
Recycled to profit or loss on ceding control of Citizens | 9 | (36) | (962) | (5,157) | |||||||||||
Amount recognized in equity | 712 | 32 | |||||||||||||
Amount transferred from equity to earnings | (1,354) | ||||||||||||||
Tax | 98 | (4) | |||||||||||||
Retranslation of net assets | (22) | ||||||||||||||
Currency translation adjustments and other movements | 3 | ||||||||||||||
Foreign currency losses on hedges of net assets | (176) | ||||||||||||||
Tax | (11) | ||||||||||||||
Profit/(loss) attributable to ordinary shareholders and other equity owners - continuing operations | (2,801) | ||||||||||||||
Profit/(loss) attributable to ordinary shareholders and other equity owners - discontinued operations | 1,207 | ||||||||||||||
Profit attributable to non-controlling interests-continuing operations | 75 | ||||||||||||||
Profit from discontinued operations attributable to non-controlling interests | 334 | £ 334 | |||||||||||||
Equity preference dividends paid | (297) | ||||||||||||||
Paid-in equity dividends paid, net of tax | (88) | ||||||||||||||
Dividends paid | (31) | ||||||||||||||
Transfer (to) from retained earnings - available-for-sale reserve | (43) | 43 | |||||||||||||
Transfer (to) from retained earnings - cash flow hedging reserve | 9 | (9) | |||||||||||||
Transfer (to) from retained earnings - foreign exchange reserve | (642) | 642 | |||||||||||||
Transfer (to) from retained earnings - merger reserve | (2,341) | 2,341 | |||||||||||||
Costs of placing Citizens equity | (29) | ||||||||||||||
Gain/(loss) on remeasurement of the retirement benefit schemes, gross | (67) | (6) | 65 | ||||||||||||
Gain/(loss) on remeasurement of the retirement benefit schemes, tax | 306 | ||||||||||||||
Shares issued under employee share schemes | (58) | ||||||||||||||
Share-based payments, gross | 36 | ||||||||||||||
Share-based payments, tax | (4) | ||||||||||||||
Disposal of own shares | 6 | ||||||||||||||
At 31 December at Dec. 31, 2015 | 11,625 | 2,646 | 25,425 | 10,881 | 307 | 458 | 1,674 | 4,542 | (4,020) | (107) | £ 53,431 | 716 | £ 3,305 | £ 47,480 | 54,147 |
Ordinary shares issued | 198 | 268 | |||||||||||||
Preference shares redeemed | (1,160) | ||||||||||||||
Redeemed/reclassified | (110) | (21) | |||||||||||||
Additional Tier 1 capital notes issued | 2,046 | ||||||||||||||
Capital reduction | (42) | ||||||||||||||
Unrealized gains | 282 | ||||||||||||||
Realized gains | (376) | ||||||||||||||
Tax | 25 | ||||||||||||||
Recycled to profit or loss on disposal of businesses | (40) | ||||||||||||||
Amount recognized in equity | 1,867 | ||||||||||||||
Amount transferred from equity to earnings | (1,102) | ||||||||||||||
Tax | (193) | ||||||||||||||
Retranslation of net assets | 1,470 | ||||||||||||||
Currency translation adjustments and other movements | 111 | ||||||||||||||
Foreign currency losses on hedges of net assets | (278) | ||||||||||||||
Tax | 62 | ||||||||||||||
Profit/(loss) attributable to ordinary shareholders and other equity owners - continuing operations | (5,258) | ||||||||||||||
Profit attributable to non-controlling interests-continuing operations | 10 | ||||||||||||||
Profit from discontinued operations attributable to non-controlling interests | 0 | ||||||||||||||
Equity preference dividends paid | (260) | ||||||||||||||
Paid-in equity dividends paid, net of tax | (244) | ||||||||||||||
Dividend access share dividend | (1,193) | ||||||||||||||
Gain/(loss) on remeasurement of the retirement benefit schemes, gross | (1,049) | (1) | |||||||||||||
Gain/(loss) on remeasurement of the retirement benefit schemes, tax | 288 | ||||||||||||||
Shares issued under employee share schemes | (10) | 41 | |||||||||||||
Share-based payments, gross | (9) | ||||||||||||||
Own shares acquired | (66) | ||||||||||||||
At 31 December at Dec. 31, 2016 | 11,823 | 4,582 | 25,693 | 10,881 | 238 | 1,030 | 2,888 | 4,542 | (12,936) | (132) | 48,609 | 795 | 2,565 | 41,462 | 49,404 |
Ordinary shares issued | 142 | 235 | |||||||||||||
Redeemed/reclassified | (524) | (196) | |||||||||||||
Redemption of debt preference shares | 748 | (748) | |||||||||||||
Capital reduction | (25,789) | £ (4,542) | 30,331 | (59) | |||||||||||
Unrealized gains | 202 | ||||||||||||||
Realized gains | (176) | ||||||||||||||
Tax | (9) | ||||||||||||||
Recycled to profit or loss on disposal of businesses | (22) | ||||||||||||||
Amount recognized in equity | (277) | ||||||||||||||
Amount transferred from equity to earnings | (792) | ||||||||||||||
Tax | 266 | ||||||||||||||
Retranslation of net assets | 111 | ||||||||||||||
Currency translation adjustments and other movements | 17 | ||||||||||||||
Foreign currency losses on hedges of net assets | (6) | ||||||||||||||
Tax | (1) | ||||||||||||||
Profit/(loss) attributable to ordinary shareholders and other equity owners - continuing operations | 1,380 | ||||||||||||||
Profit attributable to non-controlling interests-continuing operations | 35 | ||||||||||||||
Profit from discontinued operations attributable to non-controlling interests | 0 | ||||||||||||||
Equity preference dividends paid | (234) | ||||||||||||||
Paid-in equity dividends paid, net of tax | (394) | ||||||||||||||
Dividends paid | (25) | ||||||||||||||
Transfer (to) from retained earnings - merger reserve | 0 | ||||||||||||||
Gain/(loss) on remeasurement of the retirement benefit schemes, gross | 90 | (66) | |||||||||||||
Gain/(loss) on remeasurement of the retirement benefit schemes, tax | (28) | ||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, gross | (126) | ||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit or loss, tax | 18 | ||||||||||||||
Shares issued under employee share schemes | (5) | 161 | |||||||||||||
Share-based payments, gross | (22) | ||||||||||||||
Own shares acquired | (72) | ||||||||||||||
At 31 December at Dec. 31, 2017 | £ 11,965 | £ 4,058 | £ 887 | £ 10,881 | £ 255 | £ 227 | £ 2,970 | £ 17,130 | £ (43) | £ 48,330 | £ 763 | £ 2,565 | £ 41,707 | £ 49,093 |
Consolidated statement of chan6
Consolidated statement of changes in equity (Parenthetical) £ in Millions, $ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2016GBP (£) | Mar. 31, 2015GBP (£) | Dec. 31, 2015GBP (£) | Oct. 31, 2015£ / shares | |
Nominal value | £ 1 | |||
Increase (decrease) in equity | (200) | |||
Issue of Additional Tier 1 capital notes | 2,012 | |||
Called-up share capital | ||||
Par value | £ / shares | £ 1 | |||
Ordinary shares issued | 159 | |||
Paid-in equity | ||||
Issue of Additional Tier 1 capital notes | £ 2,000 | 2,000 | ||
Available-for-sale reserve | ||||
Tax charge (credit) | 6 | |||
Cash flow hedging reserve | ||||
Tax charge (credit) | (16) | |||
Non-controlling interests | ||||
Ordinary shares issued | £ 2,537 | |||
Non-controlling interests | Citizens | ||||
Ordinary shares issued | £ 2,491 |
Consolidated cash flow statemen
Consolidated cash flow statement - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Operating profit/(loss) before tax from continuing operations | £ 2,239 | £ (4,082) | £ (2,703) |
Profit before tax from discontinued operations | 1,766 | ||
Adjustments for non-cash items and other adjustments included within income statement | (4,498) | (3,024) | (5,601) |
Contributions to defined benefit schemes | (627) | (4,786) | (1,060) |
Changes in operating assets and liabilities | 42,147 | 8,413 | 8,589 |
Income taxes paid | (520) | (171) | (73) |
Net cash flows from operating activities | 38,741 | (3,650) | 918 |
Cash flows from investing activities | |||
Sale and maturity of securities | 11,656 | 8,599 | 8,229 |
Purchase of securities | (17,212) | (11,607) | (14,135) |
Sale of property, plant and equipment | 405 | 447 | 1,432 |
Purchase of property, plant and equipment | (1,132) | (912) | (783) |
Net divestment of/(investment in) business interests and intangible assets | (199) | (886) | 391 |
Net cash flows from investing activities | (6,482) | (4,359) | (4,866) |
Cash flows from financing activities | |||
Issue of ordinary shares | 306 | 300 | 307 |
Issue of Additional Tier 1 capital notes | 2,046 | 2,012 | |
Redemption of non-controlling interests | 2,537 | ||
Redemption of paid-in equity | (720) | (110) | (150) |
Redemption of equity preference shares | (1,160) | (1,214) | |
Redemption of debt preference shares | (748) | ||
Non-controlling interests equity withdrawn and disposals | (59) | (42) | |
Own shares (acquired)/disposed | 89 | (25) | 6 |
Redemption of subordinated liabilities | (5,747) | (3,606) | (3,047) |
Dividends paid | (612) | (504) | (416) |
Dividend access share | (1,193) | ||
Interest on subordinated liabilities | (717) | (813) | (975) |
Net cash flows from financing activities | (8,208) | (5,107) | (940) |
Effects of exchange rate changes on cash and cash equivalents | (16) | 8,094 | 576 |
Net increase/(decrease) in cash and cash equivalents | 24,035 | (5,022) | (4,312) |
Cash and cash equivalents at 1 January | 98,570 | 103,592 | 107,904 |
Cash and cash equivalents at 31 December | £ 122,605 | £ 98,570 | £ 103,592 |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting policies | |
Accounting policies | Accounting policies 1. Presentation of accounts The accounts, set out on pages 231 to 331 including these accounting policies on pages 242 to 254 and the audited sections of the Financial review: Capital and risk management on pages 151 to 230, are prepared on a going concern basis (see the Report of the directors, page 108) and in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFRS Interpretations Committee of the IASB as adopted by the European Union (EU) (together IFRS). The EU has not adopted the complete text of IAS 39 ‘Financial Instruments: Recognition and Measurement’; it has relaxed some of the standard’s hedging requirements. The Group has not taken advantage of this relaxation: its financial statements are prepared in accordance with IFRS as issued by the IASB. The company is incorporated in the UK and registered in Scotland. Its accounts are presented in accordance with the Companies Act 2006. With the exception of investment property and certain financial instruments as described in Accounting policies 9, 14, 16 and 23, the accounts are presented on an historical cost basis. The Group adopted two revisions to IFRSs effective 1 January 2017: In January 2016, the IASB amended IAS 7 ‘Cash Flow Statements’ to require disclosure of the movements in financing liabilities. This is shown in Note 35. In January 2016, the IASB amended IAS 12 ‘Income taxes’ to clarify the recognition of deferred tax assets in respect of unrealised losses. Neither of these amendments has had a material effect on the Group’s financial statements. 2. Basis of consolidation The consolidated accounts incorporate the financial statements of the company and entities (including certain structured entities) that are controlled by the Group. The Group controls another entity (a subsidiary) when it is exposed, or has rights, to variable returns from its involvement with that entity and has the ability to affect those returns through its power over the other entity; power generally arises from holding a majority of voting rights. On acquisition of a subsidiary, its identifiable assets, liabilities and contingent liabilities are included in the consolidated accounts at their fair value. A subsidiary is included in the consolidated financial statements from the date it is controlled by the Group until the date the Group ceases to control it through a sale or a significant change in circumstances. Changes in the Group’s interest in a subsidiary that do not result in the Group ceasing to control that subsidiary are accounted for as equity transactions. All intergroup balances, transactions, income and expenses are eliminated on consolidation. The consolidated accounts are prepared under uniform accounting policies. 3. Revenue recognition Interest income on financial assets that are classified as loans and receivables, available-for-sale or held-to-maturity and interest expense on financial liabilities other than those measured at fair value are determined using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability (or group of financial assets or liabilities) and of allocating the interest income or interest expense over the expected life of the asset or liability. The effective interest rate is the rate that exactly discounts estimated future cash flows to the instrument’s initial carrying amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument’s yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows. Negative effective interest accruing to financial assets is presented in interest payable. Financial assets and financial liabilities held-for-trading or designated as at fair value through profit or loss are recorded at fair value. Changes in fair value are recognised in profit or loss. Fees in respect of services are recognised as the right to consideration accrues through the provision of the service to the customer. The arrangements are generally contractual and the cost of providing the service is incurred as the service is rendered. The price is usually fixed and always determinable. The application of this policy to significant fee types is outlined below. Payment services - this comprises income received for payment services including cheques cashed, direct debits, Clearing House Automated Payments (the UK electronic settlement system) and BACS payments (the automated clearing house that processes direct debits and direct credits). These are generally charged on a per transaction basis. The income is earned when the payment or transaction occurs. Charges for payment services are usually debited to the customer’s account monthly or quarterly in arrears. Income is accrued at period end for services provided but not yet charged. Credit and debit card fees - fees from card business include: · Interchange received: as issuer, the Group receives a fee (interchange) each time a cardholder purchases goods and services. The Group also receives interchange fees from other card issuers for providing cash advances through its branch and automated teller machine networks. These fees are accrued once the transaction has taken place. · Periodic fees payable by a credit card or debit card holder are deferred and taken to profit or loss over the period of the service. Lending (credit facilities) - commitment and utilisation fees are determined as a percentage of the outstanding facility. If it is unlikely that a specific lending arrangement will be entered into, such fees are taken to profit or loss over the life of the facility otherwise they are deferred and included in the effective interest rate on the loan. Brokerage fees - in respect of securities, foreign exchange, futures or options transactions entered into on behalf of a customer are recognised as income on execution of a significant act. Trade finance - income from the provision of trade finance is recognised over the term of the finance unless specifically related to a significant act, in which case income is recognised when the act is executed. Investment management - fees charged for managing investments are recognised as revenue as the services are provided. Incremental costs that are directly attributable to securing an investment management contract are deferred and charged as expense as the related revenue is recognised. 4. Assets held for sale and discontinued operations A non-current asset (or disposal group) is classified as held for sale if the Group will recover its carrying amount principally through a sale transaction rather than through continuing use. A non-current asset (or disposal group) classified as held for sale is measured at the lower of its carrying amount and fair value less costs to sell. If the asset (or disposal group) is acquired as part of a business combination it is initially measured at fair value less costs to sell. Assets and liabilities of disposal groups classified as held for sale and non-current assets classified as held for sale are shown separately on the face of the balance sheet. The results of discontinued operations, comprising the post-tax profit or loss of discontinued operations and the post-tax gain or loss recognised either on measurement to fair value less costs to sell or on disposal of the discontinued operation, are shown as a single amount on the face of the income statement; an analysis of this amount is presented in Note 18 on the accounts. A discontinued operation is a cash generating unit or a group of cash generating units that either has been disposed of, or is classified as held for sale, and (a) represents a separate major line of business or geographical area of operations, (b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or (c) is a subsidiary acquired exclusively with a view to resale. 5. Employee benefits Short-term employee benefits, such as salaries, paid absences, and other benefits are accounted for on an accruals basis over the period in which the employees provide the related services. Employees may receive variable compensation satisfied by cash, by debt instruments issued by the Group or by RBSG shares. The treatment of share-based compensation is set out in Accounting policy 25. Variable compensation that is settled in cash or debt instruments is charged to profit or loss over the period from the start of the year to which the variable compensation relates to the expected settlement date taking account of forfeiture and clawback criteria. Contributions to defined contribution pension schemes are recognised in profit or loss when payable. For defined benefit schemes, the defined benefit obligation is measured on an actuarial basis using the projected unit credit method and discounted at a rate determined by reference to market yields at the end of the reporting period on high quality corporate bonds of equivalent term and currency to the scheme liabilities. Scheme assets are measured at their fair value. The difference between scheme assets and scheme liabilities, the net defined benefit asset or liability, is recognised in the balance sheet. A defined benefit asset is limited to the present value of any economic benefits available to the Group in the form of refunds from the plan or reduced contributions to it. The charge to profit or loss for pension costs (recorded in operating expenses) comprises: · the current service cost · interest, computed at the rate used to discount scheme liabilities, on the net defined benefit liability or asset · past service cost resulting from a scheme amendment or curtailment · gains or losses on settlement. A curtailment occurs when the Group significantly reduces the number of employees covered by a plan. A plan amendment occurs when the Group introduces, or withdraws, a defined benefit plan or changes the benefits payable under an existing defined benefit plan. Past service cost may be either positive (when benefits are introduced or changed so that the present value of the defined benefit obligation increases) or negative (when benefits are withdrawn or changed so that the present value of the defined benefit obligation decreases). A settlement is a transaction that eliminates all further obligation for part or all of the benefits. Actuarial gains and losses (i.e. gains or and losses on re-measuring the net defined benefit asset or liability) are recognised in other comprehensive income in full in the period in which they arise. 6. Intangible assets and goodwill Intangible assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to profit or loss over the assets’ estimated economic lives using methods that best reflect the pattern of economic benefits and is included in Depreciation and amortisation. These estimated useful economic lives are: Computer software 3 to 12 years Other acquired intangibles 5 to 10 years Expenditure on internally generated goodwill and brands is written-off as incurred. Direct costs relating to the development of internal-use computer software are capitalised once technical feasibility and economic viability have been established. These costs include payroll, the costs of materials and services, and directly attributable overheads. Capitalisation of costs ceases when the software is capable of operating as intended. During and after development, accumulated costs are reviewed for impairment against the benefits that the software is expected to generate. Costs incurred prior to the establishment of technical feasibility and economic viability are expensed as incurred as are all training costs and general overheads. The costs of licences to use computer software that are expected to generate economic benefits beyond one year are also capitalised. Intangible assets include goodwill arising on the acquisition of subsidiaries and joint ventures. Goodwill on the acquisition of a subsidiary is the excess of the fair value of the consideration transferred, the fair value of any existing interest in the subsidiary and the amount of any non-controlling interest measured either at fair value or at its share of the subsidiary’s net assets over net fair value of the subsidiary’s identifiable assets, liabilities and contingent liabilities. Goodwill arises on the acquisition of a joint venture when the cost of investment exceeds the Group’s share of the net fair value of the joint venture’s identifiable assets and liabilities. Goodwill is measured at initial cost less any subsequent impairment losses. Goodwill arising on the acquisition of associates is included within their carrying amounts. The gain or loss on the disposal of a subsidiary, associate or joint venture includes the carrying value of any related goodwill. 7. Property, plant and equipment Items of property, plant and equipment (except investment property - see Accounting policy 9) are stated at cost less accumulated depreciation and impairment losses. Where an item of property, plant and equipment comprises major components having different useful lives, these are accounted for separately. Depreciation is charged to profit or loss on a straight-line basis so as to write-off the depreciable amount of property, plant and equipment (including assets owned and let on operating leases) over their estimated useful lives. The depreciable amount is the cost of an asset less its residual value. Freehold land is not depreciated. The estimated useful lives of the Group’s property, plant and equipment are: Freehold buildings 50 years Long leasehold property (leases with more than 50 years to run) 50 years Short leaseholds unexpired period of the lease Property adaptation costs 10 to 15 years Computer equipment up to 5 years Other equipment 4 to 15 years The residual value and useful life of property, plant and equipment are reviewed at each balance sheet date and updated for any changes to previous estimates. 8. Impairment of intangible assets and property, plant and equipment At each balance sheet date, the Group assesses whether there is any indication that its intangible assets, or property, plant and equipment are impaired. If any such indication exists, the Group estimates the recoverable amount of the asset and the impairment loss if any. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. If an asset does not generate cash flows that are independent from those of other assets or groups of assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to each of the Group’s cash-generating units or groups of cash-generating units expected to benefit from the combination. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less cost to sell and its value in use. Value in use is the present value of future cash flows from the asset or cash-generating unit discounted at a rate that reflects market interest rates adjusted for risks specific to the asset or cash-generating unit that have not been taken into account in estimating future cash flows. If the recoverable amount of an intangible or tangible asset is less than its carrying value, an impairment loss is recognised immediately in profit or loss and the carrying value of the asset reduced by the amount of the loss. A reversal of an impairment loss on intangible assets (excluding goodwill) or property, plant and equipment can be recognised when an increase in service potential arises provided the increased carrying value is not greater than it would have been had no impairment loss been recognised. Impairment losses on goodwill are not reversed. 9. Investment property Investment property comprises freehold and leasehold properties that are held to earn rentals or for capital appreciation or both. Investment property is not depreciated but is stated at fair value. Fair value is based on current prices for similar properties in the same location and condition. Any gain or loss arising from a change in fair value is recognised in profit or loss. Rental income from investment property is recognised on a straight-line basis over the term of the lease in Other operating income. Lease incentives granted are recognised as an integral part of the total rental income. 10. Foreign currencies The Group’s consolidated financial statements are presented in sterling which is the functional currency of the company. Group entities record transactions in foreign currencies in their functional currency, the currency of the primary economic environment in which they operate, at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the relevant functional currency at the foreign exchange rates ruling at the balance sheet date. Foreign exchange differences arising on the settlement of foreign currency transactions and from the translation of monetary assets and liabilities are reported in income from trading activities except for differences arising on cash flow hedges and hedges of net investments in foreign operations (see Accounting policy 23). Non-monetary items denominated in foreign currencies that are stated at fair value are translated into the relevant functional currency at the foreign exchange rates ruling at the dates the values are determined. Translation differences arising on non-monetary items measured at fair value are recognised in profit or loss except for differences arising on available-for-sale non-monetary financial assets, for example equity shares, which are recognised in other comprehensive income unless the asset is the hedged item in a fair value hedge. Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into sterling at foreign exchange rates ruling at the balance sheet date. Income and expenses of foreign operations are translated into sterling at average exchange rates unless these do not approximate to the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on the translation of a foreign operation are recognised in other comprehensive income. The amount accumulated in equity is reclassified from equity to profit or loss on disposal of a foreign operation. 11. Leases As lessor Contracts with customers to lease assets are classified as finance leases if they transfer substantially all the risks and rewards of ownership of the asset to the customer; all other contracts with customers to lease assets are classified as operating leases. Finance lease receivables are included in the balance sheet, within Loans and advances to customers, at the amount of the net investment in the lease being the minimum lease payments and any unguaranteed residual value discounted at the interest rate implicit in the lease. Finance lease income is allocated to accounting periods so as to give a constant periodic rate of return before tax on the net investment and included in Interest receivable. Unguaranteed residual values are subject to regular review; if there is a reduction in their value, income allocation is revised and any reduction in respect of amounts accrued is recognised immediately. Rental income from operating leases is recognised in income on a straight-line basis over the lease term unless another systematic basis better represents the time pattern of the asset’s use. Operating lease assets are included within Property, plant and equipment and depreciated over their useful lives (see Accounting policy 7). Operating lease rentals receivable are included in Other operating income. As lessee The Group’s contracts to lease assets are principally operating leases. Operating lease rental expense is included in Premises and equipment costs and recognised as an expense on a straight-line basis over the lease term unless another systematic basis better represents the benefit to the Group. 12. Provisions The Group recognises a provision for a present obligation resulting from a past event when it is more likely than not that it will be required to transfer economic benefits to settle the obligation and the amount of the obligation can be estimated reliably. Provision is made for restructuring costs, including the costs of redundancy, when the Group has a constructive obligation to restructure. An obligation exists when the Group has a detailed formal plan for the restructuring and has raised a valid expectation in those affected by starting to implement the plan or by announcing its main features. If the Group has a contract that is onerous, it recognises the present obligation under the contract as a provision. An onerous contract is one where the unavoidable costs of meeting the Group’s contractual obligations exceed the expected economic benefits. When the Group vacates a leasehold property, a provision is recognised for the costs under the lease less any expected economic benefits (such as rental income). Contingent liabilities are possible obligations arising from past events, whose existence will be confirmed only by uncertain future events, or present obligations arising from past events that are not recognised because either an outflow of economic benefits is not probable or the amount of the obligation cannot be reliably measured. Contingent liabilities are not recognised but information about them is disclosed unless the possibility of any outflow of economic benefits in settlement is remote. 13. Tax Income tax expense or income, comprising current tax and deferred tax, is recorded in the income statement except income tax on items recognised outside profit or loss which is credited or charged to other comprehensive income or to equity as appropriate. Current tax is income tax payable or recoverable in respect of the taxable profit or loss for the year arising in profit or loss, other comprehensive income or equity. Provision is made for current tax at rates enacted or substantively enacted at the balance sheet date. Deferred tax is the tax expected to be payable or recoverable in respect of temporary differences between the carrying amount of an asset or liability for accounting purposes and its carrying amount for tax purposes. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised. Deferred tax is not recognised on temporary differences that arise from initial recognition of an asset or a liability in a transaction (other than a business combination) that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is calculated using tax rates expected to apply in the periods when the assets will be realised or the liabilities settled, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date. Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to offset and where they relate to income taxes levied by the same taxation authority either on an individual Group company or on Group companies in the same tax group that intend, in future periods, to settle current tax liabilities and assets on a net basis or on a gross basis simultaneously. 14. Financial assets On initial recognition, financial assets are classified into held-to-maturity investments; held-for-trading; designated as at fair value through profit or loss; loans and receivables; or available-for-sale financial assets. Normal purchases of financial assets classified as loans and receivables are recognised on the settlement date; all other normal transactions in financial assets are recognised on the trade date. Held-to-maturity investments - a financial asset may be classified as a held-to-maturity investment only if it has fixed or determinable payments, a fixed maturity and the Group has the positive intention and ability to hold to maturity. Held-to-maturity investments are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method (see Accounting policy 3) less any impairment losses. Held-for-trading - a financial asset is classified as held-for-trading if it is acquired principally for sale in the near term, or forms part of a portfolio of financial instruments that are managed together and for which there is evidence of short-term profit taking, or it is a derivative (not in a qualifying hedge relationship). Held-for-trading financial assets are recognised at fair value with transaction costs being recognised in profit or loss. Subsequently they are measured at fair value. Income from trading activities includes gains and losses on held-for-trading financial assets as they arise. Designated as at fair value through profit or loss - financial assets may be designated as at fair value through profit or loss only if such designation (a) eliminates or significantly reduces a measurement or recognition inconsistency; or (b) applies to a group of financial assets, financial liabilities or both, that the Group manages and evaluates on a fair value basis; or (c) relates to an instrument that contains an embedded derivative which is not evidently closely related to the host contract. Financial assets that the Group designates on initial recognition as being at fair value through profit or loss are recognised at fair value, with transaction costs being recognised in profit or loss, and are subsequently measured at fair value. Gains and losses are recognised in profit or loss as they arise. Loans and receivables - non-derivative financial assets with fixed or determinable repayments that are not quoted in an active market are classified as loans and receivables, except those that are classified as available-for-sale or as held-for-trading, or designated as at fair value through profit or loss. Loans and receivables are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method (see Accounting policy 3) less any impairment losses. Available-for-sale financial assets - financial assets that are not classified as held-to-maturity; held-for-trading; designated as at fair value through profit or loss; or loans and receivables are classified as available-for-sale. Financial assets can be designated as available-for-sale on initial recognition. Available-for-sale financial assets are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at fair value. Unquoted equity investments whose fair value cannot be measured reliably are carried at cost and classified as available-for-sale financial assets. Impairment losses and exchange differences resulting from retranslating the amortised cost of foreign currency monetary available-for-sale financial assets are recognised in profit or loss together with interest calculated using the effective interest method (see Accounting policy 3) as are gains and losses attributable to the hedged risk on available-for-sale financial assets that are hedged items in fair value hedges (see Accounting policy 23). Other changes in the fair value of available-for-sale financial assets and any related tax are reported in other comprehensive income until disposal, when the cumulative gain or loss is reclassified from equity to profit or loss. Reclassifications - held-for-trading and available-for-sale financial assets that meet the definition of loans and receivables (non-derivative financial assets with fixed or determinable payments that are not quoted in an active market) may be reclassified to loans and receivables if the Group has the intention and ability to hold the financial asset for the foreseeable future or until maturity. The Group typically regards the foreseeable future for this purpose as twelve months from the date of reclassification. Additionally, held-for-trading financial assets that do not meet the definition of loans and receivables may, in rare circumstances, be transferred to available-for-sale financial assets or to held-to-maturity investments. Reclassifications are made at fair value. This fair value becomes the asset’s new cost or amortised cost as appropriate. Gains and losses recognised up to the date of reclassification are not reversed. Fair value - the Group’s approach to determining the fair value of financial instruments measured at fair value is set out in the section of Critical accounting policies and key sources of estimation uncertainty entitled Fair value - financial instruments. Further details are given in Note 9 on the accounts. 15. Impairment of financial assets The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets classified as held-to-maturity, as available-for-sale or as loans and receivables is impaired. A financial asset or group of financial assets is impaired and an impairment loss incurred if there is objective evidence that an event or events since initial recognition of the asset have adversely affected the amount or timing of future cash flows from the asset. Financial assets carried at amortised cost - if there is objective evidence that an impairment loss on a financial asset or group of financial assets classified as loans and receivables or as held-to-maturity investments has been incurred, the Group measures the amount of the loss as the difference between the carrying amount of the asset or group of assets and the present value of estimated future cash flows from the asset or group of assets discounted at the effective interest rate of the instrument at initial recognition. For collateralised loans and receivables, estimated future cash flows include cash flows that may result from foreclosure less the costs of obtaining and selling the collateral, whether or not foreclosure is probable. Where, in the course of the orderly realisation of a loan, it is exchanged for equity shares or property, the exchange is accounted for as the sale of the loan and the acquisition of equity securities or investment property. Where the Group’s interest in equity shares following the exchange is such that the Group controls an entity, that entity is consolidated. Impairment losses are assessed individually for financial assets that are individually significant and individually or collectively for assets that are not individually significant. In making collective impairment assessments, financial assets are grouped into portfolios on the basis of similar risk characteristics. Future cash flows from these portfolios are estimated on the basis of the contractual cash flows and historical loss experience for assets with similar credit risk characteristics. Historical loss experience is adjusted, on the basis of observable data, to reflect current conditions not affecting the period of historical experience. Impairment losses are recognised in profit or loss and the carrying amount of the financial asset or group of financial assets reduced by establishing an allowance for impairment losses. If, in a subsequent period, the amount of the impairment loss reduces and the reduction can be ascribed to an event after the impairment was recognised, the previously recognised loss is reversed by adjusting the allowance. Once an impairment loss has been recognised on a financial asset or group of financial assets, interest income is recognised on the carrying amount using the rate of interest at which estimated future cash flows were discounted in measuring impairment. Impaired loans and receivables are written off, i.e. the impairment provision is applied in writing down the loan’s carrying value partially or in full, when the Group concludes that there is no longer any realistic prospect of recovery of part or all of the loan. For loans that |
Net interest income
Net interest income | 12 Months Ended |
Dec. 31, 2017 | |
Net interest income | |
Net interest income | 1 Net interest income 2017 2016 2015 £m £m £m Loans and advances to customers 10,409 10,706 11,268 Loans and advances to banks 277 246 340 Debt securities 348 306 317 Interest receivable (1) 11,034 11,258 11,925 Customer accounts: demand deposits 99 433 619 Customer accounts: savings deposits 445 432 446 Customer accounts: other time deposits 179 190 315 Balances with banks 175 97 45 Debt securities in issue 554 557 759 Subordinated liabilities 572 845 869 Internal funding of trading businesses 23 105 Interest payable (1) 2,047 2,550 3,158 Net interest income 8,987 8,708 8,767 Notes: (1) Negative interest on loans and advances is classed as interest payable and on customer deposits is classed as interest receivable. |
Non-interest income
Non-interest income | 12 Months Ended |
Dec. 31, 2017 | |
Non-interest income | |
Non-interest income | 2 Non-interest income 2017 2016 2015 £m £m £m Fees and commissions receivable Payment services 829 856 923 Credit and debit card fees 665 645 738 Lending (credit facilities) 1,060 1,044 1,076 Brokerage 148 154 262 Investment management 249 250 305 Trade finance 173 196 242 Other 214 195 196 3,338 3,340 3,742 Fees and commissions payable Banking Income from trading activities Foreign exchange 525 989 809 Interest rate 35 Credit 197 336 Changes in fair value of own debt and derivative liabilities attributable to own credit - debt securities in issue 87 252 - derivative liabilities 12 67 2 Equities and other 31 42 634 974 1,060 Loss on redemption of own debt Other operating income Operating lease and other rental income 276 287 276 Changes in the fair value of own debt designated as at fair value through profit or loss attributable to own credit risk (2) - debt securities in issue — 41 84 - subordinated liabilities — Other changes in the fair value of financial assets and liabilities designated as at fair value through profit or loss and related derivatives 99 375 Changes in the fair value of investment properties 2 Profit/(loss) on sale of securities 226 71 Profit on sale of property, plant and equipment 75 18 91 Profit/(loss) on sale of subsidiaries and associates 245 273 Loss on disposal or settlement of loans and receivables Share of profits of associated entities 104 59 140 Other income (3) 88 66 151 Non-interest income 1,064 499 426 Notes: (2) Measured as the change in fair value from movements in the year in the credit risk premium payable by RBS. Ahead of adopting IFRS9 Financial Instruments from 1 January 2018, RBS has adopted the provisions in respect of the presentation of gains and losses on financial liabilities designated as at fair value through profit or loss from 1 January 2017. (3) Includes income from activities other than banking. |
Operating expenses
Operating expenses | 12 Months Ended |
Dec. 31, 2017 | |
Operating expenses | |
Operating expenses | 3 Operating expenses 2017 2016 2015 £m £m £m Salaries 2,765 3,097 3,177 Variable compensation 298 281 314 Temporary and contract costs 415 674 638 Social security costs 318 388 344 Share-based compensation 17 32 36 Pension costs - defined benefit schemes (see Note 4) 309 267 523 - loss/(gain) on curtailments or settlements (see Note 4) 66 1 - defined contribution schemes 92 89 74 Severance 255 229 511 Other 141 66 174 Staff costs 4,676 5,124 5,726 Premises and equipment 1,565 1,388 1,827 UK bank levy 215 190 230 Other administrative expenses (1) 3,108 8,555 6,058 Property, plant and equipment depreciation and write down (see Note 16) 586 574 950 Intangible assets amortisation (see Note 15) 222 204 230 Depreciation and amortisation 808 778 1,180 Write down of goodwill and other intangible assets (see Note 15) 29 159 1,332 Operating expenses 10,401 16,194 16,353 Restructuring and divestment costs Included in operating expenses are the following restructuring and divestment costs: 2017 2016 2015 £m £m £m Staff costs 753 642 830 Premises, equipment, depreciation and amortisation 471 164 746 Other administrative expenses (2) 341 1,300 1,355 Total 1,565 2,106 2,931 Notes: (1) Includes litigation and conduct costs, net of amounts recovered. Further details are provided in Note 20. (2) Includes other administrative expenses, write down of goodwill and other intangible assets. The average number of persons employed, rounded to the nearest hundred, in continuing operations during the year, excluding temporary staff, was 73,400 (2016 - 82,400; 2015 - 88,800); on the same basis there were no people employed in discontinued operations (2016 - nil; 2015 - 10,100). The average number of temporary employees during 2017 was 5,000 (2016 - 6,700; 2015 - 7,800). The number of persons employed in continuing operations at 31 December, excluding temporary staff, by reportable segment, was as follows: 2016* 2015* UK Personal & Business Banking Ulster Bank RoI Personal & Business Banking Commercial Banking Private Banking Commercial & Private Banking RBS International NatWest Markets Central items & other Total UK USA Europe Rest of the World Total There were no people employed in discontinued operations at 31 December 2017 (2016 - nil; 2015 - nil). * Re-presented to reflect segment reorganisation. Share-based payments As described in the Remuneration report on page 103, the Group grants share-based awards to employees principally on the following bases: Award plan Eligible employees Nature of award Vesting conditions (1) Settlement Sharesave UK, Republic of Ireland, Channel Islands, Gibraltar and Isle of Man Option to buy shares under employee savings plan Continuing employment or leavers in certain circumstances 2018 to 2022 Deferred performance awards All Awards of ordinary shares Continuing employment or leavers in certain circumstances 2018 to 2024 Long-term incentives (2) Senior employees Awards of conditional shares or share options Continuing employment or leavers in certain circumstances and/or achievement of performance conditions 2018 to 2024 Notes: (1) All awards have vesting conditions and therefore some may not vest. (2) Long-term incentives include the Executive Share Option Plan, the Long-Term Incentive Plan and the Employee Share Plan. The fair value of options granted in 2017 was determined using a pricing model that included: expected volatility of shares determined at the grant date based on historical volatility over a period of up to five years; expected option lives that equal the vesting period; no dividends on equity shares; and risk-free interest rates determined from UK gilts with terms matching the expected lives of the options. The strike price of options and the fair value on granting awards of fully paid shares is the average market price over the five trading days (three trading days for Sharesave) preceding grant date. Sharesave 2017 2016 2015 Average Shares Average Shares Average Shares exercise price under option exercise price under option exercise price under option £ (million) £ (million) £ (million) At 1 January Granted Exercised ) — ) Cancelled ) ) ) At 31 December Options are exercisable within six months of vesting; 3.7 million options were exercisable at 31 December 2017 (2016 – 8.1 million; 2015 - 1.0 million). The weighted average share price at the date of exercise of options was £2.77 (2016 - £1.78; 2015 - £3.54). At 31 December 2017, exercise prices ranged from £1.68 to £4.34 (2016 - £1.68 to £4.34; 2015 - £2.33 to £18.93) and the remaining average contractual life was 2.9 years (2016 - 2.9 years; 2015 – 2.9 years). The fair value of options granted in 2017 was £21 million (2016 - £18 million; 2015 - £12 million). Deferred performance awards 2017 2016 2015 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January Granted Forfeited ) ) ) ) ) ) Vested ) ) ) ) ) ) At 31 December The awards granted in 2017 vest in three equal tranches on their anniversaries. Long-term incentives 2017 2016 2015 Value Shares Options Value at Shares Options Value at Shares Options at grant awarded over shares grant awarded over shares grant awarded over shares £m (million) (million) £m (million) (million) £m (million) (million) At 1 January Granted — — — Vested/exercised ) ) — ) ) — ) ) ) Lapsed ) ) ) ) ) ) ) ) — At 31 December The market value of awards vested/exercised in 2017 was £22 million (2016 - £40 million; 2015 - £55 million). There are vested options of 2 million shares exercisable up to 2020 (2016 - 4 million; 2015 - 5 million). Variable compensation awards The following tables analyse the Group variable compensation awards for 2017. Group Change £m £m % Non-deferred cash awards (2) ) Total non-deferred variable compensation ) Deferred bond awards ) Deferred share awards Total deferred variable compensation Total variable compensation (3) — Variable compensation as a % of adjusted operating profit (4) Proportion of variable compensation that is deferred of which - deferred bond awards - deferred share awards 2015 Reconciliation of variable compensation awards to income statement charge £m £m £m Variable compensation awarded Less: deferral of charge for amounts awarded for current year ) ) ) Income statement charge for amounts awarded in current year Add: current year charge for amounts deferred from prior years Less: forfeiture of amounts deferred from prior years ) ) ) Income statement charge for amounts deferred from prior years Income statement charge for variable compensation (3) Actual Expected Year in which income statement charge is expected to be taken for deferred variable compensation 2015 £m 2016 £m 2017 £m 2018 £m 2019 and beyond £m Variable compensation deferred from 2015 and earlier Variable compensation deferred from 2016 — — Less: forfeiture of amounts deferred from prior years ) ) ) — — Variable compensation for 2017 deferred — — — Notes: (1) The tables above relate to continuing businesses only. (2) Cash awards are limited to £2,000 for all employees. (3) Excludes other performance related compensation. (4) Adjusted operating profit before variable compensation expense. |
Pensions
Pensions | 12 Months Ended |
Dec. 31, 2017 | |
Pensions | |
Pensions | 4 Pensions Defined contribution schemes The Group sponsors a number of defined contribution pension schemes in different territories, which new employees are offered the opportunity to join. Defined benefit schemes The Group sponsors a number of pension schemes in the UK and overseas, including the Main section of The Royal Bank of Scotland Group Pension Fund (the “Main scheme”) which operates under UK trust law and is managed and administered on behalf of its members in accordance with the terms of the trust deed, the scheme rules and UK legislation. Pension fund trustees are appointed to operate each fund and ensure benefits are paid in accordance with the scheme rules and national law. The trustees are the legal owner of a scheme’s assets, and have a duty to act in the best interests of all scheme members. The schemes generally provide a pension of one-sixtieth of final pensionable salary for each year of service prior to retirement up to a maximum of 40 years and are contributory for current members. These have been closed to new entrants some ten years ago, although current members continue to build up additional pension benefits, currently subject to 2% maximum annual salary inflation, while they remain employed by the Group. The Main scheme corporate trustee is RBS Pension Trustee Limited (the Trustee), a wholly owned subsidiary of National Westminster Bank Plc, Principal Employer of the Main scheme. The Board of the Trustee comprises four member trustee directors selected from eligible active staff, deferred and pensioner members who apply and six appointed by the Group. Under UK legislation a defined benefit pension scheme is required to meet the statutory funding objective of having sufficient and appropriate assets to cover its liabilities (the pensions that have been promised to members). Similar governance principles apply to the Group’s other pension schemes. Investment strategy The assets of the Main scheme, which represent 90% of plan assets at 31 December 2017 (2016 - 89%), are invested in a diversified portfolio of quoted and private equity, government and corporate fixed-interest and index-linked bonds, and other assets including real estate and infrastructure. The Main scheme employs derivative instruments to achieve a desired asset class exposure and to reduce the scheme’s interest rate, inflation and currency risk. This means that the net funding position is considerably less sensitive to changes in market conditions than the value of the assets or liabilities in isolation. Main scheme Major classes of plan assets as a percentage of total plan assets Quoted assets Quoted equities - Consumer industry - Manufacturing industry - Energy and utilities - Financial institutions - Technology and telecommunications - Other Private equity Index-linked bonds Government fixed interest bonds Corporate fixed interest bonds Unquoted assets Corporate and other bonds Hedge funds — Real estate Derivatives Cash and other assets Equity exposure of equity futures ) ) Cash exposure of equity futures The Main scheme’s holdings of derivative instruments are summarised in the table below: 2017 2016 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps Interest rate swaps Currency forwards Equity and bond call options — Equity and bond put options — Other The investment strategy of other schemes is similar to that of the Main scheme, adjusted to take account of the nature of liabilities, risk appetite of the trustees, size of the scheme and any local regulatory constraints. Swaps are used to manage interest rate and inflation risk of the liabilities, as well as being used to manage other risks within the Main scheme. They have been executed at prevailing market rates and within standard market bid/offer spreads with a number of counterparty banks, including The Royal Bank of Scotland plc. At 31 December 2017, the gross notional value of the swaps was £57 billion (2016 - £56 billion) and had a net positive fair value of £3,045 million (2016 - £3,629 million). Collateral is required on all swap transactions. The counterparty banks had delivered a net amount of £3,436 million of collateral at 31 December 2017 (2016 - £3,991 million). The schemes do not invest directly in the Group but can have exposure to the Group within their investment programmes through indirect exposure to ordinary shares of the Group through index tracking investments, swaps contracts (before allowing for collateral posted against the mark value of the swaps) and cash deposits placed with National Westminster Bank Plc. The trustees of the respective schemes are responsible for ensuring that indirect investments in the Group do not exceed the 5% regulatory limit. Amounts in the Financial statements The Group recognises the net pension scheme surplus or deficit as a net asset or liability. In doing so, the funded status is adjusted to reflect any schemes with a surplus that the Group may not be able to access, as well as any minimum funding requirement to pay in additional contributions. This is most relevant to the Main scheme, where the current surplus is not recognised. All schemes Amounts recognised on the balance sheet 2017 £m 2016 £m Fund assets at fair value Present value of fund liabilities Funded status Asset ceiling/minimum funding ) Net pension asset/(liability) comprises 2017 £m 2016 £m Net assets of schemes in surplus (included in Prepayments, accrued income and other assets, Note 17) Net liabilities of schemes in deficit ) ) ) Main scheme All schemes Present value Asset Net Present value Asset Net Fair of defined ceiling/ pension Fair of defined ceiling/ pension value of benefit minimum liability/ value of benefit minimum liability/ plan assets obligation funding (1) (asset) plan assets obligation funding (1) (asset) Changes in value of net pension liability/(asset) £m £m £m £m £m £m £m £m At 1 January 2016 Currency translation and other adjustments — — — — — Income statement Net interest expense ) ) Current service cost — — — — Past service cost — — — — Loss on curtailments or settlements — — — — — — Statement of comprehensive income Return on plan assets above recognised interest income — — ) — — ) Experience gains and losses — ) — ) — ) — ) Effect of changes in actuarial financial assumptions — — — — Effect of changes in actuarial demographic assumptions — ) — ) — ) — ) Asset ceiling/minimum funding adjustments — — — — Contributions by employer — — ) — — ) Contributions by plan participants and other scheme members — — — — — — Liabilities extinguished upon settlement — — — — ) ) — ) Benefits paid ) ) — — ) ) — — At 1 January 2017 — Currency translation and other adjustments — — — — Income statement Net interest expense — ) Current service cost — — — — Past service cost — — — — Loss on curtailments or settlement — — — — — — Statement of comprehensive income Return on plan assets above recognised interest income — — ) — — ) Experience gains and losses — — — — Effect of changes in actuarial financial assumptions — — — — Effect of changes in actuarial demographic assumptions — ) — ) — ) — ) Asset ceiling/minimum funding adjustments — — — — ) ) Contributions by employer — — ) — — ) Contributions by plan participants and other scheme members — — — — Liabilities extinguished upon settlement — — — — ) ) — ) Benefits paid ) ) — — ) ) — — At 31 December 2017 — ) Notes: (1) In recognising the net surplus or deficit of a pension scheme, the funded status of each scheme is adjusted to reflect any minimum funding requirement imposed on the sponsor and any ceiling on the amount that the sponsor has an unconditional right to recover from a scheme. (2) The Group expects to make contributions to the Main scheme of £190 million in 2018. Funding and contributions by the Group In the UK, the Trustees of defined benefit pension schemes are required to perform funding valuations every three years. The Trustees and the Company, with the support of the Scheme Actuary, agree the assumptions used to value the liabilities and a Schedule of Contributions required to eliminate any funding deficit. The funding assumptions incorporate a margin for prudence over and above the expected cost of providing the benefits promised to members, taking into account the sponsor’s covenant and the investment strategy of the scheme. Similar arrangements apply in the other territories where the Group sponsors defined benefit pension schemes. The last funding valuation of the Main scheme was at 31 December 2015 and next funding valuation is due at 31 December 2018, to be agreed by 31 March 2020. The triennial funding valuation of the Main scheme as at 31 December 2015 determined the funding level to be 84%, pension liabilities to be £37 billion and the deficit to be £5.8 billion, subsequently reduced by a £4.2 billion cash payment in March 2016. Investment returns over the next 10 year period were forecast to absorb the £1.6 billion balance of the deficit. The average cost of the future service of current members is 35% of basic salary before contributions from those members; it includes the expenses of running the scheme. Assumptions Placing a value on the Group’s defined benefit pension schemes’ liabilities requires the Group’s management to make a number of assumptions, with the support of independent actuaries who provide advice and guidance to the Group. The ultimate cost of the defined benefit obligations to the Group will depend upon actual future events and the assumptions made are unlikely to be exactly borne out in practice, meaning the final cost may be higher or lower than expected. The most significant assumptions used for the Main scheme are shown below: Principal IAS 19 Principal assumptions of 2015 triennial valuation Discount rate Fixed interest swap yield curve plus 1.5% per annum at all durations Inflation assumption (RPI) Retail price index RPI swap yield curve Rate of increase in salaries Rate of increase in deferred pensions Rate of increase in pensions in payment (RPI floor 0%, cap 5%): Limited price indexation (LPI) (0,5) swap yield curve Proportion of pension converted to a cash lump sum at retirement Longevity at age 60 for current pensioners (years) Males Females Longevity at age 60 for future pensioners currently aged 40 (years) Males Females Discount rate The Group discounts its defined benefit pension obligations at discount rates determined by reference to the yield on ‘high quality’ corporate bonds. The sterling yield curve (applied to 96% of the Group’s defined benefit obligations) is constructed by reference to yields on ‘AA’ corporate bonds from which a single discount rate is derived based on a cash flow profile similar in structure and duration to the pension obligations. The weighted average duration of the Main scheme’s defined benefit obligation at 31 December 2017 is 21 years (2016 – 20.9 years). Significant judgement is required when setting the criteria for bonds to be included in the population from which the yield curve is derived. The criteria include issue size, quality of pricing and the exclusion of outliers. Judgement is also required in determining the shape of the yield curve at long durations: a constant credit spread relative to gilts is assumed. The table below shows how the present value of the defined benefit obligation would change if the key assumptions used were changed. The sensitivity analysis presented below may not be representative of the actual change in the defined benefit obligation as it is unlikely that the changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Main scheme (decrease)/increase in obligation at 31 December £m £m 0.25% increase in the discount rate 0.25% increase in inflation 0.25% additional rate of increase in pensions in payment Longevity increase of one year 1,522 The defined benefit obligation is attributable to the different classes of scheme members in the following proportions (Main scheme): Membership category % % Active members Deferred members Pensioners and dependants The experience history of Group schemes is shown below: Main Scheme All schemes History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets Present value of plan obligations Net surplus/(deficit) Experience (losses)/gains on plan liabilities Experience gains/(losses) on plan assets Actual return on plan assets Actual return on plan assets - % |
Auditor's remuneration
Auditor's remuneration | 12 Months Ended |
Dec. 31, 2017 | |
Auditor's remuneration | |
Auditor's remuneration | 5 Auditor’s remuneration Amounts paid to the Group’s auditors for statutory audit and other services are set out below. All audit-related and other services are approved by the Group Audit Committee and are subject to strict controls to ensure the external auditor’s independence is unaffected by the provision of other services. The Group Audit Committee recognises that for certain assignments the auditors are best placed to perform the work economically; for other work the Group selects the supplier best placed to meet its requirements. The Group’s auditors are permitted to tender for such work in competition with other firms where the work is permissible under audit independence rules. On 24 March 2016 Deloitte LLP (Deloitte) resigned as the Group’s auditors and at the Annual General Meeting on 4 May 2016 the shareholders approved the appointment of Ernst & Young LLP (EY) as the Group’s auditor for the audit of the 2016 annual accounts. EY remain the Group’s auditors for the audit of the 2017 annual accounts. Amounts paid to the Group’s auditors for statutory audit and other services are set out below: EY 2017 2016 (1) Fees payable for the audit of the Group’s annual accounts - the audit of the company’s subsidiaries - audit-related assurance services (2) Total audit and audit-related assurance services fees Other assurance services Corporate finance services (3) Total other services Deloitte 2017 2016 (4) Fees payable to the auditor and its associates for other services to the Group — — - the audit of the company’s subsidiaries — - audit-related assurance services (5) — Total audit and audit-related assurance services fees — Other assurance services — Corporate finance services (6) — Total other services — Total — Notes: (1) Includes fees for the period EY were principal Group auditor (2016 - 1 January 2016 – 31 December 2016; Deloitte 2016 to effective resignation on 24 March 2016.) (2) Comprises fees of £1.1 million (2016 - £1.1 million) in relation to reviews of interim financial information, £2.5 million (2016 - £2.2 million) in respect of reports to the Group’s regulators in the UK and overseas, £0.7 million (2016 - £0.7 million) in relation to non-statutory audit opinions. (3) Comprises fees of £0.2 million (2016 - £0.2 million) in respect of work performed by the auditors as reporting accountants on debt and equity issuances undertaken by the Group. (4) Includes fees for the period Deloitte were principal Group auditor (2016 1 January 2016 to effective resignation on 24 March 2016) (5) Comprises no fees (2016 - nil) in relation to revenues of interim financial information, no fees (2016 - £10 million) in respect of reports to the Group’s regulators in the UK and overseas, no fees (2016 - £0.2 million) in respect of internal controls assurance, and no fees in relation to non-statutory audit opinions. (6) Comprises no fees (2016 £1.4 million) in respect of work performed by the auditors as reporting accountants as debt and equity issuances undertake by the Group, including securitisations, no fees (2016 - £0.1 million), and no fees (2016 – nil) in relation to working capital report in correction with a circular to shareholders. |
Tax
Tax | 12 Months Ended |
Dec. 31, 2017 | |
Tax | |
Tax | 6 Tax £m £m £m Current tax: Charge for the year ) ) ) Over provision in respect of prior years ) ) ) Deferred tax: Credit for the year — Reduction in the carrying value of deferred tax assets ) ) — (Under)/over provision in respect of prior years ) ) Tax charge for the year ) ) ) The actual tax charge differs from the expected tax charge computed by applying the standard rate of UK corporation tax of 19.25% (2016 – 20.00%; 2015 – 20.25%) as follows: £m £m £m Expected tax (charge)/credit ) Losses and temporary differences in year where no deferred tax asset recognised ) ) ) Foreign profits taxed at other rates UK tax rate change impact (1) ) Non-deductible goodwill impairment — — ) Items not allowed for tax: - losses on disposals and write-downs ) ) ) - UK bank levy ) ) ) - regulatory and legal actions ) ) ) - other disallowable items ) ) ) Non-taxable items Taxable foreign exchange movements ) Losses brought forward and utilised Reduction in carrying value of deferred tax asset in respect of: - UK losses ) ) — Banking surcharge ) ) — Adjustments in respect of prior years (2) Actual tax charge ) ) ) Notes: (1) In recent years, the UK government has steadily reduced the rate of UK corporation tax, with the latest enacted rates standing at 20% with effect from 1 April 2015, 19% from 1 April 2017 and 17% from 1 April 2020. The Finance (No 2) Act 2015 restricts the rate at which tax losses are given credit in future periods to the main rate of UK corporation tax, excluding the Banking Surcharge 8% rate introduced by this Act. Deferred tax assets and liabilities at 31 December 2017 take into account the reduced rates in respect of tax losses and non-banking temporary differences and where appropriate, the banking surcharge inclusive rate in respect of other banking temporary differences. (2) Prior year tax adjustments incorporate refinements to tax computations made on submission and agreement with the tax authorities. Current taxation balances include provisions in respect of uncertain tax positions, in particular in relation to restructuring and other costs where the taxation treatment remains subject to agreement with the relevant tax authorities. |
Earnings per ordinary share
Earnings per ordinary share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings per ordinary share | |
Earnings per ordinary share | 7 Earnings per ordinary share Earnings per ordinary share have been calculated based on the following: £m £m £m Earnings Profit/(loss) attributable to ordinary shareholders ) ) Loss from discontinued operations attributable to ordinary shareholders — — ) Profit/(loss) from continuing operations attributable to ordinary shareholders ) ) Weighted average number of shares (millions) (1) Weighted average number of ordinary shares outstanding during the year Effect of dilutive share options and convertible securities Diluted weighted average number of ordinary shares outstanding during the year Note: (1) All periods include the effect of 51 billion B shares that were converted to 5.1 billion ordinary shares in October 2015 (see Note 25). There were no basic earnings/(loss) per ordinary share from discontinued operations (2016 - nil; 2015 – 10.5p). There were no diluted earnings per ordinary share from discontinued operations (2016 – nil; 2015 – 10.4p). An agreement on 25 June 2014 between RBS and Her Majesty’s Treasury (HMT) set out the terms for the retirement of the Dividend Access Share (DAS). On 22 March 2016 the DAS was retired on payment the final dividend of £1,193 million to HMT; the DAS was re-designated as a single B share which was then cancelled. Earnings per share for periods ended after 25 June 2014 and prior to the retirement of the DAS reflect DAS dividends recognised before the end of a reporting period; this amounted to nil (2016 – £1,193; 2015- nil). |
Financial Instruments - classif
Financial Instruments - classification | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments | |
Financial Instruments - classification | 8 Financial instruments - classification The following tables analyse financial assets and liabilities in accordance with the categories of financial instruments in IAS 39. Assets and liabilities outside the scope of IAS 39 are shown within other assets and other liabilities. Assets Held-for- Designated Hedging Available- Loans and Held-to- Other Total Cash and balances at central banks — — — — Loans and advances to banks - reverse repos — — — - other (1) — — — Loans and advances to customers - reverse repos — — — - other — — Debt securities — Equity shares — — Settlement balances — — Derivatives Other assets — — — — — 31 December 2017 Cash and balances at central banks — — — — Loans and advances to banks - reverse repos — — — - other (1) — — — Loans and advances to customers - reverse repos — — — - other — — Debt securities Equity shares — — Settlement balances — — Derivatives Other assets — — — — — 31 December 2016 Note: (1) Includes items in the course of collection from other banks of £1,017 million (2016 - £781 million). Designated as at fair value Held-for- through profit Hedging Other Liabilities trading or loss derivatives Amortised cost liabilities Total £m £m £m £m £m £m Deposits by banks - repos — - other (1) — Customer accounts - repos — - other (2) Debt securities in issue (3) Settlement balances — — Short positions — Derivatives Subordinated liabilities — Other liabilities — — 31 December 2017 Deposits by banks - repos — - other (1) — Customer accounts - repos — - other (2) Debt securities in issue (3) Settlement balances — — Short positions — Derivatives Subordinated liabilities — Other liabilities — — 31 December 2016 Notes: (1) Includes items in the course of transmission to other banks of £214 million (2016 - £295 million). (2) The carrying amount of other customer accounts designated as at fair value through profit or loss is £114 million (2016 - £155 million) higher than the principal amount. No amounts have been recognised in profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. Measured as the change in fair value from movements in the period in the credit risk premium payable. (3) Comprises bonds and medium term notes of £25,922 million (2016 - £24,037 million) and certificates of deposit and other commercial paper of £4,637 million (2016 - £3,208 million). Amounts included in operating profit/(loss) before tax: £m £m £m Gains on financial assets/liabilities designated as at fair value through profit or loss Losses on disposal or settlement of loans and receivables The tables below present information on financial assets and financial liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreement together with financial collateral received or given. Offsetable instruments Offsetable potential not recognised by IFRS Effect of Net amount after Instruments master netting Other the effect of netting outside IFRS Balance and similar Cash financial arrangements and netting Balance Gross offset sheet agreements collateral collateral related collateral arrangements sheet total 2017 £m £m £m £m £m £m £m £m £m Assets Derivatives Reverse repos — Loans to customers — — — — — Settlement balances — — — Liabilities Derivatives Repos — — Customer accounts — — — — — Settlement balances — — — 2016 Assets Derivatives Reverse repos — Loans to customers — — — — — Settlement balances — — — Liabilities Derivatives Repos — Customer accounts — — — — — Settlement balances — — — Loans and deposits on the balance sheet include cash collateral given or taken against the derivative portfolio. Where offset is available but not recognised under IFRS, this is reflected in the cash collateral column. |
Financial Instruments - valuati
Financial Instruments - valuation | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments | |
Financial instruments - valuation | 9 Financial instruments - valuation Valuation of financial instruments carried at fair value Control environment RBS’s control environment for the determination of the fair value of financial instruments includes formalised protocols for the review and validation of fair values independent of the businesses entering into the transactions. There are specific controls to ensure consistent pricing policies and procedures, incorporating disciplined price verification. RBS ensures that appropriate attention is given to bespoke transactions, structured products, illiquid products and other instruments which are difficult to price. Independent price verification (IPV) IPV is a key element of the control environment. Valuations are first performed by the business which entered into the transaction. Such valuations may be directly from available prices, or may be derived using a model and variable model inputs. These valuations are reviewed, and if necessary amended, by a team independent of those trading the financial instruments, in the light of available pricing evidence. IPV differences are classified according to the quality of independent market observables into IPV quality bands linked to the fair value hierarchy principles, as laid out in IFRS 13 ‘Fair Value Measurement’. These differences are classified into fair value levels 1, 2 and 3 (with the valuation uncertainty risk increasing as the levels rise from 1 to 3) and then further classified into high, medium, low and indicative depending on the quality of the independent data available to validate the prices. Valuations are revised if they are outside agreed thresholds. Governance framework IPV takes place at least each month end date, for all fair value positions. The IPV control includes formalised reporting and escalation of any valuation differences in breach of established thresholds. The Pricing Unit determines IPV policy, monitors adherence to that policy and performs additional independent reviews of highly subjective valuation issues. The Modelled Product Review Committee sets the policy for model documentation, testing and review, and prioritises models with significant exposure being reviewed by the RBS Pricing Model Risk team. The NatWest Markets Valuation Committee is made up of valuation specialists and senior business representatives from various functions and oversee pricing, reserving and valuations issues. This committee meets monthly to review and ratify any methodology changes. The Executive Valuation Committee meets quarterly to address key material and subjective valuation issues, to review items escalated by the NatWest Markets Valuation Committee and to discuss other relevant matters including prudential valuation. Valuation hierarchy Initial classification of a financial instrument is carried out by the Product Control team following the principles in IFRS 13. They base their judgment on information gathered during the IPV process for instruments which include the sourcing of independent prices and model inputs. The quality and completeness of the information gathered in the IPV process gives an indication as to the liquidity and valuation uncertainty of an instrument. These initial classifications are reviewed and challenged by the Pricing Unit and are also subject to senior management review. Particular attention is paid to instruments crossing from one level to another, new instrument classes or products, instruments that are generating significant profit and loss and instruments where valuation uncertainty is high. Valuation techniques RBS derives fair value of its instruments differently depending on whether the instrument is a non-modelled or a modelled product. Non-modelled products Non-modelled products are valued directly from a price input typically on a position by position basis and include cash, equities and most debt securities. Modelled products Modelled products valued using a pricing model range in complexity from comparatively vanilla products such as interest rate swaps and options (e.g. interest rate caps and floors) through to more complex derivatives. The valuation of modelled products requires an appropriate model and inputs into this model. Sometimes models are also used to derive inputs (e.g. to construct volatility surfaces). RBS uses a number of modelling methodologies. Inputs to valuation models Values between and beyond available data points are obtained by interpolation and extrapolation. When utilising valuation techniques, the fair value can be significantly affected by the choice of valuation model and by underlying assumptions concerning factors such as the amounts and timing of cash flows, discount rates and credit risk. The principal inputs to these valuation techniques are as follows: · Bond prices - quoted prices are generally available for government bonds, certain corporate securities and some mortgage-related products. · Credit spreads - where available, these are derived from prices of credit default swaps or other credit based instruments, such as debt securities. For others, credit spreads are obtained from pricing services. For counterparty credit spreads, adjustments are made to market prices (or parameters) when the creditworthiness of the counterparty differs from that of the assumed counterparty in the market price (or parameters). · Interest rates - these are principally benchmark interest rates such as the London Interbank Offered Rate (LIBOR), Overnight Index Swaps (OIS) rate and other quoted interest rates in the swap, bond and futures markets. · Foreign currency exchange rates - there are observable prices both for spot and forward contracts and futures in the world’s major currencies. · Equity and equity index prices - quoted prices are generally readily available for equity shares listed on the world’s major stock exchanges and for major indices on such shares. · Commodity prices - many commodities are actively traded in spot and forward contracts and futures on exchanges in London, New York and other commercial centres. · Price volatilities and correlations - volatility is a measure of the tendency of a price to change with time. Correlation measures the degree which two or more prices or other variables are observed to move together. · Prepayment rates - the fair value of a financial instrument that can be prepaid by the issuer or borrower differs from that of an instrument that cannot be prepaid. In valuing prepayable instruments that are not quoted in active markets, RBS considers the value of the prepayment option. · Recovery rates/loss given default - these are used as an input to valuation models and reserves for asset-backed securities and other credit products as an indicator of severity of losses on default. Recovery rates are primarily sourced from market data providers or inferred from observable credit spreads. Consensus pricing RBS uses consensus prices for the IPV of some instruments. The consensus service encompasses the equity, interest rate, currency, commodity, credit, property, fund and bond markets, providing comprehensive matrices of vanilla prices and a wide selection of exotic products. NatWest Markets contributes to consensus pricing services where there is a significant interest either from a positional point of view or to test models for future business use. Data sourced from consensus pricing services are used for a combination of control processes including direct price testing, evidence of observability and model testing. In practice this means that RBS submits prices for all material positions for which a service is available. Data from consensus services are subject to the same level of quality review as other inputs used for IPV process. In order to determine a reliable fair value, where appropriate, management applies valuation adjustments to the pricing information gathered from the above sources. The sources of independent data are reviewed for quality and are applied in the IPV processes using a formalised input quality hierarchy. These adjustments reflect RBS’s assessment of factors that market participants would consider in setting a price. Furthermore, on an ongoing basis, RBS assesses the appropriateness of any model used. To the extent that the price determined by internal models does not represent the fair value of the instrument, for instance in highly stressed market conditions, RBS makes adjustments to the model valuation to calibrate to other available pricing sources. Where unobservable inputs are used, RBS may determine a range of possible valuations derived from differing stress scenarios to determine the sensitivity associated with the valuation. When establishing the fair value of a financial instrument using a valuation technique, RBS considers adjustments to the modelled price which market participants would make when pricing that instrument. Such adjustments include the credit quality of the counterparty and adjustments to compensate for model limitations. Valuation reserves When valuing financial instruments in the trading book, adjustments are made to mid-market valuations to cover bid-offer spread, liquidity and credit risk. A breakdown of valuation adjustments is provided in Capital and risk management: Balance sheet analysis - derivatives on page 206. Credit valuation adjustments (CVA) CVA represent an estimate of the adjustment to fair value that a market participant would make to incorporate the counterparty credit risk inherent in derivative exposures. CVA is actively managed by a credit and market risk hedging process, and therefore movements in CVA are partially offset by trading revenue on the hedges. The CVA is calculated on a portfolio basis reflecting an estimate of the amount a third party would charge to assume the credit risk. Where a positive exposure exists to a counterparty that is considered to be close to default, the CVA is calculated by applying expected losses to the current level of exposure. Otherwise, expected losses are applied to estimated potential future positive exposures which are modelled to reflect the volatility of the market factors which drive the exposures and the correlation between those factors. Expected losses are determined from market implied probabilities of default and internally assessed recovery levels. The probability of default is calculated with reference to observable credit spreads and observable recovery levels. For counterparties where observable data do not exist, the probability of default is determined from the credit spreads and recovery levels of similarly rated entities. Collateral held under a credit support agreement is factored into the CVA calculation. In such cases where RBS holds collateral against counterparty exposures, CVA is held to the extent that residual risk remains. Bid-offer, liquidity and other reserves Fair value positions are adjusted to bid (long positions) or offer (short positions) levels, by marking individual cash positions directly to bid or offer or by taking bid-offer reserves calculated on a portfolio basis for derivatives exposures. The bid-offer approach is based on current market spreads and standard market bucketing of risk. Bid-offer adjustments for each risk factor (including delta (the degree to which the price of an instrument changes in response to a change in the price of the underlying), vega (the degree to which the price of an instrument changes in response to the volatility in the price of the underlying), correlation (the degree to which prices of different instruments move together) are determined by aggregating similar risk exposures arising on different products. Additional basis bid-offer reserves are taken where these are charged in the market. Bid-offer spreads vary by maturity and risk type to reflect different spreads in the market. For positions where there is no observable quote, the bid-offer spreads are widened in comparison to proxies to reflect reduced liquidity or observability. Bid-offer methodologies may also incorporate liquidity triggers whereby wider spreads are applied to risks above pre-defined thresholds. As permitted by IFRS 13, netting is applied on a portfolio basis to reflect the value at which RBS believes it could exit the portfolio, rather than the sum of exit costs for each of the portfolio’s individual trades. This is applied where the asset and liability positions are managed as a portfolio for risk and reporting purposes. Vanilla risk on exotic products is typically reserved as part of the overall portfolio based calculation e.g. delta and vega risk on exotic products are included within the delta and vega bid-offer calculations. Product related risks such as correlation risk, attract specific bid-offer reserves. Additional reserves are provided for exotic products to ensure overall reserves match market close-out costs. These market close-out costs inherently incorporate risk decay and cross-effects (taking into account how changes in one risk factor may affect other inputs rather than treating all risk factors independently) that are unlikely to be adequately reflected in a static hedge based on vanilla instruments. Where there is limited bid-offer information for a product, the pricing approach and risk management strategy are taken into account when assessing the reserve. Reserves are also held in relation to fair value funding costs that are not within the scope of FVA, potential losses arising from receivables where there is a counterparty dispute and certain uncollateralised derivatives after the pricing impact of a significant novation in 2017 was incorporated into transactions of a similar nature. The discount rates applied to derivative cash flows in determining fair value reflect any underlying collateral agreements. Collateralised derivatives are generally discounted at the relevant OIS-related rates at an individual trade level. Reserves are held to the extent that the discount rates applied do not reflect all of the terms of the collateral agreements. Funding valuation adjustment (FVA) FVA represents an estimate of the adjustment to fair value that a market participant would make to incorporate funding costs and benefits that arise in relation to uncollateralised derivative exposures. Funding levels are applied to estimated potential future exposures, the modelling of which is consistent with the approach used in the calculation of CVA. The counterparty contingent nature of the exposures is reflected in the calculation. Amounts deferred on initial recognition On initial recognition of financial assets and liabilities valued using valuation techniques incorporating information other than observable market data, any difference between the transaction price and that derived from the valuation technique is deferred. Such amounts are recognised in profit or loss over the life of the transaction; when market data becomes observable; or when the transaction matures or is closed out as appropriate. At 31 December 2017, net gains of £56 million (2016 - £72 million) were carried forward. During the year, net gains of £64 million (2016 - £27 million) were deferred and £80 million (2016 - £48 million) were recognised in the income statement. Own credit RBS takes into account the effect of its own credit standing when valuing financial liabilities recorded at fair value in accordance with IFRS. Own credit spread adjustments are made when valuing issued debt held at fair value, including issued structured notes, and derivatives. An own credit adjustment is applied to positions where it is believed that counterparties would consider RBS’s creditworthiness when pricing trades. For issued debt this adjustment is based on debt issuance spreads above average inter-bank rates (at a range of tenors). Secondary senior debt issuance spreads are used in the calculation of the own credit adjustment applied to senior debt. The fair value of RBS’s derivative financial liabilities is also adjusted to reflect RBS’s own credit risk through debit valuation adjustments (DVA). Expected gains are applied to estimated potential future negative exposures, the modelling of which is consistent with the approach used in the calculation of CVA. Expected gains are determined from market implied probabilities of default and recovery levels. FVA is considered the primary adjustment applied to derivative liabilities. The extent to which DVA and FVA overlap is eliminated from DVA. The own credit adjustment does not alter cash flows, is not used for performance management, is disregarded for regulatory capital reporting processes and will reverse over time provided the liability is not repaid at a premium or a discount. The own credit adjustments (OCA) recorded on held-for-trading (HFT) and designated as at fair value through profit or loss (DFV) debt securities in issue, subordinated liabilities and derivative liabilities are set out below. The cumulative adjustments below represent reductions/(increases) to the balance sheet liability amounts. Debt Securities in issue (3) Subordinated Cumulative own credit adjustment (2) HFT £m DFV £m liabilities DFV £m Derivatives £m Total £m 2017 — 2016 Carrying values of underlying liabilities £bn £bn £bn 2017 2016 Notes: (1) The OCA does not alter cash flows and is not used for performance management. (2) Includes wholesale and retail note issuances. (3) The reserve movement between periods will not equate to the reported profit or loss or other comprehensive income related to own credit. RBS has early adopted the provisions within IFRS 9 Financial Instruments in respect of the presentation of gains and losses on financial liabilities designated at fair value through profit and loss from 1 January 2017. The balance sheet reserve is stated by converting underlying currency balances at spot rates for each period, whereas the income statement includes intra-period foreign exchange sell-offs. (4) The cumulative adjustment for debt securities in issue is opposite to that for subordinated liabilities: debt securities in issue were issued relatively recently at wider than current spreads, whilst many of the subordinated liabilities were issued before the financial crisis at significantly tighter spreads. Key points · The cumulative OCA decrease during the year was mainly due to the tightening of RBS issuance spreads. The OCA on senior debt is determined by reference to secondary debt issuance spreads, which tightened by 52 basis points at the five year level to 10 basis points at 31 December 2017 (31 December 2016 – 62 basis points). · RBS subordinated debt spreads at the five year level tightened to 169 basis points at 31 December 2017 (31 December 2016 – 281 basis points). · RBS five year CDS credit spreads tightened to 75 basis points at 31 December 2017 (31 December 2016 – 125 basis points). · DVA in respect of derivative liabilities has reduced to nil following the tightening in spreads in 2017, such that adjustments overlap with FVA and are thus eliminated from DVA. Financial instruments: carried at fair value - valuation hierarchy The following tables show financial instruments carried at fair value on the Group’s balance sheet by valuation hierarchy – level 1, level 2 and level 3 and related level 3 sensitivities. Level 1 Level 2 Level 3 Total Level 3 sensitivity (5) 2017 £bn £bn £bn £bn Favourable (£m) Unfavourable (£m) Assets Loans and advances — 0.2 — — Debt securities 1.2 30 - of which AFS 0.3 — — Equity shares — 0.2 20 - of which AFS — 0.2 20 Derivatives — 1.7 160 3.3 210 Proportion Liabilities Customer accounts — 0.2 20 Debt securities in issue — 0.3 10 Short positions — — — Derivatives — 1.7 140 Subordinated liabilities — — — — 2.2 170 Proportion For the notes to this table refer to the following page. Level 1 Level 2 Level 3 Total Level 3 sensitivity (5) 2016 £bn £bn £bn £bn Favourable (£m) Unfavourable (£m) Assets Loans and advances — Debt securities (3) - of which AFS Equity shares - of which AFS — Derivatives — Proportion Liabilities Customer accounts — Debt securities in issue — Short positions — — — Derivatives — Subordinated liabilities — — — — Proportion Notes: (1) Level 1: valued using unadjusted quoted prices in active markets, for identical financial instruments. Examples include G10 government securities, listed equity shares, certain exchange-traded derivatives and certain US agency securities. Level 2: valued using techniques based significantly on observable market data. Instruments in this category are valued using: (a) quoted prices for similar instruments or identical instruments in markets which are not considered to be active; or (b) valuation techniques where all the inputs that have a significant effect on the valuations are directly or indirectly based on observable market data. Level 2 instruments include non-G10 government securities, most government agency securities, investment-grade corporate bonds, certain mortgage products, including CLOs, most bank loans, repos and reverse repos, less liquid listed equities, state and municipal obligations, most notes issued, and certain money market securities and loan commitments and most OTC derivatives. Level 3: instruments valued using a valuation technique where at least one input which could have a significant effect on the instrument’s valuation, is not based on observable market data. Level 3 instruments primarily include cash instruments which trade infrequently, certain syndicated and commercial mortgage loans, certain emerging markets instruments, unlisted equity shares, certain residual interests in securitisations, asset-backed products and less liquid debt securities, certain structured debt securities in issue, and OTC derivatives where valuation depends upon unobservable inputs such as certain credit and exotic derivatives. No gain or loss is recognised on the initial recognition of a financial instrument valued using a technique incorporating significant unobservable data. (2) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instruments were transferred. There were no significant transfers between level 1 and level 2. (3) For an analysis of debt securities (by issuer, measurement classification and analysis of asset backed securities) and derivatives (by type of contract) refer to Capital and risk management - Credit risk. (4) The determination of an instrument’s level cannot be made at a global product level as a single product type can be in more than one level. For example, a single name corporate credit default swap could be in level 2 or level 3 depending on whether the reference counterparty’s obligations are liquid or illiquid. (5) Sensitivity represents the favourable and unfavourable effect on the income statement or the statement of comprehensive income due to reasonably possible changes to valuations using reasonably possible alternative inputs in RBS’s valuation techniques or models. Level 3 sensitivities are calculated on a trade or low level portfolio basis and hence these aggregated figures do not reflect the correlation between some of the sensitivities. In particular, for some portfolios, the sensitivities may be negatively correlated where a downward movement in one asset would produce an upward movement in another, but due to the additive presentation above, this correlation cannot be shown. 9 Financial instruments: valuation techniques The table below shows a breakdown of valuation techniques and the ranges for those unobservable inputs used in valuation models and techniques that have a material impact on the valuation of level 3 financial instruments. Level 3 (£bn) Range Financial instruments Assets Liabilities Valuation technique Unobservable inputs Low High Loans and advances 0.2 Price-based Price Debt securities 1.2 Price-based Price 369.81 GBP Price-based Price Equity shares 0.2 Price-based Price 585,066 GBP Valuation Discount factor Valuation Fund NAV Customer accounts DCF based on recoveries Correlation Interest rate delta Debt securities in issue Price-based Price 56.77 JPY 148.68 EUR Valuation Fund NAV 977.24 GBP Derivatives 1.7 Credit 0.2 DCF based on recoveries Credit spreads 0.1 bps 500 bps Option pricing model Correlation Volatility Upfront points Recovery rate Interest and foreign exchange contracts 1.4 Option pricing model Correlation Volatility Equity 0.1 Option pricing model Correlation Forward Volatility Notes: (1) The table above excludes unobservable inputs where the impact on valuation is not significant. Movements in the underlying input may have a favourable or unfavourable impact on the valuation depending on the particular terms of the contract and the exposure. For example, an increase in the credit spread of a bond would be favourable for the issuer but unfavourable for the note holder. Whilst RBS indicates where it considers that there are significant relationships between the inputs, there inter-relationships will be affected by macro economic factors including interest rates, foreign exchange rates or equity index levels. (2) Credit spreads and discount margins: credit spreads and margins express the return required over a benchmark rate or index to compensate for the credit risk associated with a cash instrument. A higher credit spread would indicate that the underlying instrument has more credit risk associated with it. Consequently, investors require a higher yield to compensate for the higher risk. The discount rate comprises credit spread or margin plus the benchmark rate; it is used to value future cash flows. (3) Price and yield: There may be a range of prices used to value an instrument that may be a direct comparison of one instrument or portfolio with another or, movements in a more liquid instrument may be used to indicate the movement in the value of a less liquid instrument. The comparison may also be indirect in that adjustments are made to the price to reflect differences between the pricing source and the instrument being valued, for example different maturity, credit quality, seniority or expected pay-outs. Similarly to price, an instrument’s yield may be compared with other instruments’ yields either directly or indirectly. (4) Recovery rate: reflects market expectations about the return of principal for a debt instrument or other obligations after a credit event or on liquidation. Recovery rates tend to move conversely to credit spreads. (5) Valuation: for private equity investments, risk may be measured by beta, estimated by looking at past prices of similar stocks and from valuation statements where valuations are usually derived from earnings measures such as EBITDA or net asset value. (6) Correlation: measures the degree by which two prices or other variables are observed to move together. If they move in the same direction there is positive correlation; if they move in opposite directions there is negative correlation. Correlations typically include relationships between: default probabilities of assets in a basket (a group of separate assets), exchange rates, interest rates and other financial variables. (7) Volatility: a measure of the tendency of a price to change with time. (8) Interest rate delta: these ranges represent the low/high marks on the relevant discounting curve. (9) Upfront points: where CDS contracts are standardised, the inherent spread of the trade may exceed the standard premium paid or received under the contract. Upfront points will compensate for the difference between the standard premium and the actual premium at the start of the contract. (10) RBS does not have any material liabilities measured at fair value that are issued with an inseparable third party credit enhancement. The Level 3 sensitivities on the previous page are calculated at a trade or low level portfolio basis. They are not calculated on an overall portfolio basis and therefore do not reflect the likely potential uncertainty on the portfolio as a whole. The figures are aggregated and do not reflect the correlated nature of some of the sensitivities. In particular, for some of the portfolios the sensitivities may be negatively correlated where a downwards movement in one asset would produce an upwards movement in another, but due to the additive presentation of the above figures this correlation cannot be displayed. The actual potential downside sensitivity of the total portfolio may be less than the non-correlated sum of the additive figures as shown in the above table. Areas of judgment Whilst the business has simplified, the diverse range of products historically traded by RBS results in a wide range of instruments that are classified into Level 3 of the hierarchy. Whilst the majority of these instruments naturally fall into a particular level, for some products an element of judgment is required. The majority of RBS financial instruments carried at fair value are classified as Level 2: inputs are observable either directly (i.e. as a price) or indirectly (i.e. derived from prices). Active and inactive markets A key input in the decision making process for the allocation of assets to a particular level is market activity. In general, the degree of valuation uncertainty depends on the degree of liquidity of an input. Where markets are liquid, little judgment is required. However, when the information regarding the liquidity in a particular market is not clear, a judgment may need to be made. This can be more difficult as assessing the liquidity of a market is not always straightforward. For an equity traded on an exchange, daily volumes of trading can be seen, but for an over-the-counter (OTC) derivative assessing the liquidity of the market with no central exchange is more difficult. A key related matter is where a market moves from liquid to illiquid or vice versa. Where this change is considered to be temporary, the classification is not changed. For example, if there is little market trading in a product on a reporting date but at the previous reporting date and during the intervening period the market has been considered to be liquid, the instrument will continue to be classified in the same level in the hierarchy. This is to provide consistency so that transfers between levels are driven by genuine changes in market liquidity and do not reflect short term or seasonal effects. Material movements between levels are reviewed quarterly. The breadth and depth of the IPV data allows for a rules based quality assessment to be made of market activity, liquidity and pricing uncertainty, which assists with the process of allocation to an appropriate level. Where suitable independent pricing information is not readily available, the quality assessment will result in the instrument being assessed as Level 3. Modelled products For modelled products the market convention is to quote these trades through the model inputs or parameters as opposed to a cash price equivalent. A mark-to-market is derived from the use of the independent market inputs calculated using RBS’s model. The decision to classify a modelled instrument as Level 2 or 3 will be dependent upon the product/model combination, the currency, the maturity, the observability and quality of input parameters and other factors. All these must be assessed to classify the asset. If an input fails the observability or quality tests then the instrument is considered to be in Level 3 unless the input can be shown to have an insignificant effect on the overall valuation of the product. The majority of derivative instruments for example vanilla interest rate swaps, foreign exchange swaps and liquid single name credit derivatives are classified as Level 2 as they are vanilla products valued using observable inputs. The valuation uncertainty on these is considered to be low and both input and output testing may be available. Non-modelled products Non-modelled products are generally quoted on a price basis and can therefore be considered for each of the three levels. This is determined by the market activity, liquidity and valuation uncertainty of the instruments which is in turn measured from the availability of independent data used by the IPV process to allocate positions to IPV quality levels. The availability and quality of independent pricing information are considered during the classification process. An assessment is made regarding the quality of the independent information. For example, where consensus prices are used for non-modelled products, a key assessment of the quality of a price is the depth of the number of prices used to provide the consensus price. If the depth of contributors falls below a set hurdle rate, the instrument is considered to |
Financial Instruments - maturit
Financial Instruments - maturity analysis | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments | |
Financial instruments - maturity analysis | 10 Financial instruments - maturity analysis Remaining maturity The following table shows the residual maturity of financial instruments, based on contractual date of maturity. 2017 2016 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks — — Loans and advances to banks Loans and advances to customers Debt securities Equity shares — — Settlement balances — — Derivatives Liabilities Deposits by banks Customer accounts Debt securities in issue Settlement balances and short positions Derivatives Subordinated liabilities Assets and liabilities by contractual cash flow maturity The tables below show the contractual undiscounted cash flows receivable and payable, up to a period of 20 years, including future receipts and payments of interest of financial assets and liabilities by contractual maturity. The balances in the following tables do not agree directly with the consolidated balance sheet, as the tables include all cash flows relating to principal and future coupon payments, presented on an undiscounted basis. The tables have been prepared on the following basis: Financial assets have been reflected in the time band of the latest date on which they could be repaid, unless earlier repayment can be demanded by RBS. Financial liabilities are included at the earliest date on which the counterparty can require repayment, regardless of whether or not such early repayment results in a penalty. If the repayment of a financial instrument is triggered by, or is subject to, specific criteria such as market price hurdles being reached, the asset is included in the time band that contains the latest date on which it can be repaid, regardless of early repayment. The liability is included in the time band that contains the earliest possible date on which the conditions could be fulfilled, without considering the probability of the conditions being met. For example, if a structured note is automatically prepaid when an equity index exceeds a certain level, the cash outflow will be included in the less than three months period, whatever the level of the index at the year end. The settlement date of debt securities in issue, issued by certain securitisation vehicles consolidated by RBS, depends on when cash flows are received from the securitised assets. Where these assets are prepayable, the timing of the cash outflow relating to securities assumes that each asset will be prepaid at the earliest possible date. As the repayments of assets and liabilities are linked, the repayment of assets in securitisations is shown on the earliest date that the asset can be prepaid, as this is the basis used for liabilities. The principal amounts of financial assets and liabilities that are repayable after 20 years or where the counterparty has no right to repayment of the principal are excluded from the table, as are interest payments after 20 years. Held-for-trading assets of £243.9 billion (2016 - £328.9 billion) and liabilities of £232.9 billion (2016 - £317.0 billion) have been excluded from the following tables. 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2017 £m £m £m £m £m £m Assets by contractual maturity Cash and balances at central banks — — — — — Loans and advances to banks — — — Debt securities Settlement balances — — — — — Total maturing assets Loans and advances to customers Derivatives held for hedging Liabilities by contractual maturity Deposits by banks Debt securities in issue Subordinated liabilities Settlement balances and other liabilities — — — — — Total maturing liabilities Customer accounts Derivatives held for hedging Maturity gap Cumulative maturity gap Guarantees and commitments notional amount Guarantees (1) — — — — — Commitments (2) — — — — — — — — — — For the notes to this table refer to following page. 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2016 £m £m £m £m £m £m Assets by contractual maturity Cash and balances at central banks — — — — Loans and advances to banks — — — Debt securities Settlement balances — — — — — Total maturing assets Loans and advances to customers Derivatives held for hedging Liabilities by contractual maturity Deposits by banks Debt securities in issue Subordinated liabilities Settlement balances and other liabilities — — — — — Total maturing liabilities Customer accounts Derivatives held for hedging Maturity gap Cumulative maturity gap Guarantees and commitments notional amount Guarantees (1) — — — — — Commitments (2) — — — — — — — — — — Notes: (1) RBS is only called upon to satisfy a guarantee when the guaranteed party fails to meet its obligations. RBS expects most guarantees it provides to expire unused. (2) RBS has given commitments to provide funds to customers under undrawn formal facilities, credit lines and other commitments to lend subject to certain conditions being met by the counterparty. RBS does not expect all facilities to be drawn, and some may lapse before drawdown. |
Financial assets - impairments
Financial assets - impairments | 12 Months Ended |
Dec. 31, 2017 | |
Financial assets - impairments | |
Financial assets - impairments | 11 Financial assets - impairments The following table shows the movement in the provision for impairment losses on loans and advances. Individually Collectively assessed assessed Latent £m £m £m £m £m At 1 January Currency translation and other adjustments Disposals — — Amounts written-off — Recoveries of amounts previously written-off — Losses/(releases) to income statement Unwind of discount (recognised in interest income) — At 31 December (1) Notes: (1) Includes nil relating to loans and advances to banks (2016 - nil). (2) The table above excludes impairments relating to securities. Impairment losses/(releases) charged to the income statement £m £m £m Loans and advances to customers Loans and advances to banks — — Securities The following tables analyse impaired financial assets. 2017 2016 Carrying Carrying Cost Provision value Cost Provision value £m £m £m £m £m £m Loans and receivables Loans and advances to customers (1) Note: (1) Impairment provisions individually assessed on balances of £3,418 million (2016 - £4,186 million). Carrying value £m £m Available-for-sale securities Debt securities Equity shares Loans and receivables Debt securities Financial and non-financial assets recognised on the balance sheet, obtained during the year by taking possession of collateral or calling on other credit enhancements, were £30 million (2016 - £30 million). In general, RBS seeks to dispose of property and other assets not readily convertible into cash, obtained by taking possession of collateral, as rapidly as the market for the individual asset permits. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2017 | |
Derivatives | |
Derivatives | 12 Derivatives Companies within RBS transact derivatives as principal either as a trading activity or to manage balance sheet foreign exchange, interest rate and credit risk. RBS enters into fair value hedges, cash flow hedges and hedges of net investments in foreign operations. The majority of RBS’s interest rate hedges relate to the management of RBS’s non-trading interest rate risk. RBS manages this risk within approved limits. Residual risk positions are hedged with derivatives principally interest rate swaps. Suitable larger financial instruments are fair value hedged; the remaining exposure, where possible, is hedged by derivatives documented as cash flow hedges and qualifying for hedge accounting. The majority of RBS’s fair value hedges involve interest rate swaps hedging the interest rate risk in recognised financial assets and financial liabilities. Cash flow hedges relate to exposures to the variability in future interest payments and receipts on forecast transactions and on recognised financial assets and financial liabilities. RBS hedges its net investments in foreign operations with currency borrowings and forward foreign exchange contracts. For cash flow hedge relationships of interest rate risk, the hedged items are actual and forecast variable interest rate cash flows arising from financial assets and financial liabilities with interest rates linked to LIBOR, EURIBOR or the Bank of England Official Bank Rate. The financial assets are customer loans and the financial liabilities are customer deposits and LIBOR linked medium-term notes and other issued securities. At 31 December 2017 variable rate financial assets of £91 billion (2016 - £81 billion) and variable rate financial liabilities of £69 billion (2016 - £55 billion) were hedged in such cash flow hedge relationships. For cash flow hedging relationships, the initial and ongoing effectiveness is assessed by comparing movements in the fair value of the expected highly probable forecast interest cash flows with movements in the fair value of the expected changes in cash flows from the hedging interest rate swap. Hedge effectiveness is measured on a cumulative basis over a time period management feels appropriate. The method of calculating hedge ineffectiveness is the hypothetical derivative method. For fair value hedge relationships of interest rate risk, the hedged items are typically large corporate fixed-rate loans, government securities, fixed rate finance leases, fixed rate medium-term notes or preference shares classified as debt. At 31 December 2017, fixed rate financial assets of £36 billion (2016 - £29 billion) and fixed rate financial liabilities of £22 billion (2016 - £23 billion) were hedged by interest rate swaps in fair value hedge relationships. The initial and ongoing effectiveness of fair value hedge relationships is assessed on a cumulative basis by comparing movements in the fair value of the hedged item attributable to the hedged risk with changes in the fair value of the hedging interest rate swap over a time period management feels is appropriate. 2017 2016 Notional Notional amount Assets Liabilities amount Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts Spot, forwards and futures Currency swaps Options purchased — — Options written — — Interest rate contracts Interest rate swaps Options purchased — — Options written — — Futures and forwards Credit derivatives Equity and commodity contracts Included in the table above are derivatives held for hedging purposes as follows: 2017 2016 Assets Liabilities Assets Liabilities £m £m £m £m Fair value hedging Interest rate contracts Cash flow hedging Interest rate contracts Exchange rate contacts — Net investment hedging Exchange rate contracts Hedge ineffectiveness recognised in other operating income in continuing operations comprised: £m £m £m Fair value hedging (Losses)/gains on the hedged items attributable to the hedged risk Gains/(losses) on the hedging instruments Fair value hedging ineffectiveness Cash flow hedging ineffectiveness — Substantially all forecast receivable hedged cash flows occur within 5 years (2016 - 5 years) and substantially all forecast payable cash flows occur within 10 years (2016 – 10 years); the income statement is impacted over the same periods. |
Debt securities
Debt securities | 12 Months Ended |
Dec. 31, 2017 | |
Debt securities | |
Debt securities | 13 Debt securities Other Central and local government financial Of which UK US Other Banks institutions Corporate Total ABS (1) 2017 £m £m £m £m £m £m £m £m Held-for-trading Designated as at fair value through profit or loss — — — — — — — — Available-for-sale Loans and receivables — — — — Held-to-maturity — — — — — — Available-for-sale Gross unrealised gains Gross unrealised losses — 2016 Held-for-trading Designated as at fair value through profit or loss — — — — — Available-for-sale Loans and receivables — — — — Held-to-maturity — — — — — — Available-for-sale Gross unrealised gains Gross unrealised losses Note: (1) Includes covered bonds. Gross gains of £58 million (2016 - £115 million) and gross losses of £12 million (2016 - £107 million) were realised on the sale of available-for-sale securities in continuing operations. There were no gross gains or losses in discontinued operations in 2017 or 2016. The following table analyses available-for-sale debt securities and the related yield (based on weighted averages) by remaining maturity and issuer. 0-1 years 1-5 years 5-10 years Over 10 years Total Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield 2017 £m % £m % £m % £m % £m % Central and local governments - UK - US - other Banks — — Other financial institutions Corporate — — Of which ABS (1) - 2016 Central and local governments - UK - US - other Banks — — Other financial institutions Corporate — — Of which ABS (1) — — Note: (1) Includes covered bonds. |
Equity shares
Equity shares | 12 Months Ended |
Dec. 31, 2017 | |
Equity shares | |
Equity shares | 14 Equity shares 2017 2016 Listed Unlisted Total Listed Unlisted Total £m £m £m £m £m £m Held-for-trading Designated as at fair value through profit or loss Available-for-sale Available-for-sale Gross unrealised gains Gross unrealised losses — — Gross gains of £89 million (2016 - £73 million) and gross losses of £1 million (2016 - £10 million) were realised on the sale of available-for-sale equity shares in continuing operations. There were no gains or losses in discontinued operations. Dividend income from available-for-sale equity shares was £13 million (2016 - £13 million) in continuing operations and nil (2016 - nil) in discontinued operations. Unquoted equity investments whose fair value cannot be reliably measured are carried at cost and classified as available-for-sale financial assets. Unquoted equity shares generated no material gains or losses in 2017 or 2016. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets | |
Intangible assets | 15 Intangible assets 2017 2016 Cost Goodwill Other (1) Total Goodwill Other (1) Total £m £m £m £m £m £m At 1 January Currency translation and other adjustments Additions — — Disposals and write-off of fully amortised assets — — At 31 December Accumulated amortisation and impairment At 1 January Currency translation and other adjustments Disposals and write-off of fully amortised assets — — Charge for the year — — Write down of goodwill and other intangible assets — — At 31 December Net book value at 31 December Note: (1) Principally internally generated software. The Group’s goodwill acquired in business combinations is reviewed annually at 31 December for impairment. Impairment testing involves the comparison of the carrying value of each cash-generating unit (CGU) with its recoverable amount. The carrying values of the segments reflect the equity allocations made by management which are consistent with the Group’s capital targets. Recoverable amount is the higher of fair value and value in use. Value in use is the present value of expected future cash flows from the CGU. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants. Impairment testing inherently involves a number of judgmental areas: the preparation of cash flow forecasts for periods that are beyond the normal requirements of management reporting; the assessment of the discount rate appropriate to the business; estimation of the fair value of CGUs; and the valuation of the separable assets of each business whose goodwill is being reviewed. The impact of sensitivity to the more significant variables in each assessment is presented in the tables on the following page. The recoverable amounts for all CGUs at 31 December 2017 were based on value in use, using management’s latest five-year revenue and cost forecasts. The long-term growth rates have been based on expected nominal growth of the CGUs. The pre-tax risk discount rates are based on those observed to be applied to businesses regarded as peers of the CGUs. The annual review at 31 December 2017 indicated no impairment to goodwill. The analysis of goodwill by reportable segment is shown in Note 37. The carrying value of goodwill and the amount by which it is exceeded by the recoverable amount are set out below by reportable segment, along with the key assumptions applied in calculating the recoverable amount and sensitivities to changes in those assumptions. The recoverable amount of UK Personal & Business Banking, Commercial Banking and RBS International were £21.6 billion (2016 - £23.9 billion), £13.7 billion (2016 - £14.1 billion) and £3.3 billion (2016 - £2.7 billion) respectively. Consequential impact of 1% Consequential impact of 5% Break Assumptions Recoverable adverse movement in adverse movement even Terminal Pre-tax amount exceeded Discount Terminal Forecast Forecast discount Goodwill growth rate discount rate carrying value rate growth rate Income cost rate 31 December 2017 £bn % % £bn £bn £bn £bn £bn % UK Personal & Business Banking Commercial Banking RBS International — 31 December 2016 UK Personal & Business Banking Commercial Banking RBS International — Other intangible assets are reviewed for indicators of impairment. In 2017 £29 million (2016 - £159 million) of previously capitalised software was impaired primarily as a result of software which is no longer expected to derive future economic benefit. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, plant and equipment | |
Property, plant and equipment | 16 Property, plant and equipment Long Short Computers Operating Investment Freehold leasehold leasehold and other lease properties premises premises premises equipment assets Total 2017 £m £m £m £m £m £m £m Cost or valuation At 1 January Transfers to disposal groups — — Currency translation and other adjustments — — Reclassifications — — — — — Additions Change in fair value of investment properties — — — — — Disposals and write-off of fully depreciated assets At 31 December Accumulated impairment, depreciation and amortisation At 1 January — Transfers to disposal groups — — Currency translation and other adjustments — — — — Reclassifications — — — — — Write down of property, plant and equipment — — — — Disposals and write-off of fully depreciated assets — Charge for the year — At 31 December — Net book value at 31 December Long Short Computers Operating Investment Freehold leasehold leasehold and other lease properties premises premises premises equipment assets Total 2016 £m £m £m £m £m £m £m Cost or valuation At 1 January Currency translation and other adjustments Reclassifications — — — — — Additions Change in fair value of investment properties — — — — — Disposals and write-off of fully depreciated assets At 31 December Accumulated impairment, depreciation and amortisation At 1 January — Currency translation and other adjustments — Reclassifications — — — — — Write down of property, plant and equipment — — — — Disposals and write-off of fully depreciated assets — Charge for the year — At 31 December — Net book value at 31 December Investment property valuations principally employ present value techniques that discount expected cash flows. Expected cash flows reflect rental income, occupancy and residual market values; valuations are sensitive to changes in these factors. The fair value measurement of non-specialised properties in locations where the market for such properties is active and transparent are categorised as level 2 - 2% (2016 - 2%); otherwise investment property fair value measurements are categorised as level 3 - 98% (2016 - 98%). A 5% change in the most sensitive assumption, residual values, is £40 million. Valuations were carried out by qualified surveyors who are members of the Royal Institution of Chartered Surveyors, or an equivalent overseas body; property with a fair value of £201 million (2016 - £222 million) was valued by independent valuers. Rental income from investment properties was £84 million (2016 - £79 million). Direct operating expenses of investment properties in continuing operations were £9 million (2016 - £16 million). |
Prepayments, accrued income and
Prepayments, accrued income and other assets | 12 Months Ended |
Dec. 31, 2017 | |
Prepayments, accrued income and other assets | |
Prepayments, accrued income and other assets | 17 Prepayments, accrued income and other assets £m £m Prepayments Accrued income Interests in associates (1) Pension schemes in net surplus (refer to Note 4) Tax recoverable Other assets Note: (1) Interests in associates includes interest in Alawwal Bank £1,052 million (2016 - £1,083 million) and Business Growth Fund £316 million (2016 - £256 million). |
Discontinued operations and ass
Discontinued operations and assets and liabilities of disposal groups | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued operations and assets and liabilities of disposal groups | |
Discontinued operations and assets and liabilities of disposal groups | 18 Discontinued operations and assets and liabilities of disposal groups (a) Profit/(loss) from discontinued operations, net of tax £m £m £m Citizens Interest receivable — — Interest payable — — Net interest income — — Non-interest income — — Total income — — Operating expenses — — Profit before impairment losses — — Impairment losses — — Operating profit before tax — — Tax charge — — Profit after tax — — Provision for gain on disposal of subsidiary — — Gain on disposal of subsidiary — — Provision for loss on disposal of interest in associate — — Gain on disposal of interest in associate — — Profit from Citizens discontinued operation, net of tax — — Other Profit from other discontinued operations, net of tax — — Total profit from discontinued operations, net of tax — — RBS sold the final tranche of its interest in Citizens Financial Group, Inc (Citizens) during October 2015. Consequently, Citizens was classified as a disposal group at 31 December 2014 and presented as a discontinued operation until October 2015. From 3 August 2015 until the final tranche was sold in October 2015, Citizens was an associated undertaking. The gain on disposal in 2015 in relation to Citizens comprised £248 million on the derecognition of assets and liabilities, and £989 million in respect of reserves reclassified in accordance with IFRS. There was no profit from discontinued operations attributable to non-controlling interests (2016 - nil; 2015 - £334 million). (b) Operating cash flows attributable to discontinued operations Included within the Group’s cash flows are the following amounts attributable to discontinued operations: £m £m £m Net cash flows from operating activities — — Net cash flows from investing activities — — Net cash flows from financing activities — — Net decrease in cash and cash equivalents — — (c) Assets and liabilities of disposal groups £m £m Assets of disposal groups Loans and advances to banks Property, plant and equipment — Liabilities of disposal groups Other liabilities |
Short positions
Short positions | 12 Months Ended |
Dec. 31, 2017 | |
Short positions | |
Short positions | 19 Short positions £m £m Debt securities - Government - Other issuers Equity shares Note: (1) All short positions are classified as held-for-trading. |
Provisions for liabilities and
Provisions for liabilities and charges | 12 Months Ended |
Dec. 31, 2017 | |
Provision for liabilities and charges | |
Provisions for liabilities and charges | 20 Provisions for liabilities and charges Payment Other Residential Litigation protection customer mortgage backed and other Property and Provisions for liabilities and charges insurance (1) redress securities (2) regulatory (3) other (4) (5) Total £m £m £m £m £m £m At 1 January 2017 Currency translation and other movements — Charge to income statement Releases to income statement — Provisions utilised At 31 December 2017 Notes: (1) To reflect the increased volume of complaints following the FCA’s introduction of an August 2019 PPI timebar as outlined in FCA announcement CP17/3 and the introduction of new Plevin (unfair commission) complaint handling rules, RBS increased its provision for PPI by £175m in 2017 (2016 - £601 million, 2015 - £600 million, 2014 - £650 million) bringing the cumulative charge to £5.1 billion, of which £3.7 billion (74%) in redress and £0.4 billion in administrative expenses had been paid by 31 December 2017. Of the £5.1 billion cumulative charge, £4.6 billion relates to redress and £0.5 billion to administrative expenses. The principal assumptions underlying RBS’s provision in respect of PPI sales are: assessment of the total number of complaints that RBS will receive before 29 August 2019; the proportion of these that will result in redress; and the average cost of such redress. The number of complaints has been estimated from an analysis of RBS’s portfolio of PPI policies sold by vintage and by product. Estimates of the percentage of policyholders that will lodge complaints (the take up rate) and of the number of these that will be upheld (the uphold rate) have been established based on recent experience, guidance in FCA policy statements and the expected rate of responses from proactive customer contact. The average redress assumption is based on recent experience and FCA calculation rules. The table below shows the sensitivity of the provision to changes in the principal assumptions (all other assumptions remaining the same). Sensitivity Assumptions Actual to Future Change in Consequential change in Customer initiated complaints (1) 2,386k 429k +/- 5 +/- 30 Uphold rate (2) +/- 1 +/- 6 Average redress (3) £1,681 £1,476 +/- 5 +/- 30 Processing costs per claim (4) £160 £142 +/- £20 +/- 3 Notes: (1) Claims received directly by RBS to date, including those received via CMCs and Plevin (commission) only. Excluding those for proactive mailings and where no PPI policy exists. (2) Average uphold rate per customer initiated claims received directly by RBS to end of timebar for both PPI (mis-sale) and Plevin (commission), excluding those for which no PPI policy exists. (3) Average redress for PPI (mis-sale) and Plevin (commission) pay-outs. (4) Processing costs per claim on a valid complaints basis, includes direct staff costs and associated overhead - excluding FOS fees. Interest that will be payable on successful complaints has been included in the provision as has the estimated cost to RBS of administering the redress process. There are uncertainties as to the eventual cost of redress which will depend on actual complaint volumes, take up and uphold rates and average redress costs. Assumptions related to these are inherently uncertain and the ultimate financial impact may be different from the amount provided. We continue to monitor the position closely and refresh the underlying assumptions. Background information in relation to PPI claims is given in Note 31. (2) In the US, RBS is subject to civil litigation and various investigations relating to its issuance and underwriting of US mortgage-backed securities (RMBS). An additional charge of US$650 million (£492 million) was taken in Q4 2017 in connection with these matters, resulting in a year to date charge of US$971 million (£714 million). Detailed descriptions of RBS’s legal proceedings and discussion of the associated uncertainties are given in Note 31. In July 2017, RBS reached a settlement with the Federal Housing Finance Agency (FHFA) as conservator of Fannie Mae and Freddie Mac, to resolve claims by FHFA in relation to RBS’s issuance and underwriting of approximately US$32 billion (£25 billion) of RMBS in the US. As part of the settlement, FHFA’s outstanding litigation against RBS relating to those securities was withdrawn. Under the settlement, RBS paid FHFA US$5.5 billion (£4.2 billion), of which US$754 million (£581 million) was reimbursed to RBS under indemnification agreements with third parties. The cost to RBS (net of the indemnity mentioned above) of US$4.75 billion (£3.65 billion) was largely covered by then-existing provisions but an incremental charge of US$196 million (£151 million) was recorded in Q2 2017 in relation to the settlement. (3) RBS is party to certain legal proceedings and regulatory investigations and continues to co-operate with a number of regulators. All such matters are periodically reassessed with the assistance of external professional advisers, where appropriate, to determine the likelihood of RBS incurring a liability and to evaluate the extent to which a reliable estimate of any liability can be made. Details of these investigations and a discussion of the nature of the associated uncertainties are given in Note 31. (4) RBS recognised a £750 million provision in 2016 as a consequence of the announcement that HM Treasury is seeking a revised package of remedies that would conclude its remaining State Aid commitments. An additional charge of £50 million was taken in Q2 2017 following further revisions to the package, taking the total provision to £800 million. (5) The majority of property provisions relate to vacant leasehold property and comprise the present value of the shortfall between rentals payable and rentals receivable from sub-letting. In addition to the £800 million provision taken as an estimate of the cost of completing RBS’s State Aid divestment commitments as referred to in (4), other provisions include restructuring provisions of £482 million principally in relation to termination benefits. |
Accruals and other liabilities
Accruals and other liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accruals and other liabilities | |
Accruals and other liabilities | 21 Accruals and other liabilities £m £m Notes in circulation Current tax Accruals Deferred income Other liabilities |
Deferred tax
Deferred tax | 12 Months Ended |
Dec. 31, 2017 | |
Deferred tax | |
Deferred tax | 22 Deferred tax £m £m Deferred tax asset Deferred tax liability Net deferred tax asset Net deferred tax asset comprised: Fair Tax Accelerated value of AFS Cash losses capital Deferred financial financial flow Share carried Pension allowances Provisions gains instruments assets Intangibles hedging schemes forward Other Total £m £m £m £m £m £m £m £m £m £m £m £m At 1 January 2016 Acquisitions and disposals of subsidiaries — — — — — — (Credit)/charge to income statement — Charge/(credit) to other comprehensive income — — — — — — — — Currency translation and other adjustments — — At 1 January 2017 Acquisitions and disposals of subsidiaries — — — — — — — — — — Charge/(credit) to income statement — Charge/(credit) to other comprehensive income — — — — — — — Currency translation and other adjustments — — — — — — At 31 December 2017 Deferred tax assets in respect of unused tax losses are recognised if the losses can be used to offset probable future taxable profits after taking into account the expected reversal of other temporary differences. Recognised deferred tax assets in respect of tax losses are analysed further below. £m £m UK tax losses carried forward - The Royal Bank of Scotland plc - National Westminster Bank Plc - Ulster Bank Limited Total Overseas tax losses carried forward - Ulster Bank Ireland DAC UK tax losses Under UK tax rules, tax losses can be carried forward indefinitely. In periods from 1 April 2015, the Finance Act 2015 limits the offset of losses carried forward by UK banks to 50% of profits. In periods from 1 April 2016, the Finance Act 2016 further limits the offset of losses carried forward by UK banks to 25% of profits. The main rate of UK Corporation Tax reduced from 20% to 19% from 1 April 2017 and will reduce to 17% from 1 April 2020. Under the Finance (No 2) Act 2015, tax losses arising prior to 1 January 2016 are given credit in future periods at the main rate of UK corporation tax, excluding the Banking Surcharge rate (8%) introduced by the Act. Deferred tax assets and liabilities at 31 December 2017 take into account the reduced rates in respect of tax losses and non-banking temporary differences and where appropriate, the banking surcharge inclusive rate in respect of other banking temporary differences. The Royal Bank of Scotland plc – The Royal Bank of Scotland plc expects that the balance of recognised deferred tax asset at 31 December 2017 of £125 million in respect of tax losses amounting to c. £700 million will be substantially recovered by the end of 2022. Since 2012 RBS has reported mixed levels of taxable profits and losses because core banking profitability was offset by a series of restructuring plans as the group reshaped to meet commercial and regulatory demands. In total, £10,247 million of losses have not been recognised in the deferred tax balance at 31 December 2017; such losses will be available to offset 25% of future taxable profits in excess of those forecast in the closing deferred tax asset. National Westminster Bank plc – A deferred tax asset of £541 million has been recognised in respect of total losses of £3,092 million. The losses arose principally as a result of significant impairment and conduct charges between 2009 and 2012 during challenging economic conditions in the UK banking sector. National Westminster Bank plc returned to tax profitability during 2015 and expects the deferred tax asset to be substantially consumed by future taxable profits by the end of 2024. A reduction in annual profits by £120 million would extend the recovery of the deferred tax asset by one year. Overseas tax losses Ulster Bank Ireland DAC – A deferred tax asset of £259 million has been recognised in respect of losses of £2,071 million of total tax losses of £8,596 million carried forward at 31 December 2017. The losses arose principally as a result of significant impairment charges between 2008 and 2013 during challenging economic conditions in the Republic of Ireland; subsequent movements reflect £: € exchange differences. Ulster Bank Ireland DAC returned to profitability during 2014 and expects the deferred tax asset to be substantially consumed by future taxable profits by the end of 2024. Unrecognised deferred tax Deferred tax assets of £6,356 million (2016 - £7,940 million; 2015 - £6,349 million) have not been recognised in respect of tax losses and other temporary differences carried forward of £30,049 million (2016 - £33,376 million; 2015 - £27,483 million) in jurisdictions where doubt exists over the availability of future taxable profits. Of these losses and other temporary differences, £4,335 million expire within five years and £7,208 million thereafter. The balance of tax losses and other temporary differences carried forward has no expiry date. Deferred tax liabilities of £255 million (2016 - £258 million; 2015 - £256 million) have not been recognised in respect of retained earnings of overseas subsidiaries and held-over gains on the incorporation of overseas branches. Retained earnings of overseas subsidiaries are expected to be reinvested indefinitely or remitted to the UK free from further taxation. No taxation is expected to arise in the foreseeable future in respect of held-over gains. Dividends received from overseas are largely exempt from UK tax. |
Subordinated liabilities
Subordinated liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Subordinated liabilities | |
Subordinated liabilities | 23 Subordinated liabilities 2017 £m 2016 £m Dated loan capital Undated loan capital Preference shares Certain preference shares issued by the company are classified as liabilities; these securities remain subject to the capital maintenance rules of the Companies Act 2006. The following tables analyse the remaining contractual maturity of subordinated liabilities by the final redemption date and by the next call date. 2017 - final redemption 2018 £m 2019 £m 2020-2022 £m 2023-2027 £m Thereafter £m Perpetual £m Total £m Sterling — — — US dollar Euro Other — — — — — 2017 - call date Currently £m 2018 £m 2019 £m 2020-2022 £m 2023-2027 £m Thereafter £m Perpetual £m Total £m Sterling — US dollar — Euro — Other — — — — — — 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - final redemption £m £m £m £m £m £m £m Sterling — — — US dollar Euro Other — — — 2016 - call date Currently £m 2017 £m 2018 £m 2019-2021 £m 2022-2026 £m Thereafter £m Perpetual £m Total £m Sterling US dollar Euro Other — — — — — Capital treatment Redemptions £m £m £m The Royal Bank of Scotland Group plc £200 million series 1 non cumulative convertible £0.01 preference shares 7.387% (partial redemption) Ineligible — US$ 1,000 million series 1 non cumulative convertible preference shares of US$ 0.01 9.118% (partial redemption) Ineligible — $156 million 7.65% Series F non-cumulative preference shares (callable) Ineligible — $242 million 7.25% Series H non-cumulative preference shares (callable) Ineligible — $751 million 5.75% Series L non-cumulative preference shares (callable) Ineligible — US$ 750 million 6.8% (partial redemption) Ineligible — US$ 1,285 million 5.90% Trust Preferred Tier 1 — US$ 200 million 6.25% Trust Preferred Tier 1 — US$ 1,800 million 6.08% Trust Preferred Tier 1 — € 26 million 7.42% dated notes Tier 2 — € 7 million 7.38% dated notes Tier 2 — US$ 25 million floating rate notes (partial redemption) Tier 2 — The Royal Bank of Scotland plc € 750 million 4.35% subordinated notes 2017 Tier 2 — CHF124 million 9.375% subordinates notes March 2022 Tier 2 — CAD420 million 10.50% subordinated notes March 2022 Tier 2 — £564 million 10.50% subordinated notes March 2022 Tier 2 — AU$880 million 13.125% subordinated notes March 2022 Tier 2 — US$ 2,132 million 9.50% subordinated notes March 2022 Tier 2 — € 100 million floating rate subordinated notes 2017 Tier 2 — £51 million 2.35% + 5 year UK Gilts yield undated subordinated notes (callable December 2012) Ineligible — £54 million 5.13% undated notes Ineligible — CAD474 million 5.37% undated notes Ineligible — € 1 billion 4.625% dated notes Ineligible — NatWest Plc US$ 300 million 8.6250% non-cumulative preference shares (callable) Tier 1 — — RBS NV and subsidiaries € 15 million floating rate notes 2022 (partial redemption) Tier 2 — € 250 million 4.70% notes 2019 (partial redemption) Tier 2 — US$ 500 million 4.65% notes 2018 (partial redemption) Tier 2 — — NatWest Holdings Limited £20 million 11.75% perpetual tier two capital (partial redemption) Tier 2 — € 38 million 11.375% perpetual tier two capital (partial redemption) Tier 2 — — Note: (1) There were no issuances in 2017 or 2016. |
Non-controlling interests
Non-controlling interests | 12 Months Ended |
Dec. 31, 2017 | |
Non-controlling interests | |
Non-controlling interests | 24 Non-controlling interests RBS N.V. £m Other interests £m Total £m At 1 January 2016 Currency translation and other adjustments Profit attributable to non-controlling interests Equity withdrawn and disposals At 1 January 2017 Currency translation and other adjustments Profit attributable to non-controlling interests Dividends paid Equity withdrawn and disposals — At 31 December 2017 |
Share capital
Share capital | 12 Months Ended |
Dec. 31, 2017 | |
Share capital | |
Share capital | 25 Share capital Number of shares Allotted, called up and fully paid 2017 £m 2016 £m 2017 000s 2016 000s Ordinary shares of £1 Non-cumulative preference shares of US$0.01 (1) — — Non-cumulative convertible preference shares of US$0.01 — — — Non-cumulative preference shares of € 0.01 — — Non-cumulative convertible preference shares of £0.01 — — — Non-cumulative preference shares of £1 — — Cumulative preference shares of £1 Note: (1) 46 million shares with a total nominal value of £0.3 million were redeemed in September and December 2017. (2016 – 61.4 million shares with a total nominal value of £0.3 million were redeemed). Movement in allotted, called up and fully paid ordinary shares £m Number of shares - 000s At 1 January 2016 Shares issued At 1 January 2017 Shares issued At 31 December 2017 Ordinary shares There is no authorised share capital under the company’s constitution. At 31 December 2017, the directors had authority granted at the 2017 Annual General Meeting to issue up to £1,184 million nominal of ordinary shares other than by pre-emption to existing shareholders. During 2017, the company allotted and issued the following new ordinary shares of £1 each: Month Number of shares Subscription price per share Gross proceeds April 33.4m 239.688p £80 million June 29.0m 259.046p £75 million September 56.6m 256.027p £145 million In addition, the company issued 22 million ordinary shares of £1 each in connection with employee share plans. In October 2015, the company allotted and issued 5.1 billion new ordinary shares of £1 each to HM Treasury on conversion of 51 billion B shares. The company did not pay an ordinary dividend in 2017 or 2016. B shares and dividend access share From December 2009, HM Treasury owned 51 billion B shares with a nominal value of £0.01 each and a dividend access share (DAS) with a nominal value of £0.01. The B shares carried no voting rights at general meetings of ordinary shareholders and were convertible at any time at HM Treasury’s option into ordinary shares at the rate of ten B shares for each ordinary share. In October 2015, all of the B shares were converted into ordinary shares of £1 each. In March 2016, a final payment of £1,193 million was made to HM Treasury to retire the DAS. The terms for the removal of the DAS were provided by the ‘DAS Retirement Agreement’ between RBS and HM Treasury. In line with the terms of the DAS Retirement Agreement, upon the final payment, the DAS lost its preferential rights and become a single B share, which was subsequently cancelled. Preference shares Under IFRS certain of RBS’s preference shares are classified as debt and are included in subordinated liabilities on the balance sheet. Other securities Certain of RBS’s subordinated securities in the legal form of debt are classified as equity under IFRS. These securities entitle the holders to interest which may be deferred at the sole discretion of the company. Repayment of the securities is at the sole discretion of the company on giving between 30 and 60 days notice. Non-cumulative preference shares Non-cumulative preference shares entitle the holders thereof (subject to the terms of issue) to receive periodic non-cumulative cash dividends at specified fixed rates for each Series payable out of distributable profits of the company. The non-cumulative preference shares are redeemable at the option of the company, in whole or in part from time to time at the rates detailed in the table below plus dividends otherwise payable for the then current dividend period accrued to the date of redemption. In December 2017, the company redeemed in whole the Series F, H, L and 1 non-cumulative preference shares of US$0.01 and Series 1 non-cumulative convertible preference shares of £0.01. In September 2016, the company redeemed in whole the Series R and T, non-cumulative preference shares of US$0.01. In the context of macro-prudential policy discussions, the Board decided to partially neutralise any impact on CET1 capital of coupon and dividend payments from 2013 onwards. £300 million of new equity was issued during the course of 2017 and the Board has decided a further £300 million of new equity will be issued during the course of 2018 to again partially neutralise the CET1 impact of coupon and dividend payments. Number of shares Redemption Redemption Class of preference share in issue Interest rate date on or after price per share Debt/equity (1) Non-cumulative preference shares of US$0.01 Series S 26.4 million 30 June 2012 US$25 Equity Series U 10,130 floating 29 September 2017 US$100,000 Equity Non-cumulative preference shares of € 0.01 Series 1 1.25 million 31 December 2009 € 1,000 Equity Series 2 784,989 30 June 2010 € 1,000 Equity Series 3 9,429 3 month LIBOR + 2.33% 29 September 2017 € 50,000 Equity Non-cumulative preference shares of £1 Series 1 54,442 3 month LIBOR + 2.33% 5 October 2012 £1,000 Equity Note: (1) Those preference shares where RBS has an obligation to pay dividends are classified as debt; those where distributions are discretionary are classified as equity. The conversion rights attaching to the convertible preference shares may result in RBS delivering a variable number of equity shares to preference shareholders; these convertible preference shares are treated as debt. In the event that the non-cumulative convertible preference shares are not redeemed on or before the redemption date, the holder may convert them into ordinary shares in the company at the prevailing market price. Under existing arrangements, no redemption or purchase of any non-cumulative preference shares may be made by the company without the prior consent of the Prudential Regulation Authority. On a winding-up or liquidation of the company, the holders of the non-cumulative preference shares are entitled to receive, out of any surplus assets available for distribution to the company’s shareholders (after payment of arrears of dividends on the cumulative preference shares up to the date of repayment) pari passu with the cumulative preference shares and all other shares of the company ranking pari passu with the non-cumulative preference shares as regards participation in the surplus assets of the company, a liquidation distribution per share equal to the applicable redemption price detailed in the table above, together with an amount equal to dividends for the then current dividend period accrued to the date of payment, before any distribution or payment may be made to holders of the ordinary shares as regards participation in the surplus assets of the company. Except as described above, the holders of the non-cumulative preference shares have no right to participate in the surplus assets of the company. Holders of the non-cumulative preference shares are not entitled to receive notice of or attend general meetings of the company except if any resolution is proposed for adoption by the shareholders of the company to vary or abrogate any of the rights attaching to the non-cumulative preference shares or proposing the winding-up or liquidation of the company. In any such case, they are entitled to receive notice of and to attend the general meeting of shareholders at which such resolution is to be proposed and are entitled to speak and vote on such resolution (but not on any other resolution). In addition, in the event that, prior to any general meeting of shareholders, the company has failed to pay in full the three most recent quarterly dividend payments due on the non-cumulative dollar preference shares (other than Series U), the two most recent semi-annual dividend payments due on the non-cumulative convertible dollar preference shares and the most recent dividend payments due on the non-cumulative euro preference shares, the non-cumulative sterling preference shares, the Series U non-cumulative dollar preference shares and the non-cumulative convertible sterling preference shares, the holders shall be entitled to receive notice of, attend, speak and vote at such meeting on all matters together with the holders of the ordinary shares. In these circumstances only, the rights of the holders of the non-cumulative preference shares so to vote shall continue until the company shall have resumed the payment in full of the dividends in arrears. |
Other Equity
Other Equity | 12 Months Ended |
Dec. 31, 2017 | |
Other equity | |
Other equity | 26 Other equity Paid-in equity - comprises equity instruments issued by the company other than those legally constituted as shares. 2017 £m 2016 £m Additional Tier 1 notes (1) US$2.0 billion 7.5% notes callable August 2020 (2) US$1.15 billion 8% notes callable August 2025 (2) US$2.65 billion 8.625% notes callable August 2021 (3) EMTN notes US$564 million 6.99% capital securities (redeemed October 2017) - CAD321 million 6.666% notes (redeemed October 2017) - Trust preferred issues: subordinated notes (4) £93 million 5.6457% 2047 (redeemed June 2017) (5) - Notes: (1) The coupons on these notes are non-cumulative and payable at the company’s discretion. In the event the Group’s CET1 ratio falls below 7% any outstanding notes will be converted into ordinary shares at a fixed price. While taking the legal form of debt these notes are classified as equity under IFRS. (2) Issued in August 2015. In the event of conversion, converted into ordinary shares at a price of $3.606 nominal per £1 share. (3) Issued in August 2016. In the event of conversion, converted into ordinary shares at a price of $2.284 nominal per £1 share. (4) Subordinated notes issued to limited partnerships that have in turn issued partnership preferred securities to RBS Capital Trust D that issued trust preferred securities to investors. (5) Preferred securities in issue - £93 million RBS Capital Trust D, fixed/floating rate non-cumulative trust preferred securities. Merger reserve - the merger reserve comprises the premium on shares issued to acquire NatWest, less goodwill amortisation charged under previous GAAP, and the premium arising on shares issued to acquire Aonach Mor Limited, less amounts realised through subsequent share redemptions by Aonach Mor Limited. No share premium was recorded in the company financial statements through the operation of the merger relief provisions of the Companies Act. Capital redemption reserve - under UK companies legislation, when shares are redeemed or purchased wholly or partly out of the company’s profits, the amount by which the company’s issued share capital is diminished must be transferred to the capital redemption reserve. The capital maintenance provisions of UK companies legislation apply to the capital redemption reserve as if it were part of the company’s paid up share capital. On 15 June 2017, the Court of Session approved a reduction of RBSG plc capital so that the amounts which stood to the credit of the capital redemption reserve were transferred to retained earnings. Own shares held - at 31 December 2017, 16 million ordinary shares of £1 each of the company (2016 - 39 million) were held by employee share trusts in respect of share awards and options granted to employees. During the year, the employee share trusts purchased 30 million ordinary shares and delivered 53 million ordinary shares in satisfaction of the exercise of options and the vesting of share awards under the employee share plans. RBS optimises capital efficiency by maintaining reserves in subsidiaries, including regulated entities. Certain preference shares and subordinated debt are also included within regulatory capital. The remittance of reserves to the company or the redemption of shares or subordinated capital by regulated entities may be subject to maintaining the capital resources required by the relevant regulator. UK law prescribes that only the reserves of the company are taken into account for the purpose of making distributions and in determining permissible applications of the share premium account. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases | |
Leases | 27 Leases Operating lease Finance lease contracts and hire purchase agreements assets: Gross Present value Other Future Present future minimum Year in which receipt will occur amounts adjustments movements drawdowns value lease rentals £m £m £m £m £m £m 2017 Within 1 year After 1 year but within 5 years — After 5 years — Total 2016 Within 1 year After 1 year but within 5 years After 5 years - Total Nature of operating lease assets on the balance sheet £m £m Transportation Cars and light commercial vehicles Other £m £m £m Amounts recognised as income and expense in continuing operations Finance leases - contingent rental rebate Operating leases - minimum rentals payable Finance lease contracts and hire purchase agreements Accumulated allowance for uncollectable minimum receivables There were no amounts recognised as income and expense in discontinued operations (2016 - nil; 2015 - £75 million) in relation to operating leases - minimum rentals payable. Residual value exposures The table below gives details of the unguaranteed residual values included in the carrying value of finance lease receivables and operating lease assets (refer to pages 287 and 288). 2017 2016 Year in which residual value will be recovered Year in which residual value will be recovered After 1 year After 2 years After 1 year After 2 Within 1 but within but within After 5 Within 1 but within but within After 5 year 2 years 5 years years Total year 2 years 5 years years Total £m £m £m £m £m £m £m £m £m £m Operating leases - transportation - cars and light commercial vehicles — — - other Finance lease contracts Hire purchase agreements — — Acting as a lessor, RBS provides asset finance to its customers. It purchases plant, equipment and intellectual property, renting them to customers under lease arrangements that, depending on their terms, qualify as either operating or finance leases. |
Structured entities
Structured entities | 12 Months Ended |
Dec. 31, 2017 | |
Structured entities | |
Structured entities | 28 Structured entities A structured entity (SE) is an entity that has been designed such that voting or similar rights are not the dominant factor in deciding who controls the entity, for example, when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. SEs are usually established for a specific, limited purpose. They do not carry out a business or trade and typically have no employees. They take a variety of legal forms - trusts, partnerships and companies - and fulfil many different functions. As well as being a key element of securitisations, SEs are also used in fund management activities in order to segregate custodial duties from the provision of fund management advice. Consolidated structured entities Securitisations In a securitisation, assets, or interests in a pool of assets, are transferred generally to an SE which then issues liabilities to third party investors. The majority of securitisations are supported through liquidity facilities or other credit enhancements. RBS arranges securitisations to facilitate client transactions and undertakes own asset securitisations to sell or to fund portfolios of financial assets. RBS also acts as an underwriter and depositor in securitisation transactions in both client and proprietary transactions. RBS involvement in client securitisations takes a number of forms. It may: sponsor or administer a securitisation programme; provide liquidity facilities or programme-wide credit enhancement; and purchase securities issued by the vehicle. Own asset securitisations In own-asset securitisations, the pool of assets held by the SE is either originated by RBS, or (in the case of whole loan programmes) purchased from third parties. The table below analyses the asset categories for those own-asset securitisations where the transferred assets continue to be recorded on RBS balance sheet. 2017 2016 Debt securities in issue Debt securities in issue Held by third Held by Held by third Held by Assets parties RBS (1) Total Assets parties RBS (1) Total Asset type £m £m £m £m £m £m £m £m Mortgages - UK — — — — — - Irish — - US — — — — — — Cash deposits Note: (1) Debt securities retained by RBS may be pledged with central banks. Commercial paper conduits RBS consolidates a number of asset-backed commercial paper (ABCP) conduits. A conduit is an SE that issues commercial paper and uses the proceeds to purchase or fund a pool of assets. The commercial paper is secured on the assets and is redeemed by further commercial paper issuance, repayment of assets or funding from liquidity facilities. Commercial paper is typically short-dated, usually up to three months. At 31 December 2017 assets held by the conduits were nil (2016 - £0.1 billion). At 31 December 2016 the conduits were funded entirely by RBS. Covered bond programme Certain loans and advances to customers have been assigned to bankruptcy remote limited liability partnerships to provide security for issues of debt securities by RBS. RBS retains all of the risks and rewards of these loans. The partnerships are consolidated, the loans retained on RBS’s balance sheet and the related covered bonds included within debt securities in issue. At 31 December 2017, £8,915 million of mortgages provided security for debt securities in issue of £6,307 million (2016: mortgages - £8,621 million, bonds - £3,935 million). Unconsolidated structured entities RBS’s interests in unconsolidated structured entities are analysed below. 2017 2016 Asset backed Investment Asset backed Investment securitisation funds securitisation funds vehicles and other Total vehicles and other Total £m £m £m £m £m £m Held-for-trading Loans and advances to customers Debt securities Equity shares — — Derivative assets Derivative liabilities Total Other than held-for-trading Loans and advances to customers Debt securities Total Liquidity facilities/loan commitments Guarantees Maximum exposure Notes: (1) Income from interests in unconsolidated structured entities includes interest receivable, changes in fair value and other income less impairments. (2) A sponsored entity is a structured entity established by RBS where RBS provides liquidity and/or credit enhancements or provides ongoing services to the entity. RBS can act as sponsor for its own or for customers’ transactions. (3) In 2017, no assets were transferred into sponsored structured entities (2016 - nil) which are not consolidated by RBS and for which RBS held no interest at 31 December 2017. Income arising from sponsored entities where we hold no interest at year end was £11 million (2016 - £18 million). |
Asset transfers
Asset transfers | 12 Months Ended |
Dec. 31, 2017 | |
Asset transfers | |
Asset transfers | 29 Asset transfers Transfers that do not qualify for derecognition Securities repurchase agreements and lending transactions RBS enters into securities repurchase agreements and securities lending transactions under which it transfers securities in accordance with normal market practice. Generally, the agreements require additional collateral to be provided if the value of the securities falls below a predetermined level. Under standard terms for repurchase transactions in the UK and US markets, the recipient of collateral has an unrestricted right to sell or repledge it, subject to returning equivalent securities on settlement of the transaction. Securities sold under repurchase transactions are not derecognised if RBS retains substantially all the risks and rewards of ownership. The fair value (and carrying value) of securities transferred under such repurchase transactions included on the balance sheet, are set out below. All of these securities could be sold or repledged by the holder. 2017(1) Assets subject to securities repurchase agreements or security lending transactions £m £m Debt securities Note: (1) Associated liabilities were £23,692 million (2016 - £17,975 million). Assets pledged as collateral The Group pledges collateral with its counterparties in respect of derivative liabilities and bank and other borrowings. Assets pledged against liabilities Liabilities secured by assets Loans and Loans and advances advances Deposits to banks to customers Securities Total by banks Derivatives Total £m £m £m £m £m £m £m 2017 2016 |
Capital resources
Capital resources | 12 Months Ended |
Dec. 31, 2017 | |
Capital resources | |
Capital resources | 30 Capital resources RBS’s regulatory capital resources in accordance with PRA definitions were as follows: PRA transitional basis £m £m Shareholders’ equity (excluding non-controlling interests) Shareholders’ equity Preference shares - equity Other equity instruments Regulatory adjustments and deductions Own credit Defined benefit pension fund adjustment Cash flow hedging reserve Deferred tax assets Prudential valuation adjustments Goodwill and other intangible assets Expected losses less impairments Other regulatory adjustments CET1 capital Additional Tier 1 (AT1) capital Eligible AT1 Qualifying instruments and related share premium subject to phase out Qualifying instruments issued by subsidiaries and held by third parties AT1 capital Tier 1 capital Qualifying Tier 2 capital Qualifying instruments and related share premium Qualifying instruments issued by subsidiaries and held by third parties Tier 2 capital Total regulatory capital It is RBS policy to maintain a strong capital base, to expand it as appropriate and to utilise it efficiently throughout its activities to optimise the return to shareholders while maintaining a prudent relationship between the capital base and the underlying risks of the business. In carrying out this policy, RBS has regard to the supervisory requirements of the PRA. The PRA uses capital ratios as a measure of capital adequacy in the UK banking sector, comparing a bank’s capital resources with its risk-weighted assets (the assets and off-balance sheet exposures are ‘weighted’ to reflect the inherent credit and other risks); by international agreement, the Pillar 1 capital ratios should be not less than 8% with a Common Equity Tier 1 component of not less than 4.5%. RBS has complied with the PRA’s capital requirements throughout the year. A number of subsidiaries and sub-groups within RBS, principally banking entities, are subject to various individual regulatory capital requirements in the UK and overseas. Furthermore, the payment of dividends by subsidiaries and the ability of members of RBS to lend money to other members of RBS may be subject to restrictions such as local regulatory or legal requirements, the availability of reserves and financial and operating performance. |
Memorandum items
Memorandum items | 12 Months Ended |
Dec. 31, 2017 | |
Memorandum items | |
Memorandum items | 31 Memorandum items Contingent liabilities and commitments The amounts shown in the table below are intended only to provide an indication of the volume of business outstanding at 31 December 2017. Although RBS is exposed to credit risk in the event of a customer’s failure to meet its obligations, the amounts shown do not, and are not intended to, provide any indication of RBS’s expectation of future losses. More than More than 1 year but 3 years but Less than less than less than Over 1 year 3 years 5 years 5 years £m £m £m £m £m £m Guarantees and assets pledged as collateral security Other contingent liabilities Standby facilities, credit lines and other commitments Contingent liabilities and commitments Note: (1) Includes liquidity facilities provided to RBS sponsored conduits. Banking commitments and contingent obligations, which have been entered into on behalf of customers and for which there are corresponding obligations from customers, are not included in assets and liabilities. RBS’s maximum exposure to credit loss, in the event of its obligation crystallising and all counterclaims, collateral or security proving valueless, is represented by the contractual nominal amount of these instruments included in the table above. These commitments and contingent obligations are subject to RBS’s normal credit approval processes. Guarantees - RBS gives guarantees on behalf of customers. A financial guarantee represents an irrevocable undertaking that RBS will meet a customer’s specified obligations to third party if the customer fails to do so. The maximum amount that RBS could be required to pay under a guarantee is its principal amount as in the table above. RBS expects most guarantees to expire unused. Other contingent liabilities - these include standby letters of credit, supporting customer debt issues and contingent liabilities relating to customer trading activities such as those arising from performance and customs bonds, warranties and indemnities. Standby facilities and credit lines - under a loan commitment, RBS agrees to make funds available to a customer in the future. Loan commitments, which are usually for a specified term, may be unconditionally cancellable or may persist, provided all conditions in the loan facility are satisfied or waived. Commitments to lend include commercial standby facilities and credit lines, liquidity facilities to commercial paper conduits and unutilised overdraft facilities. Other commitments - these include documentary credits, which are commercial letters of credit providing for payment by RBS to a named beneficiary against presentation of specified documents, forward asset purchases, forward deposits placed and undrawn note issuance and revolving underwriting facilities, and other short-term trade related transactions. Contractual obligations for future expenditure not provided for in the accounts The following table shows contractual obligations for future expenditure not provided for in the accounts at the year end. £m £m Operating leases Minimum rentals payable under non-cancellable leases (1) - within 1 year - after 1 year but within 5 years - after 5 years Capital expenditure on property, plant and equipment Contracts to purchase goods or services (2) Notes: (1) Predominantly property leases. (2) Of which due within 1 year: £276 million (2016 - £231 million). Trustee and other fiduciary activities In its capacity as trustee or other fiduciary role, the Group may hold or place assets on behalf of individuals, trusts, companies, pension schemes and others. The assets and their income are not included in the Group’s financial statements. The Group earned fee income of £244 million (2016 - £251 million; 2015 - £321 million) from these activities. The Financial Services Compensation Scheme The Financial Services Compensation Scheme (FSCS), the UK’s statutory fund of last resort for customers of authorised financial services firms, pays compensation if a firm is unable to meet its obligations. The FSCS funds compensation for customers by raising management expenses levies and compensation levies on the industry. In relation to protected deposits, each deposit-taking institution contributes towards these levies in proportion to their share of total protected deposits on 31 December of the year preceding the scheme year (which runs from 1 April to 31 March), subject to annual maxima set by the Prudential Regulation Authority. In addition, the FSCS has the power to raise levies on a firm that has ceased to participate in the scheme and is in the process of ceasing to be authorised for the costs that it would have been liable to pay had the FSCS made a levy in the financial year it ceased to be a participant in the scheme. The FSCS has borrowed from HM Treasury to fund compensation costs associated with the failure of Bradford & Bingley, Heritable Bank, Kaupthing Singer & Friedlander, Landsbanki ‘Icesave’ and London Scottish Bank plc. The industry repaid the remaining balance on the non-Bradford and Bingley loans during the period. The Bradford and Bingley loan is interest bearing with the reference rate being the higher of 12 month LIBOR plus 111 basis points or the relevant gilt rate for the equivalent cost of borrowing from HMT. The FSCS and HM Treasury have agreed that the period of these loans will reflect the expected timetable for recoveries from the estate of Bradford & Bingley. The total interest element levied on the industry in the 2017/18 scheme year was £202 million (£337 million in the 2016/17 scheme year). RBS Group has accrued £11.6 million for its share of estimated FSCS levies. Litigation, investigations and reviews The Royal Bank of Scotland Group plc (the ‘company’ or RBSG) and certain members of the Group are party to legal proceedings and the subject of investigation and other regulatory and governmental action (‘Matters’) in the United Kingdom (UK), the United States (US), the European Union (EU) and other jurisdictions. RBS recognises a provision for a liability in relation to these Matters when it is probable that an outflow of economic benefits will be required to settle an obligation resulting from past events, and a reliable estimate can be made of the amount of the obligation. While the outcome of these Matters is inherently uncertain, the directors believe that, based on the information available to them, appropriate provisions have been made in respect of the Matters as at 31 December 2017 (refer to Note 20). In many proceedings and investigations, it is not possible to determine whether any loss is probable or to estimate reliably the amount of any loss, either as a direct consequence of the relevant proceedings and investigations or as a result of adverse impacts or restrictions on RBS’s reputation, businesses and operations. Numerous legal and factual issues may need to be resolved, including through potentially lengthy discovery and document production exercises and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the proceedings in question, before a liability can reasonably be estimated for any claim. RBS cannot predict if, how, or when such claims will be resolved or what the eventual settlement, damages, fine, penalty or other relief, if any, may be, particularly for claims that are at an early stage in their development or where claimants seek substantial or indeterminate damages. In respect of certain matters described below, we have established a provision and in certain of those matters, we have indicated that we have established a provision. RBS generally does not disclose information about the establishment or existence of a provision for a particular matter where disclosure of the information can be expected to prejudice seriously RBS’s position in the matter. There are situations where RBS may pursue an approach that in some instances leads to a settlement agreement. This may occur in order to avoid the expense, management distraction or reputational implications of continuing to contest liability, or in order to take account of the risks inherent in defending claims or investigations even for those matters for which RBS believes it has credible defences and should prevail on the merits. The uncertainties inherent in all such matters affect the amount and timing of any potential outflows for both matters with respect to which provisions have been established and other contingent liabilities. The future outflow of resources in respect of any matter may ultimately prove to be substantially greater than or less than the aggregate provision that RBS has recognised. Where (and as far as) liability cannot be reasonably estimated, no provision has been recognised. Other than those discussed below, no member of the Group is or has been involved in governmental, legal or regulatory proceedings (including those which are pending or threatened) that are expected to be material, individually or in aggregate. RBS expects that in future periods additional provisions, settlement amounts, and customer redress payments will be necessary, in amounts that are expected to be substantial in some instances. For a discussion of certain risks associated with the Group’s litigation, investigations and reviews, see the Risk Factor relating to legal, regulatory and governmental actions and investigations set out on page 349. Litigation UK 2008 rights issue shareholder litigation Between March and July 2013, claims were issued in the High Court of Justice of England and Wales by sets of current and former shareholders, against RBSG (and in one of those claims, also against certain former individual officers and directors) alleging that untrue and misleading statements and/or improper omissions, in breach of the Financial Services and Markets Act 2000, were made in connection with the rights issue announced by RBS on 22 April 2008. These and other similar threatened claims were consolidated by the Court via a Group Litigation Order. Since then, further High Court claims have been issued against RBS under the Group Litigation Order. Prior to the settlement described below, the aggregate value of the shares subscribed for at 200 pence per share by all of the then claimant shareholders was approximately £4 billion. In December 2016 RBS concluded full and final settlements with four of the five shareholder groups representing 78 per cent of the claims by value. Further full and final settlements, without any admission of liability, were reached and RBS has now concluded the action with over 98 per cent of the claimants. The aggregate settlement figure available to claimants is £900 million, for which a previously established provision is in place, and is subject to validation of claims. The Court directed that any claimant choosing not to enter the settlement should, by 28 July 2017, issue an application to restore the proceedings. No such application was made. Residential mortgage-backed securities (RMBS) litigation in the US RBS companies have been named as defendants in their various roles as issuer, depositor and/or underwriter in a number of claims in the US that relate to the securitisation and securities underwriting businesses. These cases include actions by individual purchasers of securities and a purported class action suit. In general, plaintiffs in these actions claim that certain disclosures made in connection with the relevant offerings of RMBS contained materially false or misleading statements and/or omissions regarding the underwriting standards pursuant to which the mortgage loans underlying the securities were issued. RBS Securities Inc. remains a defendant in a lawsuit relating to RMBS issued by Nomura Holding America Inc. (Nomura) and subsidiaries, filed by the US Federal Housing Finance Agency (FHFA) as conservator for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). In May 2015, following a trial, the United States District Court for the Southern District of New York issued a written decision in favour of FHFA, finding, as relevant to RBS, that the offering documents for four Nomura-issued RMBS for which RBS Securities Inc. served as an underwriter contained materially misleading statements about the mortgage loans that backed the securitisations. Nomura and RBS appealed. On 28 September 2017, the court’s judgment against Nomura and RBS Securities Inc. was affirmed by the United States Court of Appeals for the Second Circuit. RBS Securities Inc. estimates that its net exposure under the court’s judgment is approximately US$318 million, which consists of the difference between the amount of the judgment against RBS Securities Inc. (US$636 million) and the estimated market value of the four RMBS that FHFA would return to RBS Securities Inc. pursuant to the judgment, plus the costs and attorney’s fees that will be due to FHFA if the judgment is upheld. The estimated net exposure in this matter is covered by an existing provision. The judgment is stayed pending defendants’ request for review by the United States Supreme Court, though post-judgment interest on the judgment amount will accrue while that request and any further review is pending. RBS Securities Inc. intends to pursue a contractual claim for indemnification against Nomura with respect to any losses it suffers as a result of this matter. RBS companies are also defendants in a purported RMBS class action entitled New Jersey Carpenters Health Fund v. Novastar Mortgage Inc. et al., which remains pending in the United States District Court for the Southern District of New York. RBS has settled this matter for US$55.3 million, which has been paid into escrow pending court approval of the settlement. In addition to the above, the remaining RMBS lawsuits against RBS companies consist of cases filed by the Federal Home Loan Banks of Boston and Seattle and the Federal Deposit Insurance Corporation that together involve the issuance of less than US$1 billion of RMBS issued primarily from 2005 to 2007. As at 31 December 2017, the total aggregate of provisions in relation to certain of the RMBS litigation matters (described immediately above) and RMBS and other securitised products investigations (set out under ‘Investigations and reviews’ on page 310) was £3.2 billion (US$4.4 billion). The duration and outcome of these investigations and litigation matters remain uncertain, including in respect of whether settlements for all or any of such matters may be reached. RBS continues to caution that, in connection with RMBS litigation matters and RMBS investigations taken as a whole, further substantial provisions and costs may be recognised and, depending on the final outcomes, other adverse consequences may occur. London Interbank Offered Rate (LIBOR) and other rates litigation Certain members of the Group have been named as defendants in a number of class actions and individual claims filed in the US with respect to the setting of LIBOR and certain other benchmark interest rates. The complaints are substantially similar and allege that certain members of the Group and other panel banks individually and collectively violated various federal laws, including the US commodities and antitrust laws, and state statutory and common law, as well as contracts, by manipulating LIBOR and prices of LIBOR-based derivatives in various markets through various means. Most of the USD LIBOR-related actions in which RBS companies are defendants, including all purported class actions relating to USD LIBOR, were transferred to a coordinated proceeding in the United States District Court for the Southern District of New York. In the coordinated proceeding, consolidated class action complaints were filed on behalf of (1) exchange-based purchaser plaintiffs, (2) over-the-counter purchaser plaintiffs, and (3) corporate debt purchaser plaintiffs. Over 35 other USD LIBOR-related actions naming RBS as a defendant, including purported class actions on behalf of lenders and mortgage borrowers, were also made part of the coordinated proceeding. In a series of orders issued in 2013 and 2014, the district court overseeing the coordinated USD proceeding dismissed class plaintiffs’ antitrust claims and claims under RICO (Racketeer Influenced and Corrupt Organizations Act), but declined to dismiss (a) certain Commodity Exchange Act claims on behalf of persons who transacted in Eurodollar futures contracts and options on futures contracts on the Chicago Mercantile Exchange (on the theory that defendants’ alleged persistent suppression of USD LIBOR caused loss to plaintiffs), and (b) certain contract and unjust enrichment claims on behalf of over-the-counter purchaser plaintiffs who transacted directly with a defendant. On 23 May 2016, the district court’s dismissal of plaintiffs’ antitrust claims was vacated by the United States Court of Appeals for the Second Circuit, which held that plaintiffs have adequately pled antitrust injury and an antitrust conspiracy, but remanded to the lower court for further consideration on the question of whether plaintiffs possess the requisite antitrust standing to proceed with antitrust claims. In a decision issued in December 2016, the district court held that it lacks personal jurisdiction over RBS with respect to certain claims asserted in the coordinated proceeding. Following that decision, RBS has been dismissed from each of the USD LIBOR-related class actions in the coordinated proceeding, subject to appeal, although certain non-class cases on behalf of particular plaintiffs remain pending. On 10 July 2017, the US Federal Deposit Insurance Corporation (FDIC), on behalf of 39 failed US banks, served a claim in the High Court of Justice of England and Wales against RBS, other LIBOR panel banks and the British Bankers’ Association, alleging collusion with respect to the setting of USD LIBOR. The action alleges that the defendants breached English and European competition law as well as asserting common law claims of fraud under US law. The FDIC previously asserted many of the same US law USD LIBOR-related claims against RBS and others in a lawsuit pending in the United States District Court for the Southern District of New York, though most of the claims in that case have been dismissed as a result of a series of rulings by that court. RBS’s defence to the High Court claim was filed on 24 November 2017. Certain members of the Group have also been named as defendants in two class actions relating to JPY LIBOR and Euroyen TIBOR, both pending before the same judge in the United States District Court for the Southern District of New York. In the first case, relating to Euroyen TIBOR futures contracts, the court dismissed plaintiffs’ antitrust claims in March 2014, but declined to dismiss their claims under the Commodity Exchange Act for price manipulation, which are proceeding in the discovery phase. In the second case, relating to other derivatives allegedly tied to JPY LIBOR and Euroyen TIBOR, the court dismissed the case on 10 March 2017 on the ground that the plaintiffs lack standing. Plaintiffs have commenced an appeal of that decision. Certain members of the Group have also been named as defendants in class actions relating to (i) Euribor, (ii) Swiss Franc LIBOR (iii) Pound sterling LIBOR, (iv) the Singapore Interbank Offered Rate and Singapore Swap Offer Rate, and (v) the Australian Bank Bill Swap Reference Rate, all of which are pending before other judges in the United States District Court for the Southern District of New York. On 21 February 2017, the court in the action relating to Euribor dismissed all claims alleged against RBS for lack of personal jurisdiction. On 18 August 2017, the court in the action relating to the Singapore Interbank Offered Rate and Singapore Swap Offer Rate dismissed all claims against RBS for lack of personal jurisdiction; however, the court allowed the plaintiffs to replead their complaint, and defendants’ renewed motion to dismiss the amended complaint is pending. On 25 September 2017, the court in the action relating to Swiss Franc LIBOR dismissed all claims against all defendants on various grounds; however, the court held that it has personal jurisdiction over RBS and allowed the plaintiffs to replead their complaint, and defendants’ renewed motion to dismiss the amended complaint is pending. The other matters described in this paragraph (relating to Pound Sterling LIBOR and the Australian Bank Bill Swap Reference Rate) are subject to motions to dismiss that are currently pending. Details of UK litigation claims in relation to the sale of interest rate hedging products (IRHPs) involving LIBOR-related allegations are set out under ‘Interest rate hedging products litigation’ on page 308. Details of LIBOR investigations involving RBS are set out under ‘‘Investigations and reviews’’ on page 311. ISDAFIX antitrust litigation Beginning in September 2014, The Royal Bank of Scotland plc (RBS plc) and a number of other financial institutions were named as defendants in several purported class action complaints (subsequently consolidated into one complaint) in the United States District Court for the Southern District of New York alleging manipulation of USD ISDAFIX rates. In 2015, RBS plc reached an agreement to settle this matter for US$50 million, and that settlement received preliminary approval from the Court in May 2016. The settlement amount has been paid into escrow pending the final court approval of the settlement. FX antitrust litigation In 2015, Group companies settled a consolidated antitrust class action (the ‘consolidated action’), pending in the United States District Court for the Southern District of New York, asserting claims on behalf of persons who entered into (a) over-the-counter foreign exchange (FX) spot transactions, forwards, swaps, futures, options or other FX transactions the trading or settlement of which is related in any way to FX rates, or (b) exchange-traded FX instruments. Following the Court’s preliminary approval of the settlement in December 2015, RBS paid the total settlement amount (US$255 million) into escrow pending final court approval of the settlement. On 24 March 2017, the court dismissed a second FX-related antitrust class action, holding that the alleged class of ‘consumers and end-user businesses’ lacked standing to pursue antitrust claims. The plaintiffs in that case have since filed an amended complaint. The defendants made a renewed motion to dismiss the complaint but the court denied that motion on 3 August 2017. As a result, the discovery phase has commenced. RBS and the other defendants are seeking reconsideration of the court’s decision regarding standing or, in the alternative, permission to take an immediate appeal to the United States Court of Appeals for the Second Circuit. A third FX-related class action, asserting Employee Retirement Income Security Act claims on behalf of employee benefit plans that engaged in FX transactions, including claims based on alleged non-collusive FX-related conduct, was dismissed in September 2016 on the ground that the plaintiffs failed to plead that the defendants had ERISA-based fiduciary duties to the plaintiffs. The plaintiffs’ appeal of this dismissal remains pending. Beginning in September 2016, several additional class action complaints were filed in the United States District Court for the Southern District of New York asserting claims on behalf of ‘indirect purchasers’ of FX instruments. The plaintiffs define ‘indirect purchasers’ as persons who were indirectly affected by FX instruments that others entered into directly with defendant banks or on exchanges. The consolidated amended complaint for these matters alleges that certain RBS companies and other defendant banks caused damages to the ‘indirect purchasers’ by conspiring to restrain trade in the FX spot market. The plaintiffs have asserted claims under federal and state antitrust laws. RBS and the other defendants have filed a motion to dismiss, which remains pending. On 12 July 2017, Alpari (US) LLC (Alpari) filed a class action complaint against RBS companies in the United States District Court for the Southern District of New York. The complaint alleges that RBS breached contracts with Alpari and other counterparties by rejecting FX orders placed over electronic trading platforms through the application of a function referred to as ‘Last Look’, and that the rejected orders were later filled at prices less favourable to putative class members. The complaint contains claims for breach of contract and unjust enrichment. RBS has filed a motion to compel arbitration of Alpari’s claims or, in the alternative, to dismiss those claims for improper venue. In September 2015, certain members of the Group, as well as a number of other financial institutions, were named as defendants in two class actions filed in Ontario and Quebec on behalf of persons in Canada who entered into foreign exchange transactions or who invested in funds that entered into foreign exchange transactions, alleging that the defendants violated the Canadian Competition Act by conspiring to manipulate the prices of currency trades. RBS settled the matters for approximately CAD 13 million. The settlement amount has been paid and the settlement has received final court approval. Certain other foreign exchange transaction related claims have been or may be threatened against RBS in other jurisdictions. RBS cannot predict whether any of these claims will be pursued, but expects that several may. US Treasury securities antitrust litigation Beginning in July 2015, numerous class action antitrust complaints were filed in US federal courts against a number of primary dealers of US Treasury securities, including RBS Securities Inc.. The consolidated amended complaint for these matters, pending in the United States District Court for the Southern District of New York, alleges that RBS Securities Inc. and the other defendants rigged the US Treasury securities auction bidding process to deflate prices at which they bought such securities and colluded to increase the prices at which they sold such securities to plaintiffs. The complaint asserts claims under the US antitrust laws on behalf of persons who transacted in US Treasury securities or derivatives based on such instruments, including futures and options. The defendants anticipate filing a motion to dismiss the operative complaint in this matter. Swaps antitrust litigation Beginning in November 2015, RBS plc and other members of the Group, as well as a number of other interest rate swap dealers, were named as defendants in a number of class action antitrust complaints filed in the United States District Court for the Southern District of New York and the United States District Court for the Northern District of Illinois. The complaints, filed on behalf of persons who entered into interest rate swaps with the defendants, allege that the defendants violated the US antitrust laws by restraining competition in the market for interest rate swaps through various means and thereby caused inflated bid-ask spreads for interest rate swaps, to the alleged detriment of the plaintiff class. In addition, two complaints containing similar allegations of collusion were filed in United States District Court for the Southern District of New York on behalf of TeraExchange and Javelin, who allege that they would have successfully established exchange-like trading of interest rate swaps if the defendant dealers had not unlawfully conspired to prevent that from happening through boycotts and other means, in violation of the U.S. antitrust laws. In June 2016, all of these matters were transferred to the United States District Court for the Southern District of New York for coordinated or consolidated pretrial proceedings. In July 2017, the Court overseeing the above matters dismissed all claims against RBS companies relating to the 2008 - 2012 time period, but declined to dismiss certain antitrust and unjust enrichment claims covering the 2013 - 2016 time period. Discovery is ongoing. On 8 June 2017, TeraExchange filed another complaint against RBS and others in the United States District Court for the Southern District of New York, this time relating to credit default swaps instead of interest rate swaps. TeraExchange alleges it would have established exchange-like trading of credit default swap if the defendant dealers had not engaged in an unlawful antitrust conspiracy. RBS has filed a motion to dismiss the complaint in this matter. Madoff In December 2010, Irving Picard, as trustee for the bankruptcy estates of Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC., filed a clawback claim against The Royal Bank of Scotland N.V. (RBS N.V.) in the New York bankruptcy court. In the operative complaint, filed in August 2012, the trustee seeks to recover US$75.8 million in redemptions that RBS N.V. allegedly received from certain Madoff feeder funds and US$162.1 million that RBS N.V. allegedly received from its swap counterparties at a time when RBS N.V. allegedly ‘knew or should have known of Madoff’s possible fraud’. The trustee alleges that those transfers were preferences or fraudulent conveyances under the US bankruptcy code and New York law and he asserts the purported right to claw them back for the benefit of Madoff’s estate. RBS N.V. made a motion to dismiss in this case on the ground that many of the transfers at issue were extraterritorial to the United States and therefore not subject to the fraudulent conveyance statute upon which the trustee’s claim is based, but the bankruptcy court denied that motion in November 2016. RBS N.V. sought leave to appeal, but this was denied on 3 October 2017. A further claim by the trustee against RBS N.V., for clawback of an additional US$21.8 million, was filed in October 2011. With respect to that claim, the bankruptcy court granted RBS N.V.’s motion to dismiss on extraterritorial grounds, and the trustee has commenced an appeal of that decision. Thornburg adversary proceeding RBS Securities Inc. and certain other RBS companies, as well as several other financial institutions, are defendants in an adversary proceeding filed in the US bankruptcy court in Maryland by the trustee for TMST, Inc. (formerly known as Thornburg Mortgage, Inc.). The trustee seeks recovery of transfers made under certain restructuring agreements as, among other things, avoidable fraudulent and preferential conveyances and transfers. In September 2014, the Court largely denied the defendants’ motion to dismiss this matter and, as a result, discovery is ongoing. Interest rate hedging products litigation RBS is dealing with a large number of active litigation claims in relation to the sale of interest rate hedging products (IRHPs). In general claimants allege that the relevant interest rate hedging products were mis-sold to them, with some also alleging RBS made misrepresentations in relation to LIBOR. Claims have been brought by customers who were considered under the UK Financial Conduct Authority (FCA) redress programme, as well as customers who were outside of the scope of that programme, which was closed to new entrants on 31 March 2015. RBS encouraged those customers that were eligible to seek redress under the FCA redress programme to participate in that programme. RBS remains exposed to potential claims from customers who were either ineligible to be considered for redress or who are dissatisfied with their redress offers. Property Alliance Group (PAG) v The Royal Bank of Scotland plc was the leading case before the English High Court involving both IRHP mis-selling and LIBOR misconduct allegations. The amount claimed was £34.8 million and the trial ended in October 2016. In December 2016 the Court dismissed all of PAG’s claims. PAG appealed that decision, and the appeal hearing closed on 8 February 2018. The judgment is awaited. The decision (subject to the appeal by PAG) may have significance to other similar LIBOR-related cases currently pending in the English courts, some of which involve substantial amounts. The case of London Bridge Holdings Ltd and others v RBS plc remains stayed pending the outcome of the PAG appeal. The sum claimed in that case is £446.7 million. In addition to claims alleging that IRHPs were mis-sold, RBS has received a number of claims involving allegations that it breached a legal duty of care in its conduct of the FCA redress programme. These claims have been brought by customers who are dissatisfied with redress offers made to them through the FCA re |
Net cash flow from operating ac
Net cash flow from operating activities | 12 Months Ended |
Dec. 31, 2017 | |
Net cash flow from operating activities | |
Net cash flow from operating activities | 32 Net cash flow from operating activities £m £m £m Operating profit/(loss) before tax - continuing operations Profit before tax - discontinued operations — — Decrease/(increase) in prepayments and accrued income Interest on subordinated liabilities Decrease in income accruals Impairment losses/(releases) Loans and advances written-off net of recoveries Unwind of discount on impairment losses Profit on sale of property, plant and equipment Profit on sale of subsidiaries and associates (Profit)/loss on sale of securities Charge for defined benefit pension schemes Pension schemes curtailments or settlements loss/(gain) Cash contribution to defined benefit pension schemes Other provisions charged net of releases Other provisions utilised Depreciation and amortisation Loss on redemption of own debt Loss on reclassification to disposal groups — — Write down of goodwill and other intangible assets Elimination of foreign exchange differences Other non-cash items Net cash outflow from trading activities Decrease/(increase) in loans and advances to banks and customers (Increase)/decrease in securities (Increase)/decrease in other assets Decrease in derivative assets Changes in operating assets Increase/(decrease) in deposits by banks and customers Increase/(decrease) in debt securities in issue (Decrease)/increase in other liabilities Decrease in derivative liabilities Increase/(decrease) in settlement balances and short positions Changes in operating liabilities Income taxes paid Net cash inflow/(outflow) from operating activities |
Analysis of the net investment
Analysis of the net investment in business interests and intangible assets | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of the net investment in business interests and intangible assets | |
Analysis of the net investment in business interests and intangible assets | 33 Analysis of the net investment in business interests and intangible assets Acquisitions and disposals £m £m £m Fair value given for businesses acquired Net outflow of cash in respect of acquisitions Net assets/(liabilities) sold Non-cash consideration — Profit on disposal Net cash and cash equivalents disposed — Net inflow/(outflow) of cash in respect of disposals Dividends received from associates Cash expenditure on intangible assets Net (outflow)/inflow Note: (1) Includes cash proceeds of £1,628 million in 2015 relating to the disposal of the controlling interest in Citizens. |
Interest received and paid
Interest received and paid | 12 Months Ended |
Dec. 31, 2017 | |
Interest received and paid | |
Interest received and paid | 34 Interest received and paid £m £m £m Interest received Interest paid 8,683 |
Analysis of changes in financin
Analysis of changes in financing during the year | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of changes in financing during the year | |
Analysis of changes in financing during the year | 35 Analysis of changes in financing during the year Share capital, share premium, paid-in equity and merger reserve Subordinated liabilities 2017 2016 2015 2017 2016 2015 £m £m £m £m £m £m At 1 January Issue of ordinary shares Issue of Additional Tier 1 capital notes — Redemption of paid-in equity Redemption of subordinated liabilities Net cash (outflow)/inflow from financing Transfer to retained earnings — — Conversion of B shares — — Ordinary shares issued in respect of employee share schemes Redemption of debt preference shares — — Redemption of equity preference shares — — Transfer of merger reserve to retained earnings — — Other adjustments including foreign exchange — — At 31 December |
Analysis of cash and cash equiv
Analysis of cash and cash equivalents | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of cash and cash equivalents | |
Analysis of cash and cash equivalents | 36 Analysis of cash and cash equivalents 2017 2016 2015 £m £m £m At 1 January - cash - cash equivalents Net cash outflow At 31 December Comprising: Cash and balances at central banks Treasury bills and debt securities Loans and advances to banks Cash and cash equivalents Note: (1) Includes cash collateral posted with bank counterparties in respect of derivative liabilities of £6,883 million (2016 - £6,661 million; 2015 - £11,031 million). Certain members of RBS are required by law or regulation to maintain balances with the central banks in the jurisdictions in which they operate. These balances are set out below. Bank of England £0.6bn £0.5bn £0.5bn De Nederlandsche Bank € 0.1bn € 0.4bn € 0.3bn |
Segmental analysis
Segmental analysis | 12 Months Ended |
Dec. 31, 2017 | |
Segmental analysis | |
Segmental analysis | 37 Segmental analysis (a) Reportable segments The directors manage RBS primarily by class of business and present the segmental analysis on that basis. This includes the review of net interest income for each class of business - interest receivable and payable for all reportable segments is therefore presented net. Segments charge market prices for services rendered between each other; funding charges between segments are determined by RBS Treasury, having regard to commercial demands. The segment performance measure is operating profit/(loss). Segmental reorganisation and business transfers RBS continues to deliver on its plan to build a strong, simple and fair bank for both customers and shareholders. To support this, and in preparation for the UK ring-fencing regime, the previously reported operating segments were realigned in Q4 2017 and a number of business transfers completed. Segmental reorganisation The previously reported operating segments are now realigned and comparatives have been re-presented as follows: · The former Williams & Glyn reportable operating segment has been integrated into the UK PBB reportable segment; · The former Capital Resolution reportable operating segment has been integrated into the NatWest Markets reportable segment, with the exception of the costs in relation to the RMBS claims, which have been transferred to the Central & other items reportable segment; · The RBSI reportable operating segment is no longer presented within the CPB franchise. Business transfers On 1 October 2017 the following changes were made to RBS’s businesses, which impacts its financial reporting but where comparatives have not been re-presented: · Shipping and other activities, which were formerly in Capital Resolution, were transferred from the NatWest Markets reportable segment to the Commercial Banking reportable segment. · UK PBB Collective Investment Funds (CIFL) business was transferred to the Private Banking reportable segment in order to better serve customers. · The RBS International (RBSI) reportable operating segment was aligned to the legal entity The Royal Bank of Scotland International (Holdings) Limited. This predominantly involved transfers from Private Banking, and Services and Functions within Central items & other in preparation for the implementation of the UK ring-fencing regime. · Commercial Banking whole business securitisations and relevant financial institutions (RFI) were transferred to NatWest Markets during December 2017. RFIs are prohibited from being within the ring-fence due to their nature and exposure to global financial markets. The move is in preparation for the implementation of the UK ring-fencing regime. Reportable operating segments Following the changes detailed the reportable operating segments are as follows: Personal & Business Banking (PBB) comprises two reportable segments: UK Personal & Business Banking (UK PBB) and Ulster Bank RoI. UK PBB serves individuals and mass affluent customers in the UK together with small businesses (generally up to £2 million turnover). UK PBB includes Ulster Bank customers in Northern Ireland. Ulster Bank RoI serves individuals and businesses in the Republic of Ireland (RoI). Commercial & Private Banking (CPB) comprises two reportable segments: Commercial Banking and Private Banking. Commercial Banking serves commercial and corporate customers in the UK and Western Europe. Private Banking serves UK connected high net worth individuals. RBS International (RBSI) serves retail, commercial, corporate and financial institution customers in Jersey, Guernsey, Isle of Man and Gibraltar and financial institution customers in Luxembourg and London. NatWest Markets offers corporate and institutional customers global market access, providing them with trading, risk management and financing solutions through its trading and sales operations in London, Singapore and Stamford and sales offices in Dublin, Hong Kong and Tokyo. Central items & other includes corporate functions, such as RBS treasury, finance, risk management, compliance, legal, communications and human resources. Central functions manages RBS capital resources and RBS-wide regulatory projects and provides services to the reportable segments. Balances in relation to legacy litigation issues and the international private banking business are included in Central items in the relevant periods. Allocation of central balance sheet items RBS allocates all central costs relating to Services and Functions to the business using appropriate drivers, these are reported as indirect costs in the segmental income statements. Assets (and risk-weighted assets) held centrally, mainly relating to RBS Treasury, are allocated to the business using appropriate drivers. Net Depreciation Impairment interest Non-interest Total Operating and (losses)/ Operating income income income expenses amortisation releases profit/(loss) 2017 £m £m £m £m £m £m £m UK Personal & Business Banking — Ulster Bank RoI — Personal & Business Banking — Commercial Banking Private Banking — Commercial & Private Banking RBS International NatWest Markets Central items & other Total 2016* UK Personal & Business Banking Ulster Bank RoI — Personal & Business Banking Commercial Banking Private Banking — Commercial & Private Banking RBS International — NatWest Markets Central items & other — Total 2015* UK Personal & Business Banking — Ulster Bank RoI — Personal & Business Banking — Commercial Banking Private Banking — Commercial & Private Banking RBS International — — NatWest Markets Central items & other Total * Re-presented to reflect the segmental reorganisation. 2017 2016* 2015* Inter Inter Inter External segment Total External segment Total External segment Total Total income £m £m £m £m £m £m £m £m £m UK Personal & Business Banking Ulster Bank RoI Personal & Business Banking Commercial Banking Private Banking Commercial & Private Banking RBS International NatWest Markets Central items & other Total — — — 2017 2016* 2015* Inter Inter Inter External segment Total External segment Total External segment Total Total revenue £m £m £m £m £m £m £m £m £m UK Personal & Business Banking 7,348 44 7,392 7,197 52 7,249 7,164 51 7,215 Ulster Bank RoI 676 672 660 1 661 640 15 655 Personal & Business Banking 8,024 40 8,064 7,857 53 7,910 7,804 66 7,870 Commercial Banking 3,590 74 3,664 3,638 68 3,706 3,482 42 3,524 Private Banking 585 143 728 567 172 739 577 191 768 Commercial & Private Banking 4,175 217 4,392 4,205 240 4,445 4,059 233 4,292 RBS International 309 119 428 313 156 469 275 177 452 NatWest Markets 1,408 809 2,217 1,708 1,539 3,247 3,097 2,913 6,010 Central items & other 2,147 962 1,862 1,655 Total 16,063 — 16,063 15,945 — 15,945 16,890 — 16,890 * Re-presented to reflect the segmental reorganisation. 2017 2016* 2015* Cost to Cost to Cost to acquire fixed acquire fixed acquire fixed assets and assets and assets and intangible intangible intangible Assets Liabilities assets Assets Liabilities assets Assets Liabilities assets £m £m £m £m £m £m £m £m £m UK Personal & Business Banking 190,636 183,410 — 181,357 173,040 — 167,959 164,830 — Ulster Bank RoI 24,564 19,853 — 24,111 19,299 — 21,264 15,837 — Personal & Business Banking 215,200 203,263 — 205,468 192,339 — 189,223 180,667 — Commercial Banking 149,545 105,144 208 150,453 104,441 288 133,546 94,619 214 Private Banking 20,290 27,049 2 18,578 26,673 — 17,022 23,257 — Commercial & Private Banking 169,835 132,193 210 169,031 131,114 288 150,568 117,876 214 RBS International 25,867 29,077 12 23,420 25,280 — 23,130 21,398 — NatWest Markets 277,886 248,553 4 372,496 340,471 6 416,748 380,059 29 Central items & other 49,268 75,877 1,275 28,241 60,048 1,098 35,739 61,261 1,227 Total 738,056 688,963 1,501 798,656 749,252 1,392 815,408 761,261 1,470 *Re-presented to reflect the segmental reorganisation. Segmental analysis of goodwill is as follows, there was no movements in goodwill in 2016 or 2017. UK Personal & Business Commercial RBS Banking Banking International Total £m £m £m £m At 1 January 2016 and 31 December 2016 3,351 1,907 300 5,558 At 1 January 2017 and 31 December 2017 3,351 1,907 300 5,558 (b) Geographical segments The geographical analysis in the tables below has been compiled on the basis of location of office where the transactions are recorded. UK USA Europe RoW Total 2017 £m £m £m £m £m Total revenue Net interest income Net fees and commissions Income from trading activities Other operating income Total income Operating profit/(loss) before tax Total assets Of which total assets held for sale — Total liabilities Of which total liabilities held for sale — — — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments Cost to acquire property, plant and equipment and intangible assets 2016 Total revenue Net interest income Net fees and commissions Income from trading activities Other operating income Total income Operating (loss)/profit before tax Total assets Of which total assets held for sale — — — Total liabilities Of which total liabilities held for sale — — — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments Cost to acquire property, plant and equipment and intangible assets 2015 Total revenue Net interest income Net fees and commissions Income from trading activities Other operating income Total income Operating (loss)/profit before tax Total assets Of which total assets held for sale — Total liabilities Of which total liabilities held for sale — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments Cost to acquire property, plant and equipment and intangible assets |
Directors and key management re
Directors and key management remuneration | 12 Months Ended |
Dec. 31, 2017 | |
Directors' and key management remuneration | |
Directors' and key management remuneration | 38 Directors’ and key management remuneration Directors’ remuneration £000 £000 Non-executive directors emoluments Chairman and executive directors emoluments Amounts receivable under long-term incentive plans and share option plans No directors accrued benefits under defined benefit schemes or money purchase schemes during 2017 and 2016. The executive directors may participate in the company’s long-term incentive plans, executive share option and sharesave schemes and details of their interests in the company’s shares arising from their participation are given in the Directors’ remuneration report. Details of the remuneration received by each director is also given in the Directors’ remuneration report. Compensation of key management The aggregate remuneration of directors and other members of key management during the year was as follows: £000 £000 Short-term benefits Post-employment benefits Share-based payments Key management comprises members of the Executive Committee. |
Transactions with directors and
Transactions with directors and key management | 12 Months Ended |
Dec. 31, 2017 | |
Transactions with directors and key management | |
Transactions with directors and key management | 39 Transactions with directors and key management (a) At 31 December 2017, amounts outstanding in relation to transaction, arrangements and agreements entered into by authorised institutions in the Group, as defined in UK legislation, were £24,376 in respect of loans to six persons who were directors of the company at any time during the financial period. (b) For the purposes of IAS 24 ‘Related Party Disclosures’, key management comprise directors of the company and members of the Executive Committee. The captions in the Group’s primary financial statements include the following amounts attributable, in aggregate, to key management: £000 £000 Loans and advances to customers Customer accounts Key management have banking relationships with Group entities which are entered into in the normal course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with other persons of a similar standing or, where applicable, with other employees. These transactions did not involve more than the normal risk of repayment or present other unfavourable features. |
Related parties
Related parties | 12 Months Ended |
Dec. 31, 2017 | |
Related parties | |
Related parties | 40 Related parties UK Government On 1 December 2008, the UK Government through HM Treasury became the ultimate controlling party of The Royal Bank of Scotland Group plc. The UK Government’s shareholding is managed by UK Financial Investments Limited, a company wholly owned by the UK Government. As a result, the UK Government and UK Government controlled bodies became related parties of the Group. During 2015, all of the B shares held by the UK Government were converted into ordinary shares of £1 each (see Note 25). The Group enters into transactions with many of these bodies on an arm’s length basis. Transactions include the payment of: taxes principally UK corporation tax (see Note 6) and value added tax; national insurance contributions; local authority rates; and regulatory fees and levies (including the bank levy (see Note 3) and FSCS levies (see Note 31) together with banking transactions such as loans and deposits undertaken in the normal course of banker-customer relationships. Bank of England facilities The Group may participate in a number of schemes operated by the Bank of England in the normal course of business. Members of the Group that are UK authorised institutions are required to maintain non-interest bearing (cash ratio) deposits with the Bank of England amounting to 0.18% of their average eligible liabilities in excess of £600 million. They also have access to Bank of England reserve accounts: sterling current accounts that earn interest at the Bank of England Rate. Associates Transactions with associates have given rise to the following: £m £m Loans and advances Customer deposits Total income Operating expenses Other related parties (a) In their roles as providers of finance, RBS companies provide development and other types of capital support to businesses. These investments are made in the normal course of business and on arm’s length terms. In some instances, the investment may extend to ownership or control over 20% or more of the voting rights of the investee company. However, these investments are not considered to give rise to transactions of a materiality requiring disclosure under IAS 24. (b) RBS recharges The Royal Bank of Scotland Group Pension Fund with the cost of administration services incurred by it. The amounts involved are not material to the Group. (c) In accordance with IAS 24, transactions or balances between RBS entities that have been eliminated on consolidation are not reported. (d) The captions in the primary financial statements of the parent company include amounts attributable to subsidiaries. These amounts have been disclosed in aggregate in the relevant notes to the financial statements. |
Post balance sheet events
Post balance sheet events | 12 Months Ended |
Dec. 31, 2017 | |
Post balance sheet events | |
Post balance sheet events | 41 Post balance sheet events There have been no other significant events between 31 December 2017 and the date of approval of these accounts which would require a change to or additional disclosure in the accounts. |
Consolidating financial informa
Consolidating financial information | 12 Months Ended |
Dec. 31, 2017 | |
Consolidating financial information | |
Consolidating financial information | 42 Consolidating financial information The Royal Bank of Scotland plc (‘RBS plc’) is a wholly owned subsidiary of The Royal Bank of Scotland Group plc (‘RBSG plc’) and is able to offer and sell certain securities in the US from time to time pursuant to a registration statement on Form F-3 filed with the SEC with a full and unconditional guarantee from RBSG plc. RBS plc utilises an exception provided in Rule 3-10 of Regulation S-X, and therefore does not file its financial statements with the SEC. In accordance with the requirements to qualify for the exception, presented below is condensed consolidating financial information for: · RBSG plc on a stand-alone basis as guarantor; · RBS plc on a stand-alone basis as issuer; · Non-guarantor Subsidiaries of RBSG plc and RBS plc on a combined basis (‘Subsidiaries’); · Consolidation adjustments; and · RBSG plc consolidated amounts (‘RBSG Group’). Under IAS 27, RBSG plc and RBS plc account for investments in their subsidiary undertakings at cost less impairment. Rule 3-10 of Regulation S-X requires a company to account for its investments in subsidiary undertakings using the equity method, which would increase the results for the period of RBSG plc and RBS plc in the information below by £92 million and £934 million respectively for the year ended 31 December 2017 (increase by £142 million and decrease by £1,316 million for the year ended 31 December 2016; increase by £379 million and decrease by £875 million for the year ended 31 December 2015). The net assets of RBSG plc and RBS plc in the information below would also be decreased by £6,631 million and £9,319 million respectively at 31 December 2017 (decreased £6,108 million and £10,119 million at 31 December 2016). RBS plc Disposal groups and discontinued operations NatWest Holdings Limited (NatWest Holdings) The transfer of the RBS plc Personal & Business Banking (PBB) (including the former Williams & Glyn segment), Commercial & Private Banking (CPB) and certain parts of Central items and NatWest Markets, due to be included in the ring-fenced bank, to subsidiaries of NatWest Holdings, is planned for Q2 2018. It will be followed by a transfer of NatWest Holdings to RBSG. Accordingly, all of the RBS plc activities to be undertaken by NatWest Holdings and its subsidiaries are classified as disposal groups in the RBS plc accounts at 31 December 2017 and presented as discontinued operations, with comparatives re-presented. Income statement Consolidation RBSG For the year ended 31 December 2017 RBSG plc RBS plc Subsidiaries adjustments Group £m £m £m £m £m Net interest income Non-interest income Total income Operating expenses Impairment releases/(losses) — Operating profit/(loss) before tax Tax (charge)/credit Profit/(loss) from continuing operations (Loss)/profit from discontinued operations, net of tax — — — Profit/(loss) for the year Attributable to: Non-controlling interests — — Preference shareholders — — — Paid-in equity holders — — Ordinary shareholders Statement of comprehensive income Consolidation RBSG For the year ended 31 December 2017 RBSG plc RBS plc Subsidiaries adjustments Group £m £m £m £m £m Profit/(loss) for the year Items that do not qualify for reclassification Profit on remeasurement of retirement benefit schemes — — Loss on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk — — Tax (charge)/credit — — — — Items that do qualify for reclassification Available-for-sale financial assets — Cash flow hedges Currency translation — Tax credit Other comprehensive (loss)/ income after tax Total comprehensive income/(loss) for the year Total comprehensive income/(loss) is attributable to: Non-controlling interests — — — Preference shareholders — — — Paid-in equity holders — — Ordinary shareholders Income statement Consolidation RBSG For the year ended 31 December 2016 RBSG plc RBS plc Subsidiaries adjustments Group £m £m £m £m £m Net interest income Non-interest income Total income Operating expenses Impairment releases/(losses) — Operating (loss)/profit before tax Tax credit/(charge) (Loss)/profit from continuing operations (Loss)/profit from discontinued operations, net of tax — — — (Loss)/profit for the year Attributable to: Non-controlling interests — — Preference shareholders — Paid-in equity holders — — Dividend access share — — — Ordinary shareholders Statement of comprehensive income Consolidation RBSG For the year ended 31 December 2016 RBSG plc RBS plc Subsidiaries adjustments Group £m £m £m £m £m (Loss)/profit for the year Items that do not qualify for reclassification Profit/(loss) on remeasurement of retirement benefit schemes — — Tax (charge)/credit — — — — Items that do qualify for reclassification Available-for-sale financial assets — Cash flow hedges Currency translation — Tax (charge)/credit Other comprehensive income/(loss) after tax Total comprehensive (loss)/income for the year Total comprehensive (loss)/income is attributable to: Non-controlling interests — — Preference shareholders — Paid-in equity holders — — Dividend access share — — — Ordinary shareholders Income statement Consolidation RBSG For the year ended 31 December 2015 RBSG plc RBS plc Subsidiaries (1) adjustments (2) Group £m £m £m £m £m Net interest income Non-interest income Total income Operating expenses Impairment (losses)/releases Operating (loss)/profit before tax Tax (charge)/credit (Loss)/profit from continuing operations Profit from discontinued operations, net of tax — (Loss)/profit for the year Attributable to: Non-controlling interests — — Preference shareholders — Paid-in equity holders — — Ordinary shareholders Statement of comprehensive income Consolidation RBSG For the year ended 31 December 2015 RBSG plc RBS plc Subsidiaries (1) adjustments (2) Group £m £m £m £m £m (Loss)/profit for the year Items that do not qualify for reclassification Profit/(loss) on remeasurement of retirement benefit schemes — — Tax (charge)/credit — — — — Items that do qualify for reclassification Available-for-sale financial assets — Cash flow hedges Currency translation — Tax (charge)/credit Other comprehensive income/(loss) after tax Total comprehensive (loss)/income for the year Total comprehensive (loss)/income is attributable to: Non-controlling interests — — Preference shareholders — Paid-in equity holders — — Ordinary shareholders Notes: (1) The financial statements of CFG are incorporated on a line-by-line basis up to 3 August 2015 and was fully disposed of on 30 October 2015. (2) Includes adjustments to present CFG as a disposal group to the disposal date. Balance sheet At 31 December 2017 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Assets Cash and balances at central banks — Loans and advances to banks Loans and advances to customers Debt securities Equity shares Investments in Group undertakings — Settlement balances — Derivatives Intangible assets — — Property, plant and equipment — Deferred tax — Prepayments, accrued income and other assets Assets of disposals groups — Total assets Liabilities Deposits by banks — Customer accounts — Debt securities in issue Settlement balances — Short positions — Derivatives Provisions for liabilities and charges Accruals, deferred income and other liabilities Retirement benefit liabilities — Deferred tax Subordinated liabilities — ) Liabilities of disposal groups — Total liabilities Non-controlling interests — — Owners’ equity Total equity Total liabilities and equity Balance sheet At 31 December 2016 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Assets Cash and balances at central banks — — Loans and advances to banks Loans and advances to customers Debt securities Equity shares — Investments in Group undertakings — Settlement balances — Derivatives Intangible assets — Property, plant and equipment — Deferred tax — Prepayments, accrued income and other assets Assets of disposals groups — Total assets Liabilities Deposits by banks Customer accounts — Debt securities in issue Settlement balances — Short positions — Derivatives Provisions for liabilities and charges — Accruals and other liabilities Retirement benefit liabilities — Deferred tax — Subordinated liabilities Liabilities of disposal groups — — — Total liabilities Non-controlling interests — — Owners’ equity Total equity Total liabilities and equity Cash flow statement For the year ended 31 December 2017 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Effects of exchange rate changes on cash and cash equivalents Net(decrease)/increase in cash and cash equivalents Cash and cash equivalents at 1 January 2017 Cash and cash equivalents at 31 December 2017 For the year ended 31 December 2016 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Effects of exchange rate changes on cash and cash equivalents Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at 1 January 2016 Cash and cash equivalents at 31 December 2016 For the year ended 31 December 2015 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Effects of exchange rate changes on cash and cash equivalents Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 January 2015 Cash and cash equivalents at 31 December 2015 Trust preferred securities The Group has issued trust preferred securities through trusts 100% owned by the Group (through partnership interests held by RBSG Capital Corporation and RBS) which meet the definition of a finance subsidiary in Regulation S-X, Rule 3-10. The securities represent undivided beneficial interests in the assets of the trusts, which consist of partnership preferred securities representing non-cumulative perpetual preferred limited partnership interests issued by Delaware limited partnerships. The Royal Bank of Scotland Group plc has provided subordinated guarantees for the benefit of the holders of the trust preferred securities and the partnership preferred securities. Under the terms of the guarantees, the Group has fully and unconditionally guaranteed on a subordinated basis, payments on such trust preferred securities and partnership preferred securities, to the extent they are due to be paid and have not been paid by, or on behalf of the trusts and the partnerships, as the case may be. Following implementation of IFRS 10 the trusts are no longer consolidated by the Group, for those securities that were classified as subordinated liabilities, the Group’s outstanding instruments with the trusts are classified as subordinated liabilities. |
Accounting policies ( Policies)
Accounting policies ( Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting policies | |
Presentation of accounts | 1. Presentation of accounts The accounts, set out on pages 231 to 331 including these accounting policies on pages 242 to 254 and the audited sections of the Financial review: Capital and risk management on pages 151 to 230, are prepared on a going concern basis (see the Report of the directors, page 108) and in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFRS Interpretations Committee of the IASB as adopted by the European Union (EU) (together IFRS). The EU has not adopted the complete text of IAS 39 ‘Financial Instruments: Recognition and Measurement’; it has relaxed some of the standard’s hedging requirements. The Group has not taken advantage of this relaxation: its financial statements are prepared in accordance with IFRS as issued by the IASB. The company is incorporated in the UK and registered in Scotland. Its accounts are presented in accordance with the Companies Act 2006. With the exception of investment property and certain financial instruments as described in Accounting policies 9, 14, 16 and 23, the accounts are presented on an historical cost basis. The Group adopted two revisions to IFRSs effective 1 January 2017: In January 2016, the IASB amended IAS 7 ‘Cash Flow Statements’ to require disclosure of the movements in financing liabilities. This is shown in Note 35. In January 2016, the IASB amended IAS 12 ‘Income taxes’ to clarify the recognition of deferred tax assets in respect of unrealised losses. Neither of these amendments has had a material effect on the Group’s financial statements. |
Basis of consolidation | 2. Basis of consolidation The consolidated accounts incorporate the financial statements of the company and entities (including certain structured entities) that are controlled by the Group. The Group controls another entity (a subsidiary) when it is exposed, or has rights, to variable returns from its involvement with that entity and has the ability to affect those returns through its power over the other entity; power generally arises from holding a majority of voting rights. On acquisition of a subsidiary, its identifiable assets, liabilities and contingent liabilities are included in the consolidated accounts at their fair value. A subsidiary is included in the consolidated financial statements from the date it is controlled by the Group until the date the Group ceases to control it through a sale or a significant change in circumstances. Changes in the Group’s interest in a subsidiary that do not result in the Group ceasing to control that subsidiary are accounted for as equity transactions. All intergroup balances, transactions, income and expenses are eliminated on consolidation. The consolidated accounts are prepared under uniform accounting policies. |
Revenue recognition | 3. Revenue recognition Interest income on financial assets that are classified as loans and receivables, available-for-sale or held-to-maturity and interest expense on financial liabilities other than those measured at fair value are determined using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability (or group of financial assets or liabilities) and of allocating the interest income or interest expense over the expected life of the asset or liability. The effective interest rate is the rate that exactly discounts estimated future cash flows to the instrument’s initial carrying amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument’s yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows. Negative effective interest accruing to financial assets is presented in interest payable. Financial assets and financial liabilities held-for-trading or designated as at fair value through profit or loss are recorded at fair value. Changes in fair value are recognised in profit or loss. Fees in respect of services are recognised as the right to consideration accrues through the provision of the service to the customer. The arrangements are generally contractual and the cost of providing the service is incurred as the service is rendered. The price is usually fixed and always determinable. The application of this policy to significant fee types is outlined below. Payment services - this comprises income received for payment services including cheques cashed, direct debits, Clearing House Automated Payments (the UK electronic settlement system) and BACS payments (the automated clearing house that processes direct debits and direct credits). These are generally charged on a per transaction basis. The income is earned when the payment or transaction occurs. Charges for payment services are usually debited to the customer’s account monthly or quarterly in arrears. Income is accrued at period end for services provided but not yet charged. Credit and debit card fees - fees from card business include: · Interchange received: as issuer, the Group receives a fee (interchange) each time a cardholder purchases goods and services. The Group also receives interchange fees from other card issuers for providing cash advances through its branch and automated teller machine networks. These fees are accrued once the transaction has taken place. · Periodic fees payable by a credit card or debit card holder are deferred and taken to profit or loss over the period of the service. Lending (credit facilities) - commitment and utilisation fees are determined as a percentage of the outstanding facility. If it is unlikely that a specific lending arrangement will be entered into, such fees are taken to profit or loss over the life of the facility otherwise they are deferred and included in the effective interest rate on the loan. Brokerage fees - in respect of securities, foreign exchange, futures or options transactions entered into on behalf of a customer are recognised as income on execution of a significant act. Trade finance - income from the provision of trade finance is recognised over the term of the finance unless specifically related to a significant act, in which case income is recognised when the act is executed. Investment management - fees charged for managing investments are recognised as revenue as the services are provided. Incremental costs that are directly attributable to securing an investment management contract are deferred and charged as expense as the related revenue is recognised. |
Assets held for sale and discontinued operations | 4. Assets held for sale and discontinued operations A non-current asset (or disposal group) is classified as held for sale if the Group will recover its carrying amount principally through a sale transaction rather than through continuing use. A non-current asset (or disposal group) classified as held for sale is measured at the lower of its carrying amount and fair value less costs to sell. If the asset (or disposal group) is acquired as part of a business combination it is initially measured at fair value less costs to sell. Assets and liabilities of disposal groups classified as held for sale and non-current assets classified as held for sale are shown separately on the face of the balance sheet. The results of discontinued operations, comprising the post-tax profit or loss of discontinued operations and the post-tax gain or loss recognised either on measurement to fair value less costs to sell or on disposal of the discontinued operation, are shown as a single amount on the face of the income statement; an analysis of this amount is presented in Note 18 on the accounts. A discontinued operation is a cash generating unit or a group of cash generating units that either has been disposed of, or is classified as held for sale, and (a) represents a separate major line of business or geographical area of operations, (b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or (c) is a subsidiary acquired exclusively with a view to resale. |
Employee benefits | 5. Employee benefits Short-term employee benefits, such as salaries, paid absences, and other benefits are accounted for on an accruals basis over the period in which the employees provide the related services. Employees may receive variable compensation satisfied by cash, by debt instruments issued by the Group or by RBSG shares. The treatment of share-based compensation is set out in Accounting policy 25. Variable compensation that is settled in cash or debt instruments is charged to profit or loss over the period from the start of the year to which the variable compensation relates to the expected settlement date taking account of forfeiture and clawback criteria. Contributions to defined contribution pension schemes are recognised in profit or loss when payable. For defined benefit schemes, the defined benefit obligation is measured on an actuarial basis using the projected unit credit method and discounted at a rate determined by reference to market yields at the end of the reporting period on high quality corporate bonds of equivalent term and currency to the scheme liabilities. Scheme assets are measured at their fair value. The difference between scheme assets and scheme liabilities, the net defined benefit asset or liability, is recognised in the balance sheet. A defined benefit asset is limited to the present value of any economic benefits available to the Group in the form of refunds from the plan or reduced contributions to it. The charge to profit or loss for pension costs (recorded in operating expenses) comprises: · the current service cost · interest, computed at the rate used to discount scheme liabilities, on the net defined benefit liability or asset · past service cost resulting from a scheme amendment or curtailment · gains or losses on settlement. A curtailment occurs when the Group significantly reduces the number of employees covered by a plan. A plan amendment occurs when the Group introduces, or withdraws, a defined benefit plan or changes the benefits payable under an existing defined benefit plan. Past service cost may be either positive (when benefits are introduced or changed so that the present value of the defined benefit obligation increases) or negative (when benefits are withdrawn or changed so that the present value of the defined benefit obligation decreases). A settlement is a transaction that eliminates all further obligation for part or all of the benefits. Actuarial gains and losses (i.e. gains or and losses on re-measuring the net defined benefit asset or liability) are recognised in other comprehensive income in full in the period in which they arise. |
Intangible assets and goodwill | 6. Intangible assets and goodwill Intangible assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to profit or loss over the assets’ estimated economic lives using methods that best reflect the pattern of economic benefits and is included in Depreciation and amortisation. These estimated useful economic lives are: Computer software 3 to 12 years Other acquired intangibles 5 to 10 years Expenditure on internally generated goodwill and brands is written-off as incurred. Direct costs relating to the development of internal-use computer software are capitalised once technical feasibility and economic viability have been established. These costs include payroll, the costs of materials and services, and directly attributable overheads. Capitalisation of costs ceases when the software is capable of operating as intended. During and after development, accumulated costs are reviewed for impairment against the benefits that the software is expected to generate. Costs incurred prior to the establishment of technical feasibility and economic viability are expensed as incurred as are all training costs and general overheads. The costs of licences to use computer software that are expected to generate economic benefits beyond one year are also capitalised. Intangible assets include goodwill arising on the acquisition of subsidiaries and joint ventures. Goodwill on the acquisition of a subsidiary is the excess of the fair value of the consideration transferred, the fair value of any existing interest in the subsidiary and the amount of any non-controlling interest measured either at fair value or at its share of the subsidiary’s net assets over net fair value of the subsidiary’s identifiable assets, liabilities and contingent liabilities. Goodwill arises on the acquisition of a joint venture when the cost of investment exceeds the Group’s share of the net fair value of the joint venture’s identifiable assets and liabilities. Goodwill is measured at initial cost less any subsequent impairment losses. Goodwill arising on the acquisition of associates is included within their carrying amounts. The gain or loss on the disposal of a subsidiary, associate or joint venture includes the carrying value of any related goodwill. |
Property, plant and equipment | 7. Property, plant and equipment Items of property, plant and equipment (except investment property - see Accounting policy 9) are stated at cost less accumulated depreciation and impairment losses. Where an item of property, plant and equipment comprises major components having different useful lives, these are accounted for separately. Depreciation is charged to profit or loss on a straight-line basis so as to write-off the depreciable amount of property, plant and equipment (including assets owned and let on operating leases) over their estimated useful lives. The depreciable amount is the cost of an asset less its residual value. Freehold land is not depreciated. The estimated useful lives of the Group’s property, plant and equipment are: Freehold buildings 50 years Long leasehold property (leases with more than 50 years to run) 50 years Short leaseholds unexpired period of the lease Property adaptation costs 10 to 15 years Computer equipment up to 5 years Other equipment 4 to 15 years The residual value and useful life of property, plant and equipment are reviewed at each balance sheet date and updated for any changes to previous estimates. |
Impairment of intangible assets and property, plant and equipment | 8. Impairment of intangible assets and property, plant and equipment At each balance sheet date, the Group assesses whether there is any indication that its intangible assets, or property, plant and equipment are impaired. If any such indication exists, the Group estimates the recoverable amount of the asset and the impairment loss if any. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. If an asset does not generate cash flows that are independent from those of other assets or groups of assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to each of the Group’s cash-generating units or groups of cash-generating units expected to benefit from the combination. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less cost to sell and its value in use. Value in use is the present value of future cash flows from the asset or cash-generating unit discounted at a rate that reflects market interest rates adjusted for risks specific to the asset or cash-generating unit that have not been taken into account in estimating future cash flows. If the recoverable amount of an intangible or tangible asset is less than its carrying value, an impairment loss is recognised immediately in profit or loss and the carrying value of the asset reduced by the amount of the loss. A reversal of an impairment loss on intangible assets (excluding goodwill) or property, plant and equipment can be recognised when an increase in service potential arises provided the increased carrying value is not greater than it would have been had no impairment loss been recognised. Impairment losses on goodwill are not reversed. |
Investment property | 9. Investment property Investment property comprises freehold and leasehold properties that are held to earn rentals or for capital appreciation or both. Investment property is not depreciated but is stated at fair value. Fair value is based on current prices for similar properties in the same location and condition. Any gain or loss arising from a change in fair value is recognised in profit or loss. Rental income from investment property is recognised on a straight-line basis over the term of the lease in Other operating income. Lease incentives granted are recognised as an integral part of the total rental income. |
Foreign currencies | 10. Foreign currencies The Group’s consolidated financial statements are presented in sterling which is the functional currency of the company. Group entities record transactions in foreign currencies in their functional currency, the currency of the primary economic environment in which they operate, at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the relevant functional currency at the foreign exchange rates ruling at the balance sheet date. Foreign exchange differences arising on the settlement of foreign currency transactions and from the translation of monetary assets and liabilities are reported in income from trading activities except for differences arising on cash flow hedges and hedges of net investments in foreign operations (see Accounting policy 23). Non-monetary items denominated in foreign currencies that are stated at fair value are translated into the relevant functional currency at the foreign exchange rates ruling at the dates the values are determined. Translation differences arising on non-monetary items measured at fair value are recognised in profit or loss except for differences arising on available-for-sale non-monetary financial assets, for example equity shares, which are recognised in other comprehensive income unless the asset is the hedged item in a fair value hedge. Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into sterling at foreign exchange rates ruling at the balance sheet date. Income and expenses of foreign operations are translated into sterling at average exchange rates unless these do not approximate to the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on the translation of a foreign operation are recognised in other comprehensive income. The amount accumulated in equity is reclassified from equity to profit or loss on disposal of a foreign operation. |
Leases | 11. Leases As lessor Contracts with customers to lease assets are classified as finance leases if they transfer substantially all the risks and rewards of ownership of the asset to the customer; all other contracts with customers to lease assets are classified as operating leases. Finance lease receivables are included in the balance sheet, within Loans and advances to customers, at the amount of the net investment in the lease being the minimum lease payments and any unguaranteed residual value discounted at the interest rate implicit in the lease. Finance lease income is allocated to accounting periods so as to give a constant periodic rate of return before tax on the net investment and included in Interest receivable. Unguaranteed residual values are subject to regular review; if there is a reduction in their value, income allocation is revised and any reduction in respect of amounts accrued is recognised immediately. Rental income from operating leases is recognised in income on a straight-line basis over the lease term unless another systematic basis better represents the time pattern of the asset’s use. Operating lease assets are included within Property, plant and equipment and depreciated over their useful lives (see Accounting policy 7). Operating lease rentals receivable are included in Other operating income. As lessee The Group’s contracts to lease assets are principally operating leases. Operating lease rental expense is included in Premises and equipment costs and recognised as an expense on a straight-line basis over the lease term unless another systematic basis better represents the benefit to the Group. |
Provisions | 12. Provisions The Group recognises a provision for a present obligation resulting from a past event when it is more likely than not that it will be required to transfer economic benefits to settle the obligation and the amount of the obligation can be estimated reliably. Provision is made for restructuring costs, including the costs of redundancy, when the Group has a constructive obligation to restructure. An obligation exists when the Group has a detailed formal plan for the restructuring and has raised a valid expectation in those affected by starting to implement the plan or by announcing its main features. If the Group has a contract that is onerous, it recognises the present obligation under the contract as a provision. An onerous contract is one where the unavoidable costs of meeting the Group’s contractual obligations exceed the expected economic benefits. When the Group vacates a leasehold property, a provision is recognised for the costs under the lease less any expected economic benefits (such as rental income). Contingent liabilities are possible obligations arising from past events, whose existence will be confirmed only by uncertain future events, or present obligations arising from past events that are not recognised because either an outflow of economic benefits is not probable or the amount of the obligation cannot be reliably measured. Contingent liabilities are not recognised but information about them is disclosed unless the possibility of any outflow of economic benefits in settlement is remote. |
Tax | 13. Tax Income tax expense or income, comprising current tax and deferred tax, is recorded in the income statement except income tax on items recognised outside profit or loss which is credited or charged to other comprehensive income or to equity as appropriate. Current tax is income tax payable or recoverable in respect of the taxable profit or loss for the year arising in profit or loss, other comprehensive income or equity. Provision is made for current tax at rates enacted or substantively enacted at the balance sheet date. Deferred tax is the tax expected to be payable or recoverable in respect of temporary differences between the carrying amount of an asset or liability for accounting purposes and its carrying amount for tax purposes. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised. Deferred tax is not recognised on temporary differences that arise from initial recognition of an asset or a liability in a transaction (other than a business combination) that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is calculated using tax rates expected to apply in the periods when the assets will be realised or the liabilities settled, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date. Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to offset and where they relate to income taxes levied by the same taxation authority either on an individual Group company or on Group companies in the same tax group that intend, in future periods, to settle current tax liabilities and assets on a net basis or on a gross basis simultaneously. |
Financial assets | 14. Financial assets On initial recognition, financial assets are classified into held-to-maturity investments; held-for-trading; designated as at fair value through profit or loss; loans and receivables; or available-for-sale financial assets. Normal purchases of financial assets classified as loans and receivables are recognised on the settlement date; all other normal transactions in financial assets are recognised on the trade date. Held-to-maturity investments - a financial asset may be classified as a held-to-maturity investment only if it has fixed or determinable payments, a fixed maturity and the Group has the positive intention and ability to hold to maturity. Held-to-maturity investments are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method (see Accounting policy 3) less any impairment losses. Held-for-trading - a financial asset is classified as held-for-trading if it is acquired principally for sale in the near term, or forms part of a portfolio of financial instruments that are managed together and for which there is evidence of short-term profit taking, or it is a derivative (not in a qualifying hedge relationship). Held-for-trading financial assets are recognised at fair value with transaction costs being recognised in profit or loss. Subsequently they are measured at fair value. Income from trading activities includes gains and losses on held-for-trading financial assets as they arise. Designated as at fair value through profit or loss - financial assets may be designated as at fair value through profit or loss only if such designation (a) eliminates or significantly reduces a measurement or recognition inconsistency; or (b) applies to a group of financial assets, financial liabilities or both, that the Group manages and evaluates on a fair value basis; or (c) relates to an instrument that contains an embedded derivative which is not evidently closely related to the host contract. Financial assets that the Group designates on initial recognition as being at fair value through profit or loss are recognised at fair value, with transaction costs being recognised in profit or loss, and are subsequently measured at fair value. Gains and losses are recognised in profit or loss as they arise. Loans and receivables - non-derivative financial assets with fixed or determinable repayments that are not quoted in an active market are classified as loans and receivables, except those that are classified as available-for-sale or as held-for-trading, or designated as at fair value through profit or loss. Loans and receivables are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method (see Accounting policy 3) less any impairment losses. Available-for-sale financial assets - financial assets that are not classified as held-to-maturity; held-for-trading; designated as at fair value through profit or loss; or loans and receivables are classified as available-for-sale. Financial assets can be designated as available-for-sale on initial recognition. Available-for-sale financial assets are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at fair value. Unquoted equity investments whose fair value cannot be measured reliably are carried at cost and classified as available-for-sale financial assets. Impairment losses and exchange differences resulting from retranslating the amortised cost of foreign currency monetary available-for-sale financial assets are recognised in profit or loss together with interest calculated using the effective interest method (see Accounting policy 3) as are gains and losses attributable to the hedged risk on available-for-sale financial assets that are hedged items in fair value hedges (see Accounting policy 23). Other changes in the fair value of available-for-sale financial assets and any related tax are reported in other comprehensive income until disposal, when the cumulative gain or loss is reclassified from equity to profit or loss. Reclassifications - held-for-trading and available-for-sale financial assets that meet the definition of loans and receivables (non-derivative financial assets with fixed or determinable payments that are not quoted in an active market) may be reclassified to loans and receivables if the Group has the intention and ability to hold the financial asset for the foreseeable future or until maturity. The Group typically regards the foreseeable future for this purpose as twelve months from the date of reclassification. Additionally, held-for-trading financial assets that do not meet the definition of loans and receivables may, in rare circumstances, be transferred to available-for-sale financial assets or to held-to-maturity investments. Reclassifications are made at fair value. This fair value becomes the asset’s new cost or amortised cost as appropriate. Gains and losses recognised up to the date of reclassification are not reversed. Fair value - the Group’s approach to determining the fair value of financial instruments measured at fair value is set out in the section of Critical accounting policies and key sources of estimation uncertainty entitled Fair value - financial instruments. Further details are given in Note 9 on the accounts. |
Impairment of financial assets | 15. Impairment of financial assets The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets classified as held-to-maturity, as available-for-sale or as loans and receivables is impaired. A financial asset or group of financial assets is impaired and an impairment loss incurred if there is objective evidence that an event or events since initial recognition of the asset have adversely affected the amount or timing of future cash flows from the asset. Financial assets carried at amortised cost - if there is objective evidence that an impairment loss on a financial asset or group of financial assets classified as loans and receivables or as held-to-maturity investments has been incurred, the Group measures the amount of the loss as the difference between the carrying amount of the asset or group of assets and the present value of estimated future cash flows from the asset or group of assets discounted at the effective interest rate of the instrument at initial recognition. For collateralised loans and receivables, estimated future cash flows include cash flows that may result from foreclosure less the costs of obtaining and selling the collateral, whether or not foreclosure is probable. Where, in the course of the orderly realisation of a loan, it is exchanged for equity shares or property, the exchange is accounted for as the sale of the loan and the acquisition of equity securities or investment property. Where the Group’s interest in equity shares following the exchange is such that the Group controls an entity, that entity is consolidated. Impairment losses are assessed individually for financial assets that are individually significant and individually or collectively for assets that are not individually significant. In making collective impairment assessments, financial assets are grouped into portfolios on the basis of similar risk characteristics. Future cash flows from these portfolios are estimated on the basis of the contractual cash flows and historical loss experience for assets with similar credit risk characteristics. Historical loss experience is adjusted, on the basis of observable data, to reflect current conditions not affecting the period of historical experience. Impairment losses are recognised in profit or loss and the carrying amount of the financial asset or group of financial assets reduced by establishing an allowance for impairment losses. If, in a subsequent period, the amount of the impairment loss reduces and the reduction can be ascribed to an event after the impairment was recognised, the previously recognised loss is reversed by adjusting the allowance. Once an impairment loss has been recognised on a financial asset or group of financial assets, interest income is recognised on the carrying amount using the rate of interest at which estimated future cash flows were discounted in measuring impairment. Impaired loans and receivables are written off, i.e. the impairment provision is applied in writing down the loan’s carrying value partially or in full, when the Group concludes that there is no longer any realistic prospect of recovery of part or all of the loan. For loans that are individually assessed for impairment, the timing of write off is determined on a case-by-case basis. Such loans are reviewed regularly and write off will be prompted by bankruptcy, insolvency, renegotiation and similar events. The typical time frames from initial impairment to write off for the Group’s collectively-assessed portfolios are: · Retail mortgages: write off usually occurs within five years, or when an account is closed if earlier. · Credit cards: the irrecoverable amount is written off after 12 months; three years later any remaining amounts outstanding are written off. · Overdrafts and other unsecured loans: write off occurs within six years. · Business and commercial loans: write offs of commercial loans are determined in the light of individual circumstances; the period does not exceed five years. Business loans are generally written off within five years. Amounts recovered after a loan has been written off are credited to the loan impairment charge for the period in which they are received. Financial assets carried at fair value - when a decline in the fair value of a financial asset classified as available-for-sale has been recognised directly in other comprehensive income and there is objective evidence that it is impaired, the cumulative loss is reclassified from equity to profit or loss. The loss is measured as the difference between the amortised cost (including any hedge accounting adjustments) of the financial asset and its current fair value. Impairment losses on available-for-sale equity instruments are not reversed through profit or loss, but those on available-for-sale debt instruments are reversed, if there is an increase in fair value that is objectively related to a subsequent event. |
Financial liabilities | 16. Financial liabilities Financial liabilities are recognised initially at fair value and classified into held-for-trading; designated as at fair value through profit or loss; or amortised cost. Issues of financial liabilities measured at amortised cost are recognised on settlement date; all other normal transactions in financial liabilities are recognised on trade date. Held-for-trading - a financial liability is classified as held-for-trading if it is incurred principally for repurchase in the near term, or forms part of a portfolio of financial instruments that are managed together and for which there is evidence of short-term profit taking, or it is a derivative (not in a qualifying hedge relationship). Held-for-trading financial liabilities are recognised at fair value with transaction costs being recognised in profit or loss. Subsequently they are measured at fair value. Gains and losses are recognised in profit or loss as they arise. Designated as at fair value through profit or loss - financial liabilities may be designated as at fair value through profit or loss only if such designation (a) eliminates or significantly reduces a measurement or recognition inconsistency; or (b) applies to a group of financial assets, financial liabilities or both that the Group manages and evaluates on a fair value basis; or (c) relates to an instrument that contains an embedded derivative which is not evidently closely related to the host contract. Financial liabilities that the Group designates on initial recognition as being at fair value through profit or loss are recognised at fair value, with transaction costs being recognised in profit or loss, and are subsequently measured at fair value. Income from trading activities includes gains and losses on held-for-trading financial liabilities as they arise. Financial liabilities designated as at fair value through profit or loss principally comprise structured liabilities issued by the Group: designation significantly reduces the measurement inconsistency between these liabilities and the related derivatives carried at fair value. Amortised cost - all other financial liabilities are measured at amortised cost using the effective interest method (see Accounting policy 3). Fair value - the Group’s approach to determining the fair value of financial instruments measured at fair value is set out in the section of Critical accounting policies and key sources of estimation uncertainty entitled Fair value - financial instruments; further details are given in Note 9 on the accounts. |
Financial guarantee contracts | 17. Financial guarantee contracts Under a financial guarantee contract, the Group, in return for a fee, undertakes to meet a customer’s obligations under the terms of a debt instrument if the customer fails to do so. A financial guarantee is recognised as a liability; initially at fair value and, if not designated as at fair value through profit or loss, subsequently at the higher of its initial value less cumulative amortisation and any provision under the contract measured in accordance with Accounting policy 12. Amortisation is calculated so as to recognise fees receivable in profit or loss over the period of the guarantee. |
Loan commitments | 18. Loan commitments Provision is made for loan commitments, other than those classified as held-for-trading, if it is probable that the facility will be drawn and the resulting loan will be recognised at an amount less than the cash advanced. Syndicated loan commitments in excess of the level of lending under the commitment approved for retention by the Group are classified as held-for-trading and measured at fair value. |
Derecognition | 19. Derecognition A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired or when it has been transferred and the transfer qualifies for derecognition. A transfer requires that the Group either (a) transfers the contractual rights to receive the asset’s cash flows; or (b) retains the right to the asset’s cash flows but assumes a contractual obligation to pay those cash flows to a third party. After a transfer, the Group assesses the extent to which it has retained the risks and rewards of ownership of the transferred asset. The asset remains on the balance sheet if substantially all the risks and rewards have been retained. It is derecognised if substantially all the risks and rewards have been transferred. If substantially all the risks and rewards have been neither retained nor transferred, the Group assesses whether or not it has retained control of the asset. If the Group has retained control of the asset, it continues to recognise the asset to the extent of its continuing involvement; if the Group has not retained control of the asset, it is derecognised. A financial liability is removed from the balance sheet when the obligation is discharged, or is cancelled, or expires. On the redemption or settlement of debt securities (including subordinated liabilities) issued by the Group, the Group derecognises the debt instrument and records a gain or loss being the difference between the debt’s carrying amount and the cost of redemption or settlement. The same treatment applies where the debt is exchanged for a new debt issue that has terms substantially different from those of the existing debt. The assessment of whether the terms of the new debt instrument are substantially different takes into account qualitative and quantitative characteristics including a comparison of the present value of the cash flows under the new terms with the present value of the remaining cash flows of the original debt issue discounted at the effective interest rate of the original debt issue. |
Sale and repurchase transactions | 20. Sale and repurchase transactions Securities subject to a sale and repurchase agreement under which substantially all the risks and rewards of ownership are retained by the Group continue to be shown on the balance sheet and the sale proceeds recorded as a financial liability. Securities acquired in a reverse sale and repurchase transaction under which the Group is not exposed to substantially all the risks and rewards of ownership are not recognised on the balance sheet and the consideration paid is recorded as a financial asset. Securities borrowing and lending transactions are usually secured by cash or securities advanced by the borrower. Borrowed securities are not recognised on the balance sheet or lent securities derecognised. Cash collateral given or received is treated as a loan or deposit; collateral in the form of securities is not recognised. However, where securities borrowed are transferred to third parties, a liability for the obligation to return the securities to the stock lending counterparty is recorded. |
Netting | 21. Netting Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group currently has a legally enforceable right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group is party to a number of arrangements, including master netting agreements, that give it the right to offset financial assets and financial liabilities, but where it does not intend to settle the amounts net or simultaneously, the assets and liabilities concerned are presented gross. |
Capital instruments | 22. Capital instruments The Group classifies a financial instrument that it issues as a liability if it is a contractual obligation to deliver cash or another financial asset, or to exchange financial assets or financial liabilities on potentially unfavourable terms and as equity if it evidences a residual interest in the assets of the Group after the deduction of liabilities. The components of a compound financial instrument issued by the Group are classified and accounted for separately as financial assets, financial liabilities or equity as appropriate. Incremental costs and related tax that are directly attributable to an equity transaction are deducted from equity. The consideration for any ordinary shares of the company purchased by the Group (treasury shares) is deducted from equity. On the cancellation of treasury shares their nominal value is removed from equity and any excess of consideration over nominal value is treated in accordance with the capital maintenance provisions of the Companies Act. On the sale or reissue of treasury shares the consideration received and related tax are credited to equity, net of any directly attributable incremental costs. |
Derivatives and hedging | 23. Derivatives and hedging Derivative financial instruments are initially recognised, and subsequently measured, at fair value. The Group’s approach to determining the fair value of financial instruments is set out in the section of Critical accounting policies and key sources of estimation uncertainty entitled Fair value - financial instruments; further details are given in Note 9 on the accounts. A derivative embedded in a contract is accounted for as a stand-alone derivative if its economic characteristics are not closely related to the economic characteristics of the host contract; unless the entire contract is measured at fair value with changes in fair value recognised in profit or loss. Gains and losses arising from changes in the fair value of derivatives that are not the hedging instrument in a qualifying hedge are recognised as they arise in profit or loss. Gains and losses are recorded in Income from trading activities except for gains and losses on those derivatives that are managed together with financial instruments designated at fair value; these gains and losses are included in Other operating income. The Group enters into three types of hedge relationship: hedges of changes in the fair value of a recognised asset or liability or unrecognised firm commitment (fair value hedges); hedges of the variability in cash flows from a recognised asset or liability or a highly probable forecast transaction (cash flow hedges); and hedges of the net investment in a foreign operation. Hedge relationships are formally designated and documented at inception. The documentation identifies the hedged item and the hedging instrument and details the risk that is being hedged and the way in which effectiveness will be assessed at inception and during the period of the hedge. If the hedge is not highly effective in offsetting changes in fair values or cash flows attributable to the hedged risk, consistent with the documented risk management strategy, hedge accounting is discontinued. Hedge accounting is also discontinued if the Group revokes the designation of a hedge relationship. Fair value hedge - in a fair value hedge, the gain or loss on the hedging instrument is recognised in profit or loss. The gain or loss on the hedged item attributable to the hedged risk is recognised in profit or loss and, where the hedged item is measured at amortised cost, adjusts the carrying amount of the hedged item. Hedge accounting is discontinued if the hedge no longer meets the criteria for hedge accounting; or if the hedging instrument expires or is sold, terminated or exercised; or if hedge designation is revoked. If the hedged item is one for which the effective interest rate method is used, any cumulative adjustment is amortised to profit or loss over the life of the hedged item using a recalculated effective interest rate. Cash flow hedge - in a cash flow hedge, the effective portion of the gain or loss on the hedging instrument is recognised in other comprehensive income and the ineffective portion in profit or loss. When the forecast transaction results in the recognition of a financial asset or financial liability, the cumulative gain or loss is reclassified from equity to profit or loss in the same periods in which the hedged forecast cash flows affect profit or loss. Otherwise the cumulative gain or loss is removed from equity and recognised in profit or loss at the same time as the hedged transaction. Hedge accounting is discontinued if the hedge no longer meets the criteria for hedge accounting; if the hedging instrument expires or is sold, terminated or exercised; if the forecast transaction is no longer expected to occur; or if hedge designation is revoked. On the discontinuance of hedge accounting (except where a forecast transaction is no longer expected to occur), the cumulative unrealised gain or loss is reclassified from equity to profit or loss when the hedged cash flows occur or, if the forecast transaction results in the recognition of a financial asset or financial liability, when the hedged forecast cash flows affect profit or loss. Where a forecast transaction is no longer expected to occur, the cumulative unrealised gain or loss is reclassified from equity to profit or loss immediately. Hedge of net investment in a foreign operation - in the hedge of a net investment in a foreign operation, the portion of foreign exchange differences arising on the hedging instrument determined to be an effective hedge is recognised in other comprehensive income. Any ineffective portion is recognised in profit or loss. Non-derivative financial liabilities as well as derivatives may be the hedging instrument in a net investment hedge. On disposal or partial disposal of a foreign operation, the amount accumulated in equity is reclassified from equity to profit or loss. |
Associates and joint ventures | 24. Associates and joint ventures An associate is an entity over which the Group has significant influence. A joint venture is one which it controls jointly with other parties. Investments in associates and interests in joint ventures are recognised using the equity method. They are stated initially at cost, including attributable goodwill, and subsequently adjusted for post-acquisition changes in the Group’s share of net assets. |
Share-based compensation | 25. Share-based compensation The Group operates a number of share-based compensation schemes under which it awards RBSG shares and share options to its employees. Such awards are generally subject to vesting conditions: conditions that vary the amount of cash or shares to which an employee is entitled. Vesting conditions include service conditions (requiring the employee to complete a specified period of service) and performance conditions (requiring the employee to complete a specified period of service and specified performance targets to be met). Other conditions to which an award is subject are non-vesting conditions (such as a requirement to save throughout the vesting period). The cost of employee services received in exchange for an award of shares or share options granted is measured by reference to the fair value of the shares or share options on the date the award is granted and takes into account non-vesting conditions and market performance conditions (conditions related to the market price of RBSG shares): an award is treated as vesting irrespective of whether any market performance condition or non-vesting condition is met. The fair value of options granted is estimated using valuation techniques which incorporate exercise price, term, risk-free interest rates, the current share price and its expected volatility. The cost is expensed on a straight-line basis over the vesting period (the period during which all the specified vesting conditions must be satisfied) with a corresponding increase in equity in an equity-settled award, or a corresponding liability in a cash-settled award. The cost is adjusted for vesting conditions (other than market performance conditions) so as to reflect the number of shares or share options that actually vest. If an award is modified, the original cost continues to be recognised as if there had been no modification. Where modification increases the fair value of the award, this increase is recognised as an expense over the modified vesting period. A new award of shares or share options is treated as the modification of a cancelled award if, on the date the new award is granted, the Group identifies them as replacing the cancelled award. The cancellation of an award through failure to meet non-vesting conditions triggers an immediate expense for any unrecognised element of the cost of an award. |
Cash and cash equivalents | 26. Cash and cash equivalents In the cash flow statement, cash and cash equivalents comprises cash and deposits with banks with an original maturity of less than three months together with short-term highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of change in value. Critical accounting policies and key sources of estimation uncertainty The reported results of the Group are sensitive to the accounting policies, assumptions and estimates that underlie the preparation of its financial statements. UK company law and IFRS require the directors, in preparing the Group’s financial statements, to select suitable accounting policies, apply them consistently and make judgements and estimates that are reasonable and prudent. In the absence of an applicable standard or interpretation, IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’, requires management to develop and apply an accounting policy that results in relevant and reliable information in the light of the requirements and guidance in IFRS dealing with similar and related issues and the IASB’s ‘Conceptual Framework for Financial Reporting’. The judgements and assumptions involved in the Group’s accounting policies that are considered by the Board to be the most important to the portrayal of its financial condition are discussed below. The use of estimates, assumptions or models that differ from those adopted by the Group would affect its reported results. |
Goodwill | (i) Goodwill The Group capitalises goodwill arising on the acquisition of businesses, as discussed in Accounting policy 6. The carrying value of goodwill as at 31 December 2017 was £5,558 million (2016 - £5,558 million). Goodwill is the excess of the cost of an acquired business over the fair value of its net assets. Goodwill is not amortised but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Impairment testing in accordance with Accounting policy 8 inherently involves a number of judgmental areas: the preparation of cash flow forecasts for periods that are beyond the normal requirements of management reporting; the assessment of the discount rate appropriate to the business; estimation of the fair value of cash-generating units; and the valuation of their separable assets. The sensitivity of the assessment to changes in assumptions is discussed in Note 15 on the accounts. |
Provisions for liabilities | (ii) Provisions for liabilities As set out in Note 20 on the accounts, at 31 December 2017 the Group recognised provisions for liabilities in respect of Payment Protection Insurance, £1,053 million (2016 - £1,253 million), other customer redress, £870 million (2016 - £1,105 million), residential mortgage backed securities, £3,243 million (2016 - £6,752 million), litigation and other regulatory proceedings, £641 million (2016 - £1,918 million) and property and other £1,950 million (2016 - £1,808 million). Provisions are liabilities of uncertain timing or amount, and are recognised when there is a present obligation as a result of a past event, the outflow of economic benefit is probable and the outflow can be estimated reliably. Judgement is involved in determining whether an obligation exists, and in estimating the probability, timing and amount of any outflows. Where the Group can look to another party such as an insurer to pay some or all of the expenditure required to settle a provision, any reimbursement is recognised when, and only when, it is virtually certain that it will be received. Payment Protection Insurance - the Group has established a provision for redress payable in respect of the mis-selling of Payment Protection Insurance policies. The provision is management’s best estimate of the anticipated costs of redress and related administration expenses. The determination of appropriate assumptions to underpin the provision requires significant judgement by management. The principal assumptions underlying the provision together with sensitivities to changes in those assumptions are given in Note 20 on the accounts. Provisions for litigation - the Group and members of the Group are party to legal proceedings in the United Kingdom, the United States and other jurisdictions, arising out of their normal business operations. The measurement and recognition of liabilities in respect of litigation involves a high degree of management judgement. Before the existence of a present obligation as the result of a past event can be confirmed, numerous facts may need to be established, involving extensive and time-consuming discovery, and novel or unsettled legal questions addressed. Once it is determined there is an obligation, assessing the probability of economic outflows and estimating the amount of any liability can be very difficult. In many proceedings, it is not possible to determine whether any loss is probable or to estimate the amount of any loss. Furthermore, for an individual matter, there can be a wide range of possible outcomes and often it is not practicable to quantify a range of such outcomes. The Group’s outstanding litigation is periodically assessed in consultation with external professional advisers, where appropriate, to determine the likelihood of the Group incurring a liability. A detailed description of the Group’s material legal proceedings and a discussion of the nature of the associated uncertainties are given in Note 31 on the accounts. Tax contingencies - determining the Group’s income tax charge and its provisions for income taxes necessarily involves a significant degree of estimation and judgement. The tax treatment of some transactions is uncertain and tax computations are yet to be agreed with the tax authorities in a number of jurisdictions. The Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice. Any difference between the final outcome and the amounts provided will affect current and deferred income tax assets and liabilities in the period when the matter is resolved. |
Deferred tax | (iii) Deferred tax The Group makes provision for deferred tax on temporary differences where tax recognition occurs at a different time from accounting recognition. Deferred tax assets of £1,740 million were recognised as at 31 December 2017 (2016 - £1,803 million). The Group has recognised deferred tax assets in respect of losses, principally in the UK, and temporary differences. Deferred tax assets are recognised in respect of unused tax losses and other temporary differences to the extent that it is probable that there will be future taxable profits against which the losses and other temporary differences can be utilised. The Group has considered their carrying value as at 31 December 2017 and concluded that, based on management’s estimates, sufficient taxable profits will be generated in future years to recover recognised deferred tax assets. These estimates are based on forecast performance and take into account Brexit, the Group’s plans to implement the UK ring-fencing regime and the resultant transfers between members of the Group. Deferred tax assets of £6,356 million (2016 - £7,940 million) have not been recognised in respect of tax losses and other temporary differences where the availability of future taxable profits is uncertain. Further details about the Group’s deferred tax assets are given in Note 22 on the accounts. |
Loan impairment provisions | (iv) Loan impairment provisions The Group’s loan impairment provisions are established to recognise incurred impairment losses in its portfolio of loans classified as loans and receivables and carried at amortised cost in accordance with Accounting policy 16. At 31 December 2017, customer loan impairment provisions amounted to £3,814 million (2016 - £4,455 million). A loan is impaired when there is objective evidence that events since the loan was granted have affected expected cash flows from the loan. Such objective evidence, indicative that a borrower’s financial condition has deteriorated, can include for loans that are individually assessed: the non-payment of interest or principal; debt renegotiation; probable bankruptcy or liquidation; significant reduction in the value of any security; breach of limits or covenants; and deteriorating trading performance and, for collectively assessed portfolios: the borrowers’ payment status and observable data about relevant macroeconomic measures. The impairment loss is the difference between the carrying value of the loan and the present value of estimated future cash flows at the loan’s original effective interest rate. There are two components to the Group’s loan impairment provisions: individual and collective. Individual component - all impaired loans that exceed specific thresholds are individually assessed for impairment. Individually assessed loans principally comprise the Group’s portfolio of commercial loans to medium and large businesses. Impairment losses are recognised as the difference between the carrying value of the loan and the discounted value of management’s best estimate of future cash repayments and proceeds from any security held. These estimates take into account the customer’s debt capacity and financial flexibility; the level and quality of its earnings; the amount and sources of cash flows; the industry in which the counterparty operates; and the realisable value of any security held. Estimating the quantum and timing of future recoveries involves significant judgement. The size of receipts will depend on the future performance of the borrower and the value of security, both of which will be affected by future economic conditions; additionally, collateral may not be readily marketable. The actual amount of future cash flows and the date they are received may differ from these estimates and consequently actual losses incurred may differ from those recognised in these financial statements. Collective component - this is made up of two elements: loan impairment provisions for impaired loans that are below individual assessment thresholds (collectively assessed provisions) and for loan losses that have been incurred but have not been separately identified at the balance sheet date (latent loss provisions). Collectively assessed provisions are established on a portfolio basis using a present value methodology taking into account the level of arrears, security, past loss experience, credit scores and defaults based on portfolio trends. The most significant factors in establishing these provisions are the expected loss rates and the related average life. These portfolios include mortgages, credit card receivables and other personal lending. The future credit quality of these portfolios is subject to uncertainties that could cause actual credit losses to differ materially from reported loan impairment provisions. These uncertainties include the economic environment, notably interest rates and their effect on customer spending, the unemployment level, payment behaviour and bankruptcy trends. Latent loss provisions are held against estimated impairment losses in the performing portfolio that have yet to be identified as at the balance sheet date. To assess the latent loss within its portfolios, the Group has developed methodologies to estimate the time that an asset can remain impaired within a performing portfolio before it is identified and reported as such. |
Fair value - financial instruments | (v) Fair value - financial instruments In accordance with Accounting policies 14, 16 and 23, financial instruments classified as held-for-trading or designated as at fair value through profit or loss and financial assets classified as available-for-sale are recognised in the financial statements at fair value. All derivatives are measured at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. It also uses the assumptions that market participants would use when pricing the asset or liability. In determining fair value the Group maximises the use of relevant observable inputs and minimises the use of unobservable inputs. Where the Group manages a group of financial assets and financial liabilities on the basis of its net exposure to either market risks or credit risk, it measures the fair value of a group of financial assets and financial liabilities on the basis of the price that it would receive to sell a net long position (i.e. an asset) for a particular risk exposure or to transfer a net short position (i.e. a liability) for a particular risk exposure in an orderly transaction at the measurement date under current market conditions. Credit valuation adjustments are made when valuing derivative financial assets to incorporate counterparty credit risk. Adjustments are also made when valuing financial liabilities measured at fair value to reflect the Group’s own credit standing. Where the market for a financial instrument is not active, fair value is established using a valuation technique. These valuation techniques involve a degree of estimation, the extent of which depends on the instrument’s complexity and the availability of market-based data. Further details about the Group’s valuation methodologies and the sensitivity to reasonably possible alternative assumptions of the fair value of financial instruments valued using techniques where at least one significant input is unobservable are given in Note 9 on the accounts. |
Accounting developments | Accounting developments International Financial Reporting Standards A number of IFRSs and amendments to IFRS were in issue at 31 December 2017 that would affect the Group from 1 January 2018 or later. Effective 1 January 2018 - IFRS 9 In July 2014, the IASB published IFRS 9 ‘Financial Instruments’ with an effective date of 1 January 2018. IFRS 9 replaces the current financial instruments standard IAS 39, setting out new accounting requirements in a number of areas. The principle features of IFRS 9 are as follows: Recognition and derecognition The sections in IAS 39 setting out the criteria for the recognition and derecognition of financial instruments have been included unamended in IFRS 9. Classification and measurement Financial assets - There are three classifications for financial assets in IFRS 9. · Amortised cost - Financial assets with terms that give rise to interest and principal cash flows only and which are held in a business model whose objective is to hold financial assets to collect their cash flow are measured at amortised cost. · Fair value through other comprehensive income - Financial assets with terms that give rise to interest and principal cash flows only and which are held in a business model whose objective is achieved by holding financial assets to collect their cash flow and selling them are measured at fair value through other comprehensive income. · Fair value through profit and loss - Other financial assets are measured at fair value through profit and loss. At initial recognition, any financial asset may be irrevocably designated as measured at fair value through profit or loss if such designation eliminates a measurement or recognition inconsistency. The measurement basis of the majority of the Group’s financial assets is unchanged on application of IFRS 9. Financial liabilities – Since early adopting in 2017 the IFRS 9 accounting for fair value attributable to own credit risk there are no further material changes on accounting for financial liabilities on adoption of IFRS 9. Hedge accounting IFRS 9’s hedge accounting requirements are designed to align the accounting more closely to the risk management framework; permit a greater variety of hedging instruments; and remove or simplify some of the rule-based requirements in IAS 39. The elements of hedge accounting: fair value, cash flow and net investment hedges are retained. The Group accounting policy choice is continue with the IAS 39 hedge accounting framework. Credit impairment IFRS 9’s credit impairment requirements apply to financial assets measured at amortised cost, to those measured at fair value through other comprehensive income, to lease receivables and to certain loan commitments and financial guarantee contracts. On initial recognition a loss allowance is established at an amount equal to 12-month expected credit losses (ECL) that is the portion of life-time expected losses resulting from default events that are possible within the next 12 months. Where a significant increase in credit risk since initial recognition is identified, the loss allowance increases so as to recognise all expected default events over the expected life of the asset. The Group expects that financial assets where there is objective evidence of impairment under IAS 39 will be credit impaired under IFRS 9, and carry loss allowances based on all expected default events. The assessment of credit risk and the estimation of ECL are required to be unbiased and probability-weighted: determined by evaluating at the balance sheet date for each customer or loan portfolio a range of possible outcomes using reasonable and supportable information about past events, current conditions and forecasts of future events and economic conditions. The estimation of ECL also takes into account the time value of money. Recognition and measurement of credit impairments under IFRS 9 are more forward-looking than under IAS 39. A Group-wide programme implemented the necessary changes in the modelling of credit loss parameters, and the underlying credit management and financial processes. The result is an increase in overall credit impairment provisions when compared with the current basis of measurement under IAS 39. Transition The classification and measurement and impairment requirements will be applied retrospectively by adjusting the opening balance sheet at the date of initial application, with no requirement to restate comparative periods. Hedge accounting will be applied prospectively from that date. In summary, on 1 January 2018, the impact on shareholders’ equity was a £71 million post tax reduction in equity, comprising: · Reclassification of financial instruments – £561 million pre tax increase in equity · Change in impairment methodology – £616 million pre tax reduction. · Net tax impact – £16 million decrease. There will be no restatement of accounts prior to 2018. The Group has opted to early adopt the IFRS 9 amendment on negative compensation with effect from 1 January 2018; this is expected to be endorsed for use in the EU in early 2018. Effective 1 January 2018 – other standards IFRS 15 ‘Revenue from Contracts with Customers’ was issued in May 2014. It will replace IAS 11 ‘Construction Contracts’, IAS 18 ‘Revenue’ and several Interpretations. Contracts are bundled or unbundled into distinct performance obligations with revenue recognised as the obligations are met. A restatement is not expected on initial application of this standard. IFRS 2 ‘Share-based payment’ was amended in June 2016 to clarify the accounting for net settlement of tax in respect of share-based payments and the calculation of the cost of modified awards and those with vesting conditions that are not market conditions. IFRIC Interpretation 22 ‘Foreign Currency Transaction and Advance Consideration’ was issued in December 2016 clarifying the date of a foreign exchange transaction to be used on initial recognition of a related asset or other item. IAS 40 ‘Investment Property’ was amended in December 2016 to clarify that transfers into or out of the investment property classification may only occur on a change of use or the property ceasing to meet the definition of an investment property. On adoption, none of these standards are expected to have a material effect on the Group’s results. Effective after 2018 IFRS 16 ‘Leases’ was issued in January 2016 to replace IAS 17 ‘Leases’. There are no substantial changes to the accounting for leases by lessors nor for finance leases; operating leases will be brought on balance sheet through the recognition of assets representing the contractual rights of use, and liabilities will be recognised for the contractual payments that exist. The effective date is 1 January 2019. The Group is currently working on the implementation of the new requirements and currently anticipates that the property lease portfolio will have the most significant implementation impact as property represents 87% of the operating lease commitments per Note 31. A preliminary estimate (excluding the impacts of tax) of the opening balance sheet adjustment as a result of the property portfolio using a modified retrospective approach to transition would be to create a Right of Use asset of c£1.4bn, also impacting RWAs and an estimated decrease (excluding the impacts of tax) in retaining earnings of some c£0.3bn. As permitted by the standard, the Group intends to apply IFRS 16 on a retrospective basis but to take advantage of the option not to restate. The Group will continue to work on the implementation throughout 2018 and therefore this estimate of the impact is subject to change. Changes could arise from the addition of non property leases, further development of calibration of models and processes, methodology and approach refinement, and sensitivity analysis performed on key assumptions such as discount factors and lease term. IFRS 17 ‘Insurance contracts’ was issued in May 2017 to replace IFRS 4 and to establish a comprehensive standard for inceptors of insurance policies. The effective date is 1 January 2021. IFRIC Interpretation 23 ‘Uncertainty over income tax treatments’ was issued in June 2017 to clarify how to apply judgement in assessing the tax position of the reporting entity. The effective date is 1 January 2019. In October 2017, the IASB amended IAS 28 ‘Investments in associates and joint ventures’ to require long term, non-equity interests in these investments to be tested for impairment first in accordance with IFRS 9 and then in accordance with IAS 28. The effective date of the amendment is 1 January 2019. In February 2018 the IASB amended IAS ‘Employee Benefits’ to clarify the need to update assumptions whenever there is a plan amendment, curtailment or settlement during the reporting period. The effective date is 1 January 2019. The Group is assessing the effect of adopting these standards on its financial statements. |
Accounting policies (Tables)
Accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting policies | |
Schedule of estimated useful economic lives | Computer software 3 to 12 years Other acquired intangibles 5 to 10 years |
Schedule of estimated useful lives of the Group's property, plant and equipment | Freehold buildings 50 years Long leasehold property (leases with more than 50 years to run) 50 years Short leaseholds unexpired period of the lease Property adaptation costs 10 to 15 years Computer equipment up to 5 years Other equipment 4 to 15 years |
Net interest income (Tables)
Net interest income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net interest income | |
Schedule of net interest income | 2017 2016 2015 £m £m £m Loans and advances to customers 10,409 10,706 11,268 Loans and advances to banks 277 246 340 Debt securities 348 306 317 Interest receivable (1) 11,034 11,258 11,925 Customer accounts: demand deposits 99 433 619 Customer accounts: savings deposits 445 432 446 Customer accounts: other time deposits 179 190 315 Balances with banks 175 97 45 Debt securities in issue 554 557 759 Subordinated liabilities 572 845 869 Internal funding of trading businesses 23 105 Interest payable (1) 2,047 2,550 3,158 Net interest income 8,987 8,708 8,767 Notes: (1) Negative interest on loans and advances is classed as interest payable and on customer deposits is classed as interest receivable. |
Non-interest income (Tables)
Non-interest income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Non-interest income | |
Schedule of Non-interest income | 2017 2016 2015 £m £m £m Fees and commissions receivable Payment services 829 856 923 Credit and debit card fees 665 645 738 Lending (credit facilities) 1,060 1,044 1,076 Brokerage 148 154 262 Investment management 249 250 305 Trade finance 173 196 242 Other 214 195 196 3,338 3,340 3,742 Fees and commissions payable Banking Income from trading activities Foreign exchange 525 989 809 Interest rate 35 Credit 197 336 Changes in fair value of own debt and derivative liabilities attributable to own credit - debt securities in issue 87 252 - derivative liabilities 12 67 2 Equities and other 31 42 634 974 1,060 Loss on redemption of own debt Other operating income Operating lease and other rental income 276 287 276 Changes in the fair value of own debt designated as at fair value through profit or loss attributable to own credit risk (2) - debt securities in issue — 41 84 - subordinated liabilities — Other changes in the fair value of financial assets and liabilities designated as at fair value through profit or loss and related derivatives 99 375 Changes in the fair value of investment properties 2 Profit/(loss) on sale of securities 226 71 Profit on sale of property, plant and equipment 75 18 91 Profit/(loss) on sale of subsidiaries and associates 245 273 Loss on disposal or settlement of loans and receivables Share of profits of associated entities 104 59 140 Other income (3) 88 66 151 Non-interest income 1,064 499 426 Notes: (2) Measured as the change in fair value from movements in the year in the credit risk premium payable by RBS. Ahead of adopting IFRS9 Financial Instruments from 1 January 2018, RBS has adopted the provisions in respect of the presentation of gains and losses on financial liabilities designated as at fair value through profit or loss from 1 January 2017. (3) Includes income from activities other than banking. |
Operating expenses (Tables)
Operating expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Operating expenses | |
Schedule of operating expenses | 2017 2016 2015 £m £m £m Salaries 2,765 3,097 3,177 Variable compensation 298 281 314 Temporary and contract costs 415 674 638 Social security costs 318 388 344 Share-based compensation 17 32 36 Pension costs - defined benefit schemes (see Note 4) 309 267 523 - loss/(gain) on curtailments or settlements (see Note 4) 66 1 - defined contribution schemes 92 89 74 Severance 255 229 511 Other 141 66 174 Staff costs 4,676 5,124 5,726 Premises and equipment 1,565 1,388 1,827 UK bank levy 215 190 230 Other administrative expenses (1) 3,108 8,555 6,058 Property, plant and equipment depreciation and write down (see Note 16) 586 574 950 Intangible assets amortisation (see Note 15) 222 204 230 Depreciation and amortisation 808 778 1,180 Write down of goodwill and other intangible assets (see Note 15) 29 159 1,332 Operating expenses 10,401 16,194 16,353 Notes: (1) Includes litigation and conduct costs, net of amounts recovered. Further details are provided in Note 20. |
Schedule of restructuring and divestment costs | 2017 2016 2015 £m £m £m Staff costs 753 642 830 Premises, equipment, depreciation and amortisation 471 164 746 Other administrative expenses (2) 341 1,300 1,355 Total 1,565 2,106 2,931 Notes: (2) Includes other administrative expenses, write down of goodwill and other intangible assets. |
Schedule of employees in continuing operations | 2016* 2015* UK Personal & Business Banking Ulster Bank RoI Personal & Business Banking Commercial Banking Private Banking Commercial & Private Banking RBS International NatWest Markets Central items & other Total UK USA Europe Rest of the World Total * Re-presented to reflect segment reorganisation. |
Schedule of share-based compensation | Award plan Eligible employees Nature of award Vesting conditions (1) Settlement Sharesave UK, Republic of Ireland, Channel Islands, Gibraltar and Isle of Man Option to buy shares under employee savings plan Continuing employment or leavers in certain circumstances 2018 to 2022 Deferred performance awards All Awards of ordinary shares Continuing employment or leavers in certain circumstances 2018 to 2024 Long-term incentives (2) Senior employees Awards of conditional shares or share options Continuing employment or leavers in certain circumstances and/or achievement of performance conditions 2018 to 2024 Notes: (1) All awards have vesting conditions and therefore some may not vest. (2) Long-term incentives include the Executive Share Option Plan, the Long-Term Incentive Plan and the Employee Share Plan. |
Schedule of variable compensation awards | Group Change £m £m % Non-deferred cash awards (2) ) Total non-deferred variable compensation ) Deferred bond awards ) Deferred share awards Total deferred variable compensation Total variable compensation (3) — Variable compensation as a % of adjusted operating profit (4) Proportion of variable compensation that is deferred of which - deferred bond awards - deferred share awards Notes: (2) Cash awards are limited to £2,000 for all employees. (3) Excludes other performance related compensation |
Schedule of reconciliation of variable compensation awards | 2015 Reconciliation of variable compensation awards to income statement charge £m £m £m Variable compensation awarded Less: deferral of charge for amounts awarded for current year ) ) ) Income statement charge for amounts awarded in current year Add: current year charge for amounts deferred from prior years Less: forfeiture of amounts deferred from prior years ) ) ) Income statement charge for amounts deferred from prior years Income statement charge for variable compensation (3) Notes: (3) Excludes other performance related compensation. |
Schedule of income statement charge expected to be taken for variable compensation awards | Actual Expected Year in which income statement charge is expected to be taken for deferred variable compensation 2015 £m 2016 £m 2017 £m 2018 £m 2019 and beyond £m Variable compensation deferred from 2015 and earlier Variable compensation deferred from 2016 — — Less: forfeiture of amounts deferred from prior years ) ) ) — — Variable compensation for 2017 deferred — — — |
Sharesave | |
Operating expenses | |
Schedule of share-based compensation | Sharesave 2017 2016 2015 Average Shares Average Shares Average Shares exercise price under option exercise price under option exercise price under option £ (million) £ (million) £ (million) At 1 January Granted Exercised ) — ) Cancelled ) ) ) At 31 December |
Deferred performance awards | |
Operating expenses | |
Schedule of share-based compensation | Deferred performance awards 2017 2016 2015 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January Granted Forfeited ) ) ) ) ) ) Vested ) ) ) ) ) ) At 31 December |
Long-term incentives | |
Operating expenses | |
Schedule of share-based compensation | 2017 2016 2015 Value Shares Options Value at Shares Options Value at Shares Options at grant awarded over shares grant awarded over shares grant awarded over shares £m (million) (million) £m (million) (million) £m (million) (million) At 1 January Granted — — — Vested/exercised ) ) — ) ) — ) ) ) Lapsed ) ) ) ) ) ) ) ) — At 31 December |
Pensions (Tables)
Pensions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Pensions | |
Major classes of plan assets as a percentage of total plan assets | Main scheme Major classes of plan assets as a percentage of total plan assets Quoted assets Quoted equities - Consumer industry - Manufacturing industry - Energy and utilities - Financial institutions - Technology and telecommunications - Other Private equity Index-linked bonds Government fixed interest bonds Corporate fixed interest bonds Unquoted assets Corporate and other bonds Hedge funds — Real estate Derivatives Cash and other assets Equity exposure of equity futures ) ) Cash exposure of equity futures |
Summary of derivative instruments | 2017 2016 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps Interest rate swaps Currency forwards Equity and bond call options — Equity and bond put options — Other |
Changes in value of net pension liability | All schemes Amounts recognised on the balance sheet 2017 £m 2016 £m Fund assets at fair value Present value of fund liabilities Funded status Asset ceiling/minimum funding ) Net pension asset/(liability) comprises 2017 £m 2016 £m Net assets of schemes in surplus (included in Prepayments, accrued income and other assets, Note 17) Net liabilities of schemes in deficit ) ) ) Main scheme All schemes Present value Asset Net Present value Asset Net Fair of defined ceiling/ pension Fair of defined ceiling/ pension value of benefit minimum liability/ value of benefit minimum liability/ plan assets obligation funding (1) (asset) plan assets obligation funding (1) (asset) Changes in value of net pension liability/(asset) £m £m £m £m £m £m £m £m At 1 January 2016 Currency translation and other adjustments — — — — — Income statement Net interest expense ) ) Current service cost — — — — Past service cost — — — — Loss on curtailments or settlements — — — — — — Statement of comprehensive income Return on plan assets above recognised interest income — — ) — — ) Experience gains and losses — ) — ) — ) — ) Effect of changes in actuarial financial assumptions — — — — Effect of changes in actuarial demographic assumptions — ) — ) — ) — ) Asset ceiling/minimum funding adjustments — — — — Contributions by employer — — ) — — ) Contributions by plan participants and other scheme members — — — — — — Liabilities extinguished upon settlement — — — — ) ) — ) Benefits paid ) ) — — ) ) — — At 1 January 2017 — Currency translation and other adjustments — — — — Income statement Net interest expense — ) Current service cost — — — — Past service cost — — — — Loss on curtailments or settlement — — — — — — Statement of comprehensive income Return on plan assets above recognised interest income — — ) — — ) Experience gains and losses — — — — Effect of changes in actuarial financial assumptions — — — — Effect of changes in actuarial demographic assumptions — ) — ) — ) — ) Asset ceiling/minimum funding adjustments — — — — ) ) Contributions by employer — — ) — — ) Contributions by plan participants and other scheme members — — — — Liabilities extinguished upon settlement — — — — ) ) — ) Benefits paid ) ) — — ) ) — — At 31 December 2017 — ) Notes: (1) In recognising the net surplus or deficit of a pension scheme, the funded status of each scheme is adjusted to reflect any minimum funding requirement imposed on the sponsor and any ceiling on the amount that the sponsor has an unconditional right to recover from a scheme. (2) The Group expects to make contributions to the Main scheme of £190 million in 2018. |
Principal actuarial assumptions | Principal IAS 19 Principal assumptions of 2015 triennial valuation Discount rate Fixed interest swap yield curve plus 1.5% per annum at all durations Inflation assumption (RPI) Retail price index RPI swap yield curve Rate of increase in salaries Rate of increase in deferred pensions Rate of increase in pensions in payment (RPI floor 0%, cap 5%): Limited price indexation (LPI) (0,5) swap yield curve Proportion of pension converted to a cash lump sum at retirement Longevity at age 60 for current pensioners (years) Males Females Longevity at age 60 for future pensioners currently aged 40 (years) Males Females |
Sensitivities of the present value of defined benefit obligations | Main scheme (decrease)/increase in obligation at 31 December £m £m 0.25% increase in the discount rate 0.25% increase in inflation 0.25% additional rate of increase in pensions in payment Longevity increase of one year 1,522 |
Different classes of scheme members proportions | Membership category % % Active members Deferred members Pensioners and dependants |
History of defined benefit schemes | Main Scheme All schemes History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets Present value of plan obligations Net surplus/(deficit) Experience (losses)/gains on plan liabilities Experience gains/(losses) on plan assets Actual return on plan assets Actual return on plan assets - % |
Auditor's remuneration (Tables)
Auditor's remuneration (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Auditor's remuneration | |
Schedule of auditor's remuneration | EY 2017 2016 (1) Fees payable for the audit of the Group’s annual accounts - the audit of the company’s subsidiaries - audit-related assurance services (2) Total audit and audit-related assurance services fees Other assurance services Corporate finance services (3) Total other services Deloitte 2017 2016 (4) Fees payable to the auditor and its associates for other services to the Group — — - the audit of the company’s subsidiaries — - audit-related assurance services (5) — Total audit and audit-related assurance services fees — Other assurance services — Corporate finance services (6) — Total other services — Total — Notes: (1) Includes fees for the period EY were principal Group auditor (2016 - 1 January 2016 – 31 December 2016; Deloitte 2016 to effective resignation on 24 March 2016.) (2) Comprises fees of £1.1 million (2016 - £1.1 million) in relation to reviews of interim financial information, £2.5 million (2016 - £2.2 million) in respect of reports to the Group’s regulators in the UK and overseas, £0.7 million (2016 - £0.7 million) in relation to non-statutory audit opinions. (3) Comprises fees of £0.2 million (2016 - £0.2 million) in respect of work performed by the auditors as reporting accountants on debt and equity issuances undertaken by the Group. (4) Includes fees for the period Deloitte were principal Group auditor (2016 1 January 2016 to effective resignation on 24 March 2016) (5) Comprises no fees (2016 - nil) in relation to revenues of interim financial information, no fees (2016 - £10 million) in respect of reports to the Group’s regulators in the UK and overseas, no fees (2016 - £0.2 million) in respect of internal controls assurance, and no fees in relation to non-statutory audit opinions. (6) Comprises no fees (2016 £1.4 million) in respect of work performed by the auditors as reporting accountants as debt and equity issuances undertake by the Group, including securitisations, no fees (2016 - £0.1 million), and no fees (2016 – nil) in relation to working capital report in correction with a circular to shareholders. |
Tax (Tables)
Tax (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tax | |
Schedule of current and deferred tax expense | £m £m £m Current tax: Charge for the year ) ) ) Over provision in respect of prior years ) ) ) Deferred tax: Credit for the year — Reduction in the carrying value of deferred tax assets ) ) — (Under)/over provision in respect of prior years ) ) Tax charge for the year ) ) ) |
Schedule of reconciliation of actual tax charge from the expected tax charge | £m £m £m Expected tax (charge)/credit ) Losses and temporary differences in year where no deferred tax asset recognised ) ) ) Foreign profits taxed at other rates UK tax rate change impact (1) ) Non-deductible goodwill impairment — — ) Items not allowed for tax: - losses on disposals and write-downs ) ) ) - UK bank levy ) ) ) - regulatory and legal actions ) ) ) - other disallowable items ) ) ) Non-taxable items Taxable foreign exchange movements ) Losses brought forward and utilised Reduction in carrying value of deferred tax asset in respect of: - UK losses ) ) — Banking surcharge ) ) — Adjustments in respect of prior years (2) Actual tax charge ) ) ) Notes: (1) In recent years, the UK government has steadily reduced the rate of UK corporation tax, with the latest enacted rates standing at 20% with effect from 1 April 2015, 19% from 1 April 2017 and 17% from 1 April 2020. The Finance (No 2) Act 2015 restricts the rate at which tax losses are given credit in future periods to the main rate of UK corporation tax, excluding the Banking Surcharge 8% rate introduced by this Act. Deferred tax assets and liabilities at 31 December 2017 take into account the reduced rates in respect of tax losses and non-banking temporary differences and where appropriate, the banking surcharge inclusive rate in respect of other banking temporary differences. (2) Prior year tax adjustments incorporate refinements to tax computations made on submission and agreement with the tax authorities. Current taxation balances include provisions in respect of uncertain tax positions, in particular in relation to restructuring and other costs where the taxation treatment remains subject to agreement with the relevant tax authorities. |
Earnings per ordinary share (Ta
Earnings per ordinary share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings per ordinary share | |
Schedule of earnings per ordinary share | £m £m £m Earnings Profit/(loss) attributable to ordinary shareholders ) ) Loss from discontinued operations attributable to ordinary shareholders — — ) Profit/(loss) from continuing operations attributable to ordinary shareholders ) ) Weighted average number of shares (millions) (1) Weighted average number of ordinary shares outstanding during the year Effect of dilutive share options and convertible securities Diluted weighted average number of ordinary shares outstanding during the year Note: (1) All periods include the effect of 51 billion B shares that were converted to 5.1 billion ordinary shares in October 2015 (see Note 25). |
Financial Instruments - class60
Financial Instruments - classification (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments | |
Schedule of classification for financial assets | Assets Held-for- Designated Hedging Available- Loans and Held-to- Other Total Cash and balances at central banks — — — — Loans and advances to banks - reverse repos — — — - other (1) — — — Loans and advances to customers - reverse repos — — — - other — — Debt securities — Equity shares — — Settlement balances — — Derivatives Other assets — — — — — 31 December 2017 Cash and balances at central banks — — — — Loans and advances to banks - reverse repos — — — - other (1) — — — Loans and advances to customers - reverse repos — — — - other — — Debt securities Equity shares — — Settlement balances — — Derivatives Other assets — — — — — 31 December 2016 Note: (1) Includes items in the course of collection from other banks of £1,017 million (2016 - £781 million). |
Schedule of classification for financial liabilities | Designated as at fair value Held-for- through profit Hedging Other Liabilities trading or loss derivatives Amortised cost liabilities Total £m £m £m £m £m £m Deposits by banks - repos — - other (1) — Customer accounts - repos — - other (2) Debt securities in issue (3) Settlement balances — — Short positions — Derivatives Subordinated liabilities — Other liabilities — — 31 December 2017 Deposits by banks - repos — - other (1) — Customer accounts - repos — - other (2) Debt securities in issue (3) Settlement balances — — Short positions — Derivatives Subordinated liabilities — Other liabilities — — 31 December 2016 Notes: (1) Includes items in the course of transmission to other banks of £214 million (2016 - £295 million). (2) The carrying amount of other customer accounts designated as at fair value through profit or loss is £114 million (2016 - £155 million) higher than the principal amount. No amounts have been recognised in profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. Measured as the change in fair value from movements in the period in the credit risk premium payable. (3) Comprises bonds and medium term notes of £25,922 million (2016 - £24,037 million) and certificates of deposit and other commercial paper of £4,637 million (2016 - £3,208 million). |
Schedule of financial instruments amounts included in operating profit (loss) before tax | £m £m £m Gains on financial assets/liabilities designated as at fair value through profit or loss Losses on disposal or settlement of loans and receivables |
Schedule of financial assets and liabilities that are offset on the balance sheet | Offsetable instruments Offsetable potential not recognised by IFRS Effect of Net amount after Instruments master netting Other the effect of netting outside IFRS Balance and similar Cash financial arrangements and netting Balance Gross offset sheet agreements collateral collateral related collateral arrangements sheet total 2017 £m £m £m £m £m £m £m £m £m Assets Derivatives Reverse repos — Loans to customers — — — — — Settlement balances — — — Liabilities Derivatives Repos — — Customer accounts — — — — — Settlement balances — — — 2016 Assets Derivatives Reverse repos — Loans to customers — — — — — Settlement balances — — — Liabilities Derivatives Repos — Customer accounts — — — — — Settlement balances — — — |
Financial Instruments - valua61
Financial Instruments - valuation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments | |
Cumulative adjustments to balance sheet liability amounts | Debt Securities in issue (3) Subordinated Cumulative own credit adjustment (2) HFT £m DFV £m liabilities DFV £m Derivatives £m Total £m 2017 — 2016 Carrying values of underlying liabilities £bn £bn £bn 2017 2016 Notes: (1) The OCA does not alter cash flows and is not used for performance management. (2) Includes wholesale and retail note issuances. (3) The reserve movement between periods will not equate to the reported profit or loss or other comprehensive income related to own credit. RBS has early adopted the provisions within IFRS 9 Financial Instruments in respect of the presentation of gains and losses on financial liabilities designated at fair value through profit and loss from 1 January 2017. The balance sheet reserve is stated by converting underlying currency balances at spot rates for each period, whereas the income statement includes intra-period foreign exchange sell-offs. (4) The cumulative adjustment for debt securities in issue is opposite to that for subordinated liabilities: debt securities in issue were issued relatively recently at wider than current spreads, whilst many of the subordinated liabilities were issued before the financial crisis at significantly tighter spreads. |
Schedule financial assets and liabilities carried at fair value on the balance sheet by valuation hierarchy | Level 1 Level 2 Level 3 Total Level 3 sensitivity (5) 2017 £bn £bn £bn £bn Favourable (£m) Unfavourable (£m) Assets Loans and advances — 0.2 — — Debt securities 1.2 30 - of which AFS 0.3 — — Equity shares — 0.2 20 - of which AFS — 0.2 20 Derivatives — 1.7 160 3.3 210 Proportion Liabilities Customer accounts — 0.2 20 Debt securities in issue — 0.3 10 Short positions — — — Derivatives — 1.7 140 Subordinated liabilities — — — — 2.2 170 Proportion Level 1 Level 2 Level 3 Total Level 3 sensitivity (5) 2016 £bn £bn £bn £bn Favourable (£m) Unfavourable (£m) Assets Loans and advances — Debt securities (3) - of which AFS Equity shares - of which AFS — Derivatives — Proportion Liabilities Customer accounts — Debt securities in issue — Short positions — — — Derivatives — Subordinated liabilities — — — — Proportion Notes: (1) Level 1: valued using unadjusted quoted prices in active markets, for identical financial instruments. Examples include G10 government securities, listed equity shares, certain exchange-traded derivatives and certain US agency securities. Level 2: valued using techniques based significantly on observable market data. Instruments in this category are valued using: (a) quoted prices for similar instruments or identical instruments in markets which are not considered to be active; or (b) valuation techniques where all the inputs that have a significant effect on the valuations are directly or indirectly based on observable market data. Level 2 instruments include non-G10 government securities, most government agency securities, investment-grade corporate bonds, certain mortgage products, including CLOs, most bank loans, repos and reverse repos, less liquid listed equities, state and municipal obligations, most notes issued, and certain money market securities and loan commitments and most OTC derivatives. Level 3: instruments valued using a valuation technique where at least one input which could have a significant effect on the instrument’s valuation, is not based on observable market data. Level 3 instruments primarily include cash instruments which trade infrequently, certain syndicated and commercial mortgage loans, certain emerging markets instruments, unlisted equity shares, certain residual interests in securitisations, asset-backed products and less liquid debt securities, certain structured debt securities in issue, and OTC derivatives where valuation depends upon unobservable inputs such as certain credit and exotic derivatives. No gain or loss is recognised on the initial recognition of a financial instrument valued using a technique incorporating significant unobservable data. (2) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instruments were transferred. There were no significant transfers between level 1 and level 2. (3) For an analysis of debt securities (by issuer, measurement classification and analysis of asset backed securities) and derivatives (by type of contract) refer to Capital and risk management - Credit risk. (4) The determination of an instrument’s level cannot be made at a global product level as a single product type can be in more than one level. For example, a single name corporate credit default swap could be in level 2 or level 3 depending on whether the reference counterparty’s obligations are liquid or illiquid. Sensitivity represents the favourable and unfavourable effect on the income statement or the statement of comprehensive income due to reasonably possible changes to valuations using reasonably possible alternative inputs in RBS’s valuation techniques or models. Level 3 sensitivities are calculated on a trade or low level portfolio basis and hence these aggregated figures do not reflect the correlation between some of the sensitivities. In particular, for some portfolios, the sensitivities may be negatively correlated where a downward movement in one asset would produce an upward movement in another, but due to the additive presentation above, this correlation cannot be shown. |
Schedule of valuation techniques for unobservable inputs of level 3 financial instruments | Level 3 (£bn) Range Financial instruments Assets Liabilities Valuation technique Unobservable inputs Low High Loans and advances 0.2 Price-based Price Debt securities 1.2 Price-based Price 369.81 GBP Price-based Price Equity shares 0.2 Price-based Price 585,066 GBP Valuation Discount factor Valuation Fund NAV Customer accounts DCF based on recoveries Correlation Interest rate delta Debt securities in issue Price-based Price 56.77 JPY 148.68 EUR Valuation Fund NAV 977.24 GBP Derivatives 1.7 Credit 0.2 DCF based on recoveries Credit spreads 0.1 bps 500 bps Option pricing model Correlation Volatility Upfront points Recovery rate Interest and foreign exchange contracts 1.4 Option pricing model Correlation Volatility Equity 0.1 Option pricing model Correlation Forward Volatility Notes: (1) The table above excludes unobservable inputs where the impact on valuation is not significant. Movements in the underlying input may have a favourable or unfavourable impact on the valuation depending on the particular terms of the contract and the exposure. For example, an increase in the credit spread of a bond would be favourable for the issuer but unfavourable for the note holder. Whilst RBS indicates where it considers that there are significant relationships between the inputs, there inter-relationships will be affected by macro economic factors including interest rates, foreign exchange rates or equity index levels. (2) Credit spreads and discount margins: credit spreads and margins express the return required over a benchmark rate or index to compensate for the credit risk associated with a cash instrument. A higher credit spread would indicate that the underlying instrument has more credit risk associated with it. Consequently, investors require a higher yield to compensate for the higher risk. The discount rate comprises credit spread or margin plus the benchmark rate; it is used to value future cash flows. (3) Price and yield: There may be a range of prices used to value an instrument that may be a direct comparison of one instrument or portfolio with another or, movements in a more liquid instrument may be used to indicate the movement in the value of a less liquid instrument. The comparison may also be indirect in that adjustments are made to the price to reflect differences between the pricing source and the instrument being valued, for example different maturity, credit quality, seniority or expected pay-outs. Similarly to price, an instrument’s yield may be compared with other instruments’ yields either directly or indirectly. (4) Recovery rate: reflects market expectations about the return of principal for a debt instrument or other obligations after a credit event or on liquidation. Recovery rates tend to move conversely to credit spreads. (5) Valuation: for private equity investments, risk may be measured by beta, estimated by looking at past prices of similar stocks and from valuation statements where valuations are usually derived from earnings measures such as EBITDA or net asset value. (6) Correlation: measures the degree by which two prices or other variables are observed to move together. If they move in the same direction there is positive correlation; if they move in opposite directions there is negative correlation. Correlations typically include relationships between: default probabilities of assets in a basket (a group of separate assets), exchange rates, interest rates and other financial variables. (7) Volatility: a measure of the tendency of a price to change with time. (8) Interest rate delta: these ranges represent the low/high marks on the relevant discounting curve. (9) Upfront points: where CDS contracts are standardised, the inherent spread of the trade may exceed the standard premium paid or received under the contract. Upfront points will compensate for the difference between the standard premium and the actual premium at the start of the contract. (10) RBS does not have any material liabilities measured at fair value that are issued with an inseparable third party credit enhancement. |
Schedule of movement in level 3 assets and liabilities | 2017 2016 FVTPL AFS Total Total FVTPL AFS Total Total assets (2) assets assets liabilities assets (2) assets assets liabilities £m £m £m £m £m £m £m £m At 1 January Amount recorded in the income statement (1) Amount recorded in the statement of comprehensive income — — — — Level 3 transfers in Level 3 transfers out Issuances — — — Purchases Settlements — — Sales Foreign exchange and other adjustments At 31 December Amounts recorded in the income statement in respect of balances held at year end - unrealised - realised — Notes: (1) There were £240 million net losses on HFT instruments (2016 - £45 million) recorded in income from trading activities in continuing operations. Net gains on other instruments of £9 million (2016 - £4 million losses) were recorded in other operating income and interest income as appropriate in continuing operations. There were no losses in discontinued operations. (2) Fair value through profit or loss comprises held-for-trading predominantly and designated at fair value through profit and loss. |
Schedule of carrying value and fair value of financial instruments carried at amortised cost on the balance sheet | Items where fair value approximates Carrying Fair value of hierarchy level 2017 carrying value £bn value £bn Fair value £bn Level 1 £bn Level 2 £bn Level 3 £bn Financial assets Cash and balances at central banks Loans and advances to banks — Loans and advances to customers UK PBB - mortgages — — - other — — Ulster Bank RoI - mortgages — — - other — — Commercial Banking - commercial real estate — — - other — Private Banking — — RBS International — — NatWest Markets — Central items & other — — Total loans and advances to customers — Of which: Performing — Non-performing — — Debt securities Settlement balances Financial liabilities Deposits by banks — Customer accounts — Debt securities in issue — Settlement balances Notes in circulation (1) Subordinated liabilities — Note: (1) Included in Accruals and other liabilities. Items where fair value approximates Carrying Fair value of hierarchy level 2016* carrying value £bn value £bn Fair value £bn Level 1 £bn Level 2 £bn Level 3 £bn Financial assets Cash and balances at central banks Loans and advances to banks — Loans and advances to customers UK PBB - mortgages — — - other — — Ulster Bank RoI - mortgages — — - other — — Commercial Banking - commercial real estate — — - other — Private Banking — — RBS International — — NatWest Markets — Central items & other — — Total loans and advances to customers — Of which: Performing — Non-performing — — Debt securities Settlement balances Financial liabilities Deposits by banks — Customer accounts — Debt securities in issue — Settlement balances Notes in circulation (1) Subordinated liabilities — * Re-presented to reflect segment reorganisation. Note: (1) Included in Accruals and other liabilities. |
Financial Instruments - matur62
Financial Instruments - maturity analysis (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments | |
Schedule of residual maturity of financial instruments | 2017 2016 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks — — Loans and advances to banks Loans and advances to customers Debt securities Equity shares — — Settlement balances — — Derivatives Liabilities Deposits by banks Customer accounts Debt securities in issue Settlement balances and short positions Derivatives Subordinated liabilities |
Schedule of undiscounted cash flows payable by contractual maturity | 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2017 £m £m £m £m £m £m Assets by contractual maturity Cash and balances at central banks — — — — — Loans and advances to banks — — — Debt securities Settlement balances — — — — — Total maturing assets Loans and advances to customers Derivatives held for hedging Liabilities by contractual maturity Deposits by banks Debt securities in issue Subordinated liabilities Settlement balances and other liabilities — — — — — Total maturing liabilities Customer accounts Derivatives held for hedging Maturity gap Cumulative maturity gap Guarantees and commitments notional amount Guarantees (1) — — — — — Commitments (2) — — — — — — — — — — 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2016 £m £m £m £m £m £m Assets by contractual maturity Cash and balances at central banks — — — — Loans and advances to banks — — — Debt securities Settlement balances — — — — — Total maturing assets Loans and advances to customers Derivatives held for hedging Liabilities by contractual maturity Deposits by banks Debt securities in issue Subordinated liabilities Settlement balances and other liabilities — — — — — Total maturing liabilities Customer accounts Derivatives held for hedging Maturity gap Cumulative maturity gap Guarantees and commitments notional amount Guarantees (1) — — — — — Commitments (2) — — — — — — — — — — Notes: (1) RBS is only called upon to satisfy a guarantee when the guaranteed party fails to meet its obligations. RBS expects most guarantees it provides to expire unused. (2) RBS has given commitments to provide funds to customers under undrawn formal facilities, credit lines and other commitments to lend subject to certain conditions being met by the counterparty. RBS does not expect all facilities to be drawn, and some may lapse before drawdown. |
Financial assets - impairments
Financial assets - impairments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial assets - impairments | |
Movement in provision for impairment losses on loan and advances | Individually Collectively assessed assessed Latent £m £m £m £m £m At 1 January Currency translation and other adjustments Disposals — — Amounts written-off — Recoveries of amounts previously written-off — Losses/(releases) to income statement Unwind of discount (recognised in interest income) — At 31 December (1) Notes: (1) Includes nil relating to loans and advances to banks (2016 - nil). (2) The table above excludes impairments relating to securities. |
The summary of impairment charged to income statement | Impairment losses/(releases) charged to the income statement £m £m £m Loans and advances to customers Loans and advances to banks — — Securities |
The summary of impaired financial assets | 2017 2016 Carrying Carrying Cost Provision value Cost Provision value £m £m £m £m £m £m Loans and receivables Loans and advances to customers (1) Note: (1) Impairment provisions individually assessed on balances of £3,418 million (2016 - £4,186 million). Carrying value £m £m Available-for-sale securities Debt securities Equity shares Loans and receivables Debt securities |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivatives | |
The summary of actual movements in the fair value of the hedged items attributable to the hedged risk | 2017 2016 Notional Notional amount Assets Liabilities amount Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts Spot, forwards and futures Currency swaps Options purchased — — Options written — — Interest rate contracts Interest rate swaps Options purchased — — Options written — — Futures and forwards Credit derivatives Equity and commodity contracts |
The schedule of derivatives held for hedging purposes | 2017 2016 Assets Liabilities Assets Liabilities £m £m £m £m Fair value hedging Interest rate contracts Cash flow hedging Interest rate contracts Exchange rate contacts — Net investment hedging Exchange rate contracts |
Summary of hedge ineffectiveness recognized in other operating income | £m £m £m Fair value hedging (Losses)/gains on the hedged items attributable to the hedged risk Gains/(losses) on the hedging instruments Fair value hedging ineffectiveness Cash flow hedging ineffectiveness — |
Debt securities (Tables)
Debt securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt securities | |
Debt securities | Other Central and local government financial Of which UK US Other Banks institutions Corporate Total ABS (1) 2017 £m £m £m £m £m £m £m £m Held-for-trading Designated as at fair value through profit or loss — — — — — — — — Available-for-sale Loans and receivables — — — — Held-to-maturity — — — — — — Available-for-sale Gross unrealised gains Gross unrealised losses — 2016 Held-for-trading Designated as at fair value through profit or loss — — — — — Available-for-sale Loans and receivables — — — — Held-to-maturity — — — — — — Available-for-sale Gross unrealised gains Gross unrealised losses Note: (1) Includes covered bonds. |
Available-for-sale debt securities and the related yield | 0-1 years 1-5 years 5-10 years Over 10 years Total Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield 2017 £m % £m % £m % £m % £m % Central and local governments - UK - US - other Banks — — Other financial institutions Corporate — — Of which ABS (1) - 2016 Central and local governments - UK - US - other Banks — — Other financial institutions Corporate — — Of which ABS (1) — — Note: (1) Includes covered bonds. |
Equity shares (Tables)
Equity shares (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity shares | |
Schedule of equity shares | 2017 2016 Listed Unlisted Total Listed Unlisted Total £m £m £m £m £m £m Held-for-trading Designated as at fair value through profit or loss Available-for-sale Available-for-sale Gross unrealised gains Gross unrealised losses — — |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets | |
Schedule of Intangible assets | 2017 2016 Cost Goodwill Other (1) Total Goodwill Other (1) Total £m £m £m £m £m £m At 1 January Currency translation and other adjustments Additions — — Disposals and write-off of fully amortised assets — — At 31 December Accumulated amortisation and impairment At 1 January Currency translation and other adjustments Disposals and write-off of fully amortised assets — — Charge for the year — — Write down of goodwill and other intangible assets — — At 31 December Net book value at 31 December Note: (1) Principally internally generated software. |
Schedule of key assumptions applied in calculating the recoverable amount and sensitivities to changes in those assumptions | Consequential impact of 1% Consequential impact of 5% Break Assumptions Recoverable adverse movement in adverse movement even Terminal Pre-tax amount exceeded Discount Terminal Forecast Forecast discount Goodwill growth rate discount rate carrying value rate growth rate Income cost rate 31 December 2017 £bn % % £bn £bn £bn £bn £bn % UK Personal & Business Banking Commercial Banking RBS International — 31 December 2016 UK Personal & Business Banking Commercial Banking RBS International — |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, plant and equipment | |
Property, plant and equipment | Long Short Computers Operating Investment Freehold leasehold leasehold and other lease properties premises premises premises equipment assets Total 2017 £m £m £m £m £m £m £m Cost or valuation At 1 January Transfers to disposal groups — — Currency translation and other adjustments — — Reclassifications — — — — — Additions Change in fair value of investment properties — — — — — Disposals and write-off of fully depreciated assets At 31 December Accumulated impairment, depreciation and amortisation At 1 January — Transfers to disposal groups — — Currency translation and other adjustments — — — — Reclassifications — — — — — Write down of property, plant and equipment — — — — Disposals and write-off of fully depreciated assets — Charge for the year — At 31 December — Net book value at 31 December Long Short Computers Operating Investment Freehold leasehold leasehold and other lease properties premises premises premises equipment assets Total 2016 £m £m £m £m £m £m £m Cost or valuation At 1 January Currency translation and other adjustments Reclassifications — — — — — Additions Change in fair value of investment properties — — — — — Disposals and write-off of fully depreciated assets At 31 December Accumulated impairment, depreciation and amortisation At 1 January — Currency translation and other adjustments — Reclassifications — — — — — Write down of property, plant and equipment — — — — Disposals and write-off of fully depreciated assets — Charge for the year — At 31 December — Net book value at 31 December |
Prepayments, accrued income a69
Prepayments, accrued income and other assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepayments, accrued income and other assets | |
Prepayments, accrued income and other assets | £m £m Prepayments Accrued income Interests in associates (1) Pension schemes in net surplus (refer to Note 4) Tax recoverable Other assets Note: (1) Interests in associates includes interest in Alawwal Bank £1,052 million (2016 - £1,083 million) and Business Growth Fund £316 million (2016 - £256 million). |
Discontinued operations and a70
Discontinued operations and assets and liabilities of disposal groups (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued operations and assets and liabilities of disposal groups | |
Schedules relating to discontinued operations | (a) Profit/(loss) from discontinued operations, net of tax £m £m £m Citizens Interest receivable — — Interest payable — — Net interest income — — Non-interest income — — Total income — — Operating expenses — — Profit before impairment losses — — Impairment losses — — Operating profit before tax — — Tax charge — — Profit after tax — — Provision for gain on disposal of subsidiary — — Gain on disposal of subsidiary — — Provision for loss on disposal of interest in associate — — Gain on disposal of interest in associate — — Profit from Citizens discontinued operation, net of tax — — Other Profit from other discontinued operations, net of tax — — Total profit from discontinued operations, net of tax — — (b) Operating cash flows attributable to discontinued operations £m £m £m Net cash flows from operating activities — — Net cash flows from investing activities — — Net cash flows from financing activities — — Net decrease in cash and cash equivalents — — (c) Assets and liabilities of disposal groups £m £m Assets of disposal groups Loans and advances to banks Property, plant and equipment — Liabilities of disposal groups Other liabilities |
Short positions (Tables)
Short positions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Short positions | |
Short positions | £m £m Debt securities - Government - Other issuers Equity shares Note: (1) All short positions are classified as held-for-trading. |
Provisions for liabilities an72
Provisions for liabilities and charges (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Provision for liabilities and charges | |
Schedule for provisions for liabilities and charges | Payment Other Residential Litigation protection customer mortgage backed and other Property and Provisions for liabilities and charges insurance (1) redress securities (2) regulatory (3) other (4) (5) Total £m £m £m £m £m £m At 1 January 2017 Currency translation and other movements — Charge to income statement Releases to income statement — Provisions utilised At 31 December 2017 Notes: (1) To reflect the increased volume of complaints following the FCA’s introduction of an August 2019 PPI timebar as outlined in FCA announcement CP17/3 and the introduction of new Plevin (unfair commission) complaint handling rules, RBS increased its provision for PPI by £175m in 2017 (2016 - £601 million, 2015 - £600 million, 2014 - £650 million) bringing the cumulative charge to £5.1 billion, of which £3.7 billion (74%) in redress and £0.4 billion in administrative expenses had been paid by 31 December 2017. Of the £5.1 billion cumulative charge, £4.6 billion relates to redress and £0.5 billion to administrative expenses. |
Schedule of the sensitivity of the provision | Sensitivity Assumptions Actual to Future Change in Consequential change in Customer initiated complaints (1) 2,386k 429k +/- 5 +/- 30 Uphold rate (2) +/- 1 +/- 6 Average redress (3) £1,681 £1,476 +/- 5 +/- 30 Processing costs per claim (4) £160 £142 +/- £20 +/- 3 Notes: (1) Claims received directly by RBS to date, including those received via CMCs and Plevin (commission) only. Excluding those for proactive mailings and where no PPI policy exists. (2) Average uphold rate per customer initiated claims received directly by RBS to end of timebar for both PPI (mis-sale) and Plevin (commission), excluding those for which no PPI policy exists. (3) Average redress for PPI (mis-sale) and Plevin (commission) pay-outs. (4) Processing costs per claim on a valid complaints basis, includes direct staff costs and associated overhead - excluding FOS fees. |
Accruals and other liabilities
Accruals and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accruals and other liabilities | |
Schedule of accruals and other liabilities | £m £m Notes in circulation Current tax Accruals Deferred income Other liabilities |
Deferred tax (Tables)
Deferred tax (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred tax | |
Schedule of deferred tax asset and liability | £m £m Deferred tax asset Deferred tax liability Net deferred tax asset |
Schedule of net deferred tax asset | Fair Tax Accelerated value of AFS Cash losses capital Deferred financial financial flow Share carried Pension allowances Provisions gains instruments assets Intangibles hedging schemes forward Other Total £m £m £m £m £m £m £m £m £m £m £m £m At 1 January 2016 Acquisitions and disposals of subsidiaries — — — — — — (Credit)/charge to income statement — Charge/(credit) to other comprehensive income — — — — — — — — Currency translation and other adjustments — — At 1 January 2017 Acquisitions and disposals of subsidiaries — — — — — — — — — — Charge/(credit) to income statement — Charge/(credit) to other comprehensive income — — — — — — — Currency translation and other adjustments — — — — — — At 31 December 2017 |
Schedule of recognised deferred tax assets in respect of tax losses | £m £m UK tax losses carried forward - The Royal Bank of Scotland plc - National Westminster Bank Plc - Ulster Bank Limited Total Overseas tax losses carried forward - Ulster Bank Ireland DAC |
Subordinated liabilities (Table
Subordinated liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Subordinated liabilities | |
Schedule of subordinated liabilities | 2017 £m 2016 £m Dated loan capital Undated loan capital Preference shares |
Schedule of contractual maturity of subordinated liabilities | 2017 - final redemption 2018 £m 2019 £m 2020-2022 £m 2023-2027 £m Thereafter £m Perpetual £m Total £m Sterling — — — US dollar Euro Other — — — — — 2017 - call date Currently £m 2018 £m 2019 £m 2020-2022 £m 2023-2027 £m Thereafter £m Perpetual £m Total £m Sterling — US dollar — Euro — Other — — — — — — 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - final redemption £m £m £m £m £m £m £m Sterling — — — US dollar Euro Other — — — 2016 - call date Currently £m 2017 £m 2018 £m 2019-2021 £m 2022-2026 £m Thereafter £m Perpetual £m Total £m Sterling US dollar Euro Other — — — — — |
Schedule of issuances and redemptions | Capital treatment Redemptions £m £m £m The Royal Bank of Scotland Group plc £200 million series 1 non cumulative convertible £0.01 preference shares 7.387% (partial redemption) Ineligible — US$ 1,000 million series 1 non cumulative convertible preference shares of US$ 0.01 9.118% (partial redemption) Ineligible — $156 million 7.65% Series F non-cumulative preference shares (callable) Ineligible — $242 million 7.25% Series H non-cumulative preference shares (callable) Ineligible — $751 million 5.75% Series L non-cumulative preference shares (callable) Ineligible — US$ 750 million 6.8% (partial redemption) Ineligible — US$ 1,285 million 5.90% Trust Preferred Tier 1 — US$ 200 million 6.25% Trust Preferred Tier 1 — US$ 1,800 million 6.08% Trust Preferred Tier 1 — € 26 million 7.42% dated notes Tier 2 — € 7 million 7.38% dated notes Tier 2 — US$ 25 million floating rate notes (partial redemption) Tier 2 — The Royal Bank of Scotland plc € 750 million 4.35% subordinated notes 2017 Tier 2 — CHF124 million 9.375% subordinates notes March 2022 Tier 2 — CAD420 million 10.50% subordinated notes March 2022 Tier 2 — £564 million 10.50% subordinated notes March 2022 Tier 2 — AU$880 million 13.125% subordinated notes March 2022 Tier 2 — US$ 2,132 million 9.50% subordinated notes March 2022 Tier 2 — € 100 million floating rate subordinated notes 2017 Tier 2 — £51 million 2.35% + 5 year UK Gilts yield undated subordinated notes (callable December 2012) Ineligible — £54 million 5.13% undated notes Ineligible — CAD474 million 5.37% undated notes Ineligible — € 1 billion 4.625% dated notes Ineligible — NatWest Plc US$ 300 million 8.6250% non-cumulative preference shares (callable) Tier 1 — — RBS NV and subsidiaries € 15 million floating rate notes 2022 (partial redemption) Tier 2 — € 250 million 4.70% notes 2019 (partial redemption) Tier 2 — US$ 500 million 4.65% notes 2018 (partial redemption) Tier 2 — — NatWest Holdings Limited £20 million 11.75% perpetual tier two capital (partial redemption) Tier 2 — € 38 million 11.375% perpetual tier two capital (partial redemption) Tier 2 — — Note: (1) There were no issuances in 2017 or 2016. |
Non-controlling interests (Tabl
Non-controlling interests (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Non-controlling interests | |
Schedule of non-controlling interests | RBS N.V. £m Other interests £m Total £m At 1 January 2016 Currency translation and other adjustments Profit attributable to non-controlling interests Equity withdrawn and disposals At 1 January 2017 Currency translation and other adjustments Profit attributable to non-controlling interests Dividends paid Equity withdrawn and disposals — At 31 December 2017 |
Share capital (Tables)
Share capital (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share capital | |
Schedule of allocated, called up and fully paid shares | Number of shares Allotted, called up and fully paid 2017 £m 2016 £m 2017 000s 2016 000s Ordinary shares of £1 Non-cumulative preference shares of US$0.01 (1) — — Non-cumulative convertible preference shares of US$0.01 — — — Non-cumulative preference shares of € 0.01 — — Non-cumulative convertible preference shares of £0.01 — — — Non-cumulative preference shares of £1 — — Cumulative preference shares of £1 Note: (1) 46 million shares with a total nominal value of £0.3 million were redeemed in September and December 2017. (2016 – 61.4 million shares with a total nominal value of £0.3 million were redeemed). |
Schedule of movement in allocated, called up and fully paid ordinary shares | Movement in allotted, called up and fully paid ordinary shares £m Number of shares - 000s At 1 January 2016 Shares issued At 1 January 2017 Shares issued At 31 December 2017 |
Schedule of allotted and issued ordinary shares | During 2017, the company allotted and issued the following new ordinary shares of £1 each: Month Number of shares Subscription price per share Gross proceeds April 33.4m 239.688p £80 million June 29.0m 259.046p £75 million September 56.6m 256.027p £145 million |
Schedule of non-cumulative preference shares | Number of shares Redemption Redemption Class of preference share in issue Interest rate date on or after price per share Debt/equity (1) Non-cumulative preference shares of US$0.01 Series S 26.4 million 30 June 2012 US$25 Equity Series U 10,130 floating 29 September 2017 US$100,000 Equity Non-cumulative preference shares of € 0.01 Series 1 1.25 million 31 December 2009 € 1,000 Equity Series 2 784,989 30 June 2010 € 1,000 Equity Series 3 9,429 3 month LIBOR + 2.33% 29 September 2017 € 50,000 Equity Non-cumulative preference shares of £1 Series 1 54,442 3 month LIBOR + 2.33% 5 October 2012 £1,000 Equity Note: (1) Those preference shares where RBS has an obligation to pay dividends are classified as debt; those where distributions are discretionary are classified as equity. The conversion rights attaching to the convertible preference shares may result in RBS delivering a variable number of equity shares to preference shareholders; these convertible preference shares are treated as debt. |
Other Equity (Tables)
Other Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other equity | |
Schedule of other equity instruments | 2017 £m 2016 £m Additional Tier 1 notes (1) US$2.0 billion 7.5% notes callable August 2020 (2) US$1.15 billion 8% notes callable August 2025 (2) US$2.65 billion 8.625% notes callable August 2021 (3) EMTN notes US$564 million 6.99% capital securities (redeemed October 2017) - CAD321 million 6.666% notes (redeemed October 2017) - Trust preferred issues: subordinated notes (4) £93 million 5.6457% 2047 (redeemed June 2017) (5) - Notes: (1) The coupons on these notes are non-cumulative and payable at the company’s discretion. In the event the Group’s CET1 ratio falls below 7% any outstanding notes will be converted into ordinary shares at a fixed price. While taking the legal form of debt these notes are classified as equity under IFRS. (2) Issued in August 2015. In the event of conversion, converted into ordinary shares at a price of $3.606 nominal per £1 share. (3) Issued in August 2016. In the event of conversion, converted into ordinary shares at a price of $2.284 nominal per £1 share. (4) Subordinated notes issued to limited partnerships that have in turn issued partnership preferred securities to RBS Capital Trust D that issued trust preferred securities to investors. (5) Preferred securities in issue - £93 million RBS Capital Trust D, fixed/floating rate non-cumulative trust preferred securities. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases | |
Maturity analysis of finance and operating leases | Operating lease Finance lease contracts and hire purchase agreements assets: Gross Present value Other Future Present future minimum Year in which receipt will occur amounts adjustments movements drawdowns value lease rentals £m £m £m £m £m £m 2017 Within 1 year After 1 year but within 5 years — After 5 years — Total 2016 Within 1 year After 1 year but within 5 years After 5 years - Total |
Nature of operating lease assets on the balance sheet | Nature of operating lease assets on the balance sheet £m £m Transportation Cars and light commercial vehicles Other |
Contingent and minimum rental payable and accumulated allowance | £m £m £m Amounts recognised as income and expense in continuing operations Finance leases - contingent rental rebate Operating leases - minimum rentals payable Finance lease contracts and hire purchase agreements Accumulated allowance for uncollectable minimum receivables |
Residual value exposures | 2017 2016 Year in which residual value will be recovered Year in which residual value will be recovered After 1 year After 2 years After 1 year After 2 Within 1 but within but within After 5 Within 1 but within but within After 5 year 2 years 5 years years Total year 2 years 5 years years Total £m £m £m £m £m £m £m £m £m £m Operating leases - transportation - cars and light commercial vehicles — — - other Finance lease contracts Hire purchase agreements — — |
Structured entities (Tables)
Structured entities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Structured entities | |
Schedule of analyses the asset categories of own-asset securitisations transferred assets continue to be recorded on RBS's balance sheet | 2017 2016 Debt securities in issue Debt securities in issue Held by third Held by Held by third Held by Assets parties RBS (1) Total Assets parties RBS (1) Total Asset type £m £m £m £m £m £m £m £m Mortgages - UK — — — — — - Irish — - US — — — — — — Cash deposits Note: (1) Debt securities retained by RBS may be pledged with central banks. |
Schedule of RBS's interest in unconsolidated structured entities | 2017 2016 Asset backed Investment Asset backed Investment securitisation funds securitisation funds vehicles and other Total vehicles and other Total £m £m £m £m £m £m Held-for-trading Loans and advances to customers Debt securities Equity shares — — Derivative assets Derivative liabilities Total Other than held-for-trading Loans and advances to customers Debt securities Total Liquidity facilities/loan commitments Guarantees Maximum exposure Notes: (1) Income from interests in unconsolidated structured entities includes interest receivable, changes in fair value and other income less impairments. (2) A sponsored entity is a structured entity established by RBS where RBS provides liquidity and/or credit enhancements or provides ongoing services to the entity. RBS can act as sponsor for its own or for customers’ transactions. (3) In 2017, no assets were transferred into sponsored structured entities (2016 - nil) which are not consolidated by RBS and for which RBS held no interest at 31 December 2017. Income arising from sponsored entities where we hold no interest at year end was £11 million (2016 - £18 million). |
Asset transfers (Tables)
Asset transfers (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Asset transfers | |
Schedule of Assets subject to securities repurchase agreements or security lending transactions | 2017(1) Assets subject to securities repurchase agreements or security lending transactions £m £m Debt securities Note: (1) Associated liabilities were £23,692 million (2016 - £17,975 million). |
Schedule of assets pledged as collateral | Assets pledged against liabilities Liabilities secured by assets Loans and Loans and advances advances Deposits to banks to customers Securities Total by banks Derivatives Total £m £m £m £m £m £m £m 2017 2016 |
Capital resources (Tables)
Capital resources (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Capital resources | |
Schedule of regulatory capital | PRA transitional basis £m £m Shareholders’ equity (excluding non-controlling interests) Shareholders’ equity Preference shares - equity Other equity instruments Regulatory adjustments and deductions Own credit Defined benefit pension fund adjustment Cash flow hedging reserve Deferred tax assets Prudential valuation adjustments Goodwill and other intangible assets Expected losses less impairments Other regulatory adjustments CET1 capital Additional Tier 1 (AT1) capital Eligible AT1 Qualifying instruments and related share premium subject to phase out Qualifying instruments issued by subsidiaries and held by third parties AT1 capital Tier 1 capital Qualifying Tier 2 capital Qualifying instruments and related share premium Qualifying instruments issued by subsidiaries and held by third parties Tier 2 capital Total regulatory capital |
Memorandum items (Tables)
Memorandum items (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Memorandum items | |
Schedule of contingent liabilities and commitments | More than More than 1 year but 3 years but Less than less than less than Over 1 year 3 years 5 years 5 years £m £m £m £m £m £m Guarantees and assets pledged as collateral security Other contingent liabilities Standby facilities, credit lines and other commitments Contingent liabilities and commitments Note: (1) Includes liquidity facilities provided to RBS sponsored conduits. |
Schedule of contractual obligations for future expenditure not provided for in the accounts | £m £m Operating leases Minimum rentals payable under non-cancellable leases (1) - within 1 year - after 1 year but within 5 years - after 5 years Capital expenditure on property, plant and equipment Contracts to purchase goods or services (2) Notes: (1) Predominantly property leases. (2) Of which due within 1 year: £276 million (2016 - £231 million). |
Net cash flow from operating 84
Net cash flow from operating activities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net cash flow from operating activities | |
Schedule of net cash flow from operating activities | £m £m £m Operating profit/(loss) before tax - continuing operations Profit before tax - discontinued operations — — Decrease/(increase) in prepayments and accrued income Interest on subordinated liabilities Decrease in income accruals Impairment losses/(releases) Loans and advances written-off net of recoveries Unwind of discount on impairment losses Profit on sale of property, plant and equipment Profit on sale of subsidiaries and associates (Profit)/loss on sale of securities Charge for defined benefit pension schemes Pension schemes curtailments or settlements loss/(gain) Cash contribution to defined benefit pension schemes Other provisions charged net of releases Other provisions utilised Depreciation and amortisation Loss on redemption of own debt Loss on reclassification to disposal groups — — Write down of goodwill and other intangible assets Elimination of foreign exchange differences Other non-cash items Net cash outflow from trading activities Decrease/(increase) in loans and advances to banks and customers (Increase)/decrease in securities (Increase)/decrease in other assets Decrease in derivative assets Changes in operating assets Increase/(decrease) in deposits by banks and customers Increase/(decrease) in debt securities in issue (Decrease)/increase in other liabilities Decrease in derivative liabilities Increase/(decrease) in settlement balances and short positions Changes in operating liabilities Income taxes paid Net cash inflow/(outflow) from operating activities |
Analysis of the net investmen85
Analysis of the net investment in business interests and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of the net investment in business interests and intangible assets | |
Schedule of the analysis of the net investment in business interests and intangible assets | Acquisitions and disposals £m £m £m Fair value given for businesses acquired Net outflow of cash in respect of acquisitions Net assets/(liabilities) sold Non-cash consideration — Profit on disposal Net cash and cash equivalents disposed — Net inflow/(outflow) of cash in respect of disposals Dividends received from associates Cash expenditure on intangible assets Net (outflow)/inflow Note: (1) Includes cash proceeds of £1,628 million in 2015 relating to the disposal of the controlling interest in Citizens. |
Interest received and paid (Tab
Interest received and paid (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Interest received and paid | |
Schedule of interest received and paid | £m £m £m Interest received Interest paid 8,683 |
Analysis of changes in financ87
Analysis of changes in financing during the year (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of changes in financing during the year | |
Schedule of the analysis of changes in financing during the year | Share capital, share premium, paid-in equity and merger reserve Subordinated liabilities 2017 2016 2015 2017 2016 2015 £m £m £m £m £m £m At 1 January Issue of ordinary shares Issue of Additional Tier 1 capital notes — Redemption of paid-in equity Redemption of subordinated liabilities Net cash (outflow)/inflow from financing Transfer to retained earnings — — Conversion of B shares — — Ordinary shares issued in respect of employee share schemes Redemption of debt preference shares — — Redemption of equity preference shares — — Transfer of merger reserve to retained earnings — — Other adjustments including foreign exchange — — At 31 December |
Analysis of cash and cash equ88
Analysis of cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of cash and cash equivalents | |
Schedule of the analysis of cash and cash equivalents | 2017 2016 2015 £m £m £m At 1 January - cash - cash equivalents Net cash outflow At 31 December Comprising: Cash and balances at central banks Treasury bills and debt securities Loans and advances to banks Cash and cash equivalents Note: (1) Includes cash collateral posted with bank counterparties in respect of derivative liabilities of £6,883 million (2016 - £6,661 million; 2015 - £11,031 million). |
Schedule of bank balances required by law or regulation to be maintained | Bank of England £0.6bn £0.5bn £0.5bn De Nederlandsche Bank € 0.1bn € 0.4bn € 0.3bn |
Segmental analysis (Tables)
Segmental analysis (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segmental analysis | |
Schedule of operating segments | Net Depreciation Impairment interest Non-interest Total Operating and (losses)/ Operating income income income expenses amortisation releases profit/(loss) 2017 £m £m £m £m £m £m £m UK Personal & Business Banking — Ulster Bank RoI — Personal & Business Banking — Commercial Banking Private Banking — Commercial & Private Banking RBS International NatWest Markets Central items & other Total 2016* UK Personal & Business Banking Ulster Bank RoI — Personal & Business Banking Commercial Banking Private Banking — Commercial & Private Banking RBS International — NatWest Markets Central items & other — Total 2015* UK Personal & Business Banking — Ulster Bank RoI — Personal & Business Banking — Commercial Banking Private Banking — Commercial & Private Banking RBS International — — NatWest Markets Central items & other Total * Re-presented to reflect the segmental reorganisation. 2017 2016* 2015* Inter Inter Inter External segment Total External segment Total External segment Total Total income £m £m £m £m £m £m £m £m £m UK Personal & Business Banking Ulster Bank RoI Personal & Business Banking Commercial Banking Private Banking Commercial & Private Banking RBS International NatWest Markets Central items & other Total — — — 2017 2016* 2015* Inter Inter Inter External segment Total External segment Total External segment Total Total revenue £m £m £m £m £m £m £m £m £m UK Personal & Business Banking 7,348 44 7,392 7,197 52 7,249 7,164 51 7,215 Ulster Bank RoI 676 672 660 1 661 640 15 655 Personal & Business Banking 8,024 40 8,064 7,857 53 7,910 7,804 66 7,870 Commercial Banking 3,590 74 3,664 3,638 68 3,706 3,482 42 3,524 Private Banking 585 143 728 567 172 739 577 191 768 Commercial & Private Banking 4,175 217 4,392 4,205 240 4,445 4,059 233 4,292 RBS International 309 119 428 313 156 469 275 177 452 NatWest Markets 1,408 809 2,217 1,708 1,539 3,247 3,097 2,913 6,010 Central items & other 2,147 962 1,862 1,655 Total 16,063 — 16,063 15,945 — 15,945 16,890 — 16,890 * Re-presented to reflect the segmental reorganisation. 2017 2016* 2015* Cost to Cost to Cost to acquire fixed acquire fixed acquire fixed assets and assets and assets and intangible intangible intangible Assets Liabilities assets Assets Liabilities assets Assets Liabilities assets £m £m £m £m £m £m £m £m £m UK Personal & Business Banking 190,636 183,410 — 181,357 173,040 — 167,959 164,830 — Ulster Bank RoI 24,564 19,853 — 24,111 19,299 — 21,264 15,837 — Personal & Business Banking 215,200 203,263 — 205,468 192,339 — 189,223 180,667 — Commercial Banking 149,545 105,144 208 150,453 104,441 288 133,546 94,619 214 Private Banking 20,290 27,049 2 18,578 26,673 — 17,022 23,257 — Commercial & Private Banking 169,835 132,193 210 169,031 131,114 288 150,568 117,876 214 RBS International 25,867 29,077 12 23,420 25,280 — 23,130 21,398 — NatWest Markets 277,886 248,553 4 372,496 340,471 6 416,748 380,059 29 Central items & other 49,268 75,877 1,275 28,241 60,048 1,098 35,739 61,261 1,227 Total 738,056 688,963 1,501 798,656 749,252 1,392 815,408 761,261 1,470 *Re-presented to reflect the segmental reorganisation. UK Personal & Business Commercial RBS Banking Banking International Total £m £m £m £m At 1 January 2016 and 31 December 2016 3,351 1,907 300 5,558 At 1 January 2017 and 31 December 2017 3,351 1,907 300 5,558 |
Schedule of geographical segments | UK USA Europe RoW Total 2017 £m £m £m £m £m Total revenue Net interest income Net fees and commissions Income from trading activities Other operating income Total income Operating profit/(loss) before tax Total assets Of which total assets held for sale — Total liabilities Of which total liabilities held for sale — — — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments Cost to acquire property, plant and equipment and intangible assets 2016 Total revenue Net interest income Net fees and commissions Income from trading activities Other operating income Total income Operating (loss)/profit before tax Total assets Of which total assets held for sale — — — Total liabilities Of which total liabilities held for sale — — — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments Cost to acquire property, plant and equipment and intangible assets 2015 Total revenue Net interest income Net fees and commissions Income from trading activities Other operating income Total income Operating (loss)/profit before tax Total assets Of which total assets held for sale — Total liabilities Of which total liabilities held for sale — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments Cost to acquire property, plant and equipment and intangible assets |
Directors and key management 90
Directors and key management remuneration (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Directors' and key management remuneration | |
Schedule of directors' remuneration | Directors’ remuneration £000 £000 Non-executive directors emoluments Chairman and executive directors emoluments Amounts receivable under long-term incentive plans and share option plans |
Schedule of compensation of key management | £000 £000 Short-term benefits Post-employment benefits Share-based payments |
Transactions with directors a91
Transactions with directors and key management (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Transactions with directors and key management | |
Schedule of transactions with directors and key management | £000 £000 Loans and advances to customers Customer accounts |
Related parties (Tables)
Related parties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Transactions between related parties | |
Schedule of transactions with associates | £000 £000 Loans and advances to customers Customer accounts |
Associate | |
Transactions between related parties | |
Schedule of transactions with associates | £m £m Loans and advances Customer deposits Total income Operating expenses |
Consolidating financial infor93
Consolidating financial information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Consolidating financial information | |
Schedule of Consolidating financial information | Income statement Consolidation RBSG For the year ended 31 December 2017 RBSG plc RBS plc Subsidiaries adjustments Group £m £m £m £m £m Net interest income Non-interest income Total income Operating expenses Impairment releases/(losses) — Operating profit/(loss) before tax Tax (charge)/credit Profit/(loss) from continuing operations (Loss)/profit from discontinued operations, net of tax — — — Profit/(loss) for the year Attributable to: Non-controlling interests — — Preference shareholders — — — Paid-in equity holders — — Ordinary shareholders Statement of comprehensive income Consolidation RBSG For the year ended 31 December 2017 RBSG plc RBS plc Subsidiaries adjustments Group £m £m £m £m £m Profit/(loss) for the year Items that do not qualify for reclassification Profit on remeasurement of retirement benefit schemes — — Loss on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk — — Tax (charge)/credit — — — — Items that do qualify for reclassification Available-for-sale financial assets — Cash flow hedges Currency translation — Tax credit Other comprehensive (loss)/ income after tax Total comprehensive income/(loss) for the year Total comprehensive income/(loss) is attributable to: Non-controlling interests — — — Preference shareholders — — — Paid-in equity holders — — Ordinary shareholders Income statement Consolidation RBSG For the year ended 31 December 2016 RBSG plc RBS plc Subsidiaries adjustments Group £m £m £m £m £m Net interest income Non-interest income Total income Operating expenses Impairment releases/(losses) — Operating (loss)/profit before tax Tax credit/(charge) (Loss)/profit from continuing operations (Loss)/profit from discontinued operations, net of tax — — — (Loss)/profit for the year Attributable to: Non-controlling interests — — Preference shareholders — Paid-in equity holders — — Dividend access share — — — Ordinary shareholders Statement of comprehensive income Consolidation RBSG For the year ended 31 December 2016 RBSG plc RBS plc Subsidiaries adjustments Group £m £m £m £m £m (Loss)/profit for the year Items that do not qualify for reclassification Profit/(loss) on remeasurement of retirement benefit schemes — — Tax (charge)/credit — — — — Items that do qualify for reclassification Available-for-sale financial assets — Cash flow hedges Currency translation — Tax (charge)/credit Other comprehensive income/(loss) after tax Total comprehensive (loss)/income for the year Total comprehensive (loss)/income is attributable to: Non-controlling interests — — Preference shareholders — Paid-in equity holders — — Dividend access share — — — Ordinary shareholders Income statement Consolidation RBSG For the year ended 31 December 2015 RBSG plc RBS plc Subsidiaries (1) adjustments (2) Group £m £m £m £m £m Net interest income Non-interest income Total income Operating expenses Impairment (losses)/releases Operating (loss)/profit before tax Tax (charge)/credit (Loss)/profit from continuing operations Profit from discontinued operations, net of tax — (Loss)/profit for the year Attributable to: Non-controlling interests — — Preference shareholders — Paid-in equity holders — — Ordinary shareholders Statement of comprehensive income Consolidation RBSG For the year ended 31 December 2015 RBSG plc RBS plc Subsidiaries (1) adjustments (2) Group £m £m £m £m £m (Loss)/profit for the year Items that do not qualify for reclassification Profit/(loss) on remeasurement of retirement benefit schemes — — Tax (charge)/credit — — — — Items that do qualify for reclassification Available-for-sale financial assets — Cash flow hedges Currency translation — Tax (charge)/credit Other comprehensive income/(loss) after tax Total comprehensive (loss)/income for the year Total comprehensive (loss)/income is attributable to: Non-controlling interests — — Preference shareholders — Paid-in equity holders — — Ordinary shareholders Notes: (1) The financial statements of CFG are incorporated on a line-by-line basis up to 3 August 2015 and was fully disposed of on 30 October 2015. (2) Includes adjustments to present CFG as a disposal group to the disposal date. Balance sheet At 31 December 2017 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Assets Cash and balances at central banks — Loans and advances to banks Loans and advances to customers Debt securities Equity shares Investments in Group undertakings — Settlement balances — Derivatives Intangible assets — — Property, plant and equipment — Deferred tax — Prepayments, accrued income and other assets Assets of disposals groups — Total assets Liabilities Deposits by banks — Customer accounts — Debt securities in issue Settlement balances — Short positions — Derivatives Provisions for liabilities and charges Accruals, deferred income and other liabilities Retirement benefit liabilities — Deferred tax Subordinated liabilities — ) Liabilities of disposal groups — Total liabilities Non-controlling interests — — Owners’ equity Total equity Total liabilities and equity Balance sheet At 31 December 2016 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Assets Cash and balances at central banks — — Loans and advances to banks Loans and advances to customers Debt securities Equity shares — Investments in Group undertakings — Settlement balances — Derivatives Intangible assets — Property, plant and equipment — Deferred tax — Prepayments, accrued income and other assets Assets of disposals groups — Total assets Liabilities Deposits by banks Customer accounts — Debt securities in issue Settlement balances — Short positions — Derivatives Provisions for liabilities and charges — Accruals and other liabilities Retirement benefit liabilities — Deferred tax — Subordinated liabilities Liabilities of disposal groups — — — Total liabilities Non-controlling interests — — Owners’ equity Total equity Total liabilities and equity Cash flow statement For the year ended 31 December 2017 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Effects of exchange rate changes on cash and cash equivalents Net(decrease)/increase in cash and cash equivalents Cash and cash equivalents at 1 January 2017 Cash and cash equivalents at 31 December 2017 For the year ended 31 December 2016 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Effects of exchange rate changes on cash and cash equivalents Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at 1 January 2016 Cash and cash equivalents at 31 December 2016 For the year ended 31 December 2015 RBSG plc £m RBS plc £m Subsidiaries £m Consolidation adjustments £m RBSG Group £m Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Effects of exchange rate changes on cash and cash equivalents Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 January 2015 Cash and cash equivalents at 31 December 2015 |
Accounting policies (Details)
Accounting policies (Details) £ in Millions | Jan. 01, 2018GBP (£) | Dec. 31, 2017GBP (£)componentitem | Dec. 31, 2016GBP (£) | Dec. 31, 2015GBP (£) |
Reclassifications | ||||
Holding period for loans and receivables | 12 months | |||
Derivatives and hedging | ||||
Number of types of hedges | item | 3 | |||
Goodwill | ||||
Carrying value of goodwill | £ 5,558 | £ 5,558 | ||
Provisions for liabilities | ||||
Provisions for liabilities | 7,757 | 12,836 | ||
Deferred tax | ||||
Deferred tax assets | 1,740 | 1,803 | ||
Unrecognised deferred tax | 6,356 | 7,940 | ||
Loan impairment provisions | ||||
Loan impairment provisions | £ 3,814 | 4,455 | £ 7,119 | |
Number of components | component | 2 | |||
Accounting developments | ||||
Decrease in equity | £ (700) | 400 | £ 200 | |
Application of IFRS 16 | ||||
Accounting developments | ||||
Percentage of property under operating lease commitments | 87.00% | |||
Right of use asset | £ 1,400 | |||
Retaining earnings | 300 | |||
Effect of transition to IFRS | ||||
Accounting developments | ||||
Decrease in equity | £ 71 | |||
Pre tax increase in equity on reclassification of financial instruments due to transition | 561 | |||
Pre tax decrease in equity on change in impairment methodology due to transition | 616 | |||
Tax on changes in equity due to transition | £ 16 | |||
Payment protection insurance | ||||
Provisions for liabilities | ||||
Provisions for liabilities | 1,053 | 1,253 | ||
Other customer redress | ||||
Provisions for liabilities | ||||
Provisions for liabilities | 870 | 1,105 | ||
Residential mortgage backed securities | ||||
Provisions for liabilities | ||||
Provisions for liabilities | 3,243 | 6,752 | ||
Litigation and other regulatory proceedings | ||||
Provisions for liabilities | ||||
Provisions for liabilities | 641 | 1,918 | ||
Property and other | ||||
Provisions for liabilities | ||||
Provisions for liabilities | 1,950 | 1,808 | ||
Collectively-assessed | ||||
Loan impairment provisions | ||||
Loan impairment provisions | £ 2,292 | £ 2,660 | ||
Retail mortgages | Collectively-assessed | ||||
Financial assets carried at amortised cost | ||||
Write off period | 5 years | |||
Credit cards | Collectively-assessed | ||||
Financial assets carried at amortised cost | ||||
Write off period | 3 years | |||
Credit cards | Irrecoverable Amount | ||||
Financial assets carried at amortised cost | ||||
Write off period | 12 months | |||
Overdrafts and other unsecured loans | Collectively-assessed | ||||
Financial assets carried at amortised cost | ||||
Write off period | 6 years | |||
Business loans | Collectively-assessed | ||||
Financial assets carried at amortised cost | ||||
Write off period | 5 years | |||
Freehold buildings | ||||
Property, plant and equipment | ||||
Estimated useful economic lives | 50 years | |||
Long leasehold property | ||||
Property, plant and equipment | ||||
Estimated useful economic lives | 50 years | |||
Minimum | Property adaptation costs | ||||
Property, plant and equipment | ||||
Estimated useful economic lives | 10 years | |||
Minimum | Other equipment | ||||
Property, plant and equipment | ||||
Estimated useful economic lives | 4 years | |||
Minimum | Computer software | ||||
Intangible assets and goodwill | ||||
Estimated useful economic lives | 3 years | |||
Minimum | Other acquired intangibles | ||||
Intangible assets and goodwill | ||||
Estimated useful economic lives | 5 years | |||
Maximum | Commercial loans | Collectively-assessed | ||||
Financial assets carried at amortised cost | ||||
Write off period | 5 years | |||
Maximum | Property adaptation costs | ||||
Property, plant and equipment | ||||
Estimated useful economic lives | 15 years | |||
Maximum | Computers equipment | ||||
Property, plant and equipment | ||||
Estimated useful economic lives | 5 years | |||
Maximum | Other equipment | ||||
Property, plant and equipment | ||||
Estimated useful economic lives | 15 years | |||
Maximum | Computer software | ||||
Intangible assets and goodwill | ||||
Estimated useful economic lives | 12 years | |||
Maximum | Other acquired intangibles | ||||
Intangible assets and goodwill | ||||
Estimated useful economic lives | 10 years |
Net interest income (Details)
Net interest income (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net interest income | |||
Loans and advances to customers | £ 10,409 | £ 10,706 | £ 11,268 |
Loans and advances to banks | 277 | 246 | 340 |
Debt securities | 348 | 306 | 317 |
Interest receivable | 11,034 | 11,258 | 11,925 |
Customer accounts: demand deposits | 99 | 433 | 619 |
Customer accounts: savings deposits | 445 | 432 | 446 |
Customer accounts: other time deposits | 179 | 190 | 315 |
Balances with banks | 175 | 97 | 45 |
Debt securities in issue | 554 | 557 | 759 |
Subordinated liabilities | 572 | 845 | 869 |
Internal funding of trading businesses | 23 | (4) | 105 |
Interest payable | 2,047 | 2,550 | 3,158 |
Net interest income | £ 8,987 | £ 8,708 | £ 8,767 |
Non-interest income (Details)
Non-interest income (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fees and commissions receivable | |||
Payment services | £ 829 | £ 856 | £ 923 |
Credit and debit card fees | 665 | 645 | 738 |
Lending (credit facilities) | 1,060 | 1,044 | 1,076 |
Brokerage | 148 | 154 | 262 |
Investment management | 249 | 250 | 305 |
Trade finance | 173 | 196 | 242 |
Other | 214 | 195 | 196 |
Fees and commissions receivable | 3,338 | 3,340 | 3,742 |
Fees and commissions payable | |||
Banking | (883) | (805) | (809) |
Income from trading activities | |||
Foreign exchange | 525 | 989 | 809 |
Interest rate | (50) | (480) | 35 |
Credit | 197 | 336 | (80) |
Changes in fair value of own debt and derivative liabilities attributable to own credit risk - debt securities in issue | (81) | 87 | 252 |
Changes in fair value of own debt and derivative liabilities attributable to own credit risk - derivative liabilities | 12 | 67 | 2 |
Equities and other | 31 | (25) | 42 |
Income from trading activities | 634 | 974 | 1,060 |
Loss on redemption of own debt | (7) | (126) | (263) |
Operating lease and other rental income | 276 | 287 | 276 |
Changes in the fair value of own debt designated as at fair value through profit or loss attributable to own credit risk | |||
- debt securities in issue | 41 | 84 | |
- subordinated liabilities | (15) | (29) | |
Other changes in the fair value of financial assets and liabilities designated as at fair value through profit or loss and related derivatives | 99 | (13) | 375 |
Changes in the fair value of investment properties | (14) | (11) | 2 |
Profit/(loss) on sale of securities | 226 | 71 | (4) |
Profit on sale of property, plant and equipment | 75 | 18 | 91 |
Profit/(loss) on sale of subsidiaries and associates | 245 | 273 | (102) |
Loss on disposal or settlement of loans and receivables | (35) | (277) | (558) |
Share of profits of associated entities | 104 | 59 | 140 |
Other income | 88 | 66 | 151 |
Non-interest income | £ 1,064 | £ 499 | £ 426 |
Operating expenses (Details)
Operating expenses (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses | |||
Salaries | £ 2,765 | £ 3,097 | £ 3,177 |
Variable compensation | 298 | 281 | 314 |
Temporary and contract costs | 415 | 674 | 638 |
Social security costs | 318 | 388 | 344 |
Share-based compensation | 17 | 32 | 36 |
Pension costs - defined benefit schemes (see Note 4) | 309 | 267 | 523 |
Pension costs - loss/(gain) on curtailments or settlements (see Note 4) | 66 | 1 | (65) |
Pension costs - defined contribution schemes | 92 | 89 | 74 |
Severance | 255 | 229 | 511 |
Other | 141 | 66 | 174 |
Staff costs | 4,676 | 5,124 | 5,726 |
Premises and equipment | 1,565 | 1,388 | 1,827 |
UK bank levy | 215 | 190 | 230 |
Other administrative expenses | 3,108 | 8,555 | 6,058 |
Property, plant and equipment depreciation and write down (see Note 16) | 586 | 574 | 950 |
Intangible assets amortisation (see Note 15) | 222 | 204 | 230 |
Depreciation and amortisation | 808 | 778 | 1,180 |
Write down of goodwill and other intangible assets | 29 | 159 | 1,332 |
Operating expenses | £ 10,401 | £ 16,194 | £ 16,353 |
Operating expenses - Restructur
Operating expenses - Restructuring (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses | |||
Staff costs | £ 753 | £ 642 | £ 830 |
Premises, equipment, depreciation and amortisation | 471 | 164 | 746 |
Other administrative expenses | 341 | 1,300 | 1,355 |
Total restructuring and divestment costs | £ 1,565 | £ 2,106 | £ 2,931 |
Operating expenses - Continuing
Operating expenses - Continuing operations (Details) - employee | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Continuing operations | |||
Number and average number of employees | |||
Average number of employees | 73,400 | 82,400 | 88,800 |
Temporary employees | 5,000 | 6,700 | 7,800 |
Number of employees | 69,700 | 77,000 | 87,800 |
Continuing operations | UK | |||
Number and average number of employees | |||
Number of employees | 51,200 | 57,300 | 64,100 |
Continuing operations | USA | |||
Number and average number of employees | |||
Number of employees | 500 | 700 | 1,100 |
Continuing operations | Europe | |||
Number and average number of employees | |||
Number of employees | 4,200 | 5,200 | 6,200 |
Continuing operations | Rest of the World | |||
Number and average number of employees | |||
Number of employees | 13,800 | 13,800 | 16,400 |
Continuing operations | Operating segment | Personal & Business Banking | |||
Number and average number of employees | |||
Number of employees | 24,500 | 28,100 | 32,400 |
Continuing operations | Operating segment | UK Personal & Business Banking | |||
Number and average number of employees | |||
Number of employees | 21,900 | 25,100 | 29,900 |
Continuing operations | Operating segment | Ulster Bank RoI | |||
Number and average number of employees | |||
Number of employees | 2,600 | 3,000 | 2,500 |
Continuing operations | Operating segment | Commercial & Private Banking | |||
Number and average number of employees | |||
Number of employees | 6,000 | 7,300 | 7,600 |
Continuing operations | Operating segment | Commercial Banking | |||
Number and average number of employees | |||
Number of employees | 4,500 | 5,600 | 5,700 |
Continuing operations | Operating segment | Private Banking | |||
Number and average number of employees | |||
Number of employees | 1,500 | 1,700 | 1,900 |
Continuing operations | Operating segment | RBS International | |||
Number and average number of employees | |||
Number of employees | 1,600 | 800 | 700 |
Continuing operations | Operating segment | NatWest Markets | |||
Number and average number of employees | |||
Number of employees | 5,300 | 1,500 | 2,500 |
Continuing operations | Operating segment | Central items & other | |||
Number and average number of employees | |||
Number of employees | 32,300 | 39,300 | 44,600 |
Discontinued operations | |||
Number and average number of employees | |||
Average number of employees | 0 | 0 | 10,100 |
Number of employees | 0 | 0 | 0 |
Operating expenses - Share-base
Operating expenses - Share-based payments (Details) shares in Millions, Options in Millions, EquityInstruments in Millions | 12 Months Ended | ||
Dec. 31, 2017GBP (£)YOptionsEquityInstrumentsshares | Dec. 31, 2016GBP (£)YOptionsEquityInstrumentsshares | Dec. 31, 2015GBP (£)YOptionsEquityInstrumentsshares | |
Sharesave | |||
Average exercise price | |||
At 1 January | £ 2.46 | £ 2.87 | £ 2.85 |
Granted | 2.27 | 1.68 | 2.91 |
Exercised | 2.46 | 2.37 | 2.38 |
Cancelled | 2.49 | 3.02 | 2.98 |
At 31 December | £ 2.38 | £ 2.46 | £ 2.87 |
Shares under option | |||
At 1 January | Options | 56 | 56 | 51 |
Granted | Options | 21 | 17 | 12 |
Exercised | Options | (3) | (2) | |
Cancelled | Options | (14) | (17) | (5) |
At 31 December | Options | 60 | 56 | 56 |
Options exercisable, vesting period | 6 months | ||
Options exercisable | Options | 3.7 | 8.1 | 1 |
Weighted average share price at the date of exercise of options | £ 2.77 | £ 1.78 | £ 3.54 |
Remaining average contractual life | Y | 2.9 | 2.9 | 2.9 |
Fair value of options granted | £ 21,000,000 | £ 18,000,000 | £ 12,000,000 |
Sharesave | Minimum | |||
Shares under option | |||
Exercise price | 1.68 | 1.68 | 2.33 |
Sharesave | Maximum | |||
Shares under option | |||
Exercise price | 4.34 | 4.34 | 18.93 |
Deferred performance awards | |||
Value at grant | |||
At 1 January | 296,000,000 | 276,000,000 | 272,000,000 |
Granted | 152,000,000 | 170,000,000 | 186,000,000 |
Forfeited | (11,000,000) | (19,000,000) | (34,000,000) |
Vested | (173,000,000) | (131,000,000) | (148,000,000) |
At 31 December | £ 264,000,000 | £ 296,000,000 | £ 276,000,000 |
Shares awarded | |||
At 1 January (in shares) | EquityInstruments | 102 | 80 | 85 |
Granted (in shares) | EquityInstruments | 63 | 75 | 50 |
Forfeited (in shares) | EquityInstruments | (4) | (7) | (11) |
Vested/exercised (in shares) | EquityInstruments | (60) | (46) | (44) |
At 31 December (in shares) | EquityInstruments | 101 | 102 | 80 |
Long-term incentives | |||
Value at grant | |||
At 1 January | £ 119,000,000 | £ 153,000,000 | £ 214,000,000 |
Granted | 35,000,000 | 37,000,000 | 39,000,000 |
Vested | (22,000,000) | (39,000,000) | (51,000,000) |
Lapsed | (30,000,000) | (32,000,000) | (49,000,000) |
At 31 December | £ 102,000,000 | £ 119,000,000 | £ 153,000,000 |
Shares awarded | |||
At 1 January (in shares) | EquityInstruments | 38 | 44 | 69 |
Granted (in shares) | EquityInstruments | 15 | 16 | 11 |
Vested/exercised (in shares) | EquityInstruments | (7) | (12) | (18) |
Lapsed (in shares) | EquityInstruments | (9) | (10) | (18) |
At 31 December (in shares) | EquityInstruments | 37 | 38 | 44 |
Options over shares | |||
At 1 January (in shares) | shares | 4 | 5 | 7 |
Vested/exercised (in shares) | shares | (2) | ||
Lapsed (in shares) | shares | (2) | (1) | |
At 31 December (in shares) | shares | 2 | 4 | 5 |
Market value of awards vested and exercised | £ 22,000,000 | £ 40,000,000 | £ 55,000,000 |
Vested options over shares exercisable | shares | 2 | 4 | 5 |
Operating expenses - Variable c
Operating expenses - Variable compensation awards (Details) - GBP (£) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based payments | |||
Total variable compensation | £ 342,000,000 | £ 343,000,000 | £ 373,000,000 |
Variable compensation as a % of adjusted operating profit | 7.00% | 9.00% | |
Proportion of variable compensation that is deferred | 85.00% | 84.00% | |
Of which - deferred bond awards | 46.00% | 48.00% | |
Of which - deferred share awards | 54.00% | 52.00% | |
Total non-deferred variable compensation | |||
Share-based payments | |||
Total variable compensation | £ 51,000,000 | £ 56,000,000 | |
Change (as a percent) | (9.00%) | ||
Non-deferred cash awards | |||
Share-based payments | |||
Total variable compensation | £ 51,000,000 | 56,000,000 | |
Change (as a percent) | (9.00%) | ||
Non-deferred cash awards | Maximum | |||
Share-based payments | |||
Cash awards | £ 2,000 | ||
Total deferred variable compensation | |||
Share-based payments | |||
Total variable compensation | £ 291,000,000 | 287,000,000 | |
Change (as a percent) | 1.00% | ||
Deferred bond awards | |||
Share-based payments | |||
Total variable compensation | £ 134,000,000 | 138,000,000 | |
Change (as a percent) | (3.00%) | ||
Deferred share awards | |||
Share-based payments | |||
Total variable compensation | £ 157,000,000 | £ 149,000,000 | |
Change (as a percent) | 5.00% |
Operating expenses - Variabl102
Operating expenses - Variable compensation awards reconciliation (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses | |||
Variable compensation awarded | £ 342 | £ 343 | £ 373 |
Less: deferral of charge for amounts awarded for current year | (133) | (103) | (97) |
Income statement charge for amounts awarded in current year | 209 | 240 | 276 |
Add: current year charge for amounts deferred from prior years | 96 | 147 | 140 |
Less: forfeiture of amounts deferred from prior years | (7) | (106) | (102) |
Income statement charge for amounts deferred from prior years | 89 | 41 | 38 |
Income statement charge for variable compensation | £ 298 | £ 281 | £ 314 |
Operating expenses - Variabl103
Operating expenses - Variable compensation awards - Actual and Expected (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based payments | |||
Variable compensation deferred from 2015 and earlier | £ 16 | £ 147 | £ 140 |
Variable compensation deferred from 2016 | 80 | ||
Less: forfeiture of amounts deferred from prior years | (7) | (106) | (102) |
Income statement charge for amounts deferred from prior years | 89 | £ 41 | £ 38 |
0-1 years | |||
Share-based payments | |||
Variable compensation deferred from 2015 and earlier | 6 | ||
Variable compensation deferred from 2016 | 20 | ||
Variable compensation for 2017 deferred | 89 | ||
Income statement charge for amounts deferred from prior years | 115 | ||
2019 and beyond | |||
Share-based payments | |||
Variable compensation deferred from 2015 and earlier | 1 | ||
Variable compensation deferred from 2016 | 13 | ||
Variable compensation for 2017 deferred | 44 | ||
Income statement charge for amounts deferred from prior years | £ 58 |
Pensions (Details)
Pensions (Details) | 12 Months Ended |
Dec. 31, 2017trustee | |
Pensions | |
Portion of final pensionable salary, considered for pension | 6.25% |
Maximum number of years of service for pension | 40 years |
Maximum annual salary inflation | 2.00% |
Main Scheme | |
Pensions | |
Number of nominated trustee directors | 4 |
Number of appointed trustee directors | 6 |
Pensions - Investment strategy
Pensions - Investment strategy (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Pensions | ||
Fair value of assets | £ 160,843 | £ 246,981 |
Fair value of liabilities | 154,506 | 236,475 |
Collateral | 72,078 | 57,166 |
Inflation rate swaps | ||
Pensions | ||
Notional amount | 11 | 12 |
Fair value of assets | 310 | 299 |
Fair value of liabilities | 555 | 549 |
Interest rate swaps | ||
Pensions | ||
Notional amount | 44 | 41 |
Fair value of assets | 8,161 | 9,440 |
Fair value of liabilities | 4,779 | 5,442 |
Currency forwards | ||
Pensions | ||
Notional amount | 12 | 15 |
Fair value of assets | 160 | 191 |
Fair value of liabilities | 34 | 136 |
Equity and bond call options | ||
Pensions | ||
Notional amount | 2 | 2 |
Fair value of assets | 428 | 799 |
Fair value of liabilities | 1 | |
Equity and bond put options | ||
Pensions | ||
Notional amount | 3 | 2 |
Fair value of assets | 3 | |
Fair value of liabilities | 1 | 2 |
Other | ||
Pensions | ||
Notional amount | 4 | 4 |
Fair value of assets | 327 | 1,719 |
Fair value of liabilities | £ 444 | £ 1,816 |
Main Scheme | ||
Pensions | ||
Percentage of total plan assets | 90.00% | 89.00% |
Consumer industry | 6.70% | 4.60% |
Manufacturing industry | 1.80% | 1.80% |
Energy and utilities | 3.60% | 2.70% |
Financial institutions | 7.80% | 8.30% |
Technology and telecommunications | 1.90% | 2.30% |
Other | 0.10% | 0.80% |
Private equity | 4.00% | 3.40% |
Index-linked bonds | 30.60% | 31.40% |
Government fixed interest bonds | 9.20% | 5.90% |
Corporate fixed interest bonds | 15.80% | 17.90% |
Corporate and other bonds | 1.00% | 1.80% |
Hedge funds | 0.20% | |
Real estate | 5.20% | 5.20% |
Derivatives | 8.10% | 10.20% |
Cash and other assets | 4.20% | 3.40% |
Equity exposure of equity futures | (3.60%) | (1.80%) |
Cash exposure of equity futures | 3.60% | 1.90% |
Total | 100.00% | 100.00% |
Collateral | £ 3,436 | £ 3,991 |
Maximum percentage of indirect investment by trustees | 5.00% | |
Main Scheme | Swap | ||
Pensions | ||
Notional amount | £ 57,000 | 56,000 |
Fair value of assets | £ 3,045 | £ 3,629 |
Pensions - Amounts in the Finan
Pensions - Amounts in the Financial statements (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Pensions | |||||
Fund assets at fair value | £ 49,746 | £ 49,229 | £ 34,708 | £ 34,359 | £ 28,488 |
Present value of fund liabilities | 42,378 | 43,990 | 35,152 | 36,643 | 31,484 |
Funded status | 7,368 | 5,239 | (444) | (2,284) | (2,996) |
Net assets of schemes in surplus | 392 | 276 | |||
Net liabilities of schemes in deficit | (129) | (363) | |||
Retirement benefit liability | 263 | (87) | 3,574 | ||
Main Scheme | |||||
Pensions | |||||
Fund assets at fair value | 44,652 | 43,824 | 30,703 | 30,077 | 24,272 |
Present value of fund liabilities | 37,937 | 38,851 | 30,966 | 31,776 | 26,958 |
Funded status | 6,715 | 4,973 | (263) | £ (1,699) | £ (2,686) |
Retirement benefit liability | 3,244 | ||||
Asset ceiling/minimum funding | |||||
Pensions | |||||
Funded status | 7,105 | 5,326 | |||
Retirement benefit liability | 7,105 | 5,326 | 3,130 | ||
Asset ceiling/minimum funding | Main Scheme | |||||
Pensions | |||||
Retirement benefit liability | £ 6,715 | £ 4,973 | £ 2,981 |
Pensions - Changes in value of
Pensions - Changes in value of net pension liability (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Pensions | |||||
Balance at beginning of year | £ (87) | £ 3,574 | |||
Currency translation and other adjustments | 3 | 69 | |||
Net interest expense | (3) | (5) | |||
Current service cost | 292 | 264 | |||
Past service cost | 20 | 8 | |||
Loss on curtailments or settlements | 66 | 1 | £ (65) | ||
Total | 375 | 268 | |||
Return on plan assets above recognised interest income | (1,728) | (9,254) | 458 | £ (5,171) | £ (1,097) |
Experience gains and losses | 93 | (794) | (258) | (18) | (176) |
Effect of changes in actuarial financial assumptions | 737 | 9,565 | |||
Effect of changes in actuarial demographic assumptions | (826) | (542) | |||
Asset ceiling/minimum funding adjustments | 1,634 | 2,074 | |||
Total | (90) | 1,049 | |||
Contributions by employer | (627) | (4,786) | |||
Liabilities extinguished upon settlement | (11) | (87) | |||
Balance at end of year | 263 | (87) | 3,574 | ||
Main Scheme | |||||
Pensions | |||||
Balance at beginning of year | 3,244 | ||||
Net interest expense | (10) | ||||
Current service cost | 226 | 199 | |||
Past service cost | 19 | 28 | |||
Total | 245 | 217 | |||
Return on plan assets above recognised interest income | (1,580) | (8,562) | 415 | (4,629) | (986) |
Experience gains and losses | 107 | (658) | (233) | £ (3) | £ (102) |
Effect of changes in actuarial financial assumptions | 678 | 8,803 | |||
Effect of changes in actuarial demographic assumptions | (794) | (402) | |||
Asset ceiling/minimum funding adjustments | 1,608 | 1,876 | |||
Total | 19 | 1,057 | |||
Contributions by employer | (264) | (4,518) | |||
Balance at end of year | 3,244 | ||||
Expected contributions to scheme in 2018 | 190 | ||||
Fair value of plan assets | |||||
Pensions | |||||
Balance at beginning of year | (49,229) | 34,708 | |||
Currency translation and other adjustments | (46) | (533) | |||
Net interest expense | (1,285) | (1,454) | |||
Total | (1,285) | (1,454) | |||
Return on plan assets above recognised interest income | (1,728) | (9,254) | |||
Total | (1,728) | (9,254) | |||
Contributions by employer | (627) | (4,786) | |||
Contributions by plan participants and other scheme members | 10 | (12) | |||
Liabilities extinguished upon settlement | 744 | ||||
Benefits paid | 2,435 | 43 | |||
Transfer to disposal groups | 1,475 | ||||
Balance at end of year | (49,746) | (49,229) | 34,708 | ||
Fair value of plan assets | Main Scheme | |||||
Pensions | |||||
Balance at beginning of year | (43,824) | (30,703) | |||
Net interest expense | (1,155) | (1,310) | |||
Total | (1,155) | (1,310) | |||
Return on plan assets above recognised interest income | (1,580) | (8,562) | |||
Total | (1,580) | (8,562) | |||
Contributions by employer | (264) | (4,518) | |||
Contributions by plan participants and other scheme members | 4 | ||||
Benefits paid | 2,175 | ||||
Transfer to disposal groups | 1,269 | ||||
Balance at end of year | (44,652) | (43,824) | (30,703) | ||
Present value of defined benefit obligation | |||||
Pensions | |||||
Balance at beginning of year | 43,990 | 35,152 | |||
Currency translation and other adjustments | 46 | 602 | |||
Net interest expense | 1,140 | 1,327 | |||
Current service cost | 292 | 264 | |||
Past service cost | 20 | 8 | |||
Loss on curtailments or settlements | 66 | 1 | |||
Total | 1,518 | 1,600 | |||
Experience gains and losses | 93 | (794) | |||
Effect of changes in actuarial financial assumptions | 737 | 9,565 | |||
Effect of changes in actuarial demographic assumptions | (826) | (542) | |||
Total | 4 | 8,229 | |||
Contributions by plan participants and other scheme members | 10 | 12 | |||
Liabilities extinguished upon settlement | (755) | (130) | |||
Benefits paid | (2,435) | (1,475) | |||
Balance at end of year | 42,378 | 43,990 | 35,152 | ||
Present value of defined benefit obligation | Main Scheme | |||||
Pensions | |||||
Balance at beginning of year | 38,851 | 30,966 | |||
Net interest expense | 1,021 | 1,184 | |||
Current service cost | 226 | 199 | |||
Past service cost | 19 | 28 | |||
Total | 1,266 | 1,411 | |||
Experience gains and losses | 107 | (658) | |||
Effect of changes in actuarial financial assumptions | 678 | 8,803 | |||
Effect of changes in actuarial demographic assumptions | (794) | (402) | |||
Total | (9) | 7,743 | |||
Contributions by plan participants and other scheme members | 4 | ||||
Benefits paid | (2,175) | (1,269) | |||
Balance at end of year | 37,937 | 38,851 | 30,966 | ||
Asset ceiling/minimum funding | |||||
Pensions | |||||
Balance at beginning of year | 5,326 | 3,130 | |||
Currency translation and other adjustments | 3 | ||||
Net interest expense | 142 | 122 | |||
Total | 142 | 122 | |||
Asset ceiling/minimum funding adjustments | 1,634 | 2,074 | |||
Total | 1,634 | 2,074 | |||
Balance at end of year | 7,105 | 5,326 | 3,130 | ||
Asset ceiling/minimum funding | Main Scheme | |||||
Pensions | |||||
Balance at beginning of year | 4,973 | 2,981 | |||
Net interest expense | 134 | 116 | |||
Total | 134 | 116 | |||
Asset ceiling/minimum funding adjustments | 1,608 | 1,876 | |||
Total | 1,608 | 1,876 | |||
Balance at end of year | £ 6,715 | £ 4,973 | £ 2,981 |
Pensions - Funding and contribu
Pensions - Funding and contributions by the Group and most significant assumptions used for the Main Scheme (Details) - Main Scheme - GBP (£) £ in Billions | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pensions | |||||
Period of funding valuations (in years) | 3 years | ||||
Funding level, as percent | 84.00% | ||||
Pension liabilities | £ 37 | ||||
Deficit | £ 5.8 | ||||
Cash payment | £ 4.2 | ||||
investment return period | 10 years | ||||
Remaining deficit | £ 1.6 | ||||
Average cost (as a percent) | 35.00% | ||||
Principal IAS 19 actuarial assumptions | |||||
Pensions | |||||
Discount rate | 2.60% | 2.70% | |||
Inflation assumption (RPI) | 3.10% | 3.20% | |||
Rate of increase in salaries | 1.80% | 1.80% | |||
Rate of increase in deferred pensions | 3.00% | 3.20% | |||
Rate of increase in pensions in payment | 2.90% | 3.00% | |||
Proportion of pension converted to a cash lump sum at retirement | 21.00% | 21.00% | |||
Longevity at age 60 for current pensioners (years), males | 27 years 2 months 12 days | 27 years 4 months 24 days | |||
Longevity at age 60 for current pensioners (years), females | 28 years 8 months 12 days | 29 years 1 month 6 days | |||
Longevity at age 60 for future pensioners currently aged 40 (years), males | 28 years 7 months 6 days | 29 years | |||
Longevity at age 60 for future pensioners currently aged 40 (years), females | 30 years 4 months 24 days | 31 years 2 months 12 days | |||
Triennial valuation 2015 | |||||
Pensions | |||||
Proportion of pension converted to a cash lump sum at retirement | 21.00% | ||||
Inflation assumption, RPI cap | 5.00% | ||||
Longevity at age 60 for current pensioners (years), males | 28 years 4 months 24 days | ||||
Longevity at age 60 for current pensioners (years), females | 30 years 2 months 12 days | ||||
Longevity at age 60 for future pensioners currently aged 40 (years), males | 29 years 10 months 24 days | ||||
Longevity at age 60 for future pensioners currently aged 40 (years), females | 32 years 4 months 24 days | ||||
Triennial Valuations 2015 and 2013 | |||||
Pensions | |||||
Discount rate spread | 1.50% | ||||
Inflation assumption, RPI floor | 0.00% | ||||
Inflation assumption, LPI floor | 0.00% | ||||
Inflation assumption, LPI cap | 5.00% |
Pensions - Sensitivities of the
Pensions - Sensitivities of the present value of defined benefit obligation (Details) £ in Millions | 12 Months Ended | |
Dec. 31, 2017GBP (£)Y | Dec. 31, 2016GBP (£)Y | |
Pensions | ||
Percentage of defined benefit obligations with applied sterling yield curve | 96.00% | |
Main Scheme | ||
Pensions | ||
Weighted average duration of defined benefit obligation (in years) | Y | 21 | 20.9 |
Active members | 16.20% | 18.10% |
Deferred members | 47.30% | 45.90% |
Pensioners and dependants | 36.50% | 36.00% |
Total proportions to the different classes of scheme | 100.00% | 100.00% |
Discount rate | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/Increase in obligation | £ (1,964) | £ (1,978) |
Inflation | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/Increase in obligation | £ 1,329 | £ 1,552 |
Pension increase | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/Increase in obligation | £ 1,328 | £ 1,339 |
Longevity increase | Main Scheme | ||
Pensions | ||
(Decrease)/Increase in obligation | £ 1,478 | £ 1,522 |
Pensions - History of defined b
Pensions - History of defined benefit schemes (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Pensions | |||||
Fair value of plan assets | £ 49,746 | £ 49,229 | £ 34,708 | £ 34,359 | £ 28,488 |
Present value of plan obligations | 42,378 | 43,990 | 35,152 | 36,643 | 31,484 |
Funded status | 7,368 | 5,239 | (444) | (2,284) | (2,996) |
Experience (losses)/gains on plan liabilities | (93) | 794 | 258 | 18 | 176 |
Experience gains/(losses) on plan assets | 1,728 | 9,254 | (458) | 5,171 | 1,097 |
Actual return on plan assets | £ 3,013 | £ 10,708 | £ 749 | £ 6,485 | £ 2,270 |
Actual return on plan assets - % | 6.10% | 30.90% | 2.20% | 22.80% | 8.60% |
Main Scheme | |||||
Pensions | |||||
Fair value of plan assets | £ 44,652 | £ 43,824 | £ 30,703 | £ 30,077 | £ 24,272 |
Present value of plan obligations | 37,937 | 38,851 | 30,966 | 31,776 | 26,958 |
Funded status | 6,715 | 4,973 | (263) | (1,699) | (2,686) |
Experience (losses)/gains on plan liabilities | (107) | 658 | 233 | 3 | 102 |
Experience gains/(losses) on plan assets | 1,580 | 8,562 | (415) | 4,629 | 986 |
Actual return on plan assets | £ 2,735 | £ 9,872 | £ 703 | £ 5,766 | £ 1,997 |
Actual return on plan assets - % | 6.20% | 32.20% | 2.30% | 23.80% | 8.90% |
Auditor's remuneration (Details
Auditor's remuneration (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
EY | ||
Auditor's remuneration | ||
Fees payable for the audit of the Group's annual accounts | £ 4 | £ 4 |
Fees payable for the audit of the company's subsidiaries | 22.9 | 20.7 |
Fees payable for audit-related assurance services | 4.3 | 4 |
Total audit and audit-related assurance services fees | 31.2 | 28.7 |
Other assurance services | 1.7 | 3.4 |
Corporate finance services | 0.2 | 0.2 |
Total other services | 1.9 | 3.6 |
Fees for review of interim financial information | 1.1 | 1.1 |
Fees for reports to the regulatory | 2.5 | 2.2 |
Fees for non-statutory audit opinions | 0.7 | 0.7 |
Fees for the auditors as reporting accountants on debt and equity issuances | 0.2 | 0.2 |
Deloitte | ||
Auditor's remuneration | ||
Fees payable for the audit of the company's subsidiaries | 0.2 | |
Fees payable for audit-related assurance services | 0.5 | |
Total audit and audit-related assurance services fees | 0.7 | |
Other assurance services | 0.2 | |
Corporate finance services | 1.3 | |
Total other services | 1.5 | |
Total | 2.2 | |
Fees for review of interim financial information | 0 | 0 |
Fees for reports to the regulatory | 0 | 10 |
Fees for internal controls assurance | 0 | 0.2 |
Fees for non-statutory audit opinions | 0 | 0 |
Fees for the auditors as reporting accountants on debt and equity issuances | 0 | 1.4 |
Fees for the auditors as reporting accountants on securitisations | 0.1 | |
Fees in relation to a working capital report in connection with a circular to shareholders | £ 0 | £ 0 |
Tax - Tax charge (Details)
Tax - Tax charge (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax: | |||
Charge for the year | £ (1,018) | £ (1,126) | £ (249) |
Over provision in respect of prior years | 227 | 186 | 220 |
Total current tax | (791) | (940) | (29) |
Deferred tax: | |||
Credit for the year | 108 | 246 | |
Reduction in the carrying value of deferred tax assets | (30) | (317) | |
(Under)/over provision in respect of prior years | (111) | (155) | 6 |
Tax charge for the year | £ (824) | £ (1,166) | £ (23) |
Tax - Reconciliation (Details)
Tax - Reconciliation (Details) - GBP (£) £ in Millions | Apr. 01, 2020 | Apr. 01, 2017 | Apr. 01, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Tax reconciliation | ||||||
UK corporation tax | 19.00% | 20.00% | 19.25% | 20.00% | 20.25% | |
Expected tax (charge)/credit | £ (431) | £ 816 | £ 547 | |||
Losses and temporary differences in year where no deferred tax asset recognised | (303) | (742) | (1,086) | |||
Foreign profits taxed at other rates | 104 | 340 | 510 | |||
UK tax rate change impact | (7) | 6 | 94 | |||
Non-deductible goodwill impairment | (124) | |||||
Losses on disposals and write-downs | (69) | (45) | (23) | |||
UK bank levy | (45) | (41) | (50) | |||
Regulatory and legal actions | (56) | (952) | (232) | |||
Other disallowable items | (110) | (141) | (199) | |||
Other non-taxable items | 134 | 136 | 173 | |||
Taxable foreign exchange movements | 27 | (57) | 19 | |||
Losses brought forward and utilised | 11 | 10 | 122 | |||
Banking surcharge | (165) | (210) | ||||
Adjustments in respect of prior years | 116 | 31 | 226 | |||
Tax charge for the year | £ (824) | (1,166) | £ (23) | |||
Banking surcharge rate | 8.00% | |||||
Forecast | ||||||
Tax reconciliation | ||||||
UK corporation tax | 17.00% | |||||
UK | ||||||
Tax reconciliation | ||||||
Reduction in carrying value of deferred tax asset | £ (30) | £ (317) |
Earnings per ordinary share (De
Earnings per ordinary share (Details) - GBP (£) £ / shares in Units, £ in Millions, shares in Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Profit/(loss) attributable to ordinary shareholders | £ 752 | £ (6,955) | £ (1,979) | |
Loss from discontinued operations attributable to ordinary shareholders | (1,207) | |||
Profit/(loss) from continuing operations attributable to ordinary shareholders | £ 752 | £ (6,955) | £ (3,186) | |
Weighted average number of shares | ||||
Weighted average number of ordinary shares outstanding during the year | 11,867 | 11,692 | 11,516 | |
Effect of dilutive share options and convertible securities | 69 | 51 | 60 | |
Diluted weighted average number of ordinary shares outstanding during the year | 11,936 | 11,743 | 11,576 | |
Share issued on conversion | 5,100 | |||
Ordinary share from discontinued operations basic | £ 0 | £ 0 | £ 10.5 | |
Ordinary share from discontinued operations dilutive | £ 0 | £ 0 | £ 10.4 | |
Dividend access share | £ (1,193) | |||
B Shares | ||||
Weighted average number of shares | ||||
Number of shares that were converted | 51,000 | 51,000 | 51,000 |
Financial Instruments - clas115
Financial Instruments - classification - Assets (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financial Instruments | |||
Assets | £ 738,056 | £ 798,656 | £ 815,408 |
Cash and balances at central banks | |||
Financial Instruments | |||
Financial Assets | 98,337 | 74,250 | |
Loans and advances to banks - reverse repos | |||
Financial Instruments | |||
Financial Assets | 13,997 | 12,860 | |
Loans and advances to banks - other | |||
Financial Instruments | |||
Financial Assets | 16,254 | 17,278 | |
Items in course of collection from other banks | 1,017 | 781 | |
Loans and advances to customers - reverse repos | |||
Financial Instruments | |||
Financial Assets | 26,735 | 28,927 | |
Loans and advances to customers - other | |||
Financial Instruments | |||
Financial Assets | 323,184 | 323,023 | |
Debt securities | |||
Financial Instruments | |||
Financial Assets | 78,933 | 72,522 | |
Equity shares | |||
Financial Instruments | |||
Financial Assets | 450 | 703 | |
Settlement balances | |||
Financial Instruments | |||
Financial Assets | 2,517 | 5,526 | |
Derivatives | |||
Financial Instruments | |||
Financial Assets | 160,843 | 246,981 | |
Other assets | |||
Financial Instruments | |||
Assets | 16,806 | 16,586 | |
Other assets | |||
Financial Instruments | |||
Assets | 16,806 | 16,586 | |
Other assets | Other assets | |||
Financial Instruments | |||
Assets | 16,806 | 16,586 | |
Held-for-trading | Financial Assets and Liabilities, Category | |||
Financial Instruments | |||
Financial Assets | 243,867 | 328,852 | |
Held-for-trading | Financial Assets and Liabilities, Category | Loans and advances to banks - reverse repos | |||
Financial Instruments | |||
Financial Assets | 11,845 | 11,120 | |
Held-for-trading | Financial Assets and Liabilities, Category | Loans and advances to banks - other | |||
Financial Instruments | |||
Financial Assets | 6,889 | 6,780 | |
Held-for-trading | Financial Assets and Liabilities, Category | Loans and advances to customers - reverse repos | |||
Financial Instruments | |||
Financial Assets | 24,427 | 26,586 | |
Held-for-trading | Financial Assets and Liabilities, Category | Loans and advances to customers - other | |||
Financial Instruments | |||
Financial Assets | 15,320 | 17,504 | |
Held-for-trading | Financial Assets and Liabilities, Category | Debt securities | |||
Financial Instruments | |||
Financial Assets | 27,481 | 24,504 | |
Held-for-trading | Financial Assets and Liabilities, Category | Equity shares | |||
Financial Instruments | |||
Financial Assets | 29 | 166 | |
Held-for-trading | Financial Assets and Liabilities, Category | Derivatives | |||
Financial Instruments | |||
Financial Assets | 157,876 | 242,192 | |
Designated as at fair value through profit or loss | Financial Assets and Liabilities, Category | |||
Financial Instruments | |||
Financial Assets | 190 | 281 | |
Designated as at fair value through profit or loss | Financial Assets and Liabilities, Category | Loans and advances to customers - other | |||
Financial Instruments | |||
Financial Assets | 56 | 82 | |
Designated as at fair value through profit or loss | Financial Assets and Liabilities, Category | Debt securities | |||
Financial Instruments | |||
Financial Assets | 27 | ||
Designated as at fair value through profit or loss | Financial Assets and Liabilities, Category | Equity shares | |||
Financial Instruments | |||
Financial Assets | 134 | 172 | |
Hedging derivatives | Financial Assets and Liabilities, Category | |||
Financial Instruments | |||
Financial Assets | 2,967 | 4,789 | |
Hedging derivatives | Financial Assets and Liabilities, Category | Derivatives | |||
Financial Instruments | |||
Financial Assets | 2,967 | 4,789 | |
Available-for-sale | Financial Assets and Liabilities, Category | |||
Financial Instruments | |||
Financial Assets | 43,968 | 39,619 | |
Available-for-sale | Financial Assets and Liabilities, Category | Debt securities | |||
Financial Instruments | |||
Financial Assets | 43,681 | 39,254 | |
Available-for-sale | Financial Assets and Liabilities, Category | Equity shares | |||
Financial Instruments | |||
Financial Assets | 287 | 365 | |
Loans and receivables | Financial Assets and Liabilities, Category | |||
Financial Instruments | |||
Financial Assets | 426,130 | 403,760 | |
Loans and receivables | Financial Assets and Liabilities, Category | Cash and balances at central banks | |||
Financial Instruments | |||
Financial Assets | 98,337 | 74,250 | |
Loans and receivables | Financial Assets and Liabilities, Category | Loans and advances to banks - reverse repos | |||
Financial Instruments | |||
Financial Assets | 2,152 | 1,740 | |
Loans and receivables | Financial Assets and Liabilities, Category | Loans and advances to banks - other | |||
Financial Instruments | |||
Financial Assets | 9,365 | 10,498 | |
Loans and receivables | Financial Assets and Liabilities, Category | Loans and advances to customers - reverse repos | |||
Financial Instruments | |||
Financial Assets | 2,308 | 2,341 | |
Loans and receivables | Financial Assets and Liabilities, Category | Loans and advances to customers - other | |||
Financial Instruments | |||
Financial Assets | 307,808 | 305,437 | |
Loans and receivables | Financial Assets and Liabilities, Category | Debt securities | |||
Financial Instruments | |||
Financial Assets | 3,643 | 3,968 | |
Loans and receivables | Financial Assets and Liabilities, Category | Settlement balances | |||
Financial Instruments | |||
Financial Assets | 2,517 | 5,526 | |
Held-to-maturity | Financial Assets and Liabilities, Category | |||
Financial Instruments | |||
Financial Assets | 4,128 | 4,769 | |
Held-to-maturity | Financial Assets and Liabilities, Category | Debt securities | |||
Financial Instruments | |||
Financial Assets | £ 4,128 | £ 4,769 |
Financial Instruments - clas116
Financial Instruments - classification - Liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financial Instruments | |||
Liabilities | £ 688,963 | £ 749,252 | £ 761,261 |
Deposits by banks - repos | |||
Financial Instruments | |||
Financial Liabilities | 7,419 | 5,239 | |
Deposits - other | |||
Financial Instruments | |||
Financial Liabilities | 39,479 | 33,317 | |
Items in course of transmission to other banks | 214 | 295 | |
Customer accounts - repos | |||
Financial Instruments | |||
Financial Liabilities | 31,002 | 27,096 | |
Customer accounts - other | |||
Financial Instruments | |||
Financial Liabilities | 367,034 | 353,872 | |
Increase of carrying amount of other customer accounts designated as at fair value through profit or loss | 114 | 155 | |
Debt securities in issue | |||
Financial Instruments | |||
Financial Liabilities | 30,559 | 27,245 | |
Debt securities in issue | Bonds and Medium Term Notes | |||
Financial Instruments | |||
Financial Liabilities | 25,922 | 24,037 | |
Debt securities in issue | Certificates of Deposit and Other Commercial Paper | |||
Financial Instruments | |||
Financial Liabilities | 4,637 | 3,208 | |
Settlement balances | |||
Financial Instruments | |||
Financial Liabilities | 2,844 | 3,645 | |
Short positions | |||
Financial Instruments | |||
Financial Liabilities | 28,527 | 22,077 | |
Derivatives | |||
Financial Instruments | |||
Financial Liabilities | 154,506 | 236,475 | |
Subordinated liabilities | |||
Financial Instruments | |||
Financial Liabilities | 12,722 | 19,419 | |
Other liabilities | |||
Financial Instruments | |||
Liabilities | 14,871 | 20,867 | |
Held-for-trading | Debt securities in issue | |||
Financial Instruments | |||
Financial Liabilities | 1,100 | 1,600 | |
Designated as at fair value through profit or loss | Debt securities in issue | |||
Financial Instruments | |||
Financial Liabilities | 3,400 | 4,600 | |
Designated as at fair value through profit or loss | Subordinated liabilities | |||
Financial Instruments | |||
Financial Liabilities | 900 | 1,000 | |
Financial Assets and Liabilities, Category | Held-for-trading | |||
Financial Instruments | |||
Financial Liabilities | 232,917 | 316,954 | |
Financial Assets and Liabilities, Category | Held-for-trading | Deposits by banks - repos | |||
Financial Instruments | |||
Financial Liabilities | 4,030 | 4,125 | |
Financial Assets and Liabilities, Category | Held-for-trading | Deposits - other | |||
Financial Instruments | |||
Financial Liabilities | 12,472 | 20,756 | |
Financial Assets and Liabilities, Category | Held-for-trading | Customer accounts - repos | |||
Financial Instruments | |||
Financial Liabilities | 24,333 | 23,186 | |
Financial Assets and Liabilities, Category | Held-for-trading | Customer accounts - other | |||
Financial Instruments | |||
Financial Liabilities | 11,513 | 12,778 | |
Financial Assets and Liabilities, Category | Held-for-trading | Debt securities in issue | |||
Financial Instruments | |||
Financial Liabilities | 1,107 | 1,614 | |
Financial Assets and Liabilities, Category | Held-for-trading | Short positions | |||
Financial Instruments | |||
Financial Liabilities | 28,527 | 22,077 | |
Financial Assets and Liabilities, Category | Held-for-trading | Derivatives | |||
Financial Instruments | |||
Financial Liabilities | 150,935 | 232,418 | |
Financial Assets and Liabilities, Category | Designated as at fair value through profit or loss | |||
Financial Instruments | |||
Financial Liabilities | 5,216 | 7,082 | |
Financial Assets and Liabilities, Category | Designated as at fair value through profit or loss | Customer accounts - other | |||
Financial Instruments | |||
Financial Liabilities | 874 | 1,506 | |
Financial Assets and Liabilities, Category | Designated as at fair value through profit or loss | Debt securities in issue | |||
Financial Instruments | |||
Financial Liabilities | 3,403 | 4,621 | |
Financial Assets and Liabilities, Category | Designated as at fair value through profit or loss | Subordinated liabilities | |||
Financial Instruments | |||
Financial Liabilities | 939 | 955 | |
Financial Assets and Liabilities, Category | Hedging derivatives | |||
Financial Instruments | |||
Financial Liabilities | 3,571 | 4,057 | |
Financial Assets and Liabilities, Category | Hedging derivatives | Derivatives | |||
Financial Instruments | |||
Financial Liabilities | 3,571 | 4,057 | |
Financial Assets and Liabilities, Category | Amortised cost | |||
Financial Instruments | |||
Liabilities | 434,569 | 402,302 | |
Financial Assets and Liabilities, Category | Amortised cost | Deposits by banks - repos | |||
Financial Instruments | |||
Financial Liabilities | 3,389 | 1,114 | |
Financial Assets and Liabilities, Category | Amortised cost | Deposits - other | |||
Financial Instruments | |||
Financial Liabilities | 27,007 | 12,561 | |
Financial Assets and Liabilities, Category | Amortised cost | Customer accounts - repos | |||
Financial Instruments | |||
Financial Liabilities | 6,669 | 3,910 | |
Financial Assets and Liabilities, Category | Amortised cost | Customer accounts - other | |||
Financial Instruments | |||
Financial Liabilities | 354,647 | 339,588 | |
Financial Assets and Liabilities, Category | Amortised cost | Debt securities in issue | |||
Financial Instruments | |||
Financial Liabilities | 26,049 | 21,010 | |
Financial Assets and Liabilities, Category | Amortised cost | Settlement balances | |||
Financial Instruments | |||
Financial Liabilities | 2,844 | 3,645 | |
Financial Assets and Liabilities, Category | Amortised cost | Subordinated liabilities | |||
Financial Instruments | |||
Financial Liabilities | 11,783 | 18,464 | |
Financial Assets and Liabilities, Category | Amortised cost | Other liabilities | |||
Financial Instruments | |||
Liabilities | 2,181 | 2,010 | |
Other liabilities | |||
Financial Instruments | |||
Liabilities | 12,690 | 18,857 | |
Other liabilities | Other liabilities | |||
Financial Instruments | |||
Liabilities | £ 12,690 | £ 18,857 |
Financial Instruments - clas117
Financial Instruments - classification - Gains and losses (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Financial Instruments | |||
Gains on financial assets/liabilities designated as at fair value through profit or loss | £ 60 | £ 13 | £ 388 |
Loss on disposal or settlement of loans and receivables | £ (35) | £ (277) | £ (558) |
Financial Instruments - clas118
Financial Instruments - classification - Offsetable assets (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Offsetable instruments | ||
Gross | £ 256,456 | £ 365,844 |
IFRS offset | (62,840) | (84,937) |
Balance sheet | 193,616 | 280,907 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (128,616) | (198,340) |
Cash collateral | (20,311) | (28,742) |
Other financial collateral | (40,496) | (45,373) |
Net amount after the effect of netting arrangements and related collateral | 4,193 | 8,452 |
Instruments outside netting arrangements | 333,660 | 336,410 |
Balance sheet total | 527,276 | 617,317 |
Derivatives | ||
Offsetable instruments | ||
Gross | 175,670 | 293,728 |
IFRS offset | (17,088) | (51,080) |
Balance sheet | 158,582 | 242,648 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (128,287) | (197,288) |
Cash collateral | (20,311) | (28,742) |
Other financial collateral | (5,850) | (8,435) |
Net amount after the effect of netting arrangements and related collateral | 4,134 | 8,183 |
Instruments outside netting arrangements | 2,261 | 4,333 |
Balance sheet total | 160,843 | 246,981 |
Reverse repos | ||
Offsetable instruments | ||
Gross | 78,991 | 69,805 |
IFRS offset | (43,974) | (31,728) |
Balance sheet | 35,017 | 38,077 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (329) | (1,052) |
Other financial collateral | (34,646) | (36,938) |
Net amount after the effect of netting arrangements and related collateral | 42 | 87 |
Instruments outside netting arrangements | 5,715 | 3,710 |
Balance sheet total | 40,732 | 41,787 |
Loans and advances to customers | ||
Offsetable instruments | ||
Gross | 1,110 | 600 |
IFRS offset | (1,110) | (600) |
Offsetable potential not recognised by IFRS | ||
Instruments outside netting arrangements | 323,184 | 323,023 |
Balance sheet total | 323,184 | 323,023 |
Settlement balances | ||
Offsetable instruments | ||
Gross | 685 | 1,711 |
IFRS offset | (668) | (1,529) |
Balance sheet | 17 | 182 |
Offsetable potential not recognised by IFRS | ||
Net amount after the effect of netting arrangements and related collateral | 17 | 182 |
Instruments outside netting arrangements | 2,500 | 5,344 |
Balance sheet total | £ 2,517 | £ 5,526 |
Financial Instruments - clas119
Financial Instruments - classification - Offsetable liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Offsetable instruments | ||
Gross | £ 252,754 | £ 348,780 |
IFRS offset | (62,840) | (84,937) |
Balance sheet | 189,914 | 263,843 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (128,616) | (198,340) |
Cash collateral | (18,035) | (20,417) |
Other financial collateral | (39,737) | (40,008) |
Net amount after the effect of netting arrangements and related collateral | 3,526 | 5,078 |
Instruments outside netting arrangements | 372,891 | 362,484 |
Balance sheet total | 562,805 | 626,327 |
Derivatives | ||
Offsetable instruments | ||
Gross | 170,405 | 284,255 |
IFRS offset | (17,557) | (50,574) |
Balance sheet | 152,848 | 233,681 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (128,287) | (197,288) |
Cash collateral | (18,035) | (20,417) |
Other financial collateral | (3,952) | (11,048) |
Net amount after the effect of netting arrangements and related collateral | 2,574 | 4,928 |
Instruments outside netting arrangements | 1,658 | 2,794 |
Balance sheet total | 154,506 | 236,475 |
Repos | ||
Offsetable instruments | ||
Gross | 80,088 | 61,742 |
IFRS offset | (43,974) | (31,728) |
Balance sheet | 36,114 | 30,014 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (329) | (1,052) |
Other financial collateral | (35,785) | (28,960) |
Net amount after the effect of netting arrangements and related collateral | 2 | |
Instruments outside netting arrangements | 2,307 | 2,321 |
Balance sheet total | 38,421 | 32,335 |
Customer accounts | ||
Offsetable instruments | ||
Gross | 641 | 1,106 |
IFRS offset | (641) | (1,106) |
Offsetable potential not recognised by IFRS | ||
Instruments outside netting arrangements | 367,034 | 353,872 |
Balance sheet total | 367,034 | 353,872 |
Settlement balances | ||
Offsetable instruments | ||
Gross | 1,620 | 1,677 |
IFRS offset | (668) | (1,529) |
Balance sheet | 952 | 148 |
Offsetable potential not recognised by IFRS | ||
Net amount after the effect of netting arrangements and related collateral | 952 | 148 |
Instruments outside netting arrangements | 1,892 | 3,497 |
Balance sheet total | £ 2,844 | £ 3,645 |
Financial Instruments - valu120
Financial Instruments - valuation - Initial Recognition (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Amounts Deferred Upon Recognition | ||
Net gains carried forward | £ 56 | £ 72 |
Net gains deferred | 64 | 27 |
Net gains recognized in the income statement | £ 80 | £ 48 |
Financial Instruments - valu121
Financial Instruments - valuation - OCA (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives, Debt and Subordinated liabilities | ||
Financial Instruments | ||
Cumulative own credit adjustment | £ 32 | £ 237 |
Debt securities in issue | ||
Financial Instruments | ||
Financial Liabilities | £ 30,559 | £ 27,245 |
Debt securities in issue | Secondary Debt Issuance | ||
Financial Instruments | ||
Adjustment to interest rate basis at five years level | 52 | |
Adjustment to interest rate basis | 0.10% | 0.62% |
Basis point spread period | 5 years | 5 years |
Subordinated liabilities | ||
Financial Instruments | ||
Financial Liabilities | £ 12,722 | £ 19,419 |
Adjustment to interest rate basis | 1.69% | 2.81% |
Basis point spread period | 5 years | 5 years |
Derivatives | ||
Financial Instruments | ||
Cumulative own credit adjustment | £ 81 | |
Financial Liabilities | £ 154,506 | £ 236,475 |
Debt valuation adjustments (DVA) | £ 0 | |
Derivatives | Credit Default Swap | ||
Financial Instruments | ||
Adjustment to interest rate basis | 0.75% | 1.25% |
Basis point spread period | 5 years | 5 years |
Held-for-trading | Debt securities in issue | ||
Financial Instruments | ||
Cumulative own credit adjustment | £ (47) | £ (34) |
Financial Liabilities | 1,100 | 1,600 |
Designated as at fair value through profit or loss | Debt securities in issue | ||
Financial Instruments | ||
Cumulative own credit adjustment | (37) | (6) |
Financial Liabilities | 3,400 | 4,600 |
Designated as at fair value through profit or loss | Subordinated liabilities | ||
Financial Instruments | ||
Cumulative own credit adjustment | 116 | 196 |
Financial Liabilities | £ 900 | £ 1,000 |
Financial Instruments - valu122
Financial Instruments - valuation - FV of Assets (Details) - Recurring - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair value of assets | |||
Assets | £ 291,000 | £ 373,500 | |
Proportion (as a percent) | 100.00% | 100.00% | |
Sensitivity favourable | £ 210 | £ 360 | |
Sensitivity unfavourable | (210) | (320) | |
Loans and advances | |||
Fair value of assets | |||
Assets | 58,500 | 62,100 | |
Sensitivity favourable | 50 | ||
Sensitivity unfavourable | (50) | ||
Debt securities | |||
Fair value of assets | |||
Assets | 71,200 | 63,800 | |
Sensitivity favourable | 30 | 70 | |
Sensitivity unfavourable | (10) | (20) | |
Debt securities | Available-for-sale | |||
Fair value of assets | |||
Assets | 43,700 | 39,200 | |
Sensitivity favourable | 20 | ||
Sensitivity unfavourable | (10) | ||
Equity shares | |||
Fair value of assets | |||
Assets | 500 | 700 | |
Sensitivity favourable | 20 | 40 | |
Sensitivity unfavourable | (30) | (50) | |
Equity shares | Available-for-sale | |||
Fair value of assets | |||
Assets | 300 | 400 | |
Sensitivity favourable | 20 | 30 | |
Sensitivity unfavourable | (20) | (40) | |
Derivatives | |||
Fair value of assets | |||
Assets | 160,800 | 246,900 | |
Sensitivity favourable | 160 | 200 | |
Sensitivity unfavourable | (170) | (200) | |
Level 1 | |||
Fair value of assets | |||
Assets | £ 56,800 | £ 53,900 | |
Proportion (as a percent) | 19.60% | 14.40% | |
Level 1 | Debt securities | |||
Fair value of assets | |||
Assets | £ 56,800 | £ 53,800 | |
Level 1 | Debt securities | Available-for-sale | |||
Fair value of assets | |||
Assets | 37,200 | 35,100 | |
Level 1 | Equity shares | |||
Fair value of assets | |||
Assets | 100 | ||
Level 2 | |||
Fair value of assets | |||
Assets | £ 230,900 | £ 315,100 | |
Proportion (as a percent) | 79.30% | 84.40% | |
Level 2 | Loans and advances | |||
Fair value of assets | |||
Assets | £ 58,300 | £ 61,500 | |
Level 2 | Debt securities | |||
Fair value of assets | |||
Assets | 13,200 | 9,200 | |
Level 2 | Debt securities | Available-for-sale | |||
Fair value of assets | |||
Assets | 6,200 | 4,000 | |
Level 2 | Equity shares | |||
Fair value of assets | |||
Assets | 300 | 200 | |
Level 2 | Equity shares | Available-for-sale | |||
Fair value of assets | |||
Assets | 100 | 100 | |
Level 2 | Derivatives | |||
Fair value of assets | |||
Assets | 159,100 | 244,200 | |
Level 3 | |||
Fair value of assets | |||
Assets | £ 3,288 | £ 4,537 | £ 3,917 |
Proportion (as a percent) | 1.10% | 1.20% | |
Level 3 | Available-for-sale | |||
Fair value of assets | |||
Assets | £ 498 | £ 426 | £ 765 |
Level 3 | Loans and advances | |||
Fair value of assets | |||
Assets | 200 | 600 | |
Level 3 | Debt securities | |||
Fair value of assets | |||
Assets | 1,200 | 800 | |
Level 3 | Debt securities | Available-for-sale | |||
Fair value of assets | |||
Assets | 300 | 100 | |
Level 3 | Equity shares | |||
Fair value of assets | |||
Assets | 200 | 400 | |
Level 3 | Equity shares | Available-for-sale | |||
Fair value of assets | |||
Assets | 200 | 300 | |
Level 3 | Derivatives | |||
Fair value of assets | |||
Assets | £ 1,700 | £ 2,700 |
Financial Instruments - valu123
Financial Instruments - valuation - FV of Liabilities (Details) - Recurring - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair value of liabilities | |||
Liabilities | £ 241,700 | £ 328,100 | |
Proportion (as a percent) | 100.00% | 100.00% | |
Sensitivity favourable | £ 170 | £ 180 | |
Sensitivity unfavourable | (170) | (170) | |
Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 53,200 | 62,400 | |
Sensitivity favourable | 20 | 20 | |
Sensitivity unfavourable | (20) | (10) | |
Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 4,500 | 6,200 | |
Sensitivity favourable | 10 | 40 | |
Sensitivity unfavourable | (10) | (40) | |
Short positions | |||
Fair value of liabilities | |||
Liabilities | 28,500 | 22,100 | |
Derivatives | |||
Fair value of liabilities | |||
Liabilities | 154,600 | 236,400 | |
Sensitivity favourable | 140 | 120 | |
Sensitivity unfavourable | (140) | (120) | |
Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 900 | 1,000 | |
Level 1 | |||
Fair value of liabilities | |||
Liabilities | £ 23,700 | £ 19,700 | |
Proportion (as a percent) | 9.80% | 6.00% | |
Level 1 | Short positions | |||
Fair value of liabilities | |||
Liabilities | £ 23,700 | £ 19,700 | |
Level 2 | |||
Fair value of liabilities | |||
Liabilities | £ 215,800 | £ 305,400 | |
Proportion (as a percent) | 89.30% | 93.10% | |
Level 2 | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | £ 53,000 | £ 62,000 | |
Level 2 | Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 4,200 | 5,600 | |
Level 2 | Short positions | |||
Fair value of liabilities | |||
Liabilities | 4,800 | 2,400 | |
Level 2 | Derivatives | |||
Fair value of liabilities | |||
Liabilities | 152,900 | 234,400 | |
Level 2 | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 900 | 1,000 | |
Level 3 | |||
Fair value of liabilities | |||
Liabilities | £ 2,185 | £ 2,997 | £ 2,716 |
Proportion (as a percent) | 0.90% | 0.90% | |
Level 3 | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | £ 200 | £ 400 | |
Level 3 | Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 300 | 600 | |
Level 3 | Derivatives | |||
Fair value of liabilities | |||
Liabilities | £ 1,700 | £ 2,000 |
Financial Instruments - valu124
Financial Instruments - valuation - Valuation techniques (Details) | 12 Months Ended | ||||
Dec. 31, 2017JPY (¥) | Dec. 31, 2017EUR (€) | Dec. 31, 2017GBP (£) | Dec. 31, 2016GBP (£) | Dec. 31, 2015GBP (£) | |
Unobservable Inputs | |||||
Specified target level of certainty for assumptions of unobservable inputs | 90.00% | 90.00% | 90.00% | ||
Recurring | |||||
Unobservable Inputs | |||||
Assets | £ 291,000,000,000 | £ 373,500,000,000 | |||
Liabilities | £ 241,700,000,000 | 328,100,000,000 | |||
Loans and advances | Recurring | Minimum | |||||
Unobservable Inputs | |||||
Price (as percent) | 0.00% | 0.00% | 0.00% | ||
Loans and advances | Recurring | Maximum | |||||
Unobservable Inputs | |||||
Price (as percent) | 100.53% | 100.53% | 100.53% | ||
Debt securities | Recurring | Minimum | |||||
Unobservable Inputs | |||||
Price (as percent) | 99.94% | 99.94% | 99.94% | ||
Price | £ 0 | ||||
Debt securities | Recurring | Maximum | |||||
Unobservable Inputs | |||||
Price (as percent) | 101.84% | 101.84% | 101.84% | ||
Price | £ 369.81 | ||||
Equity shares | Recurring | Minimum | |||||
Unobservable Inputs | |||||
Fund NAV (as percent) | 80.00% | 80.00% | 80.00% | ||
Price | £ 0.164 | ||||
Discount factor | 9.00% | 9.00% | 9.00% | ||
Equity shares | Recurring | Maximum | |||||
Unobservable Inputs | |||||
Fund NAV (as percent) | 120.00% | 120.00% | 120.00% | ||
Price | £ 585,066 | ||||
Discount factor | 13.00% | 13.00% | 13.00% | ||
Customer accounts | Recurring | Minimum | |||||
Unobservable Inputs | |||||
Interest rate delta | (0.38%) | (0.38%) | (0.38%) | ||
Correlation | (29.00%) | (29.00%) | (29.00%) | ||
Customer accounts | Recurring | Maximum | |||||
Unobservable Inputs | |||||
Interest rate delta | 2.61% | 2.61% | 2.61% | ||
Correlation | 86.05% | 86.05% | 86.05% | ||
Debt securities in issue | Recurring | Minimum | |||||
Unobservable Inputs | |||||
Fund NAV | £ 0.202 | ||||
Price | ¥ | ¥ 56.77 | ||||
Debt securities in issue | Recurring | Maximum | |||||
Unobservable Inputs | |||||
Fund NAV | £ 977.24 | ||||
Price | € | € 148.68 | ||||
Credit Default Swap | Recurring | Minimum | |||||
Unobservable Inputs | |||||
Credit spreads | 0.00% | 0.00% | 0.00% | ||
Correlation | (50.00%) | (50.00%) | (50.00%) | ||
Volatility - assets/liabilities | 38.00% | 38.00% | 38.00% | ||
Upfront points | 0.00% | 0.00% | 0.00% | ||
Credit Default Swap | Recurring | Maximum | |||||
Unobservable Inputs | |||||
Credit spreads | 6.50% | 6.50% | 6.50% | ||
Correlation | 80.00% | 80.00% | 80.00% | ||
Volatility - assets/liabilities | 80.00% | 80.00% | 80.00% | ||
Upfront points | 99.00% | 99.00% | 99.00% | ||
Interest and foreign exchange contracts | Recurring | Minimum | |||||
Unobservable Inputs | |||||
Correlation | (75.00%) | (75.00%) | (75.00%) | ||
Recovery rate | 10.00% | 10.00% | 10.00% | ||
Volatility - liabilities | 0.00% | 0.00% | 0.00% | ||
Interest and foreign exchange contracts | Recurring | Maximum | |||||
Unobservable Inputs | |||||
Correlation | 100.00% | 100.00% | 100.00% | ||
Recovery rate | 40.00% | 40.00% | 40.00% | ||
Volatility - liabilities | 292.00% | 292.00% | 292.00% | ||
Equity | Recurring | Minimum | |||||
Unobservable Inputs | |||||
Correlation | (57.00%) | (57.00%) | (57.00%) | ||
Forward | 146.00% | 146.00% | 146.00% | ||
Volatility - liabilities | 7.00% | 7.00% | 7.00% | ||
Equity | Recurring | Maximum | |||||
Unobservable Inputs | |||||
Correlation | 95.00% | 95.00% | 95.00% | ||
Forward | 189.00% | 189.00% | 189.00% | ||
Volatility - liabilities | 11.00% | 11.00% | 11.00% | ||
Level 3 | Recurring | |||||
Unobservable Inputs | |||||
Assets | £ 3,288,000,000 | 4,537,000,000 | £ 3,917,000,000 | ||
Liabilities | 2,185,000,000 | £ 2,997,000,000 | £ 2,716,000,000 | ||
Level 3 | Loans and advances | Recurring | |||||
Unobservable Inputs | |||||
Assets | 200,000,000 | ||||
Level 3 | Debt securities | Recurring | |||||
Unobservable Inputs | |||||
Assets | 1,200,000,000 | ||||
Level 3 | Equity shares | Recurring | |||||
Unobservable Inputs | |||||
Assets | 200,000,000 | ||||
Level 3 | Customer accounts | Recurring | |||||
Unobservable Inputs | |||||
Liabilities | 200,000,000 | ||||
Level 3 | Debt securities in issue | Recurring | |||||
Unobservable Inputs | |||||
Liabilities | 300,000,000 | ||||
Level 3 | Derivatives | Recurring | |||||
Unobservable Inputs | |||||
Assets | 1,700,000,000 | ||||
Liabilities | 1,700,000,000 | ||||
Level 3 | Credit Default Swap | Recurring | |||||
Unobservable Inputs | |||||
Assets | 200,000,000 | ||||
Liabilities | 100,000,000 | ||||
Level 3 | Interest and foreign exchange contracts | Recurring | |||||
Unobservable Inputs | |||||
Assets | 1,400,000,000 | ||||
Liabilities | 1,500,000,000 | ||||
Level 3 | Equity | Recurring | |||||
Unobservable Inputs | |||||
Assets | 100,000,000 | ||||
Liabilities | £ 100,000,000 |
Financial Instruments - valu125
Financial Instruments - valuation - Level 3 Assets (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Level 3 | Discontinued operations | ||
Movement in level 3 assets | ||
Amount recorded in the income statement - discontinued operations | £ 0 | £ 0 |
Level 3 | Other | Continuing operations | ||
Movement in level 3 assets | ||
Amount recorded in the income statement | 9 | 4 |
Held-for-trading | Level 3 | ||
Movement in level 3 assets | ||
Amount recorded in the income statement | 240 | 45 |
Recurring | ||
Movement in level 3 assets | ||
Assets at beginning of period | 373,500 | |
Assets at end of period | 291,000 | 373,500 |
Recurring | Level 3 | ||
Movement in level 3 assets | ||
Assets at beginning of period | 4,537 | 3,917 |
Amount recorded in the income statement | (572) | (119) |
Amount recorded in the statement of comprehensive income | 2 | 71 |
Level 3 transfers in | 994 | 2,164 |
Level 3 transfers out | (1,018) | (1,133) |
Issuances | 371 | 3 |
Purchases | 1,808 | 1,340 |
Settlements | (161) | (758) |
Sales | (2,655) | (1,006) |
Foreign exchange and other adjustments | (18) | 58 |
Assets at end of period | 3,288 | 4,537 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | (80) | 40 |
Amounts recorded in the income statement in respect of balances held at year end - realised | 276 | 278 |
Recurring | Designated as at fair value through profit or loss | Level 3 | ||
Movement in level 3 assets | ||
Assets at beginning of period | 4,111 | 3,152 |
Amount recorded in the income statement | (654) | (124) |
Level 3 transfers in | 719 | 2,135 |
Level 3 transfers out | (1,015) | (1,020) |
Issuances | 371 | 3 |
Purchases | 1,789 | 1,298 |
Settlements | (161) | (758) |
Sales | (2,354) | (624) |
Foreign exchange and other adjustments | (16) | 49 |
Assets at end of period | 2,790 | 4,111 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | (84) | 29 |
Amounts recorded in the income statement in respect of balances held at year end - realised | 276 | 282 |
Recurring | Available-for-sale | Level 3 | ||
Movement in level 3 assets | ||
Assets at beginning of period | 426 | 765 |
Amount recorded in the income statement | 82 | 5 |
Amount recorded in the statement of comprehensive income | 2 | 71 |
Level 3 transfers in | 275 | 29 |
Level 3 transfers out | (3) | (113) |
Purchases | 19 | 42 |
Sales | (301) | (382) |
Foreign exchange and other adjustments | (2) | 9 |
Assets at end of period | 498 | 426 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | £ 4 | 11 |
Amounts recorded in the income statement in respect of balances held at year end - realised | £ (4) |
Financial Instruments - valu126
Financial Instruments - valuation - Level 3 Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in level 3 liabilities | |||
Amount recorded in the income statement | £ (81) | £ 87 | £ 252 |
Recurring | |||
Movement in level 3 liabilities | |||
Liabilities at beginning of period | 328,100 | ||
Liabilities at end of period | 241,700 | 328,100 | |
Recurring | Level 3 | |||
Movement in level 3 liabilities | |||
Liabilities at beginning of period | 2,997 | 2,716 | |
Amount recorded in the income statement | (341) | (70) | |
Level 3 transfers in | 530 | 1,408 | |
Level 3 transfers out | (672) | (1,052) | |
Issuances | 35 | ||
Purchases | 412 | 600 | |
Settlements | (423) | (610) | |
Sales | (323) | (87) | |
Foreign exchange and other adjustments | 5 | 57 | |
Liabilities at end of period | 2,185 | 2,997 | £ 2,716 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | 595 | 13 | |
Amounts recorded in the income statement in respect of balances held at year end - realised | £ (100) | £ (34) |
Financial Instruments - valu127
Financial Instruments - valuation - Assets at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and balances at central banks | ||
Fair value of assets | ||
Carrying value, Financial assets | £ 98,337 | £ 74,250 |
Cash and balances at central banks | Items where fair values approximates carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 98,300 | 74,300 |
Loans and advances to banks | ||
Fair value of assets | ||
Carrying value, Financial assets | 30,251 | 30,138 |
Loans and advances to banks | Items where fair values approximates carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 1,000 | 800 |
Loans and advances to banks | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 10,500 | 11,400 |
Loans and advances to banks | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 10,500 | 11,500 |
Loans and advances to banks | At fair value | Level 2 | ||
Fair value of assets | ||
Fair value, Financial assets | 9,100 | 3,300 |
Loans and advances to banks | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 1,400 | 8,200 |
Loans and advances to customers | ||
Fair value of assets | ||
Carrying value, Financial assets | 349,919 | 351,950 |
Loans and advances to customers | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 310,100 | 307,800 |
Loans and advances to customers | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 306,800 | 306,000 |
Loans and advances to customers | At fair value | Level 2 | ||
Fair value of assets | ||
Fair value, Financial assets | 1,300 | 900 |
Loans and advances to customers | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 305,500 | 305,100 |
Loans and advances to customers - other | ||
Fair value of assets | ||
Carrying value, Financial assets | 323,184 | 323,023 |
Debt securities | ||
Fair value of assets | ||
Carrying value, Financial assets | 78,933 | 72,522 |
Debt securities | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 7,800 | 8,700 |
Debt securities | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 7,900 | 8,800 |
Debt securities | At fair value | Level 1 | ||
Fair value of assets | ||
Fair value, Financial assets | 4,300 | 5,000 |
Debt securities | At fair value | Level 2 | ||
Fair value of assets | ||
Fair value, Financial assets | 1,500 | 300 |
Debt securities | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 2,100 | 3,500 |
Settlement balances | ||
Fair value of assets | ||
Carrying value, Financial assets | 2,517 | 5,526 |
Settlement balances | Items where fair values approximates carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 2,500 | 5,500 |
Performing Financial Instruments | Loans and advances to customers | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 303,900 | 300,400 |
Performing Financial Instruments | Loans and advances to customers | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 300,800 | 298,800 |
Performing Financial Instruments | Loans and advances to customers | At fair value | Level 2 | ||
Fair value of assets | ||
Fair value, Financial assets | 1,300 | 900 |
Performing Financial Instruments | Loans and advances to customers | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 299,500 | 297,900 |
Nonperforming Financial Instruments | Loans and advances to customers | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 6,200 | 7,400 |
Nonperforming Financial Instruments | Loans and advances to customers | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 6,000 | 7,200 |
Nonperforming Financial Instruments | Loans and advances to customers | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 6,000 | 7,200 |
UK Personal & Business Banking | Loans and advances to customers, mortgages | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 136,600 | 137,500 |
UK Personal & Business Banking | Loans and advances to customers, mortgages | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 136,600 | 138,400 |
UK Personal & Business Banking | Loans and advances to customers, mortgages | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 136,600 | 138,400 |
UK Personal & Business Banking | Loans and advances to customers - other | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 25,100 | 15,200 |
UK Personal & Business Banking | Loans and advances to customers - other | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 24,700 | 14,700 |
UK Personal & Business Banking | Loans and advances to customers - other | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 24,700 | 14,700 |
Ulster Bank RoI | Loans and advances to customers, mortgages | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 14,500 | 14,400 |
Ulster Bank RoI | Loans and advances to customers, mortgages | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 12,800 | 12,300 |
Ulster Bank RoI | Loans and advances to customers, mortgages | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 12,800 | 12,300 |
Ulster Bank RoI | Loans and advances to customers - other | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 5,000 | 4,500 |
Ulster Bank RoI | Loans and advances to customers - other | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 5,000 | 4,500 |
Ulster Bank RoI | Loans and advances to customers - other | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 5,000 | 4,500 |
Commercial Banking | Loans and advances to customers, commercial real estate | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 15,900 | 16,600 |
Commercial Banking | Loans and advances to customers, commercial real estate | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 15,700 | 16,400 |
Commercial Banking | Loans and advances to customers, commercial real estate | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 15,700 | 16,400 |
Commercial Banking | Loans and advances to customers - other | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 81,100 | 83,700 |
Commercial Banking | Loans and advances to customers - other | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 80,200 | 84,400 |
Commercial Banking | Loans and advances to customers - other | At fair value | Level 2 | ||
Fair value of assets | ||
Fair value, Financial assets | 100 | 100 |
Commercial Banking | Loans and advances to customers - other | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 80,100 | 84,300 |
Private Banking | Loans and advances to customers | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 13,500 | 12,200 |
Private Banking | Loans and advances to customers | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 13,400 | 12,200 |
Private Banking | Loans and advances to customers | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 13,400 | 12,200 |
RBS International | Loans and advances to customers | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 8,700 | 8,500 |
RBS International | Loans and advances to customers | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 8,600 | 8,300 |
RBS International | Loans and advances to customers | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 8,600 | 8,300 |
NatWest Markets | Loans and advances to customers | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 9,600 | 13,100 |
NatWest Markets | Loans and advances to customers | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 9,700 | 12,700 |
NatWest Markets | Loans and advances to customers | At fair value | Level 2 | ||
Fair value of assets | ||
Fair value, Financial assets | 1,200 | 800 |
NatWest Markets | Loans and advances to customers | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 8,500 | 11,900 |
Central Items and other | Loans and advances to customers | Carrying value | ||
Fair value of assets | ||
Carrying value, Financial assets | 100 | 2,100 |
Central Items and other | Loans and advances to customers | At fair value | ||
Fair value of assets | ||
Fair value, Financial assets | 100 | 2,100 |
Central Items and other | Loans and advances to customers | At fair value | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | £ 100 | £ 2,100 |
Financial Instruments - valu128
Financial Instruments - valuation - Liabilities at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deposits by banks | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | £ 46,898 | £ 38,556 |
Customer accounts | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 398,036 | 380,968 |
Debt securities in issue | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 30,559 | 27,245 |
Settlement balances | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 2,844 | 3,645 |
Subordinated liabilities | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 12,722 | 19,419 |
Items where fair values approximates carrying value | Deposits by banks | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 4,500 | 4,300 |
Items where fair values approximates carrying value | Customer accounts | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 321,500 | 308,400 |
Items where fair values approximates carrying value | Settlement balances | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 2,800 | 3,600 |
Items where fair values approximates carrying value | Notes in circulation | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 2,200 | 2,000 |
Carrying value | Deposits by banks | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 25,900 | 9,400 |
Carrying value | Customer accounts | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 39,800 | 35,100 |
Carrying value | Debt securities in issue | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 26,000 | 21,000 |
Carrying value | Subordinated liabilities | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 11.8 | 18,500 |
At fair value | Deposits by banks | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 26,000 | 9,500 |
At fair value | Customer accounts | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 39,900 | 35,200 |
At fair value | Debt securities in issue | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 27,300 | 21,600 |
At fair value | Subordinated liabilities | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 12,600 | 18,500 |
At fair value | Level 2 | Deposits by banks | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 22,400 | 6,200 |
At fair value | Level 2 | Customer accounts | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 12,900 | 10,900 |
At fair value | Level 2 | Debt securities in issue | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 22,200 | 17,100 |
At fair value | Level 2 | Subordinated liabilities | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 12,500 | 18,400 |
At fair value | Level 3 | Deposits by banks | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 3,600 | 3,300 |
At fair value | Level 3 | Customer accounts | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 27,000 | 24,300 |
At fair value | Level 3 | Debt securities in issue | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 5,100 | 4,500 |
At fair value | Level 3 | Subordinated liabilities | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | £ 100 | £ 100 |
Financial Instruments - matu129
Financial Instruments - maturity analysis - Residual Maturity (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deposits by banks | ||
Financial Instruments | ||
Financial Liabilities | £ 46,898 | £ 38,556 |
Customer accounts | ||
Financial Instruments | ||
Financial Liabilities | 398,036 | 380,968 |
Debt securities in issue | ||
Financial Instruments | ||
Financial Liabilities | 30,559 | 27,245 |
Settlement balances and short positions | ||
Financial Instruments | ||
Financial Liabilities | 31,371 | 25,722 |
Derivatives | ||
Financial Instruments | ||
Financial Liabilities | 154,506 | 236,475 |
Subordinated liabilities | ||
Financial Instruments | ||
Financial Liabilities | 12,722 | 19,419 |
0-1 years | Deposits by banks | ||
Financial Instruments | ||
Financial Liabilities | 27,303 | 32,043 |
0-1 years | Customer accounts | ||
Financial Instruments | ||
Financial Liabilities | 394,587 | 377,328 |
0-1 years | Debt securities in issue | ||
Financial Instruments | ||
Financial Liabilities | 7,940 | 6,689 |
0-1 years | Settlement balances and short positions | ||
Financial Instruments | ||
Financial Liabilities | 4,938 | 5,010 |
0-1 years | Derivatives | ||
Financial Instruments | ||
Financial Liabilities | 32,212 | 60,878 |
0-1 years | Subordinated liabilities | ||
Financial Instruments | ||
Financial Liabilities | 2,383 | 1,062 |
2019 and beyond | Deposits by banks | ||
Financial Instruments | ||
Financial Liabilities | 19,595 | 6,513 |
2019 and beyond | Customer accounts | ||
Financial Instruments | ||
Financial Liabilities | 3,449 | 3,640 |
2019 and beyond | Debt securities in issue | ||
Financial Instruments | ||
Financial Liabilities | 22,619 | 20,556 |
2019 and beyond | Settlement balances and short positions | ||
Financial Instruments | ||
Financial Liabilities | 26,433 | 20,712 |
2019 and beyond | Derivatives | ||
Financial Instruments | ||
Financial Liabilities | 122,294 | 175,597 |
2019 and beyond | Subordinated liabilities | ||
Financial Instruments | ||
Financial Liabilities | 10,339 | 18,357 |
Cash and balances at central banks | ||
Financial Instruments | ||
Financial Assets | 98,337 | 74,250 |
Cash and balances at central banks | 0-1 years | ||
Financial Instruments | ||
Financial Assets | 98,337 | 74,250 |
Loans and advances to banks | ||
Financial Instruments | ||
Financial Assets | 30,251 | 30,138 |
Loans and advances to banks | 0-1 years | ||
Financial Instruments | ||
Financial Assets | 30,153 | 30,078 |
Loans and advances to banks | 2019 and beyond | ||
Financial Instruments | ||
Financial Assets | 98 | 60 |
Loans and advances to customers | ||
Financial Instruments | ||
Financial Assets | 349,919 | 351,950 |
Loans and advances to customers | 0-1 years | ||
Financial Instruments | ||
Financial Assets | 108,990 | 115,925 |
Loans and advances to customers | 2019 and beyond | ||
Financial Instruments | ||
Financial Assets | 240,929 | 236,025 |
Debt securities | ||
Financial Instruments | ||
Financial Assets | 78,933 | 72,522 |
Debt securities | 0-1 years | ||
Financial Instruments | ||
Financial Assets | 17,204 | 19,530 |
Debt securities | 2019 and beyond | ||
Financial Instruments | ||
Financial Assets | 61,729 | 52,992 |
Equity shares | ||
Financial Instruments | ||
Financial Assets | 450 | 703 |
Equity shares | 2019 and beyond | ||
Financial Instruments | ||
Financial Assets | 450 | 703 |
Settlement balances | ||
Financial Instruments | ||
Financial Assets | 2,517 | 5,526 |
Settlement balances | 0-1 years | ||
Financial Instruments | ||
Financial Assets | 2,517 | 5,526 |
Derivatives | ||
Financial Instruments | ||
Financial Assets | 160,843 | 246,981 |
Derivatives | 0-1 years | ||
Financial Instruments | ||
Financial Assets | 32,372 | 61,719 |
Derivatives | 2019 and beyond | ||
Financial Instruments | ||
Financial Assets | £ 128,471 | £ 185,262 |
Financial Instruments - matu130
Financial Instruments - maturity analysis - Contractual Maturity (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financial Instruments | ||
Contractual maturity period for undiscounted cash flows | 20 years | |
Threshold period for principal amounts of financial liabilities to be excluded from contractual maturity for cash outflows | 20 years | |
Threshold period for interest payments of financial liabilities to be excluded from contractual maturity for cash outflows | 20 years | |
0-3 months | ||
Financial Instruments | ||
Maturity gap | £ 96,918 | £ 79,957 |
Cumulative maturity gap | 96,918 | 79,957 |
0-3 months | Financial assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 161,500 | 144,470 |
0-3 months | Total maturing assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 115,321 | 96,100 |
0-3 months | Cash and balances at central banks | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 98,337 | 73,822 |
0-3 months | Loans and advances to banks | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 10,792 | 11,753 |
0-3 months | Debt securities | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 3,675 | 4,999 |
0-3 months | Settlement balances | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 2,517 | 5,526 |
0-3 months | Loans and advances to customers | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 45,898 | 47,915 |
0-3 months | Derivative held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 281 | 455 |
0-3 months | Financial liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, liabilities | 375,209 | 354,784 |
0-3 months | Total maturing liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 18,403 | 16,143 |
0-3 months | Deposits by banks | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 9,180 | 7,205 |
0-3 months | Debt securities in issue | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 4,106 | 2,269 |
0-3 months | Subordinated Liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 87 | 996 |
0-3 months | Settlement Balances and other liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 5,030 | 5,673 |
0-3 months | Customer accounts | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 356,594 | 338,436 |
0-3 months | Derivatives held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, derivative financial liabilities | 212 | 205 |
0-3 months | Guarantees and Commitments | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 128,947 | 142,191 |
0-3 months | Guarantees | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 7,718 | 7,867 |
0-3 months | Commitments | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 121,229 | 134,324 |
3-12 months | ||
Financial Instruments | ||
Maturity gap | (2,185) | 754 |
Cumulative maturity gap | 94,733 | 80,711 |
3-12 months | Financial assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 39,385 | 40,911 |
3-12 months | Total maturing assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 6,522 | 6,290 |
3-12 months | Cash and balances at central banks | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 428 | |
3-12 months | Loans and advances to banks | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 633 | 438 |
3-12 months | Debt securities | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 5,889 | 5,424 |
3-12 months | Loans and advances to customers | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 32,031 | 33,443 |
3-12 months | Derivative held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 832 | 1,178 |
3-12 months | Financial liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, liabilities | 13,294 | 10,884 |
3-12 months | Total maturing liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 8,707 | 5,536 |
3-12 months | Deposits by banks | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 1,740 | 33 |
3-12 months | Debt securities in issue | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 4,322 | 4,537 |
3-12 months | Subordinated Liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,645 | 966 |
3-12 months | Customer accounts | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 4,298 | 4,943 |
3-12 months | Derivatives held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, derivative financial liabilities | 289 | 405 |
More than 1 year but less than 3 years | ||
Financial Instruments | ||
Maturity gap | (3,549) | (2,050) |
Cumulative maturity gap | 91,184 | 78,661 |
More than 1 year but less than 3 years | Financial assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 78,467 | 78,655 |
More than 1 year but less than 3 years | Total maturing assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 12,054 | 11,309 |
More than 1 year but less than 3 years | Loans and advances to banks | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 94 | 47 |
More than 1 year but less than 3 years | Debt securities | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 11,960 | 11,262 |
More than 1 year but less than 3 years | Loans and advances to customers | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 65,077 | 65,027 |
More than 1 year but less than 3 years | Derivative held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 1,336 | 2,319 |
More than 1 year but less than 3 years | Financial liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, liabilities | 18,009 | 16,172 |
More than 1 year but less than 3 years | Total maturing liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 15,603 | 13,359 |
More than 1 year but less than 3 years | Deposits by banks | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 3,614 | 1,285 |
More than 1 year but less than 3 years | Debt securities in issue | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 10,474 | 7,239 |
More than 1 year but less than 3 years | Subordinated Liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 1,515 | 4,835 |
More than 1 year but less than 3 years | Customer accounts | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 1,218 | 1,484 |
More than 1 year but less than 3 years | Derivatives held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, derivative financial liabilities | 1,188 | 1,329 |
More than 3 years but less than 5 years | ||
Financial Instruments | ||
Maturity gap | (10,062) | (4,502) |
Cumulative maturity gap | 81,122 | 74,159 |
More than 3 years but less than 5 years | Financial assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 63,662 | 61,773 |
More than 3 years but less than 5 years | Total maturing assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 11,312 | 8,567 |
More than 3 years but less than 5 years | Debt securities | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 11,312 | 8,567 |
More than 3 years but less than 5 years | Loans and advances to customers | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 52,016 | 52,675 |
More than 3 years but less than 5 years | Derivative held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 334 | 531 |
More than 3 years but less than 5 years | Financial liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, liabilities | 21,977 | 13,802 |
More than 3 years but less than 5 years | Total maturing liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 21,374 | 13,069 |
More than 3 years but less than 5 years | Deposits by banks | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 16,023 | 5,050 |
More than 3 years but less than 5 years | Debt securities in issue | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 3,731 | 5,381 |
More than 3 years but less than 5 years | Subordinated Liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 1,620 | 2,638 |
More than 3 years but less than 5 years | Customer accounts | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 77 | 149 |
More than 3 years but less than 5 years | Derivatives held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, derivative financial liabilities | 526 | 584 |
5-10 years | ||
Financial Instruments | ||
Maturity gap | (4,756) | (6,562) |
Cumulative maturity gap | 76,366 | 67,597 |
5-10 years | Financial assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 81,479 | 79,305 |
5-10 years | Total maturing assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 12,813 | 13,541 |
5-10 years | Debt securities | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 12,813 | 13,541 |
5-10 years | Loans and advances to customers | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 68,500 | 65,427 |
5-10 years | Derivative held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 166 | 337 |
5-10 years | Financial liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, liabilities | 18,402 | 21,008 |
5-10 years | Total maturing liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 17,569 | 20,103 |
5-10 years | Deposits by banks | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 61 | 78 |
5-10 years | Debt securities in issue | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 9,762 | 7,604 |
5-10 years | Subordinated Liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 7,746 | 12,421 |
5-10 years | Customer accounts | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 20 | 51 |
5-10 years | Derivatives held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, derivative financial liabilities | 813 | 854 |
10-20 years | ||
Financial Instruments | ||
Maturity gap | 936 | (118) |
Cumulative maturity gap | 77,302 | 67,479 |
10-20 years | Financial assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 85,744 | 81,126 |
10-20 years | Total maturing assets | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 3,638 | 3,291 |
10-20 years | Debt securities | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 3,638 | 3,291 |
10-20 years | Loans and advances to customers | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 81,995 | 77,710 |
10-20 years | Derivative held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, assets | 111 | 125 |
10-20 years | Financial liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, liabilities | 3,468 | 4,301 |
10-20 years | Total maturing liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,702 | 3,409 |
10-20 years | Deposits by banks | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 71 | 79 |
10-20 years | Debt securities in issue | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 49 | 798 |
10-20 years | Subordinated Liabilities | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,582 | 2,532 |
10-20 years | Customer accounts | ||
Financial Instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 28 | 35 |
10-20 years | Derivatives held for hedging | ||
Financial Instruments | ||
Undiscounted cash flows, derivative financial liabilities | 738 | 857 |
Held-for-trading | Financial Assets and Liabilities, Category | ||
Financial Instruments | ||
Financial Liabilities | 232,917 | 316,954 |
Held-for-trading | Financial Assets and Liabilities, Category | ||
Financial Instruments | ||
Financial Assets | £ 243,867 | £ 328,852 |
Financial assets - impairmen131
Financial assets - impairments (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in provision for impairment losses on loans and advances | |||
Balance at beginning of period | £ 4,455 | £ 7,119 | |
Currency translation and other adjustments | (26) | 500 | |
Disposals | (5) | (2) | |
Utilisation, allowance account for credit losses of financial assets | (1,210) | (3,695) | |
Recoveries of amounts previously written-off | 156 | 109 | |
Losses/(releases) to income statement | 530 | 537 | £ (853) |
Unwind of discount (recognised in interest income) | (86) | (113) | |
Balance at end of period | 3,814 | 4,455 | 7,119 |
Individually assessed | |||
Movement in provision for impairment losses on loans and advances | |||
Balance at beginning of period | 1,395 | ||
Currency translation and other adjustments | (39) | ||
Disposals | (5) | ||
Utilisation, allowance account for credit losses of financial assets | (453) | ||
Recoveries of amounts previously written-off | 29 | ||
Losses/(releases) to income statement | 229 | ||
Unwind of discount (recognised in interest income) | (24) | ||
Balance at end of period | 1,132 | 1,395 | |
Collectively-assessed | |||
Movement in provision for impairment losses on loans and advances | |||
Balance at beginning of period | 2,660 | ||
Currency translation and other adjustments | 9 | ||
Utilisation, allowance account for credit losses of financial assets | (757) | ||
Recoveries of amounts previously written-off | 127 | ||
Losses/(releases) to income statement | 315 | ||
Unwind of discount (recognised in interest income) | (62) | ||
Balance at end of period | 2,292 | 2,660 | |
Latent | |||
Movement in provision for impairment losses on loans and advances | |||
Balance at beginning of period | 400 | ||
Currency translation and other adjustments | 4 | ||
Losses/(releases) to income statement | (14) | ||
Balance at end of period | 390 | 400 | |
Loans and advances to banks | |||
Movement in provision for impairment losses on loans and advances | |||
Balance at beginning of period | 0 | ||
Losses/(releases) to income statement | £ (4) | ||
Balance at end of period | £ 0 | £ 0 |
Financial assets - impairmen132
Financial assets - impairments - Impairment charged to income statement (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impairment losses/(releases) charged to the income statement | |||
losses/(releases) charged to the income statement | £ 530 | £ 537 | £ (853) |
Securities | (37) | (59) | 126 |
Impairment losses/(releases) charged to the income statement | 493 | 478 | (727) |
Loans and advances to customers | |||
Impairment losses/(releases) charged to the income statement | |||
losses/(releases) charged to the income statement | £ 530 | £ 537 | (849) |
Loans and advances to banks | |||
Impairment losses/(releases) charged to the income statement | |||
losses/(releases) charged to the income statement | £ (4) |
Financial assets - impairmen133
Financial assets - impairments - Impaired financial assets (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Impaired Financial Assets | ||
Impaired financial assets | ||
Carrying value, Financial assets | £ 23 | £ 58 |
Loans and advances to customers | ||
Impaired financial assets | ||
Carrying value, Financial assets | 349,919 | 351,950 |
Loans and advances to customers | Impaired Financial Assets | Loans and receivables | ||
Impaired financial assets | ||
Carrying value, Financial assets | 3,999 | 4,810 |
Loans and advances to customers | Impaired Financial Assets | Cost | Loans and receivables | ||
Impaired financial assets | ||
Carrying value, Financial assets | 7,423 | 8,865 |
Loans and advances to customers | Impaired Financial Assets | Provision | Loans and receivables | ||
Impaired financial assets | ||
Carrying value, Financial assets | 3,424 | 4,055 |
Loans and advances to customers | Individually assessed | ||
Impaired financial assets | ||
Carrying value, Financial assets | £ 3,418 | £ 4,186 |
Financial assets - impairmen134
Financial assets - impairments - Carrying value of impaired financial assets (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying value of impaired financial assets | ||
Assets obtained by taking possession of collateral or calling on other credit enhancements | £ 30 | £ 30 |
Debt securities | ||
Carrying value of impaired financial assets | ||
Carrying value, Financial assets | 78,933 | 72,522 |
Equity shares | ||
Carrying value of impaired financial assets | ||
Carrying value, Financial assets | 450 | 703 |
Impaired Financial Assets | ||
Carrying value of impaired financial assets | ||
Carrying value, Financial assets | 23 | 58 |
Impaired Financial Assets | Available-for-sale | Debt securities | ||
Carrying value of impaired financial assets | ||
Carrying value, Financial assets | 2 | 33 |
Impaired Financial Assets | Available-for-sale | Equity shares | ||
Carrying value of impaired financial assets | ||
Carrying value, Financial assets | 20 | 23 |
Impaired Financial Assets | Loans and receivables | Debt securities | ||
Carrying value of impaired financial assets | ||
Carrying value, Financial assets | £ 1 | £ 2 |
Derivatives (Details)
Derivatives (Details) - GBP (£) £ in Billions | Dec. 31, 2017 | Dec. 31, 2016 |
Cash flow hedging | Variable rate | ||
Financial instruments by type of interest rate | ||
Financial assets | £ 91 | £ 81 |
Financial liabilities | 69 | 55 |
Fair value hedging | Fixed interest rate | ||
Financial instruments by type of interest rate | ||
Financial assets | 36 | 29 |
Financial liabilities | £ 22 | £ 23 |
Derivatives - fair value of the
Derivatives - fair value of the hedging derivative (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair value of the hedging derivative | ||
Derivative financial assets | £ 160,843 | £ 246,981 |
Derivative financial liabilities | 154,506 | 236,475 |
Fair value hedging | ||
Fair value of the hedging derivative | ||
Derivative financial assets | 160,843 | 246,981 |
Derivative financial liabilities | 154,506 | 236,475 |
Derivatives | ||
Fair value of the hedging derivative | ||
Derivative financial assets | 2,967 | 4,789 |
Derivative financial liabilities | 3,571 | 4,057 |
Exchange rate contracts | Spot, forwards and futures | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 1,900,000 | 2,271,000 |
Derivative financial assets | 19,283 | 35,817 |
Derivative financial liabilities | 19,172 | 33,986 |
Exchange rate contracts | Currency swaps | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 666,000 | 821,000 |
Derivative financial assets | 11,163 | 22,139 |
Derivative financial liabilities | 13,534 | 25,053 |
Exchange rate contracts | Options purchased | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 419,000 | 670,000 |
Derivative financial assets | 8,765 | 17,486 |
Exchange rate contracts | Options written | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 440,000 | 683,000 |
Derivative financial liabilities | 8,975 | 18,109 |
Exchange rate contracts | Derivatives | Cash flow hedging | ||
Fair value of the hedging derivative | ||
Derivative financial assets | 63 | 259 |
Derivative financial liabilities | 37 | |
Exchange rate contracts | Derivatives | Net investment hedging | ||
Fair value of the hedging derivative | ||
Derivative financial assets | 11 | 86 |
Derivative financial liabilities | 28 | 26 |
Interest rate contracts | Options purchased | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 1,162,000 | 1,518,000 |
Derivative financial assets | 21,733 | 31,457 |
Interest rate contracts | Options written | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 1,032,000 | 1,181,000 |
Derivative financial liabilities | 21,021 | 31,298 |
Interest rate contracts | Interest rate swaps | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 8,058,000 | 11,523,000 |
Derivative financial assets | 99,065 | 139,004 |
Derivative financial liabilities | 91,025 | 127,151 |
Interest rate contracts | Futures and forwards | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 1,764,000 | 2,403,000 |
Derivative financial assets | 147 | 63 |
Derivative financial liabilities | 114 | 36 |
Interest rate contracts | Derivatives | Fair value hedging | ||
Fair value of the hedging derivative | ||
Derivative financial assets | 904 | 1,365 |
Derivative financial liabilities | 2,211 | 2,612 |
Interest rate contracts | Derivatives | Cash flow hedging | ||
Fair value of the hedging derivative | ||
Derivative financial assets | 1,989 | 3,079 |
Derivative financial liabilities | 1,295 | 1,419 |
Credit derivatives | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 38,000 | 42,000 |
Derivative financial assets | 531 | 682 |
Derivative financial liabilities | 558 | 557 |
Equity and commodity contracts | Fair value hedging | ||
Fair value of the hedging derivative | ||
Notional amount | 3,000 | 21,000 |
Derivative financial assets | 156 | 333 |
Derivative financial liabilities | £ 107 | £ 285 |
Derivatives - Hedge ineffective
Derivatives - Hedge ineffectiveness recognised (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivatives | |||
(Losses)/gains on the hedged items attributable to the hedged risk | £ (48) | £ 1,146 | £ 110 |
Gains/(losses) on the hedging instruments | 78 | (1,117) | (39) |
Fair value hedging ineffectiveness | 30 | 29 | 71 |
Cash flow hedging ineffectiveness | 9 | £ (29) | (23) |
Total gain (loss) on hedge ineffectiveness | £ 39 | £ 48 | |
Forecast receivable hedged cash flow (in years) | 5 years | 5 years | |
Forecast payable hedged cash flow (in years) | 10 years | 10 years |
Debt securities (Details)
Debt securities (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt securities | ||
Debt instruments held | £ 78,933 | £ 72,522 |
Continuing operations | ||
Debt securities | ||
Gross unrealised gains, debt securities | 58 | 115 |
Gross unrealised losses, debt securities | 12 | (107) |
Discontinued operations | ||
Debt securities | ||
Gross unrealised gains, debt securities | 0 | 0 |
Gross unrealised losses, debt securities | 0 | 0 |
Debt securities | ||
Debt securities | ||
Debt instruments held | 78,933 | 72,522 |
Gross unrealised gains, debt securities | 1,127 | 1,431 |
Gross unrealised losses, debt securities | (117) | (198) |
Central and local government | UK | ||
Debt securities | ||
Debt instruments held | 25,298 | 17,965 |
Gross unrealised gains, debt securities | 703 | 768 |
Gross unrealised losses, debt securities | (19) | (16) |
Central and local government | USA | ||
Debt securities | ||
Debt instruments held | 12,128 | 11,086 |
Gross unrealised gains, debt securities | 67 | 56 |
Gross unrealised losses, debt securities | (70) | (123) |
Central and local government | Other | ||
Debt securities | ||
Debt instruments held | 26,190 | 29,790 |
Gross unrealised gains, debt securities | 324 | 504 |
Gross unrealised losses, debt securities | (16) | (13) |
Banks | ||
Debt securities | ||
Debt instruments held | 4,062 | 2,673 |
Gross unrealised gains, debt securities | 8 | 8 |
Gross unrealised losses, debt securities | (4) | (1) |
Other financial institutions | ||
Debt securities | ||
Debt instruments held | 10,031 | 10,147 |
Gross unrealised gains, debt securities | 24 | 93 |
Gross unrealised losses, debt securities | (7) | (43) |
Corporate | ||
Debt securities | ||
Debt instruments held | 1,224 | 861 |
Gross unrealised gains, debt securities | 1 | 2 |
Gross unrealised losses, debt securities | (1) | (2) |
ABS | ||
Debt securities | ||
Debt instruments held | 6,196 | 6,963 |
Gross unrealised gains, debt securities | 12 | 75 |
Gross unrealised losses, debt securities | (32) | |
Held-for-trading | Debt securities | ||
Debt securities | ||
Debt instruments held | 27,481 | 24,504 |
Held-for-trading | Central and local government | UK | ||
Debt securities | ||
Debt instruments held | 3,514 | 2,615 |
Held-for-trading | Central and local government | USA | ||
Debt securities | ||
Debt instruments held | 3,667 | 4,133 |
Held-for-trading | Central and local government | Other | ||
Debt securities | ||
Debt instruments held | 14,736 | 14,087 |
Held-for-trading | Banks | ||
Debt securities | ||
Debt instruments held | 1,844 | 821 |
Held-for-trading | Other financial institutions | ||
Debt securities | ||
Debt instruments held | 2,746 | 2,299 |
Held-for-trading | Corporate | ||
Debt securities | ||
Debt instruments held | 974 | 549 |
Held-for-trading | ABS | ||
Debt securities | ||
Debt instruments held | 870 | 886 |
Designated as at fair value through profit or loss | Debt securities | ||
Debt securities | ||
Debt instruments held | 27 | |
Designated as at fair value through profit or loss | Central and local government | Other | ||
Debt securities | ||
Debt instruments held | 25 | |
Designated as at fair value through profit or loss | Other financial institutions | ||
Debt securities | ||
Debt instruments held | 2 | |
Available-for-sale | Debt securities | ||
Debt securities | ||
Debt instruments held | 43,681 | 39,254 |
Available-for-sale | Central and local government | UK | ||
Debt securities | ||
Debt instruments held | 17,656 | 10,581 |
Available-for-sale | Central and local government | USA | ||
Debt securities | ||
Debt instruments held | 8,461 | 6,953 |
Available-for-sale | Central and local government | Other | ||
Debt securities | ||
Debt instruments held | 11,454 | 15,678 |
Available-for-sale | Banks | ||
Debt securities | ||
Debt instruments held | 2,218 | 1,852 |
Available-for-sale | Other financial institutions | ||
Debt securities | ||
Debt instruments held | 3,784 | 4,072 |
Available-for-sale | Corporate | ||
Debt securities | ||
Debt instruments held | 108 | 118 |
Available-for-sale | ABS | ||
Debt securities | ||
Debt instruments held | 1,826 | 2,263 |
Loans and receivables | Debt securities | ||
Debt securities | ||
Debt instruments held | 3,643 | 3,968 |
Loans and receivables | Other financial institutions | ||
Debt securities | ||
Debt instruments held | 3,501 | 3,774 |
Loans and receivables | Corporate | ||
Debt securities | ||
Debt instruments held | 142 | 194 |
Loans and receivables | ABS | ||
Debt securities | ||
Debt instruments held | 3,500 | 3,814 |
Held-to-maturity | Debt securities | ||
Debt securities | ||
Debt instruments held | 4,128 | 4,769 |
Held-to-maturity | Central and local government | UK | ||
Debt securities | ||
Debt instruments held | £ 4,128 | £ 4,769 |
Debt securities - Available for
Debt securities - Available for sale securities and yield (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
0-1 years | ||
Debt securities | ||
Available-for-sale | £ 7,955 | £ 8,143 |
Yield % | 0.90% | 1.00% |
1-5 years | ||
Debt securities | ||
Available-for-sale | £ 17,981 | £ 14,942 |
Yield % | 1.90% | 2.00% |
5-10 years | ||
Debt securities | ||
Available-for-sale | £ 11,087 | £ 10,533 |
Yield % | 1.70% | 2.10% |
Over 10 years | ||
Debt securities | ||
Available-for-sale | £ 6,658 | £ 5,636 |
Yield % | 2.90% | 2.60% |
Debt securities | ||
Debt securities | ||
Available-for-sale | £ 43,681 | £ 39,254 |
Yield % | 1.80% | 1.90% |
Central and local government | UK | ||
Debt securities | ||
Available-for-sale | £ 17,656 | £ 10,581 |
Yield % | 2.40% | 3.40% |
Central and local government | UK | 0-1 years | ||
Debt securities | ||
Available-for-sale | £ 1,152 | £ 1,722 |
Yield % | 1.70% | 0.90% |
Central and local government | UK | 1-5 years | ||
Debt securities | ||
Available-for-sale | £ 7,000 | £ 2,900 |
Yield % | 2.50% | 5.20% |
Central and local government | UK | 5-10 years | ||
Debt securities | ||
Available-for-sale | £ 5,814 | £ 3,318 |
Yield % | 2.00% | 3.50% |
Central and local government | UK | Over 10 years | ||
Debt securities | ||
Available-for-sale | £ 3,690 | £ 2,641 |
Yield % | 3.20% | 3.00% |
Central and local government | USA | ||
Debt securities | ||
Available-for-sale | £ 8,461 | £ 6,953 |
Yield % | 2.10% | 2.20% |
Central and local government | USA | 0-1 years | ||
Debt securities | ||
Available-for-sale | £ 455 | £ 41 |
Yield % | 0.80% | 1.90% |
Central and local government | USA | 1-5 years | ||
Debt securities | ||
Available-for-sale | £ 4,243 | £ 2,797 |
Yield % | 1.90% | 1.90% |
Central and local government | USA | 5-10 years | ||
Debt securities | ||
Available-for-sale | £ 2,221 | £ 2,799 |
Yield % | 2.10% | 2.10% |
Central and local government | USA | Over 10 years | ||
Debt securities | ||
Available-for-sale | £ 1,542 | £ 1,316 |
Yield % | 2.80% | 3.00% |
Central and local government | Other | ||
Debt securities | ||
Available-for-sale | £ 11,454 | £ 15,678 |
Yield % | 1.20% | 1.20% |
Central and local government | Other | 0-1 years | ||
Debt securities | ||
Available-for-sale | £ 4,716 | £ 5,104 |
Yield % | 0.70% | 1.10% |
Central and local government | Other | 1-5 years | ||
Debt securities | ||
Available-for-sale | £ 3,405 | £ 5,942 |
Yield % | 1.50% | 1.00% |
Central and local government | Other | 5-10 years | ||
Debt securities | ||
Available-for-sale | £ 2,230 | £ 3,444 |
Yield % | 1.10% | 1.20% |
Central and local government | Other | Over 10 years | ||
Debt securities | ||
Available-for-sale | £ 1,103 | £ 1,188 |
Yield % | 2.60% | 2.40% |
Banks | ||
Debt securities | ||
Available-for-sale | £ 2,218 | £ 1,852 |
Yield % | 0.80% | 0.50% |
Banks | 0-1 years | ||
Debt securities | ||
Available-for-sale | £ 619 | £ 798 |
Yield % | 0.60% | 0.50% |
Banks | 1-5 years | ||
Debt securities | ||
Available-for-sale | £ 1,287 | £ 965 |
Yield % | 0.90% | 0.40% |
Banks | 5-10 years | ||
Debt securities | ||
Available-for-sale | £ 312 | £ 89 |
Yield % | 0.60% | 0.30% |
Other financial institutions | ||
Debt securities | ||
Available-for-sale | £ 3,784 | £ 4,072 |
Yield % | 1.10% | 1.00% |
Other financial institutions | 0-1 years | ||
Debt securities | ||
Available-for-sale | £ 987 | £ 451 |
Yield % | 1.20% | 1.10% |
Other financial institutions | 1-5 years | ||
Debt securities | ||
Available-for-sale | £ 1,983 | £ 2,282 |
Yield % | 1.10% | 1.10% |
Other financial institutions | 5-10 years | ||
Debt securities | ||
Available-for-sale | £ 491 | £ 848 |
Yield % | 1.00% | 0.90% |
Other financial institutions | Over 10 years | ||
Debt securities | ||
Available-for-sale | £ 323 | £ 491 |
Yield % | 0.40% | 0.30% |
Corporate | ||
Debt securities | ||
Available-for-sale | £ 108 | £ 118 |
Yield % | 1.80% | 0.70% |
Corporate | 0-1 years | ||
Debt securities | ||
Available-for-sale | £ 26 | £ 27 |
Yield % | 1.90% | 0.70% |
Corporate | 1-5 years | ||
Debt securities | ||
Available-for-sale | £ 63 | £ 56 |
Yield % | 1.90% | 0.70% |
Corporate | 5-10 years | ||
Debt securities | ||
Available-for-sale | £ 19 | £ 35 |
Yield % | 1.00% | 0.70% |
ABS | ||
Debt securities | ||
Available-for-sale | £ 1,826 | £ 2,263 |
Yield % | 0.40% | 0.30% |
ABS | 0-1 years | ||
Debt securities | ||
Available-for-sale | £ 263 | £ 377 |
Yield % | 0.40% | 0.80% |
ABS | 1-5 years | ||
Debt securities | ||
Available-for-sale | £ 1,009 | £ 974 |
Yield % | 0.50% | 0.50% |
ABS | 5-10 years | ||
Debt securities | ||
Available-for-sale | £ 231 | £ 415 |
ABS | Over 10 years | ||
Debt securities | ||
Available-for-sale | £ 323 | £ 497 |
Yield % | 0.10% |
Equity shares (Details)
Equity shares (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Equity shares | ||
Equity shares | ||
Held-for-trading | £ 29 | £ 166 |
Designated as at fair value through profit or loss | 134 | 172 |
Available-for-sale | 287 | 365 |
Total financial assets | 450 | 703 |
Gross unrealised gains | 67 | 61 |
Gross unrealised losses | (8) | (8) |
Total | 59 | 53 |
Equity shares | Continuing operations | ||
Equity shares | ||
Gross unrealised gains | 89 | 73 |
Gross unrealised losses | (1) | (10) |
Dividend income | 13 | 13 |
Equity shares | Discontinued operations | ||
Equity shares | ||
Gross unrealised gains | 0 | 0 |
Gross unrealised losses | 0 | 0 |
Dividend income | 0 | 0 |
Listed | ||
Equity shares | ||
Held-for-trading | 7 | 106 |
Designated as at fair value through profit or loss | 6 | 3 |
Available-for-sale | 35 | 30 |
Total financial assets | 48 | 139 |
Gross unrealised gains | 20 | 13 |
Total | 20 | 13 |
Unlisted | ||
Equity shares | ||
Held-for-trading | 22 | 60 |
Designated as at fair value through profit or loss | 128 | 169 |
Available-for-sale | 252 | 335 |
Total financial assets | 402 | 564 |
Gross unrealised gains | 47 | 48 |
Gross unrealised losses | (8) | (8) |
Total | £ 39 | £ 40 |
Intangible assets (Details)
Intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible assets | |||
At 1 January | £ 6,480 | ||
Charge for the year | 222 | £ 204 | £ 230 |
Write down of goodwill and other intangible assets | 29 | 159 | 1,332 |
At 31 December | 6,543 | 6,480 | |
Impairment to goodwill | 0 | ||
Cost | |||
Intangible assets | |||
At 1 January | 19,851 | 18,673 | |
Currency translation and other adjustments | 280 | 1,349 | |
Additions | 384 | 480 | |
Disposals and write-off of fully amortised assets | (217) | (651) | |
At 31 December | 20,298 | 19,851 | 18,673 |
Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
At 1 January | 13,371 | 12,136 | |
Currency translation and other adjustments | 278 | 1,343 | |
Disposals and write-off of fully amortised assets | (145) | (471) | |
Charge for the year | 222 | 204 | |
Write down of goodwill and other intangible assets | 29 | 159 | |
At 31 December | 13,755 | 13,371 | 12,136 |
Goodwill | |||
Intangible assets | |||
At 1 January | 5,558 | ||
At 31 December | 5,558 | 5,558 | |
Goodwill | Cost | |||
Intangible assets | |||
At 1 January | 17,756 | 16,483 | |
Currency translation and other adjustments | 283 | 1,273 | |
At 31 December | 18,039 | 17,756 | 16,483 |
Goodwill | Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
At 1 January | 12,198 | 10,925 | |
Currency translation and other adjustments | 283 | 1,273 | |
At 31 December | 12,481 | 12,198 | 10,925 |
Other | Internally generated software | |||
Intangible assets | |||
At 1 January | 922 | ||
At 31 December | 985 | 922 | |
Other | Internally generated software | Cost | |||
Intangible assets | |||
At 1 January | 2,095 | 2,190 | |
Currency translation and other adjustments | (3) | 76 | |
Additions | 384 | 480 | |
Disposals and write-off of fully amortised assets | (217) | (651) | |
At 31 December | 2,259 | 2,095 | 2,190 |
Other | Internally generated software | Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
At 1 January | 1,173 | 1,211 | |
Currency translation and other adjustments | (5) | 70 | |
Disposals and write-off of fully amortised assets | (145) | (471) | |
Charge for the year | 222 | 204 | |
Write down of goodwill and other intangible assets | 29 | 159 | |
At 31 December | £ 1,274 | £ 1,173 | £ 1,211 |
Intangible assets - Assumptions
Intangible assets - Assumptions (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of information for cash-generating units | ||
Goodwill | £ 5,558 | £ 5,558 |
Other | ||
Disclosure of information for cash-generating units | ||
Impairment of intangible | 29 | 159 |
UK Personal & Business Banking | ||
Disclosure of information for cash-generating units | ||
Recoverable amount | 21,600 | 23,900 |
Goodwill | £ 3,351 | £ 3,351 |
Terminal growth rate | 2.00% | 2.50% |
Pre-tax discount rate | 13.10% | 12.80% |
Recoverable amount exceeded carrying value | £ 9,700 | £ 14,600 |
Discount rate (in amount) | (1,800) | (2,300) |
Terminal growth rate (in amount) | (1,200) | (1,500) |
Forecast Income | (1,300) | (1,200) |
Forecast cost | £ (600) | £ (600) |
Breakeven discount rate | 21.60% | 27.00% |
Commercial Banking | ||
Disclosure of information for cash-generating units | ||
Recoverable amount | £ 13,700 | £ 14,100 |
Goodwill | £ 1,907 | £ 1,907 |
Terminal growth rate | 2.00% | 2.50% |
Pre-tax discount rate | 12.90% | 12.90% |
Recoverable amount exceeded carrying value | £ 1,300 | £ 2,100 |
Discount rate (in amount) | (1,200) | (1,200) |
Terminal growth rate (in amount) | (800) | (800) |
Forecast Income | (700) | (700) |
Forecast cost | £ (400) | £ (400) |
Breakeven discount rate | 13.90% | 14.70% |
RBS International | ||
Disclosure of information for cash-generating units | ||
Recoverable amount | £ 3,300 | £ 2,700 |
Goodwill | £ 300 | £ 300 |
Terminal growth rate | 2.00% | 2.50% |
Pre-tax discount rate | 11.00% | 10.90% |
Recoverable amount exceeded carrying value | £ 600 | £ 200 |
Discount rate (in amount) | (400) | (300) |
Terminal growth rate (in amount) | (300) | (200) |
Forecast Income | £ (100) | £ (100) |
Breakeven discount rate | 12.80% | 11.70% |
Property, plant and equipmen143
Property, plant and equipment (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of changes in property, plant and equipment | ||
At 1 January | £ 4,590 | |
Additions | 1,117 | |
Disposals and write-off of fully depreciated assets | (649) | |
At 31 December | 4,602 | £ 4,590 |
A 5% change in the most sensitive assumption, residual values | 40 | |
Fair value of property | 201 | 222 |
Rental income from investment properties | 84 | 79 |
Direct operating expenses of investment properties | £ 9 | £ 16 |
Level 2 | ||
Reconciliation of changes in property, plant and equipment | ||
Fair value percentage of investment property classified | 2.00% | 2.00% |
Level 3 | ||
Reconciliation of changes in property, plant and equipment | ||
Fair value percentage of investment property classified | 98.00% | 98.00% |
Investment properties | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | £ 1,095 | |
Additions | 8 | |
At 31 December | 1,093 | £ 1,095 |
Freehold premises | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 1,559 | |
Additions | 691 | |
Disposals and write-off of fully depreciated assets | (34) | |
At 31 December | 1,863 | 1,559 |
Long leasehold premises | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 80 | |
Additions | 5 | |
Disposals and write-off of fully depreciated assets | (14) | |
At 31 December | 75 | 80 |
Short leasehold premises | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 448 | |
Additions | 66 | |
Disposals and write-off of fully depreciated assets | (176) | |
At 31 December | 356 | 448 |
Computers and other equipment | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 683 | |
Additions | 148 | |
Disposals and write-off of fully depreciated assets | (159) | |
At 31 December | 616 | 683 |
Operating lease assets | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 725 | |
Additions | 199 | |
Disposals and write-off of fully depreciated assets | (266) | |
At 31 December | 599 | 725 |
Cost | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 9,010 | 8,771 |
Transfers to disposal groups | (437) | |
Currency translation and other adjustments | (36) | 442 |
Additions | 912 | |
Change in fair value of investment properties | (14) | (11) |
Disposals and write-off of fully depreciated assets | (981) | (1,104) |
At 31 December | 8,659 | 9,010 |
Cost | Investment properties | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 1,095 | 915 |
Currency translation and other adjustments | 18 | 140 |
Additions | 103 | |
Change in fair value of investment properties | (14) | (11) |
Disposals and write-off of fully depreciated assets | (14) | (52) |
At 31 December | 1,093 | 1,095 |
Cost | Freehold premises | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 2,736 | 2,559 |
Transfers to disposal groups | (405) | |
Currency translation and other adjustments | (36) | 91 |
Reclassifications | 109 | 46 |
Additions | 215 | |
Disposals and write-off of fully depreciated assets | (80) | (175) |
At 31 December | 3,015 | 2,736 |
Cost | Long leasehold premises | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 152 | 177 |
Transfers to disposal groups | (10) | |
Currency translation and other adjustments | 5 | |
Additions | 5 | |
Disposals and write-off of fully depreciated assets | (14) | (35) |
At 31 December | 133 | 152 |
Cost | Short leasehold premises | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 1,247 | 1,259 |
Transfers to disposal groups | (1) | |
Currency translation and other adjustments | 73 | |
Reclassifications | (109) | (46) |
Additions | 79 | |
Disposals and write-off of fully depreciated assets | (218) | (118) |
At 31 December | 985 | 1,247 |
Cost | Computers and other equipment | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 2,467 | 2,305 |
Transfers to disposal groups | (21) | |
Currency translation and other adjustments | (17) | 108 |
Additions | 282 | |
Disposals and write-off of fully depreciated assets | (208) | (228) |
At 31 December | 2,369 | 2,467 |
Cost | Operating lease assets | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 1,313 | 1,556 |
Currency translation and other adjustments | (1) | 25 |
Additions | 228 | |
Disposals and write-off of fully depreciated assets | (447) | (496) |
At 31 December | 1,064 | 1,313 |
Accumulated impairment, depreciation and amortisation | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 4,420 | 4,289 |
Transfers to disposal groups | (247) | |
Currency translation and other adjustments | (53) | 232 |
Write down of property, plant and equipment | (125) | 78 |
Disposals and write-off of fully depreciated assets | (675) | |
Charge for the year | 461 | 496 |
At 31 December | 4,057 | 4,420 |
Accumulated impairment, depreciation and amortisation | Freehold premises | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 1,177 | 1,090 |
Transfers to disposal groups | (223) | |
Currency translation and other adjustments | (35) | 70 |
Reclassifications | 57 | 9 |
Write down of property, plant and equipment | (122) | 71 |
Disposals and write-off of fully depreciated assets | (137) | |
Charge for the year | 88 | 74 |
At 31 December | 1,152 | 1,177 |
Accumulated impairment, depreciation and amortisation | Long leasehold premises | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 72 | 87 |
Transfers to disposal groups | (5) | |
Currency translation and other adjustments | 3 | |
Disposals and write-off of fully depreciated assets | (22) | |
Charge for the year | 5 | 4 |
At 31 December | 58 | 72 |
Accumulated impairment, depreciation and amortisation | Short leasehold premises | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 799 | 759 |
Transfers to disposal groups | (1) | |
Currency translation and other adjustments | 53 | |
Reclassifications | (57) | (9) |
Disposals and write-off of fully depreciated assets | (86) | |
Charge for the year | 64 | 82 |
At 31 December | 629 | 799 |
Accumulated impairment, depreciation and amortisation | Computers and other equipment | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 1,784 | 1,677 |
Transfers to disposal groups | (18) | |
Currency translation and other adjustments | (18) | 97 |
Write down of property, plant and equipment | (3) | 7 |
Disposals and write-off of fully depreciated assets | (180) | |
Charge for the year | 161 | 183 |
At 31 December | 1,753 | 1,784 |
Accumulated impairment, depreciation and amortisation | Operating lease assets | ||
Reconciliation of changes in property, plant and equipment | ||
At 1 January | 588 | 676 |
Currency translation and other adjustments | 9 | |
Disposals and write-off of fully depreciated assets | (250) | |
Charge for the year | 143 | 153 |
At 31 December | £ 465 | £ 588 |
Prepayments, accrued income 144
Prepayments, accrued income and other assets (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Prepayments, accrued income and other assets | ||
Prepayments | £ 392 | £ 350 |
Accrued income | 378 | 412 |
Interests in associates | 1,410 | 1,509 |
Pension schemes in net surplus (refer to Note 4) | 392 | 276 |
Tax recoverable | 27 | 71 |
Other assets | 1,127 | 1,082 |
Total | 3,726 | 3,700 |
Alawwal Bank | ||
Prepayments, accrued income and other assets | ||
Interests in associates | 1,052 | 1,083 |
Business Growth Fund | ||
Prepayments, accrued income and other assets | ||
Interests in associates | £ 316 | £ 256 |
Discontinued operations and 145
Discontinued operations and assets and liabilities of disposal groups - Profit/(loss) from discontinued operations, net of tax (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Profit/(loss) from discontinued operations, net of tax | |||
Operating profit before tax | £ 1,766 | ||
Provision for gain/(loss) on disposal | (273) | ||
Total profit/(loss) from discontinued operation, net of tax | 1,541 | ||
Profit from discontinued operations attributable to non-controlling interests | £ 0 | £ 0 | 334 |
Citizens | |||
Noncurrent assets or disposal groups classified as held for sale | |||
Gain on disposal relating to derecognition of assets and liabilities | 248 | ||
Revaluation surplus | 989 | ||
Profit/(loss) from discontinued operations, net of tax | |||
Interest receivable | 1,433 | ||
Interest payable | (144) | ||
Net interest income | 1,289 | ||
Non-interest income | 615 | ||
Total income | 1,904 | ||
Operating expenses | (1,181) | ||
Profit before impairment losses | 723 | ||
Impairment losses | (103) | ||
Operating profit before tax | 620 | ||
Tax charge | (212) | ||
Profit after tax | 408 | ||
Total profit/(loss) from discontinued operation, net of tax | 1,525 | ||
Citizens | Subsidiary | |||
Profit/(loss) from discontinued operations, net of tax | |||
Gain on disposal of noncurrent assets | 1,147 | ||
Provision for gain/(loss) on disposal | 10 | ||
Citizens | Associate | |||
Profit/(loss) from discontinued operations, net of tax | |||
Gain on disposal of noncurrent assets | 90 | ||
Provision for gain/(loss) on disposal | (130) | ||
Other | |||
Profit/(loss) from discontinued operations, net of tax | |||
Total profit/(loss) from discontinued operation, net of tax | £ 16 |
Discontinued operations and 146
Discontinued operations and assets and liabilities of disposal groups - Operating cash flows attributable to discontinued operations (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2015GBP (£) | |
Discontinued operations and assets and liabilities of disposal groups | |
Net cash flows from operating activities | £ (57) |
Net cash flows from investing activities | (6) |
Net cash flows from financing activities | 10 |
Net (decrease)/increase in cash and cash equivalents | £ (58) |
Discontinued operations and 147
Discontinued operations and assets and liabilities of disposal groups - Profit/(loss) from discontinued operations, net of tax, Assets and Liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets of disposal groups | |||
Loans and advances to banks | £ 30,251 | £ 30,138 | |
Property, plant and equipment | 4,602 | 4,590 | |
Assets | 738,056 | 798,656 | £ 815,408 |
Liabilities Of Disposal Groups | |||
Liabilities | 688,963 | 749,252 | £ 761,261 |
Discontinued operations | |||
Assets of disposal groups | |||
Loans and advances to banks | 10 | 13 | |
Property, plant and equipment | 185 | ||
Assets | 195 | 13 | |
Liabilities Of Disposal Groups | |||
Other liabilities | 10 | 15 | |
Liabilities | £ 10 | £ 15 |
Short positions (Details)
Short positions (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Short positions | ||
Short positions | £ 28,527 | £ 22,077 |
Government | ||
Short positions | ||
Short positions | 26,381 | 20,979 |
Other issuers | ||
Short positions | ||
Short positions | 2,145 | 1,095 |
Equity shares | ||
Short positions | ||
Short positions | £ 1 | £ 3 |
Provisions for liabilities a149
Provisions for liabilities and charges (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Provisions for liabilities and charges | ||||
At 1 January | £ 12,836 | |||
Currency translation and other movements | (533) | |||
Charge to income statement | 2,400 | |||
Releases to income statement | (469) | |||
Provisions utilised | (6,477) | |||
At 31 December | 7,757 | £ 12,836 | ||
Payment protection insurance | ||||
Provisions for liabilities and charges | ||||
At 1 January | 1,253 | |||
Charge to income statement | 175 | 175 | ||
Provisions utilised | (375) | |||
At 31 December | 1,053 | 1,253 | ||
Payment protection insurance | FCA | ||||
Provisions for liabilities and charges | ||||
Increase in other provisions | 175 | 601 | £ 600 | £ 650 |
Cumulative charge of provision | 5,100 | |||
Other customer redress | ||||
Provisions for liabilities and charges | ||||
At 1 January | 1,105 | |||
Currency translation and other movements | 4 | |||
Charge to income statement | 228 | |||
Releases to income statement | (54) | |||
Provisions utilised | (413) | |||
At 31 December | 870 | 1,105 | ||
Residential mortgage backed securities | ||||
Provisions for liabilities and charges | ||||
At 1 January | 6,752 | |||
Currency translation and other movements | (541) | |||
Charge to income statement | 714 | |||
Releases to income statement | (50) | |||
Provisions utilised | (3,632) | |||
At 31 December | 3,243 | 6,752 | ||
Litigation and other regulatory proceedings | ||||
Provisions for liabilities and charges | ||||
At 1 January | 1,918 | |||
Currency translation and other movements | (31) | |||
Charge to income statement | 280 | |||
Releases to income statement | (156) | |||
Provisions utilised | (1,370) | |||
At 31 December | 641 | 1,918 | ||
Property and other | ||||
Provisions for liabilities and charges | ||||
At 1 January | 1,808 | |||
Currency translation and other movements | 35 | |||
Charge to income statement | 1,003 | |||
Releases to income statement | (209) | |||
Provisions utilised | (687) | |||
At 31 December | 1,950 | £ 1,808 | ||
Redress | Payment protection insurance | ||||
Provisions for liabilities and charges | ||||
Provisions utilised | (4,100) | |||
Redress | Payment protection insurance | FCA | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | 4,600 | |||
Provisions utilised | £ (3,700) | |||
Percentage of provision paid | 74.00% | |||
Administrative expenses | Payment protection insurance | FCA | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | £ 500 | |||
Provisions utilised | £ (400) |
Provisions for liabilities a150
Provisions for liabilities and charges - Sensitivity (Details) - Payment protection insurance complaint in Thousands | 12 Months Ended |
Dec. 31, 2017GBP (£)complaint | |
Customer Initiated Complaints | |
Disclosure of financial liabilities | |
Number of customer initiated complaints | complaint | 2,386 |
Customer Initiated Complaints | Estimated change in provision | |
Disclosure of financial liabilities | |
Number of customer initiated complaints | complaint | 429 |
Customer Initiated Complaints | Estimated change in provision | Minimum | |
Disclosure of financial liabilities | |
Change in assumption (as a percent) | (5.00%) |
Change in provisions | £ (30,000,000) |
Customer Initiated Complaints | Estimated change in provision | Maximum | |
Disclosure of financial liabilities | |
Change in assumption (as a percent) | 5.00% |
Change in provisions | £ 30,000,000 |
Uphold rate | |
Disclosure of financial liabilities | |
Actual to date (as a percent) | 90.00% |
Uphold rate | Estimated change in provision | |
Disclosure of financial liabilities | |
Actual to date (as a percent) | 94.00% |
Uphold rate | Estimated change in provision | Minimum | |
Disclosure of financial liabilities | |
Change in assumption (as a percent) | (1.00%) |
Change in provisions | £ (6,000,000) |
Uphold rate | Estimated change in provision | Maximum | |
Disclosure of financial liabilities | |
Change in assumption (as a percent) | 1.00% |
Change in provisions | £ 6,000,000 |
Average redress | |
Disclosure of financial liabilities | |
Average redress | 1,681 |
Average redress | Estimated change in provision | |
Disclosure of financial liabilities | |
Average redress | £ 1,476 |
Average redress | Estimated change in provision | Minimum | |
Disclosure of financial liabilities | |
Change in assumption (as a percent) | (5.00%) |
Change in provisions | £ (30,000,000) |
Average redress | Estimated change in provision | Maximum | |
Disclosure of financial liabilities | |
Change in assumption (as a percent) | 5.00% |
Change in provisions | £ 30,000,000 |
Processing costs per claim | |
Disclosure of financial liabilities | |
Processing costs per claim | 160 |
Processing costs per claim | Estimated change in provision | |
Disclosure of financial liabilities | |
Processing costs per claim | 142 |
Processing costs per claim | Estimated change in provision | Minimum | |
Disclosure of financial liabilities | |
Change in assumption | (20) |
Change in provisions | (3,000,000) |
Processing costs per claim | Estimated change in provision | Maximum | |
Disclosure of financial liabilities | |
Change in assumption | 20 |
Change in provisions | £ 3,000,000 |
Provision for liabilities and c
Provision for liabilities and charges - Other (Details) £ in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Jul. 31, 2017USD ($) | Jul. 31, 2017GBP (£) | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | Jun. 30, 2017USD ($) | Jun. 30, 2017GBP (£) | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2016GBP (£) | |
Disclosure of financial liabilities | |||||||||
Provisions made | £ 2,400 | ||||||||
Provisions utilised | 6,477 | ||||||||
Provisions for liabilities | £ 7,757 | 7,757 | £ 12,836 | ||||||
FHFA | FHFA | |||||||||
Disclosure of financial liabilities | |||||||||
Provisions made | $ 196 | £ 151 | |||||||
Settlement amount | $ 32,000 | £ 25,000 | |||||||
Settlement amount paid | $ 5,500 | 4,200 | |||||||
Settlement amount reimbursed | 754 | 581 | |||||||
Provisions utilised | 4,750 | 3,650 | |||||||
Residential mortgage backed securities | |||||||||
Disclosure of financial liabilities | |||||||||
Provisions made | 714 | ||||||||
Provisions utilised | 3,632 | ||||||||
Provisions for liabilities | 3,243 | 3,243 | 6,752 | ||||||
Property and other | |||||||||
Disclosure of financial liabilities | |||||||||
Provisions made | 1,003 | ||||||||
Provisions utilised | 687 | ||||||||
Provisions for liabilities | 1,950 | 1,950 | 1,808 | ||||||
RMBS and other securitised products investigations | Residential mortgage backed securities | |||||||||
Disclosure of financial liabilities | |||||||||
Provisions made | $ 650 | 492 | $ 971 | 714 | |||||
HM Treasury provision | Property and other | |||||||||
Disclosure of financial liabilities | |||||||||
Provisions made | £ 50 | £ 750 | |||||||
Provisions for liabilities | 800 | 800 | |||||||
Restructuring provision | Property and other | |||||||||
Disclosure of financial liabilities | |||||||||
Provisions for liabilities | £ 482 | £ 482 |
Accruals and other liabiliti152
Accruals and other liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accruals and other liabilities | ||
Notes in circulation | £ 2,186 | £ 2,028 |
Current tax | 227 | 336 |
Accruals | 1,074 | 1,311 |
Deferred income | 469 | 483 |
Other liabilities | 2,436 | 2,833 |
Accruals and other liabilities | £ 6,392 | £ 6,991 |
Deferred tax - Asset and liabil
Deferred tax - Asset and liability (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax | |||
Deferred tax assets | £ (1,740) | £ (1,803) | |
Deferred tax liability | 583 | 662 | |
Net deferred tax asset | £ (1,157) | £ (1,141) | £ (1,749) |
Deferred tax - Net deferred tax
Deferred tax - Net deferred tax asset (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of net deferred tax asset | ||
At 1 January | £ (1,141) | £ (1,749) |
Acquisitions and disposals of subsidiaries | (29) | (52) |
Charge/(credit) to income statement | 33 | 226 |
(Credit)/charge to other comprehensive income | 4 | 424 |
Currency translation and other adjustments | (24) | 10 |
At 31 December | (1,157) | (1,141) |
Pension | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (662) | (857) |
Acquisitions and disposals of subsidiaries | (1) | |
Charge/(credit) to income statement | 3 | (39) |
(Credit)/charge to other comprehensive income | 266 | 240 |
Currency translation and other adjustments | (5) | |
At 31 December | (393) | (662) |
Accelerated capital allowances | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 361 | 238 |
Acquisitions and disposals of subsidiaries | (29) | (59) |
Charge/(credit) to income statement | (126) | 149 |
Currency translation and other adjustments | (14) | 33 |
At 31 December | 192 | 361 |
Provisions | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (322) | (344) |
Charge/(credit) to income statement | 55 | 25 |
Currency translation and other adjustments | 1 | (3) |
At 31 December | (266) | (322) |
Deferred gains | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 114 | 132 |
Acquisitions and disposals of subsidiaries | 3 | |
Charge/(credit) to income statement | (45) | (22) |
(Credit)/charge to other comprehensive income | (19) | |
Currency translation and other adjustments | 3 | 1 |
At 31 December | 53 | 114 |
Fair value of financial instruments | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 22 | 21 |
Charge/(credit) to income statement | (52) | 1 |
At 31 December | (30) | 22 |
AFS financial assets | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 73 | 100 |
Acquisitions and disposals of subsidiaries | 4 | |
Charge/(credit) to income statement | (4) | (24) |
(Credit)/charge to other comprehensive income | 23 | (9) |
Currency translation and other adjustments | 2 | |
At 31 December | 92 | 73 |
Intangibles | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 5 | 4 |
Currency translation and other adjustments | 1 | |
At 31 December | 5 | 5 |
Cash flow hedging | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 300 | 253 |
Charge/(credit) to income statement | 102 | (143) |
(Credit)/charge to other comprehensive income | (266) | 193 |
Currency translation and other adjustments | (3) | |
At 31 December | 136 | 300 |
Share schemes | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (10) | (23) |
Charge/(credit) to income statement | 1 | 13 |
At 31 December | (9) | (10) |
Total losses carried forward | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (1,050) | (1,332) |
Charge/(credit) to income statement | 121 | 317 |
Currency translation and other adjustments | (10) | (35) |
At 31 December | (939) | (1,050) |
Other | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 28 | 59 |
Acquisitions and disposals of subsidiaries | 1 | |
Charge/(credit) to income statement | (22) | (51) |
Currency translation and other adjustments | (4) | 19 |
At 31 December | £ 2 | £ 28 |
Deferred tax - Tax losses (Deta
Deferred tax - Tax losses (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Unused tax losses | ||
Deferred tax assets | £ 1,740 | £ 1,803 |
Total losses carried forward | ||
Unused tax losses | ||
Deferred tax assets | 939 | 1,050 |
Total losses carried forward | UK | ||
Unused tax losses | ||
Deferred tax assets | 680 | 801 |
Total losses carried forward | UK | The Royal Bank of Scotland plc | ||
Unused tax losses | ||
Deferred tax assets | 125 | 182 |
Total losses carried forward | UK | National Westminster Bank Plc | ||
Unused tax losses | ||
Deferred tax assets | 541 | 605 |
Total losses carried forward | UK | Ulster Bank | ||
Unused tax losses | ||
Deferred tax assets | 14 | 14 |
Total losses carried forward | Ireland | Ulster Bank | ||
Unused tax losses | ||
Deferred tax assets | £ 259 | £ 249 |
Deferred tax - Other (Details)
Deferred tax - Other (Details) - GBP (£) £ in Millions | Apr. 01, 2020 | Apr. 01, 2017 | Apr. 01, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 30, 2016 |
Deferred tax: | |||||||
Deferred tax assets | £ 1,740 | £ 1,803 | |||||
Limit of offset of losses carried forward (as a percent) | 50.00% | 25.00% | |||||
UK corporation tax | 19.00% | 20.00% | 19.25% | 20.00% | 20.25% | ||
Banking surcharge rate | 8.00% | ||||||
Loss for the year | £ (1,415) | £ 5,248 | £ 1,185 | ||||
Deferred tax assets that have not been recognised | 6,356 | 7,940 | 6,349 | ||||
Tax losses and other temporary differences carried forward | 30,049 | 33,376 | 27,483 | ||||
Deferred tax liabilities that have not been recognised | 255 | 258 | £ 256 | ||||
Forecast | |||||||
Deferred tax: | |||||||
UK corporation tax | 17.00% | ||||||
within 5 years | |||||||
Deferred tax: | |||||||
Deferred tax assets | 4,335 | ||||||
After 5 years | |||||||
Deferred tax: | |||||||
Deferred tax assets | 7,208 | ||||||
The Royal Bank of Scotland plc | |||||||
Deferred tax: | |||||||
Tax losses not recognised | 10,247 | ||||||
Tax losses carried forward | 700 | ||||||
National Westminster Bank Plc | |||||||
Deferred tax: | |||||||
Reduction in annual profits that would extend the recovery of deferred tax assets | 120 | ||||||
Tax losses carried forward | 3,092 | ||||||
Ireland | Ulster Bank | |||||||
Deferred tax: | |||||||
Loss for the year | 2,071 | ||||||
Tax losses carried forward | 8,596 | ||||||
Total losses carried forward | |||||||
Deferred tax: | |||||||
Deferred tax assets | 939 | 1,050 | |||||
Total losses carried forward | UK | |||||||
Deferred tax: | |||||||
Deferred tax assets | 680 | 801 | |||||
Total losses carried forward | UK | The Royal Bank of Scotland plc | |||||||
Deferred tax: | |||||||
Deferred tax assets | 125 | 182 | |||||
Total losses carried forward | UK | National Westminster Bank Plc | |||||||
Deferred tax: | |||||||
Deferred tax assets | 541 | 605 | |||||
Total losses carried forward | UK | Ulster Bank | |||||||
Deferred tax: | |||||||
Deferred tax assets | 14 | 14 | |||||
Total losses carried forward | Ireland | Ulster Bank | |||||||
Deferred tax: | |||||||
Deferred tax assets | £ 259 | £ 249 |
Subordinated liabilities (Detai
Subordinated liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Subordinated liabilities | ||
Dated loan capital | £ 10,394 | £ 15,288 |
Undated loan capital | 2,169 | 2,775 |
Preference shares | 159 | 1,356 |
Total subordinated liabilities | £ 12,722 | £ 19,419 |
Subordinated liabilities - Cont
Subordinated liabilities - Contractual maturities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | £ 12,722 | £ 19,419 |
Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 12,722 | 19,419 |
Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 12,722 | 19,419 |
Currently | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 15 | 2,045 |
0-1 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 2,383 | 1,062 |
0-1 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 3,250 | 4,186 |
After 1 year but within 2 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 208 | 2,517 |
After 1 year but within 2 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,152 | 2,630 |
After 2 years but within 5 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 2,329 | 780 |
After 2 years but within 5 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 2,442 | 1,683 |
5-10 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 5,074 | 10,552 |
5-10 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 4,211 | 6,760 |
Over 10 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 818 | 1,230 |
Over 10 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,399 | 1,471 |
Perpetual | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,910 | 3,278 |
Perpetual | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 253 | 644 |
Sterling | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 874 | 962 |
Sterling | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 874 | 962 |
Sterling | Currently | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 15 | |
Sterling | 0-1 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 16 | 17 |
Sterling | 0-1 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 123 | 68 |
Sterling | After 1 year but within 2 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 37 | 113 |
Sterling | After 2 years but within 5 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 354 | 369 |
Sterling | After 2 years but within 5 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 466 | 407 |
Sterling | 5-10 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 23 | 140 |
Sterling | Over 10 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 21 | 22 |
Sterling | Perpetual | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 504 | 576 |
Sterling | Perpetual | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 204 | 197 |
US dollar | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 7,945 | 12,367 |
US dollar | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 7,945 | 12,367 |
US dollar | Currently | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 15 | 1,860 |
US dollar | 0-1 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 441 | 98 |
US dollar | 0-1 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,043 | 1,817 |
US dollar | After 1 year but within 2 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 63 | 700 |
US dollar | After 1 year but within 2 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 63 | 700 |
US dollar | After 2 years but within 5 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,704 | 168 |
US dollar | After 2 years but within 5 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,705 | 168 |
US dollar | 5-10 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 4,037 | 7,955 |
US dollar | 5-10 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 4,041 | 6,242 |
US dollar | Over 10 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 517 | 967 |
US dollar | Over 10 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,078 | 1,186 |
US dollar | Perpetual | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,183 | 2,479 |
US dollar | Perpetual | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 394 | |
Euro | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 3,895 | 5,176 |
Euro | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 3,895 | 5,176 |
Euro | Currently | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 162 | |
Euro | 0-1 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,926 | 913 |
Euro | 0-1 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 2,084 | 1,395 |
Euro | After 1 year but within 2 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 145 | 1,817 |
Euro | After 1 year but within 2 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,044 | 1,817 |
Euro | After 2 years but within 5 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 271 | 243 |
Euro | After 2 years but within 5 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 271 | 1,108 |
Euro | 5-10 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 1,037 | 1,725 |
Euro | 5-10 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 147 | 378 |
Euro | Over 10 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 301 | 263 |
Euro | Over 10 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 300 | 263 |
Euro | Perpetual | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 215 | 215 |
Euro | Perpetual | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 49 | 53 |
Other | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 8 | 914 |
Other | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 8 | 914 |
Other | Currently | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 8 | |
Other | 0-1 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 34 | |
Other | 0-1 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 906 | |
Other | After 1 year but within 2 years | Call date | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 8 | |
Other | 5-10 years | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | 872 | |
Other | Perpetual | Final redemption | ||
Disclosure of detailed information about borrowings [line items] | ||
Subordinated liabilities | £ 8 | £ 8 |
Subordinated liabilities - Rede
Subordinated liabilities - Redemption (Details) £ / shares in Units, $ / shares in Units, € in Millions, £ in Millions, SFr in Millions, $ in Millions, $ in Millions, $ in Millions | 12 Months Ended | ||||||||||||||
Dec. 31, 2017GBP (£) | Dec. 31, 2016GBP (£) | Dec. 31, 2015GBP (£) | Dec. 31, 2017CHF (SFr) | Dec. 31, 2017CAD ($) | Dec. 31, 2017AUD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2017GBP (£)£ / shares | Dec. 31, 2016CHF (SFr) | Dec. 31, 2016CAD ($) | Dec. 31, 2016AUD ($) | Dec. 31, 2016EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2016GBP (£)£ / shares | |
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | £ 5,747 | £ 3,606 | £ 3,047 | ||||||||||||
Issue of subordinated liabilities | 0 | 0 | |||||||||||||
Royal Bank of Scotland Group plc | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 1,306 | 2,338 | |||||||||||||
Royal Bank of Scotland Group Pound Sterling 200 million series 1 non cumulative convertible 0.01 preference shares 7.387% (partial redemption) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | £ 200 | £ 200 | |||||||||||||
Par value | £ / shares | £ 0.01 | £ 0.01 | |||||||||||||
Interest rate | 7.387% | 7.387% | 7.387% | 7.387% | 7.387% | 7.387% | 7.387% | 7.387% | 7.387% | 7.387% | 7.387% | 7.387% | |||
Royal Bank of Scotland Group Pound Sterling 200 million series 1 non cumulative convertible 0.01 preference shares 7.387% (partial redemption) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 15 | ||||||||||||||
Royal Bank of Scotland Group US$1,000 million series 1 non cumulative convertible preference shares of US$ 0.01 9.118% (partial redemption) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 1,000 | $ 1,000 | |||||||||||||
Par value | $ / shares | $ 0.01 | ||||||||||||||
Interest rate | 9.118% | 9.118% | 9.118% | 9.118% | 9.118% | 9.118% | |||||||||
Royal Bank of Scotland Group US$1,000 million series 1 non cumulative convertible preference shares of US$ 0.01 9.118% (partial redemption) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 48 | ||||||||||||||
Royal Bank of Scotland Group US$156 million 7.65% Series F non-cumulative preference shares (callable) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 156 | $ 156 | |||||||||||||
Interest rate | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% | |||
Royal Bank of Scotland Group US$156 million 7.65% Series F non-cumulative preference shares (callable) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 120 | ||||||||||||||
Royal Bank of Scotland Group US$242 million 7.25% Series H non-cumulative preference shares (callable) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 242 | $ 242 | |||||||||||||
Interest rate | 7.25% | 7.25% | 7.25% | 7.25% | 7.25% | 7.25% | |||||||||
Royal Bank of Scotland Group US$242 million 7.25% Series H non-cumulative preference shares (callable) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 186 | ||||||||||||||
Royal Bank of Scotland Group US$751 million 5.75% Series L non-cumulative preference shares (callable) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 751 | $ 751 | |||||||||||||
Interest rate | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | |||
Royal Bank of Scotland Group US$751 million 5.75% Series L non-cumulative preference shares (callable) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 577 | ||||||||||||||
Royal Bank of Scotland Group US$ 750 million 6.8% (partial redemption) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 750 | $ 750 | |||||||||||||
Interest rate | 6.80% | 6.80% | 6.80% | 6.80% | 6.80% | 6.80% | |||||||||
Royal Bank of Scotland Group US$ 750 million 6.8% (partial redemption) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 360 | ||||||||||||||
Royal Bank of Scotland Group US$1,285 million 5.90% Trust Preferred | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 1,285 | $ 1,285 | |||||||||||||
Interest rate | 5.90% | 5.90% | 5.90% | 5.90% | 5.90% | 5.90% | 5.90% | 5.90% | 5.90% | 5.90% | 5.90% | 5.90% | |||
Royal Bank of Scotland Group US$1,285 million 5.90% Trust Preferred | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 902 | ||||||||||||||
Royal Bank of Scotland Group US$200 million 6.25% Trust Preferred | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 200 | $ 200 | |||||||||||||
Interest rate | 6.25% | 6.25% | 6.25% | 6.25% | 6.25% | 6.25% | 6.25% | 6.25% | 6.25% | 6.25% | 6.25% | 6.25% | |||
Royal Bank of Scotland Group US$200 million 6.25% Trust Preferred | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 140 | ||||||||||||||
Royal Bank of Scotland Group US$1,800 Million 6.08% Trust Preferred | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 1,800 | $ 1,800 | |||||||||||||
Interest rate | 6.08% | 6.08% | 6.08% | 6.08% | 6.08% | 6.08% | 6.08% | 6.08% | 6.08% | 6.08% | 6.08% | 6.08% | |||
Royal Bank of Scotland Group US$1,800 Million 6.08% Trust Preferred | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 1,263 | ||||||||||||||
Royal Bank of Scotland Group Euro 26 million 7.42% dated notes | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | € | € 26 | € 26 | |||||||||||||
Interest rate | 7.42% | 7.42% | 7.42% | 7.42% | 7.42% | 7.42% | 7.42% | 7.42% | 7.42% | 7.42% | 7.42% | 7.42% | |||
Royal Bank of Scotland Group Euro 26 million 7.42% dated notes | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 21 | ||||||||||||||
Royal Bank of Scotland Group Euro 7 million 7.38% dated notes | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | € | € 7 | € 7 | |||||||||||||
Interest rate | 7.38% | 7.38% | 7.38% | 7.38% | 7.38% | 7.38% | 7.38% | 7.38% | 7.38% | 7.38% | 7.38% | 7.38% | |||
Royal Bank of Scotland Group Euro 7 million 7.38% dated notes | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 6 | ||||||||||||||
Royal Bank of Scotland Group US$25 million floating rate notes (partial redemption) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 25 | $ 25 | |||||||||||||
Royal Bank of Scotland Group US$25 million floating rate notes (partial redemption) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 6 | ||||||||||||||
Royal Bank of Scotland plc | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 3,903 | 1,204 | |||||||||||||
Royal Bank of Scotland Euro 750 million 4.35% subordinated notes 2017 | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | € | € 750 | € 750 | |||||||||||||
Interest rate | 4.35% | 4.35% | 4.35% | 4.35% | 4.35% | 4.35% | 4.35% | 4.35% | 4.35% | 4.35% | 4.35% | 4.35% | |||
Royal Bank of Scotland Euro 750 million 4.35% subordinated notes 2017 | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 645 | ||||||||||||||
Royal Bank of Scotland CHF124 million 9.375% subordinates notes March 2022 | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | SFr | SFr 124 | SFr 124 | |||||||||||||
Interest rate | 9.375% | 9.375% | 9.375% | 9.375% | 9.375% | 9.375% | 9.375% | 9.375% | 9.375% | 9.375% | 9.375% | 9.375% | |||
Royal Bank of Scotland CHF124 million 9.375% subordinates notes March 2022 | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 101 | ||||||||||||||
Royal Bank of Scotland CAD420 million 10.50% subordinated notes March 2022 | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 420 | $ 420 | |||||||||||||
Interest rate | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | |||
Royal Bank of Scotland CAD420 million 10.50% subordinated notes March 2022 | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 255 | ||||||||||||||
Royal Bank of Scotland Pound Sterling 564 million 10.50% subordinated notes March 2022 | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | £ 564 | £ 564 | |||||||||||||
Interest rate | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | 10.50% | |||
Royal Bank of Scotland Pound Sterling 564 million 10.50% subordinated notes March 2022 | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 489 | ||||||||||||||
Royal Bank of Scotland AU$880 million 13.125% subordinated notes March 2022 | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 880 | $ 880 | |||||||||||||
Interest rate | 13.125% | 13.125% | 13.125% | 13.125% | 13.125% | 13.125% | 13.125% | 13.125% | 13.125% | 13.125% | 13.125% | 13.125% | |||
Royal Bank of Scotland AU$880 million 13.125% subordinated notes March 2022 | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 548 | ||||||||||||||
Royal Bank of Scotland US$ 2,132 million 9.50% subordinated notes March 2022 | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 2,132 | $ 2,132 | |||||||||||||
Interest rate | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | |||
Royal Bank of Scotland US$ 2,132 million 9.50% subordinated notes March 2022 | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 1,724 | ||||||||||||||
Royal Bank of Scotland Euro 100 million floating rate subordinated notes 2017 | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | € | € 100 | € 100 | |||||||||||||
Royal Bank of Scotland Euro 100 million floating rate subordinated notes 2017 | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | £ 90 | ||||||||||||||
Royal Bank of Scotland Pound Sterling 51 million 2.35% + 5 year UK Gilts yield undated subordinated notes (callable December 2012) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | £ 51 | £ 51 | |||||||||||||
Interest rate | 2.35% | 2.35% | 2.35% | 2.35% | 2.35% | 2.35% | 2.35% | 2.35% | 2.35% | 2.35% | 2.35% | 2.35% | |||
Debt term (in years) | 5 years | ||||||||||||||
Royal Bank of Scotland Pound Sterling 51 million 2.35% + 5 year UK Gilts yield undated subordinated notes (callable December 2012) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | £ 51 | ||||||||||||||
Royal Bank of Scotland Pound Sterling 54 million 5.13% undated notes | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | £ 54 | £ 54 | |||||||||||||
Interest rate | 5.13% | 5.13% | 5.13% | 5.13% | 5.13% | 5.13% | 5.13% | 5.13% | 5.13% | 5.13% | 5.13% | 5.13% | |||
Royal Bank of Scotland Pound Sterling 54 million 5.13% undated notes | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 55 | ||||||||||||||
Royal Bank of Scotland CAD$474 million 5.37% undated notes | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 474 | $ 474 | |||||||||||||
Interest rate | 5.37% | 5.37% | 5.37% | 5.37% | 5.37% | 5.37% | 5.37% | 5.37% | 5.37% | 5.37% | 5.37% | 5.37% | |||
Royal Bank of Scotland CAD$474 million 5.37% undated notes | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 283 | ||||||||||||||
Royal Bank of Scotland Euro 1 billion 4.63% dated notes | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | € | € 1 | € 1 | |||||||||||||
Interest rate | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | |||
Royal Bank of Scotland Euro 1 billion 4.63% dated notes | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | £ 866 | ||||||||||||||
NatWest Plc | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 178 | ||||||||||||||
NatWest US$ 300 million 8.6250% non-cumulative preference shares (callable) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 300 | $ 300 | |||||||||||||
Interest rate | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | |||
NatWest US$ 300 million 8.6250% non-cumulative preference shares (callable) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 178 | ||||||||||||||
RBS NV and subsidiaries | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 326 | ||||||||||||||
RBS N.V. and subsidiaries Euro 15 million floating rate notes 2022 (partial redemption) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | € | € 15 | € 15 | |||||||||||||
RBS N.V. and subsidiaries Euro 15 million floating rate notes 2022 (partial redemption) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 2 | ||||||||||||||
RBS N.V. and subsidiaries Euro 250 million 4.70% notes 2019 (partial redemption) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | € | € 250 | € 250 | |||||||||||||
Interest rate | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | |||
RBS N.V. and subsidiaries Euro 250 million 4.70% notes 2019 (partial redemption) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 80 | ||||||||||||||
RBS N.V. and subsidiaries US$ 500 million 4.65% notes 2018 (partial redemption) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | $ | $ 500 | $ 500 | |||||||||||||
Interest rate | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | |||
RBS N.V. and subsidiaries US$ 500 million 4.65% notes 2018 (partial redemption) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 244 | ||||||||||||||
NatWest Holdings Limited | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 15 | ||||||||||||||
NatWest Holdings Limited Pound Sterling 20 million 11.75% perpetual tier two capital (partial redemption) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | £ 20 | £ 20 | |||||||||||||
Interest rate | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | |||
NatWest Holdings Limited Pound Sterling 20 million 11.75% perpetual tier two capital (partial redemption) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | 9 | ||||||||||||||
NatWest Holdings Limited Euro 38 million 11.375% perpetual tier two capital (partial redemption) | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Notional amount | € | € 38 | € 38 | |||||||||||||
Interest rate | 11.375% | 11.375% | 11.375% | 11.375% | 11.375% | 11.375% | 11.375% | 11.375% | 11.375% | 11.375% | 11.375% | 11.375% | |||
NatWest Holdings Limited Euro 38 million 11.375% perpetual tier two capital (partial redemption) | Final redemption | |||||||||||||||
Subordinated liabilities | |||||||||||||||
Redemption of subordinated liabilities | £ 6 |
Non-controlling interests (Deta
Non-controlling interests (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
At 1 January | £ 49,404 | £ 54,147 | |
Profit attributable to non-controlling interests | 35 | 10 | £ 409 |
At 31 December | 49,093 | 49,404 | 54,147 |
Non-controlling interests | |||
At 1 January | 795 | 716 | 2,946 |
Currency translation adjustments and other movements | 17 | 111 | 3 |
Profit attributable to non-controlling interests | 35 | 10 | |
Dividends paid | (25) | (31) | |
Equity withdrawn and disposals | (59) | (42) | (24) |
At 31 December | 763 | 795 | 716 |
RBS N.V. | Non-controlling interests | |||
At 1 January | 733 | 662 | |
Currency translation adjustments and other movements | 22 | 108 | |
Profit attributable to non-controlling interests | 30 | 6 | |
Dividends paid | (20) | ||
Equity withdrawn and disposals | (59) | (43) | |
At 31 December | 706 | 733 | 662 |
Other interests | Non-controlling interests | |||
At 1 January | 62 | 54 | |
Currency translation adjustments and other movements | (5) | 3 | |
Profit attributable to non-controlling interests | 5 | 4 | |
Dividends paid | (5) | ||
Equity withdrawn and disposals | 1 | ||
At 31 December | £ 57 | £ 62 | £ 54 |
Share capital (Details)
Share capital (Details) £ / shares in Units, shares in Thousands, £ in Millions | 1 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017€ / sharesshares | Dec. 31, 2016€ / sharesshares | Dec. 31, 2017$ / shares | Dec. 31, 2017GBP (£)£ / sharesshares | Sep. 30, 2017shares | Jun. 30, 2017shares | Apr. 30, 2017shares | Dec. 31, 2016$ / shares | Dec. 31, 2016GBP (£)£ / sharesshares | Dec. 31, 2015GBP (£) | Oct. 31, 2015shares | |
Share capital | |||||||||||
Value of shares | £ | £ 49,093 | £ 49,404 | £ 54,147 | ||||||||
Nominal value | £ | 0.3 | 0.3 | 1 | ||||||||
Ordinary shares | |||||||||||
Share capital | |||||||||||
Value of shares | £ | £ 11,965 | £ 11,823 | £ 11,625 | ||||||||
Number of shares | 11,964,565 | 56,600 | 29,000 | 33,400 | 11,823,163 | 5,100,000 | |||||
Par value per share | £ / shares | £ 1 | £ 1 | |||||||||
Non-cumulative preference shares of US$0.01 | |||||||||||
Share capital | |||||||||||
Number of shares | 26,459 | 72,430 | |||||||||
Par value per share | $ / shares | $ 0.01 | $ 0.01 | |||||||||
Shares redeemed | 46,000 | 61,400 | |||||||||
Nominal value | £ | £ 0.3 | £ 0.3 | |||||||||
Non-cumulative convertible preference shares of US$0.01 | |||||||||||
Share capital | |||||||||||
Number of shares | 65 | ||||||||||
Par value per share | (per share) | $ 0.01 | £ 0.01 | $ 0.01 | ||||||||
Non-cumulative preference shares of 0.01 | |||||||||||
Share capital | |||||||||||
Number of shares | 2,044 | 2,044 | |||||||||
Par value per share | € / shares | € 0.01 | € 0.01 | |||||||||
Non-cumulative convertible preference shares of 0.01 | |||||||||||
Share capital | |||||||||||
Number of shares | 15 | ||||||||||
Par value per share | £ / shares | £ 0.01 | £ 0.01 | |||||||||
Non-cumulative preference shares of 1 | |||||||||||
Share capital | |||||||||||
Number of shares | 54 | 54 | |||||||||
Par value per share | £ / shares | £ 1 | £ 1 | |||||||||
Cumulative preference shares of 1 | |||||||||||
Share capital | |||||||||||
Value of shares | £ | £ 1 | £ 1 | |||||||||
Number of shares | 900 | 900 | |||||||||
Par value per share | £ / shares | £ 1 | £ 1 |
Share capital - Movement in sha
Share capital - Movement in shares (Details) - GBP (£) shares in Thousands, £ in Millions | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Jun. 30, 2017 | Apr. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Value of shares | |||||
At 1 January | £ 49,404 | £ 54,147 | |||
At 31 December | 49,093 | 49,404 | |||
Ordinary shares | |||||
Value of shares | |||||
At 1 January | 11,823 | 11,625 | |||
Ordinary shares issued | £ 145 | £ 75 | £ 80 | 142 | 198 |
At 31 December | £ 11,965 | £ 11,823 | |||
Number of shares | |||||
At 1 January | 11,823,163 | 11,624,564 | |||
Shares issued | 141,402 | 198,599 | |||
At 31 December | 11,964,565 | 11,823,163 |
Share capital - Ordinary shares
Share capital - Ordinary shares (Details) - GBP (£) £ / shares in Units, shares in Thousands, £ in Millions | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Jun. 30, 2017 | Apr. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2015 | |
Disclosure of classes of share capital [line items] | ||||||
B Shares converted | 51,000,000 | |||||
Ordinary shares | ||||||
Disclosure of classes of share capital [line items] | ||||||
Authorized share capital granted | £ 1,184 | |||||
Number of shares issued | 56,600 | 29,000 | 33,400 | 11,964,565 | 11,823,163 | 5,100,000 |
Subscription price per share | £ 256.027 | £ 259.046 | £ 239.688 | |||
Equity raised | £ 145 | £ 75 | £ 80 | £ 142 | £ 198 | |
Shares issued in connection with employee share plans | 22,000 | |||||
Par value | £ 1 | £ 1 | ||||
Number of shares | 56,600 | 29,000 | 33,400 | 11,964,565 | 11,823,163 | 5,100,000 |
Share capital - Additional shar
Share capital - Additional share information (Details) - GBP (£) £ / shares in Units, £ in Millions | 1 Months Ended | 12 Months Ended | |||||
Mar. 31, 2016 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Apr. 30, 2017 | Dec. 31, 2016 | Oct. 31, 2015 | |
Disclosure of classes of share capital [line items] | |||||||
B Shares converted | 51,000,000,000 | ||||||
Ordinary shares | |||||||
Disclosure of classes of share capital [line items] | |||||||
Number of shares | 11,964,565,000 | 56,600,000 | 29,000,000 | 33,400,000 | 11,823,163,000 | 5,100,000,000 | |
Par value per share | £ 1 | £ 1 | |||||
B Shares | |||||||
Disclosure of classes of share capital [line items] | |||||||
Number of shares | 51,000,000,000 | ||||||
Par value per share | £ 0.01 | ||||||
Dividend access value per share | £ 0.01 | ||||||
B Shares converted | 10 | ||||||
Conversion rate per share | 1 | ||||||
Settlement of dividend access share | £ 1,193 | ||||||
Other securities | Minimum | |||||||
Disclosure of classes of share capital [line items] | |||||||
Required notice term | 30 days | ||||||
Other securities | Maximum | |||||||
Disclosure of classes of share capital [line items] | |||||||
Required notice term | 60 days |
Share capital - Non-cumulative
Share capital - Non-cumulative preference shares (Details) £ / shares in Units, £ in Millions | 12 Months Ended | |||||||||||
Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | Dec. 31, 2017€ / sharesshares | Dec. 31, 2017$ / sharesshares | Dec. 31, 2017£ / sharesshares | Sep. 30, 2017shares | Jun. 30, 2017shares | Apr. 30, 2017shares | Dec. 31, 2016€ / sharesshares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2016£ / sharesshares | Oct. 31, 2015shares | |
Ordinary shares | ||||||||||||
Share capital | ||||||||||||
Par value | £ / shares | £ 1 | £ 1 | ||||||||||
Number of shares | 11,964,565,000 | 11,964,565,000 | 11,964,565,000 | 56,600,000 | 29,000,000 | 33,400,000 | 11,823,163,000 | 11,823,163,000 | 11,823,163,000 | 5,100,000,000 | ||
Preference shares | ||||||||||||
Share capital | ||||||||||||
New equity issued | £ | £ 300 | £ 300 | ||||||||||
Non-cumulative preference shares of US$0.01 | ||||||||||||
Share capital | ||||||||||||
Par value | $ / shares | $ 0.01 | $ 0.01 | ||||||||||
Number of shares | 26,459,000 | 26,459,000 | 26,459,000 | 72,430,000 | 72,430,000 | 72,430,000 | ||||||
Series S, Non-cumulative preference shares of US$0.01 | ||||||||||||
Share capital | ||||||||||||
Par value | $ / shares | $ 0.01 | |||||||||||
Number of shares | 26,400,000 | 26,400,000 | 26,400,000 | |||||||||
Interest Rate | 6.60% | 6.60% | 6.60% | |||||||||
Redemption price per share | $ / shares | $ 25 | |||||||||||
Series U, Non-cumulative preference shares of US$0.01 | ||||||||||||
Share capital | ||||||||||||
Number of shares | 10,130 | 10,130 | 10,130 | |||||||||
Redemption price per share | $ / shares | $ 100,000 | |||||||||||
Non-cumulative convertible preference shares of US$0.01 | ||||||||||||
Share capital | ||||||||||||
Par value | (per share) | $ 0.01 | £ 0.01 | $ 0.01 | |||||||||
Number of shares | 65,000 | 65,000 | 65,000 | |||||||||
Non-cumulative preference shares of 0.01 | ||||||||||||
Share capital | ||||||||||||
Par value | € / shares | € 0.01 | € 0.01 | ||||||||||
Number of shares | 2,044,000 | 2,044,000 | 2,044,000 | 2,044,000 | 2,044,000 | 2,044,000 | ||||||
Series 1, Non-cumulative preference shares of 0.01 | ||||||||||||
Share capital | ||||||||||||
Number of shares | 1,250,000 | 1,250,000 | 1,250,000 | |||||||||
Interest Rate | 5.50% | 5.50% | 5.50% | |||||||||
Redemption price per share | € / shares | € 1,000 | |||||||||||
Series 2, Non-cumulative preference shares of 0.01 | ||||||||||||
Share capital | ||||||||||||
Number of shares | 784,989 | 784,989 | 784,989 | |||||||||
Interest Rate | 5.25% | 5.25% | 5.25% | |||||||||
Redemption price per share | € / shares | € 1,000 | |||||||||||
Series 3, Non-cumulative preference shares of 0.01 | ||||||||||||
Share capital | ||||||||||||
Number of shares | 9,429 | 9,429 | 9,429 | |||||||||
Interest Rate | 2.33% | 2.33% | 2.33% | |||||||||
Redemption price per share | € / shares | € 50,000 | |||||||||||
Non-cumulative convertible preference shares of 0.01 | ||||||||||||
Share capital | ||||||||||||
Par value | £ / shares | £ 0.01 | £ 0.01 | ||||||||||
Number of shares | 15,000 | 15,000 | 15,000 | |||||||||
Non-cumulative preference shares of 1 | ||||||||||||
Share capital | ||||||||||||
Par value | £ / shares | £ 1 | £ 1 | ||||||||||
Number of shares | 54,000 | 54,000 | 54,000 | 54,000 | 54,000 | 54,000 | ||||||
Interest rate basis | 3 months LIBOR | |||||||||||
Series 1, Non-cumulative preference shares of 1 | ||||||||||||
Share capital | ||||||||||||
Number of shares | 54,442 | 54,442 | 54,442 | |||||||||
Adjustment to interest rate basis | 2.33% | 2.33% | 2.33% | |||||||||
Redemption price per share | £ / shares | £ 1,000 |
Other Equity (Details)
Other Equity (Details) £ / shares in Units, $ / shares in Units, £ in Millions, $ in Millions, $ in Millions | Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2017GBP (£)£ / shares | Dec. 31, 2016CAD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016GBP (£) | Dec. 31, 2015GBP (£) | Dec. 31, 2014GBP (£) |
Borrowings | ||||||||
Equity | £ 49,093 | £ 49,404 | £ 54,147 | |||||
Paid-in equity | ||||||||
Borrowings | ||||||||
Equity | 4,058 | 4,582 | £ 2,646 | £ 784 | ||||
Paid-in equity | Additional tier 1 note callable August, 2020, USD | ||||||||
Borrowings | ||||||||
Equity | £ 1,278 | £ 1,278 | ||||||
Notional amount | $ | $ 2,000 | $ 2,000 | ||||||
Interest rate | 7.50% | 7.50% | 7.50% | 7.50% | 7.50% | 7.50% | ||
Conversion rate | $ / shares | $ 3.606 | |||||||
Par value | £ / shares | £ 1 | |||||||
Paid-in equity | Additional tier 1 note callable August, 2025, USD | ||||||||
Borrowings | ||||||||
Equity | £ 734 | £ 734 | ||||||
Notional amount | $ | $ 1,150 | $ 1,150 | ||||||
Interest rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | ||
Conversion rate | $ / shares | $ 3.606 | |||||||
Par value | £ / shares | £ 1 | |||||||
Paid-in equity | Additional tier 1 note callable August, 2021, USD | ||||||||
Borrowings | ||||||||
Equity | £ 2,046 | £ 2,046 | ||||||
Notional amount | $ | $ 2,650 | $ 2,650 | ||||||
Interest rate | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | ||
Conversion rate | $ / shares | $ 2.284 | |||||||
Par value | £ / shares | £ 1 | |||||||
Paid-in equity | EMTN note redeemed October, 2017, USD | ||||||||
Borrowings | ||||||||
Equity | £ 275 | |||||||
Notional amount | $ | $ 564 | $ 564 | ||||||
Interest rate | 6.99% | 6.99% | 6.99% | 6.99% | 6.99% | 6.99% | ||
Paid-in equity | EMTN note redeemed October, 2017, CAD | ||||||||
Borrowings | ||||||||
Equity | £ 156 | |||||||
Notional amount | $ | $ 321 | $ 321 | ||||||
Interest rate | 6.666% | 6.666% | 6.666% | 6.666% | 6.666% | 6.666% | ||
Paid-in equity | Subordinated note redeemed June, 2017, Pound | ||||||||
Borrowings | ||||||||
Equity | £ 93 | |||||||
Notional amount | £ 93 | £ 93 | ||||||
Interest rate | 5.6457% | 5.6457% | 5.6457% | 5.6457% | 5.6457% | 5.6457% | ||
Paid-in equity | Maximum | Additional Tier 1 notes | ||||||||
Borrowings | ||||||||
CET1 ratio (as a percent) | 7.00% | 7.00% | 7.00% |
Other Equity - Additional discl
Other Equity - Additional disclosures (Details) - GBP (£) £ / shares in Units, £ in Millions, shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2016 | |
Merger reserve | |||
Transfer (to) from retained earnings - merger reserve | £ 0 | £ (2,341) | |
Share awards and options | Own shares held | |||
Own shares held | 16 | 39 | |
Par value | £ 1 | ||
Own shares acquired | 30 | ||
Delivery of own shares held | 53 |
Leases (Details)
Leases (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Finance lease and operating lease by lessor | ||
Gross amounts | £ 9,912 | £ 10,891 |
Present value adjustments | (1,398) | (1,699) |
Other movements | (246) | (193) |
Future drawdowns | (70) | (95) |
Present value | 8,198 | 8,904 |
Future minimum lease rentals | 407 | 460 |
0-1 years | ||
Finance lease and operating lease by lessor | ||
Gross amounts | 3,164 | 3,174 |
Present value adjustments | (212) | (230) |
Other movements | (125) | (54) |
Future drawdowns | (70) | (27) |
Present value | 2,757 | 2,863 |
Future minimum lease rentals | 129 | 139 |
1-5 years | ||
Finance lease and operating lease by lessor | ||
Gross amounts | 4,686 | 5,002 |
Present value adjustments | (444) | (518) |
Other movements | (94) | (113) |
Future drawdowns | (68) | |
Present value | 4,148 | 4,303 |
Future minimum lease rentals | 257 | 296 |
After 5 years | ||
Finance lease and operating lease by lessor | ||
Gross amounts | 2,062 | 2,715 |
Present value adjustments | (742) | (951) |
Other movements | (27) | (26) |
Present value | 1,293 | 1,738 |
Future minimum lease rentals | £ 21 | £ 25 |
Leases - operating lease assets
Leases - operating lease assets on the balance sheet (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Operating lease assets on the balance sheet | ||
Operating lease asset | £ 599 | £ 725 |
Transportation | ||
Operating lease assets on the balance sheet | ||
Operating lease asset | 283 | 391 |
Cars and light commercial vehicles | ||
Operating lease assets on the balance sheet | ||
Operating lease asset | 45 | 56 |
Other | ||
Operating lease assets on the balance sheet | ||
Operating lease asset | £ 271 | £ 278 |
Leases - Residual value exposur
Leases - Residual value exposures - income and expense in continuing operations (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Amounts recognised as income and expense in continuing operations | |||
Operating leases - minimum rentals payable | £ 2,279 | £ 2,807 | |
Finance lease contracts and hire purchase agreements | |||
Accumulated allowance for uncollectable minimum receivables | 63 | 54 | £ 65 |
Continuing operations | |||
Amounts recognised as income and expense in continuing operations | |||
Finance leases - contingent rental rebate | (34) | (76) | (81) |
Operating leases - minimum rentals payable | 221 | 239 | 239 |
Discontinued operations | |||
Amounts recognised as income and expense in continuing operations | |||
Operating leases - minimum rentals payable | £ 0 | £ 0 | £ 75 |
Leases - Residual value expo171
Leases - Residual value exposures (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Residual value exposures | ||
Unguaranteed residual values of finance lease contracts | £ 207 | £ 142 |
Unguaranteed residual values of hire purchase agreements | 41 | 51 |
Unguaranteed residual values | 488 | 535 |
0-1 years | ||
Residual value exposures | ||
Unguaranteed residual values of finance lease contracts | 88 | 43 |
Unguaranteed residual values of hire purchase agreements | 38 | 24 |
Unguaranteed residual values | 181 | 126 |
After 1 year but within 2 years | ||
Residual value exposures | ||
Unguaranteed residual values of finance lease contracts | 20 | 27 |
Unguaranteed residual values of hire purchase agreements | 2 | 25 |
Unguaranteed residual values | 75 | 136 |
After 2 years but within 5 years | ||
Residual value exposures | ||
Unguaranteed residual values of finance lease contracts | 72 | 46 |
Unguaranteed residual values of hire purchase agreements | 1 | 2 |
Unguaranteed residual values | 179 | 220 |
After 5 years | ||
Residual value exposures | ||
Unguaranteed residual values of finance lease contracts | 27 | 26 |
Unguaranteed residual values | 53 | 53 |
Transportation | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 137 | 233 |
Transportation | 0-1 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 29 | 24 |
Transportation | After 1 year but within 2 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 22 | 60 |
Transportation | After 2 years but within 5 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 69 | 128 |
Transportation | After 5 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 17 | 21 |
Cars and light commercial vehicles | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 19 | 22 |
Cars and light commercial vehicles | 0-1 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 5 | 5 |
Cars and light commercial vehicles | After 1 year but within 2 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 7 | 5 |
Cars and light commercial vehicles | After 2 years but within 5 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 7 | 12 |
Other | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 84 | 87 |
Other | 0-1 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 21 | 30 |
Other | After 1 year but within 2 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 24 | 19 |
Other | After 2 years but within 5 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 30 | 32 |
Other | After 5 years | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | £ 9 | £ 6 |
Structured entities (Details)
Structured entities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated structured entities | ||
Debt securities in issue | £ 30,559 | £ 27,245 |
Loans and advances to customers | 349,919 | 351,950 |
Securitisations | ||
Consolidated structured entities | ||
Assets excluding cash deposits recorded in statements | 4,073 | 8,830 |
Cash deposits | 518 | 965 |
Total assets | 4,591 | 9,795 |
Securitisations | UK mortgages | ||
Consolidated structured entities | ||
Assets excluding cash deposits recorded in statements | 1,475 | |
Securitisations | Irish mortgages | ||
Consolidated structured entities | ||
Assets excluding cash deposits recorded in statements | 4,073 | 7,054 |
Securitisations | US mortgages | ||
Consolidated structured entities | ||
Assets excluding cash deposits recorded in statements | 301 | |
Covered Bond Programme | ||
Consolidated structured entities | ||
Loans and advances to customers | 8,915 | |
Consolidated structured entities | Securitisations | ||
Consolidated structured entities | ||
Debt securities in issue | 4,688 | 9,876 |
Consolidated structured entities | Securitisations | UK mortgages | ||
Consolidated structured entities | ||
Debt securities in issue | 1,774 | |
Consolidated structured entities | Securitisations | Irish mortgages | ||
Consolidated structured entities | ||
Debt securities in issue | 4,688 | 7,801 |
Consolidated structured entities | Securitisations | US mortgages | ||
Consolidated structured entities | ||
Debt securities in issue | 301 | |
Consolidated structured entities | Commercial paper conduits | ||
Consolidated structured entities | ||
Assets held by the conduits | 0 | 100 |
Consolidated structured entities | Covered Bond Programme | ||
Consolidated structured entities | ||
Debt securities in issue | 6,307 | 3,935 |
Loans and advances to customers | 8,621 | |
Held by Third party | Securitisations | ||
Consolidated structured entities | ||
Debt securities in issue | 1,481 | |
Held by Third party | Securitisations | Irish mortgages | ||
Consolidated structured entities | ||
Debt securities in issue | 1,180 | |
Held by Third party | Securitisations | US mortgages | ||
Consolidated structured entities | ||
Debt securities in issue | 301 | |
Held by RBS | Securitisations | ||
Consolidated structured entities | ||
Debt securities in issue | 4,688 | 8,395 |
Held by RBS | Securitisations | UK mortgages | ||
Consolidated structured entities | ||
Debt securities in issue | 1,774 | |
Held by RBS | Securitisations | Irish mortgages | ||
Consolidated structured entities | ||
Debt securities in issue | £ 4,688 | £ 6,621 |
Structured entities - Unconsoli
Structured entities - Unconsolidated structured entities (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Unconsolidated structured entities | ||
Unconsolidated structured entities | ||
Liquidity facilities/loan commitments | £ 2,572 | £ 2,154 |
Guarantees | 234 | 61 |
Maximum exposure | 9,298 | 10,425 |
Assets transferred to sponsored entities | 0 | 0 |
Income arising from sponsored entities | 11 | 18 |
Unconsolidated structured entities | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (692) | (611) |
Unconsolidated structured entities | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 1,100 | 1,152 |
Unconsolidated structured entities | Held-for-trading | Loans and advances to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 475 | 628 |
Unconsolidated structured entities | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 777 | 395 |
Unconsolidated structured entities | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 5,392 | 7,058 |
Unconsolidated structured entities | Other than held-for-trading | Loans and advances to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 1,363 | 2,210 |
Asset backed securitisation vehicles | ||
Unconsolidated structured entities | ||
Liquidity facilities/loan commitments | 2,117 | 1,397 |
Guarantees | 229 | 55 |
Maximum exposure | 8,460 | 8,508 |
Asset backed securitisation vehicles | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (561) | (509) |
Asset backed securitisation vehicles | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 983 | 1,015 |
Asset backed securitisation vehicles | Held-for-trading | Loans and advances to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 380 | 588 |
Asset backed securitisation vehicles | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 660 | 318 |
Asset backed securitisation vehicles | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 5,131 | 6,041 |
Asset backed securitisation vehicles | Other than held-for-trading | Loans and advances to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 1,243 | 1,339 |
Investment funds and other | ||
Unconsolidated structured entities | ||
Liquidity facilities/loan commitments | 455 | 757 |
Guarantees | 5 | 6 |
Maximum exposure | 838 | 1,921 |
Investment funds and other | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (131) | (102) |
Investment funds and other | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 117 | 137 |
Investment funds and other | Held-for-trading | Loans and advances to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 95 | 40 |
Investment funds and other | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 117 | 77 |
Investment funds and other | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 261 | 1,017 |
Investment funds and other | Other than held-for-trading | Loans and advances to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 120 | 871 |
Debt securities | Unconsolidated structured entities | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 536 | 646 |
Debt securities | Unconsolidated structured entities | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 4,029 | 4,848 |
Debt securities | Asset backed securitisation vehicles | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 504 | 618 |
Debt securities | Asset backed securitisation vehicles | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 3,888 | 4,702 |
Debt securities | Investment funds and other | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 32 | 28 |
Debt securities | Investment funds and other | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 141 | 146 |
Equity shares | Unconsolidated structured entities | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 4 | 94 |
Equity shares | Investment funds and other | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | £ 4 | £ 94 |
Asset transfers (Details)
Asset transfers (Details) - Securities repurchase agreements or lending transactions - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Securities repurchase agreements or lending transactions | ||
Fair value of associated liabilities | £ 23,692 | £ 17,975 |
Debt securities | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | £ 23,781 | £ 18,107 |
Asset transfers - Assets pledge
Asset transfers - Assets pledged as collateral (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Asset transfers | ||
Assets pledged against liabilities | £ 72,078 | £ 57,166 |
Liabilities secured by assets | 43,182 | 31,957 |
Deposits by banks | ||
Asset transfers | ||
Liabilities secured by assets | 20,226 | 5,514 |
Derivatives | ||
Asset transfers | ||
Liabilities secured by assets | 22,956 | 26,443 |
Loans and advances to banks | ||
Asset transfers | ||
Assets pledged against liabilities | 7,622 | 7,360 |
Loans and advances to customers | ||
Asset transfers | ||
Assets pledged against liabilities | 45,986 | 29,654 |
Securities | ||
Asset transfers | ||
Assets pledged against liabilities | £ 18,470 | £ 20,152 |
Capital resources (Details)
Capital resources (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Shareholders' equity (excluding non-controlling interests) | ||
Shareholders' equity | £ 48,330 | £ 48,609 |
Preference shares - equity | (2,565) | (2,565) |
Other equity instruments | (4,058) | (4,582) |
Shareholders' equity (excluding non-controlling interests) | 41,707 | 41,462 |
Regulatory adjustments and deductions | ||
Own credit | (90) | (304) |
Defined benefit pension fund adjustment | (287) | (208) |
Cash flow hedging reserve | (227) | (1,030) |
Deferred tax assets | (849) | (906) |
Prudential valuation adjustments | (496) | (532) |
Goodwill and other intangible assets | (6,543) | (6,480) |
Expected losses less impairments | (1,286) | (1,371) |
Other regulatory adjustments | 28 | (8) |
Total regulatory adjustments and deductions | (9,750) | (10,839) |
CET1 capital | 31,957 | 30,623 |
Additional Tier 1 (AT1) capital | ||
Eligible AT1 | 4,041 | 4,041 |
Qualifying instruments and related share premium subject to phase out | 3,416 | 5,416 |
Qualifying instruments issued by subsidiaries and held by third parties | 140 | 339 |
AT1 capital | 7,597 | 9,796 |
Tier 1 capital | 39,554 | 40,419 |
Qualifying Tier 2 capital | ||
Qualifying instruments and related share premium | 6,501 | 7,066 |
Qualifying instruments issued by subsidiaries and held by third parties | 1,876 | 4,818 |
Tier 2 capital | 8,377 | 11,884 |
Total regulatory capital | £ 47,931 | £ 52,303 |
Minimum pillar 1 capital ratio | 8.00% | |
Minimum tier 1 component ratio | 4.50% |
Memorandum items (Details)
Memorandum items (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | £ 124,941 | £ 138,645 | |
Contingent liabilities and commitments | 136,050 | 150,691 | £ 153,752 |
0-1 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 60,079 | ||
Contingent liabilities and commitments | 62,042 | ||
More than 1 year but less than 3 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 22,884 | ||
Contingent liabilities and commitments | 24,492 | ||
More than 3 years but less than 5 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 36,511 | ||
Contingent liabilities and commitments | 37,172 | ||
After 5 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 5,467 | ||
Contingent liabilities and commitments | 12,344 | ||
Guarantees and assets pledged as collateral security | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 7,718 | 7,867 | |
Guarantees and assets pledged as collateral security | 0-1 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 1,354 | ||
Guarantees and assets pledged as collateral security | More than 1 year but less than 3 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 493 | ||
Guarantees and assets pledged as collateral security | More than 3 years but less than 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 481 | ||
Guarantees and assets pledged as collateral security | After 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 5,390 | ||
Other contingent liabilities | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 3,391 | £ 4,179 | |
Other contingent liabilities | 0-1 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 609 | ||
Other contingent liabilities | More than 1 year but less than 3 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 1,115 | ||
Other contingent liabilities | More than 3 years but less than 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 180 | ||
Other contingent liabilities | After 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | £ 1,487 |
Memorandum items - Contractual
Memorandum items - Contractual Obligations of future (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Contractual obligations | ||
Minimum lease payments payable under non-cancellable operating lease | £ 2,279 | £ 2,807 |
Capital expenditure on property, plant and equipment | 18 | 21 |
Contracts to purchase goods or services | 682 | 598 |
Total capital commitments | 2,979 | 3,426 |
0-1 years | ||
Contractual obligations | ||
Minimum lease payments payable under non-cancellable operating lease | 206 | 246 |
Contracts to purchase goods or services | 276 | 231 |
1-5 years | ||
Contractual obligations | ||
Minimum lease payments payable under non-cancellable operating lease | 651 | 786 |
After 5 years | ||
Contractual obligations | ||
Minimum lease payments payable under non-cancellable operating lease | £ 1,422 | £ 1,775 |
Memorandum items - Litigation,
Memorandum items - Litigation, Investigations and Reviews (Details) £ / shares in Units, € in Millions, £ in Millions, SFr in Millions, $ in Millions, $ in Millions, $ in Millions | Nov. 09, 2017item | Oct. 05, 2017item | Feb. 03, 2017USD ($) | Dec. 23, 2015USD ($) | Dec. 15, 2015USD ($) | May 20, 2015USD ($) | Nov. 19, 2014USD ($) | Nov. 19, 2014GBP (£) | Dec. 31, 2017GBP (£) | Jan. 31, 2017CAD ($) | Dec. 31, 2016GBP (£)shareholder | Oct. 31, 2016GBP (£) | Dec. 31, 2015item | Nov. 30, 2015complaint | Sep. 30, 2015item | Mar. 31, 2015item | Aug. 31, 2012USD ($) | Oct. 31, 2011USD ($) | Dec. 31, 2017CHF (SFr)actionitem | Dec. 31, 2017EUR (€)actionitem | Dec. 31, 2017USD ($)actionitem | Dec. 31, 2017GBP (£)actionitem | Dec. 31, 2016SGD ($) | Dec. 31, 2016GBP (£)£ / shares | Dec. 31, 2015USD ($)company | Dec. 31, 2015GBP (£)company | Dec. 31, 2012GBP (£) | Dec. 31, 2017USD ($)action | Dec. 31, 2017GBP (£)action | Oct. 26, 2017USD ($) | Jul. 10, 2017item |
Trustee and other fiduciary activities | |||||||||||||||||||||||||||||||
Fee income | £ 244 | £ 251 | £ 321 | ||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Additional Provisions | 2,400 | ||||||||||||||||||||||||||||||
Provisions utilised | £ 6,477 | ||||||||||||||||||||||||||||||
Number of UK based financial institutions and certain US banks involved in money laundering | item | 16 | 16 | 16 | 16 | |||||||||||||||||||||||||||
Payment protection insurance | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Additional Provisions | £ 175 | 175 | |||||||||||||||||||||||||||||
Total aggregate provisions | £ 5,100 | ||||||||||||||||||||||||||||||
Provisions utilised | 375 | ||||||||||||||||||||||||||||||
RMBS and other securitised products investigations | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Total aggregate provisions | $ 4,400 | 3,200 | |||||||||||||||||||||||||||||
Penalty paid | £ 125 | ||||||||||||||||||||||||||||||
Interest rate hedging products (IRHP) redress programme | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Total aggregate provisions | 1,470 | ||||||||||||||||||||||||||||||
Investment advice review | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Total aggregate provisions | 201 | ||||||||||||||||||||||||||||||
Other provisions utilised | 102 | ||||||||||||||||||||||||||||||
Packaged accounts | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Total aggregate provisions | 409 | ||||||||||||||||||||||||||||||
Treatment of tracker mortgage customers | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Additional Provisions | € 87 | 76 | |||||||||||||||||||||||||||||
Total aggregate provisions | 298 | £ 248 | |||||||||||||||||||||||||||||
Provisions utilised | 75 | 64 | |||||||||||||||||||||||||||||
Internal review from treatment of tracker mortgage customers | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Additional Provisions | € 101 | 89 | |||||||||||||||||||||||||||||
Redress | Payment protection insurance | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Provisions utilised | 4,100 | ||||||||||||||||||||||||||||||
FCA | Redress | Payment protection insurance | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Additional Provisions | 4,600 | ||||||||||||||||||||||||||||||
Provisions utilised | £ 3,700 | ||||||||||||||||||||||||||||||
The Financial Services Compensation Scheme | |||||||||||||||||||||||||||||||
The Financial Services Compensation Scheme | |||||||||||||||||||||||||||||||
Interest rate basis | 12 month LIBOR | 12 month LIBOR | 12 month LIBOR | 12 month LIBOR | |||||||||||||||||||||||||||
Adjustment to interest rate basis | 1.11% | 1.11% | 1.11% | ||||||||||||||||||||||||||||
Interest element levied on the industry | £ 202 | £ 337 | |||||||||||||||||||||||||||||
Accrued estimated FSCS levies | £ 11.6 | ||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Value per share under loss contingency | £ / shares | £ 2 | ||||||||||||||||||||||||||||||
Number of shareholders to whom final settlement made | shareholder | 4 | ||||||||||||||||||||||||||||||
Number of total shareholders under litigation | shareholder | 5 | ||||||||||||||||||||||||||||||
Percentage of claims settlement amount | 78.00% | ||||||||||||||||||||||||||||||
Percentage of claimants action concluded | 98.00% | ||||||||||||||||||||||||||||||
Maximum settlement amount | £ 900 | ||||||||||||||||||||||||||||||
Damages claimed | £ 4,000 | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities (RMBS) litigation in the US | District of Connecticut | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Number of former traders entered guilty | item | 2 | 2 | |||||||||||||||||||||||||||||
Number of securities fraud committed | item | 1 | 1 | |||||||||||||||||||||||||||||
Penalty payable | $ | $ 35 | ||||||||||||||||||||||||||||||
Reimbursement to customers | $ | $ 9.1 | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities (RMBS) litigation in the US, issued by Nomura Holding America Inc and subsidiaries | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Maximum settlement amount | $ | $ 636 | ||||||||||||||||||||||||||||||
Estimated net exposure | $ | $ 318 | ||||||||||||||||||||||||||||||
Number of RMBS | item | 4 | 4 | 4 | 4 | |||||||||||||||||||||||||||
Total settlement amount paid | $ | $ 55.3 | ||||||||||||||||||||||||||||||
Legal Proceedings Federal Home Loan Banks and Other | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Maximum RMBS issued | $ | $ 1,000 | ||||||||||||||||||||||||||||||
London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Number of other USD LIBOR-related actions | action | 35 | 35 | 35 | ||||||||||||||||||||||||||||
Number of failed US banks | item | 39 | ||||||||||||||||||||||||||||||
JPY LIBOR and Euroyen TIBOR | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Number of class actions | action | 2 | 2 | 2 | 2 | |||||||||||||||||||||||||||
ISDAFIX antitrust litigation | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Maximum settlement amount | $ | $ 50 | ||||||||||||||||||||||||||||||
ISDAFIX antitrust litigation | CFTC | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Penalty paid | $ | $ 85 | ||||||||||||||||||||||||||||||
FX antitrust litigation | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Maximum settlement amount | $ | $ 13 | ||||||||||||||||||||||||||||||
Total settlement amount paid | $ | $ 255 | ||||||||||||||||||||||||||||||
Number of purported class actions | item | 2 | ||||||||||||||||||||||||||||||
FX antitrust litigation | CFTC | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Penalty paid | $ | $ 290 | ||||||||||||||||||||||||||||||
FX antitrust litigation | FCA | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Penalty paid | £ 217 | ||||||||||||||||||||||||||||||
FX antitrust litigation | Federal reserve | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Penalty paid | $ | $ 274 | ||||||||||||||||||||||||||||||
FX antitrust litigation | DOJ | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Penalty paid | $ | $ 395 | ||||||||||||||||||||||||||||||
Swaps antitrust litigation | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Number of complaints filed | complaint | 2 | ||||||||||||||||||||||||||||||
Madoff | |||||||||||||||||||||||||||||||
The Financial Services Compensation Scheme | |||||||||||||||||||||||||||||||
Maximum contingent liability | $ | $ 162.1 | ||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Damages claimed | $ | $ 75.8 | $ 21.8 | |||||||||||||||||||||||||||||
Property Alliance Group claim | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Damages claimed | £ 34.8 | £ 446.7 | |||||||||||||||||||||||||||||
SMEs | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Maximum credit exposure | £ 20 | ||||||||||||||||||||||||||||||
SMEs | FCA | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Total aggregate provisions | £ 400 | £ 400 | £ 400 | ||||||||||||||||||||||||||||
Provisions utilised | 150 | ||||||||||||||||||||||||||||||
Coutts & Co Ltd | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Penalty paid | $ 78.5 | $ 2.4 | |||||||||||||||||||||||||||||
NPA term | 4 years | ||||||||||||||||||||||||||||||
Disgorge Profits | SFr | SFr 6.5 | ||||||||||||||||||||||||||||||
Tax dispute | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Damages claimed | £ 80 | ||||||||||||||||||||||||||||||
Value-added-tax | £ 86 | ||||||||||||||||||||||||||||||
Number of claimants | company | 10 | 10 | |||||||||||||||||||||||||||||
NatWest | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Number of terrorist attacks claims dismissed | item | 2 | ||||||||||||||||||||||||||||||
Number of terrorist attacks denied | item | 16 | ||||||||||||||||||||||||||||||
Number of terrorist attacks in Iraq between 2003 and 2011 | item | 55 | ||||||||||||||||||||||||||||||
Maximum | Tax dispute | |||||||||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | |||||||||||||||||||||||||||||||
Penalty as a percentage of VAT | 100.00% | 100.00% | 100.00% | 100.00% |
Net cash flow from operating180
Net cash flow from operating activities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net cash flow from operating activities | |||
Operating profit/(loss) before tax | £ 2,239 | £ (4,082) | £ (2,703) |
Profit before tax - discontinued operations | 1,766 | ||
(Increases)/decrease in prepayments and accrued income | 1 | (42) | 410 |
Interest on subordinated liabilities | 572 | 845 | 875 |
Decrease in income accruals | (236) | (444) | (1,075) |
Impairment losses/(releases) | 493 | 478 | (624) |
Loans and advances written-off net of recoveries | (1,054) | (3,586) | (8,789) |
Unwind of discount on impairment losses | (86) | (113) | (144) |
Profit on sale of property, plant and equipment | (75) | (18) | (91) |
Profit on sale of subsidiaries and associates | (155) | (22) | (1,135) |
(Profit)/loss on sale of securities | (226) | (71) | 4 |
Charge for defined benefit pension schemes | 309 | 267 | 523 |
Pension schemes curtailments or settlements loss/(gain) | 66 | 1 | (65) |
Cash contribution to defined benefit pension schemes | (627) | (4,786) | (1,060) |
Other provisions charged net of releases | 1,931 | 7,216 | 4,566 |
Other provisions utilised | (6,477) | (2,699) | (2,202) |
Depreciation and amortisation | 808 | 778 | 1,180 |
Loss on redemption of own debt | 7 | 126 | 263 |
Loss on reclassification to disposal groups | 273 | ||
Write down of goodwill and other intangible assets | 29 | 159 | 1,332 |
Elimination of foreign exchange differences | (426) | (6,518) | (1,501) |
Other non-cash items | 21 | 619 | 599 |
Net cash outflow from trading activities | (2,886) | (11,892) | (7,598) |
(Increase)/decrease in loans and advances to banks and customers | 2,466 | (12,960) | 58,766 |
Decrease in securities | (1,319) | 16,741 | 13,149 |
Decrease in other assets | (221) | 1,195 | 2,808 |
Decrease/(increase) in derivative assets | 86,138 | 15,562 | 91,311 |
Changes in operating assets | 87,064 | 20,538 | 166,034 |
Increase/(decrease) in deposits by banks and customers | 25,449 | 10,418 | (43,597) |
Decrease in debt securities in issue | 3,326 | (3,967) | (20,580) |
(Decrease)/increase in other liabilities | (381) | (422) | 4,465 |
(Decrease)/increase in derivative liabilities | (81,969) | (18,258) | (94,951) |
Increase/(decrease) in settlement balances and short positions | 8,658 | 104 | (2,782) |
Changes in operating liabilities | (44,917) | (12,125) | (157,445) |
Income taxes paid | (520) | (171) | (73) |
Net cash flows from operating activities | £ 38,741 | £ (3,650) | £ 918 |
Analysis of the net investme181
Analysis of the net investment in business interests and intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Analysis of the net investment in business interests and intangible assets | |||
Fair value given for businesses acquired | £ (131) | £ (87) | £ (59) |
Net outflow of cash in respect of acquisitions | (131) | (87) | (59) |
Net assets/(liabilities) sold | 177 | (400) | (2,041) |
Non-cash consideration | (15) | (5) | |
Profit on disposals | 155 | 22 | 1,135 |
Net cash and cash equivalents disposed | 55 | 1,959 | |
Net inflow/(outflow) of cash in respect of disposals | 317 | (328) | 1,053 |
Dividends received from associates | (1) | 9 | 11 |
Cash expenditure on intangible assets | (384) | (480) | (614) |
Net (outflow)/inflow | £ (199) | £ (886) | £ 391 |
Analysis of the net investme182
Analysis of the net investment in business interest and intangible assets, proceeds on disposal (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2015GBP (£) | |
Citizens | |
Noncurrent assets or disposal groups classified as held for sale | |
Cash proceeds relating to disposal of controlling interest | £ 1,628 |
Interest received and paid (Det
Interest received and paid (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest received and paid | |||
Interest received | £ 10,946 | £ 11,321 | £ 11,788 |
Interest paid | (2,300) | (2,638) | (3,598) |
Interest received (paid) net | £ 8,646 | £ 8,683 | £ 8,190 |
Analysis of changes in finan184
Analysis of changes in financing during the year (Details) £ in Millions, $ in Billions | 12 Months Ended | |||||
Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2016USD ($) | Dec. 31, 2016GBP (£) | Dec. 31, 2015USD ($) | Dec. 31, 2015GBP (£) | |
At 1 January | £ 49,404 | £ 54,147 | ||||
Issue of ordinary shares | 306 | 300 | £ 307 | |||
Issue of Additional Tier 1 capital notes | 2,046 | 2,012 | ||||
Redemption of paid-in equity | (720) | (110) | (150) | |||
Redemption of subordinated liabilities | (5,747) | (3,606) | (3,047) | |||
Net cash flows from financing activities | (8,208) | (5,107) | (940) | |||
Conversion of B shares | $ | $ 1.1 | $ 1.5 | $ 1.9 | |||
Redemption of debt preference shares | 748 | |||||
Redemption of equity preference shares | (1,160) | (1,214) | ||||
At 31 December | 49,093 | 49,404 | 54,147 | |||
Share capital, share premium, paid-in equity and merger reserve | ||||||
At 1 January | 52,979 | 50,577 | 45,935 | |||
Issue of ordinary shares | 306 | 300 | 307 | |||
Issue of Additional Tier 1 capital notes | 2,046 | 2,012 | ||||
Redemption of paid-in equity | (720) | (110) | (150) | |||
Net cash flows from financing activities | (414) | 2,236 | 2,169 | |||
Transfer to retained earnings | (25,789) | |||||
Conversion of B shares | 4,590 | |||||
Redemption of debt preference shares | 748 | |||||
Redemption of equity preference shares | (1) | |||||
Transfer of merger reserve to retained earnings | (2,341) | |||||
Other adjustments including foreign exchange | 196 | |||||
At 31 December | 27,791 | 52,979 | 50,577 | |||
Employee share schemes | Share capital, share premium, paid-in equity and merger reserve | ||||||
Issue of ordinary shares | £ 71 | £ 166 | £ 225 |
Analysis of changes in finan185
Analysis of changes in financing during the year, Subordinated liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Subordinated liabilities | |||
Subordinated liabilities at beginning of period | £ 19,419 | ||
Redemption of subordinated liabilities | (5,747) | £ (3,606) | £ (3,047) |
Net cash flows from financing activities | (8,208) | (5,107) | (940) |
Subordinated liabilities at end of period | 12,722 | 19,419 | |
Subordinated Liabilities | |||
Subordinated liabilities | |||
Subordinated liabilities at beginning of period | 19,419 | 19,847 | 22,905 |
Redemption of subordinated liabilities | (5,747) | (3,606) | (3,047) |
Net cash flows from financing activities | (5,747) | (3,606) | (3,047) |
Other adjustments including foreign exchange | (950) | 3,178 | (11) |
Subordinated liabilities at end of period | £ 12,722 | £ 19,419 | £ 19,847 |
Analysis of cash and cash eq186
Analysis of cash and cash equivalents (Details) - GBP (£) £ in Millions | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Analysis of cash and cash equivalents | ||||||
Cash | £ 88,414 | £ 94,832 | £ 92,060 | |||
Cash equivalents | 10,156 | 8,760 | 15,844 | |||
Cash and cash equivalents at 1 January | £ 98,570 | £ 103,592 | £ 107,904 | |||
Net cash outflow | 24,035 | (5,022) | (4,312) | |||
Cash and cash equivalents at 31 December | 122,605 | 98,570 | 103,592 | |||
Cash and balances at central banks | 98,337 | 74,250 | 79,404 | |||
Treasury bills and debt securities | 427 | 387 | 1,578 | |||
Loans and advances to banks | 23,841 | 23,933 | 22,610 | |||
Total cash and cash equivalents | £ 98,570 | £ 103,592 | £ 107,904 | 122,605 | 98,570 | 103,592 |
Cash collateral posted with bank counterparties | £ 6,883 | £ 6,661 | £ 11,031 |
Analysis of cash and cash eq187
Analysis of cash and cash equivalents - Mandatory reserve deposits (Details) € in Billions, £ in Billions | Dec. 31, 2017EUR (€) | Dec. 31, 2017GBP (£) | Dec. 31, 2016EUR (€) | Dec. 31, 2016GBP (£) | Dec. 31, 2015EUR (€) | Dec. 31, 2015GBP (£) |
Bank of England | ||||||
Cash | ||||||
Mandatory reserve deposits at central banks | £ | £ 0.6 | £ 0.5 | £ 0.5 | |||
De Nederlandsche Bank | ||||||
Cash | ||||||
Mandatory reserve deposits at central banks | € | € 0.1 | € 0.4 | € 0.3 |
Segmental analysis (Details)
Segmental analysis (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2017GBP (£)segment | |
Personal and Business Banking (PBB) | |
Segmental analysis | |
Number of reportable segments | 2 |
UK Personal & Business Banking | |
Segmental analysis | |
Turnover threshold | £ | £ 2 |
Commercial and Private Banking (CPB) | |
Segmental analysis | |
Number of reportable segments | 2 |
Segmental analysis - Segment ac
Segmental analysis - Segment activity (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segmental analysis | |||
Net interest income | £ 8,987 | £ 8,708 | £ 8,767 |
Non-interest income | 4,146 | 3,882 | 4,156 |
Total income | 13,133 | 12,590 | 12,923 |
Operating expenses, excluding depreciation and amortisation | (9,593) | (15,416) | (15,173) |
Depreciation and amortisation | (808) | (778) | (1,180) |
Impairment (losses)/releases | (493) | (478) | 727 |
Operating profit/(loss) before tax | 2,239 | (4,082) | (2,703) |
Personal and Business Banking (PBB) | |||
Segmental analysis | |||
Net interest income | 5,551 | 5,354 | 5,175 |
Non-interest income | 1,530 | 1,349 | 1,408 |
Total income | 7,081 | 6,703 | 6,583 |
Operating expenses, excluding depreciation and amortisation | (4,505) | (4,947) | (4,993) |
Depreciation and amortisation | 2 | ||
Impairment (losses)/releases | (295) | (12) | 133 |
Operating profit/(loss) before tax | 2,281 | 1,746 | 1,723 |
UK Personal & Business Banking | |||
Segmental analysis | |||
Net interest income | 5,130 | 4,945 | 4,810 |
Non-interest income | 1,347 | 1,182 | 1,223 |
Total income | 6,477 | 6,127 | 6,033 |
Operating expenses, excluding depreciation and amortisation | (3,829) | (4,278) | (4,564) |
Depreciation and amortisation | 2 | ||
Impairment (losses)/releases | (235) | (125) | (8) |
Operating profit/(loss) before tax | 2,413 | 1,726 | 1,461 |
Ulster Bank RoI | |||
Segmental analysis | |||
Net interest income | 421 | 409 | 365 |
Non-interest income | 183 | 167 | 185 |
Total income | 604 | 576 | 550 |
Operating expenses, excluding depreciation and amortisation | (676) | (669) | (429) |
Impairment (losses)/releases | (60) | 113 | 141 |
Operating profit/(loss) before tax | (132) | 20 | 262 |
Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Net interest income | 2,750 | 2,592 | 2,433 |
Non-interest income | 1,412 | 1,480 | 1,465 |
Total income | 4,162 | 4,072 | 3,898 |
Operating expenses, excluding depreciation and amortisation | (2,399) | (2,873) | (2,881) |
Depreciation and amortisation | (144) | (143) | (141) |
Impairment (losses)/releases | (368) | (203) | (82) |
Operating profit/(loss) before tax | 1,251 | 853 | 794 |
Commercial Banking | |||
Segmental analysis | |||
Net interest income | 2,286 | 2,143 | 1,997 |
Non-interest income | 1,198 | 1,272 | 1,257 |
Total income | 3,484 | 3,415 | 3,254 |
Operating expenses, excluding depreciation and amortisation | (1,870) | (2,324) | (1,780) |
Depreciation and amortisation | (144) | (143) | (141) |
Impairment (losses)/releases | (362) | (206) | (69) |
Operating profit/(loss) before tax | 1,108 | 742 | 1,264 |
Private Banking | |||
Segmental analysis | |||
Net interest income | 464 | 449 | 436 |
Non-interest income | 214 | 208 | 208 |
Total income | 678 | 657 | 644 |
Operating expenses, excluding depreciation and amortisation | (529) | (549) | (1,101) |
Impairment (losses)/releases | (6) | 3 | (13) |
Operating profit/(loss) before tax | 143 | 111 | (470) |
RBS International | |||
Segmental analysis | |||
Net interest income | 325 | 303 | 303 |
Non-interest income | 64 | 71 | 64 |
Total income | 389 | 374 | 367 |
Operating expenses, excluding depreciation and amortisation | (217) | (174) | (160) |
Depreciation and amortisation | (2) | ||
Impairment (losses)/releases | (3) | (10) | |
Operating profit/(loss) before tax | 167 | 190 | 207 |
NatWest Markets | |||
Segmental analysis | |||
Net interest income | 203 | 343 | 452 |
Non-interest income | 847 | 869 | 1,614 |
Total income | 1,050 | 1,212 | 2,066 |
Operating expenses, excluding depreciation and amortisation | (2,250) | (2,810) | (5,226) |
Depreciation and amortisation | 49 | (14) | (15) |
Impairment (losses)/releases | 174 | (253) | 730 |
Operating profit/(loss) before tax | (977) | (1,865) | (2,445) |
Central Items and other | |||
Segmental analysis | |||
Net interest income | 158 | 116 | 404 |
Non-interest income | 293 | 113 | (395) |
Total income | 451 | 229 | 9 |
Operating expenses, excluding depreciation and amortisation | (222) | (4,612) | (1,913) |
Depreciation and amortisation | (711) | (623) | (1,024) |
Impairment (losses)/releases | (1) | (54) | |
Operating profit/(loss) before tax | £ (483) | £ (5,006) | £ (2,982) |
Segmental analysis - Total inco
Segmental analysis - Total income (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segmental analysis | |||
Total income | £ 13,133 | £ 12,590 | £ 12,923 |
Personal and Business Banking (PBB) | |||
Segmental analysis | |||
Total income | 7,081 | 6,703 | 6,583 |
UK Personal & Business Banking | |||
Segmental analysis | |||
Total income | 6,477 | 6,127 | 6,033 |
Ulster Bank RoI | |||
Segmental analysis | |||
Total income | 604 | 576 | 550 |
Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Total income | 4,162 | 4,072 | 3,898 |
Commercial Banking | |||
Segmental analysis | |||
Total income | 3,484 | 3,415 | 3,254 |
Private Banking | |||
Segmental analysis | |||
Total income | 678 | 657 | 644 |
RBS International | |||
Segmental analysis | |||
Total income | 389 | 374 | 367 |
NatWest Markets | |||
Segmental analysis | |||
Total income | 1,050 | 1,212 | 2,066 |
Central Items and other | |||
Segmental analysis | |||
Total income | 451 | 229 | 9 |
Operating segment | |||
Segmental analysis | |||
Total income | 13,133 | 12,590 | 12,923 |
Operating segment | Personal and Business Banking (PBB) | |||
Segmental analysis | |||
Total income | 7,074 | 6,699 | 6,558 |
Operating segment | UK Personal & Business Banking | |||
Segmental analysis | |||
Total income | 6,465 | 6,115 | 5,989 |
Operating segment | Ulster Bank RoI | |||
Segmental analysis | |||
Total income | 609 | 584 | 569 |
Operating segment | Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Total income | 4,445 | 4,341 | 4,153 |
Operating segment | Commercial Banking | |||
Segmental analysis | |||
Total income | 3,851 | 3,787 | 3,619 |
Operating segment | Private Banking | |||
Segmental analysis | |||
Total income | 594 | 554 | 534 |
Operating segment | RBS International | |||
Segmental analysis | |||
Total income | 281 | 239 | 200 |
Operating segment | NatWest Markets | |||
Segmental analysis | |||
Total income | 1,077 | 1,296 | 2,190 |
Operating segment | Central Items and other | |||
Segmental analysis | |||
Total income | 256 | 15 | (178) |
Inter segment/consolidation adjustments | Personal and Business Banking (PBB) | |||
Segmental analysis | |||
Total income | 7 | 4 | 25 |
Inter segment/consolidation adjustments | UK Personal & Business Banking | |||
Segmental analysis | |||
Total income | 12 | 12 | 44 |
Inter segment/consolidation adjustments | Ulster Bank RoI | |||
Segmental analysis | |||
Total income | (5) | (8) | (19) |
Inter segment/consolidation adjustments | Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Total income | (283) | (269) | (255) |
Inter segment/consolidation adjustments | Commercial Banking | |||
Segmental analysis | |||
Total income | (367) | (372) | (365) |
Inter segment/consolidation adjustments | Private Banking | |||
Segmental analysis | |||
Total income | 84 | 103 | 110 |
Inter segment/consolidation adjustments | RBS International | |||
Segmental analysis | |||
Total income | 108 | 135 | 167 |
Inter segment/consolidation adjustments | NatWest Markets | |||
Segmental analysis | |||
Total income | (27) | (84) | (124) |
Inter segment/consolidation adjustments | Central Items and other | |||
Segmental analysis | |||
Total income | £ 195 | £ 214 | £ 187 |
Segmental analysis - Total reve
Segmental analysis - Total revenue (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segmental analysis | |||
Revenue | £ 16,063 | £ 15,945 | £ 16,890 |
Personal and Business Banking (PBB) | |||
Segmental analysis | |||
Revenue | 8,064 | 7,910 | 7,870 |
UK Personal & Business Banking | |||
Segmental analysis | |||
Revenue | 7,392 | 7,249 | 7,215 |
Ulster Bank RoI | |||
Segmental analysis | |||
Revenue | 672 | 661 | 655 |
Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Revenue | 4,392 | 4,445 | 4,292 |
Commercial Banking | |||
Segmental analysis | |||
Revenue | 3,664 | 3,706 | 3,524 |
Private Banking | |||
Segmental analysis | |||
Revenue | 728 | 739 | 768 |
RBS International | |||
Segmental analysis | |||
Revenue | 428 | 469 | 452 |
NatWest Markets | |||
Segmental analysis | |||
Revenue | 2,217 | 3,247 | 6,010 |
Central Items and other | |||
Segmental analysis | |||
Revenue | 962 | (126) | (1,734) |
Inter segment/consolidation adjustments | Personal and Business Banking (PBB) | |||
Segmental analysis | |||
Revenue | 40 | 53 | 66 |
Inter segment/consolidation adjustments | UK Personal & Business Banking | |||
Segmental analysis | |||
Revenue | 44 | 52 | 51 |
Inter segment/consolidation adjustments | Ulster Bank RoI | |||
Segmental analysis | |||
Revenue | (4) | 1 | 15 |
Inter segment/consolidation adjustments | Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Revenue | 217 | 240 | 233 |
Inter segment/consolidation adjustments | Commercial Banking | |||
Segmental analysis | |||
Revenue | 74 | 68 | 42 |
Inter segment/consolidation adjustments | Private Banking | |||
Segmental analysis | |||
Revenue | 143 | 172 | 191 |
Inter segment/consolidation adjustments | RBS International | |||
Segmental analysis | |||
Revenue | 119 | 156 | 177 |
Inter segment/consolidation adjustments | NatWest Markets | |||
Segmental analysis | |||
Revenue | 809 | 1,539 | 2,913 |
Inter segment/consolidation adjustments | Central Items and other | |||
Segmental analysis | |||
Revenue | (1,185) | (1,988) | (3,389) |
Operating segment | |||
Segmental analysis | |||
Revenue | 16,063 | 15,945 | 16,890 |
Operating segment | Personal and Business Banking (PBB) | |||
Segmental analysis | |||
Revenue | 8,024 | 7,857 | 7,804 |
Operating segment | UK Personal & Business Banking | |||
Segmental analysis | |||
Revenue | 7,348 | 7,197 | 7,164 |
Operating segment | Ulster Bank RoI | |||
Segmental analysis | |||
Revenue | 676 | 660 | 640 |
Operating segment | Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Revenue | 4,175 | 4,205 | 4,059 |
Operating segment | Commercial Banking | |||
Segmental analysis | |||
Revenue | 3,590 | 3,638 | 3,482 |
Operating segment | Private Banking | |||
Segmental analysis | |||
Revenue | 585 | 567 | 577 |
Operating segment | RBS International | |||
Segmental analysis | |||
Revenue | 309 | 313 | 275 |
Operating segment | NatWest Markets | |||
Segmental analysis | |||
Revenue | 1,408 | 1,708 | 3,097 |
Operating segment | Central Items and other | |||
Segmental analysis | |||
Revenue | £ 2,147 | £ 1,862 | £ 1,655 |
Segmental analysis - Assets and
Segmental analysis - Assets and Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segmental analysis | |||
Assets | £ 738,056 | £ 798,656 | £ 815,408 |
Liabilities | 688,963 | 749,252 | 761,261 |
Cost to acquire fixed assets and intangible assets | 1,501 | 1,392 | 1,470 |
Personal and Business Banking (PBB) | |||
Segmental analysis | |||
Assets | 215,200 | 205,468 | 189,223 |
Liabilities | 203,263 | 192,339 | 180,667 |
UK Personal & Business Banking | |||
Segmental analysis | |||
Assets | 190,636 | 181,357 | 167,959 |
Liabilities | 183,410 | 173,040 | 164,830 |
Ulster Bank RoI | |||
Segmental analysis | |||
Assets | 24,564 | 24,111 | 21,264 |
Liabilities | 19,853 | 19,299 | 15,837 |
Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Assets | 169,835 | 169,031 | 150,568 |
Liabilities | 132,193 | 131,114 | 117,876 |
Cost to acquire fixed assets and intangible assets | 210 | 288 | 214 |
Commercial Banking | |||
Segmental analysis | |||
Assets | 149,545 | 150,453 | 133,546 |
Liabilities | 105,144 | 104,441 | 94,619 |
Cost to acquire fixed assets and intangible assets | 208 | 288 | 214 |
Private Banking | |||
Segmental analysis | |||
Assets | 20,290 | 18,578 | 17,022 |
Liabilities | 27,049 | 26,673 | 23,257 |
Cost to acquire fixed assets and intangible assets | 2 | ||
RBS International | |||
Segmental analysis | |||
Assets | 25,867 | 23,420 | 23,130 |
Liabilities | 29,077 | 25,280 | 21,398 |
Cost to acquire fixed assets and intangible assets | 12 | ||
NatWest Markets | |||
Segmental analysis | |||
Assets | 277,886 | 372,496 | 416,748 |
Liabilities | 248,553 | 340,471 | 380,059 |
Cost to acquire fixed assets and intangible assets | 4 | 6 | 29 |
Central Items and other | |||
Segmental analysis | |||
Assets | 49,268 | 28,241 | 35,739 |
Liabilities | 75,877 | 60,048 | 61,261 |
Cost to acquire fixed assets and intangible assets | £ 1,275 | £ 1,098 | £ 1,227 |
Segmental analysis - Goodwill (
Segmental analysis - Goodwill (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Analysis of goodwill | ||
Goodwill | £ 5,558 | £ 5,558 |
UK Personal & Business Banking | ||
Analysis of goodwill | ||
Goodwill | 3,351 | 3,351 |
Commercial Banking | ||
Analysis of goodwill | ||
Goodwill | 1,907 | 1,907 |
RBS International | ||
Analysis of goodwill | ||
Goodwill | £ 300 | £ 300 |
Segmental analysis - Geographic
Segmental analysis - Geographical segments (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Geographical segments | |||
Total revenue | £ 16,063 | £ 15,945 | £ 16,890 |
Net interest income | 8,987 | 8,708 | 8,767 |
Net fees and commissions | 2,455 | 2,535 | 2,933 |
Income from trading activities | 634 | 974 | 1,060 |
Other operating income | 1,057 | 373 | 163 |
Total income | 13,133 | 12,590 | 12,923 |
Operating profit/(loss) before tax | 2,239 | (4,082) | (2,703) |
Total assets | 738,056 | 798,656 | 815,408 |
Of which total assets held for sale | 195 | 13 | 3,486 |
Total liabilities | 688,963 | 749,252 | 761,261 |
Of which total liabilities held for sale | 10 | 15 | 2,980 |
Net assets attributable to equity owners and non-controlling interests | 49,093 | 49,404 | 54,147 |
Contingent liabilities and commitments | 136,050 | 150,691 | 153,752 |
Cost to acquire property, plant and equipment and intangible assets | 1,501 | 1,392 | 1,470 |
UK | |||
Geographical segments | |||
Total revenue | 15,011 | 14,606 | 14,724 |
Net interest income | 8,611 | 8,243 | 7,947 |
Net fees and commissions | 2,192 | 2,287 | 2,377 |
Income from trading activities | 570 | 790 | 942 |
Other operating income | 806 | 261 | 102 |
Total income | 12,179 | 11,581 | 11,368 |
Operating profit/(loss) before tax | 3,230 | (2,214) | (87) |
Total assets | 662,314 | 715,685 | 673,409 |
Of which total assets held for sale | 182 | ||
Total liabilities | 626,103 | 675,089 | 630,818 |
Net assets attributable to equity owners and non-controlling interests | 36,211 | 40,596 | 42,591 |
Contingent liabilities and commitments | 128,127 | 141,963 | 127,781 |
Cost to acquire property, plant and equipment and intangible assets | 1,479 | 1,323 | 1,331 |
USA | |||
Geographical segments | |||
Total revenue | 192 | 264 | 315 |
Net interest income | (4) | 82 | 162 |
Net fees and commissions | 97 | 9 | 139 |
Income from trading activities | 83 | 159 | 44 |
Other operating income | 22 | (40) | (118) |
Total income | 198 | 210 | 227 |
Operating profit/(loss) before tax | (580) | (1,652) | (2,723) |
Total assets | 38,485 | 44,447 | 77,514 |
Of which total assets held for sale | 10 | 13 | 15 |
Total liabilities | 36,564 | 44,513 | 75,971 |
Of which total liabilities held for sale | 10 | 15 | 16 |
Net assets attributable to equity owners and non-controlling interests | 1,921 | (66) | 1,543 |
Contingent liabilities and commitments | 78 | 639 | 9,729 |
Cost to acquire property, plant and equipment and intangible assets | 1 | 3 | 70 |
Europe | |||
Geographical segments | |||
Total revenue | 655 | 738 | 1,247 |
Net interest income | 346 | 302 | 407 |
Net fees and commissions | 113 | 175 | 334 |
Income from trading activities | (24) | 18 | 85 |
Other operating income | 121 | 9 | 34 |
Total income | 556 | 504 | 860 |
Operating profit/(loss) before tax | (485) | (266) | 261 |
Total assets | 34,280 | 32,142 | 42,133 |
Of which total assets held for sale | 3 | 1,251 | |
Total liabilities | 25,171 | 26,311 | 34,942 |
Of which total liabilities held for sale | 418 | ||
Net assets attributable to equity owners and non-controlling interests | 9,109 | 5,831 | 7,191 |
Contingent liabilities and commitments | 7,823 | 8,038 | 14,961 |
Cost to acquire property, plant and equipment and intangible assets | 11 | 54 | 36 |
RoW | |||
Geographical segments | |||
Total revenue | 205 | 337 | 604 |
Net interest income | 34 | 81 | 251 |
Net fees and commissions | 53 | 64 | 83 |
Income from trading activities | 5 | 7 | (11) |
Other operating income | 108 | 143 | 145 |
Total income | 200 | 295 | 468 |
Operating profit/(loss) before tax | 74 | 50 | (154) |
Total assets | 2,977 | 6,382 | 22,352 |
Of which total assets held for sale | 2,220 | ||
Total liabilities | 1,125 | 3,339 | 19,530 |
Of which total liabilities held for sale | 2,546 | ||
Net assets attributable to equity owners and non-controlling interests | 1,852 | 3,043 | 2,822 |
Contingent liabilities and commitments | 22 | 51 | 1,281 |
Cost to acquire property, plant and equipment and intangible assets | £ 10 | £ 12 | £ 33 |
Directors' and key management r
Directors' and key management remuneration - Directors (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Transactions between related parties | ||
Director emoluments before amounts receivable under long-term incentive plans and share option plans | £ 7,046 | £ 7,267 |
Amounts receivable under long-term incentive plans and share option plans | 1,410,000 | 1,509,000 |
Total Directors' remuneration | 8,271 | 8,260 |
Accrued benefits | 0 | 0 |
Non-executive directors | ||
Transactions between related parties | ||
Director emoluments before amounts receivable under long-term incentive plans and share option plans | 1,747 | 1,466 |
Chairman and executive directors | ||
Transactions between related parties | ||
Director emoluments before amounts receivable under long-term incentive plans and share option plans | 5,299 | 5,801 |
Director | ||
Transactions between related parties | ||
Amounts receivable under long-term incentive plans and share option plans | £ 1,225 | £ 993 |
Directors' and key managemen196
Directors' and key management remuneration - Key management (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Directors' and key management remuneration | ||
Short-term benefits | £ 19,019 | £ 20,350 |
Post-employment benefits | 434 | 471 |
Share-based payments | 3,558 | 2,606 |
Total remuneration | £ 23,011 | £ 23,427 |
Transactions with directors 197
Transactions with directors and key management (Details) | Dec. 31, 2017GBP (£)director | Dec. 31, 2016GBP (£) |
Transactions with directors and key management | ||
Loans and advances to customers | £ 349,919,000,000 | £ 351,950,000,000 |
Customer accounts | 398,036,000,000 | 380,968,000,000 |
key management personnel | ||
Transactions with directors and key management | ||
Loans to directors | £ 24,376 | |
Number of directors with outstanding loans | director | 6 | |
Loans and advances to customers | £ 3,942,000 | 4,127,000 |
Customer accounts | £ 23,619,000 | £ 17,045,000 |
Related parties (Details)
Related parties (Details) - GBP (£) £ / shares in Units, £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of transactions between related parties [line items] | |||
Conversion price per share | £ 1 | ||
Cash ratio deposits | 0.18% | ||
Threshold eligible liabilities | £ 600 | ||
Loans and advances | 30,251 | £ 30,138 | |
Customer deposits | 398,036 | 380,968 | |
Total income | 13,133 | 12,590 | £ 12,923 |
Operating expenses | 10,401 | 16,194 | £ 16,353 |
Associate | |||
Disclosure of transactions between related parties [line items] | |||
Loans and advances | 130 | 150 | |
Customer deposits | 111 | 64 | |
Total income | 28 | 30 | |
Operating expenses | £ 23 | £ 8 |
Consolidating financial info199
Consolidating financial information - Income statement (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidating financial information | |||
Net interest income | £ 8,987 | £ 8,708 | £ 8,767 |
Non-interest income | 4,146 | 3,882 | 4,156 |
Total income | 13,133 | 12,590 | 12,923 |
Operating expenses | (10,401) | (16,194) | (16,353) |
Impairment (losses)/releases | (493) | (478) | 727 |
Operating profit/(loss) before tax | 2,239 | (4,082) | (2,703) |
Tax credit/(charge) | (824) | (1,166) | (23) |
Profit/(loss) from continuing operations | 1,415 | (5,248) | (2,726) |
Profit from discontinued operations, net of tax | 1,541 | ||
(Loss)/profit for the year | 1,415 | (5,248) | (1,185) |
Attributable to: | |||
Non-controlling interests | 35 | 10 | 409 |
Preference shareholders | 234 | 260 | 297 |
Paid-in equity holders | 394 | 244 | 88 |
Dividend access share | 1,193 | ||
Ordinary shareholders | 752 | (6,955) | (1,979) |
(Loss)/profit for the year | 1,415 | (5,248) | (1,185) |
RBSG plc | |||
Consolidating financial information | |||
Net interest income | 203 | 267 | 401 |
Non-interest income | 1,390 | (4,945) | (2,239) |
Total income | 1,593 | (4,678) | (1,838) |
Operating expenses | (122) | (738) | 38 |
Impairment (losses)/releases | (5) | ||
Operating profit/(loss) before tax | 1,471 | (5,416) | (1,805) |
Tax credit/(charge) | (187) | 7 | (177) |
Profit/(loss) from continuing operations | 1,284 | (5,409) | (1,982) |
(Loss)/profit for the year | 1,284 | (5,409) | (1,982) |
Attributable to: | |||
Preference shareholders | 234 | 260 | 297 |
Paid-in equity holders | 390 | 235 | 79 |
Dividend access share | 1,193 | ||
Ordinary shareholders | 660 | (7,097) | (2,358) |
(Loss)/profit for the year | 1,284 | (5,409) | (1,982) |
RBS plc | |||
Consolidating financial information | |||
Net interest income | (26) | 4 | (172) |
Non-interest income | 909 | 1,066 | 1,227 |
Total income | 883 | 1,070 | 1,055 |
Operating expenses | (1,601) | (3,864) | (4,138) |
Impairment (losses)/releases | 77 | 73 | 258 |
Operating profit/(loss) before tax | (641) | (2,721) | (2,825) |
Tax credit/(charge) | 168 | (199) | 504 |
Profit/(loss) from continuing operations | (473) | (2,920) | (2,321) |
Profit from discontinued operations, net of tax | (510) | (531) | 1,290 |
(Loss)/profit for the year | (983) | (3,451) | (1,031) |
Attributable to: | |||
Preference shareholders | 23 | 44 | |
Ordinary shareholders | (983) | (3,474) | (1,075) |
(Loss)/profit for the year | (983) | (3,451) | (1,031) |
Subsidiaries | |||
Consolidating financial information | |||
Net interest income | 6,157 | 6,050 | 6,988 |
Non-interest income | (674) | (5,099) | (448) |
Total income | 5,483 | 951 | 6,540 |
Operating expenses | (3,946) | (5,911) | (8,625) |
Impairment (losses)/releases | (370) | (4) | 314 |
Operating profit/(loss) before tax | 1,167 | (4,964) | (1,771) |
Tax credit/(charge) | (853) | (827) | (552) |
Profit/(loss) from continuing operations | 314 | (5,791) | (2,323) |
Profit from discontinued operations, net of tax | 16 | ||
(Loss)/profit for the year | 314 | (5,791) | (2,307) |
Attributable to: | |||
Non-controlling interests | 5 | 5 | 2 |
Ordinary shareholders | 309 | (5,796) | (2,309) |
(Loss)/profit for the year | 314 | (5,791) | (2,307) |
Inter segment/consolidation adjustments | |||
Consolidating financial information | |||
Net interest income | 2,653 | 2,387 | 1,550 |
Non-interest income | 2,521 | 12,860 | 5,616 |
Total income | 5,174 | 15,247 | 7,166 |
Operating expenses | (4,732) | (5,681) | (3,628) |
Impairment (losses)/releases | (200) | (547) | 160 |
Operating profit/(loss) before tax | 242 | 9,019 | 3,698 |
Tax credit/(charge) | 48 | (147) | 202 |
Profit/(loss) from continuing operations | 290 | 8,872 | 3,900 |
Profit from discontinued operations, net of tax | 510 | 531 | 235 |
(Loss)/profit for the year | 800 | 9,403 | 4,135 |
Attributable to: | |||
Non-controlling interests | 30 | 5 | 407 |
Preference shareholders | (23) | (44) | |
Paid-in equity holders | 4 | 9 | 9 |
Ordinary shareholders | 766 | 9,412 | 3,763 |
(Loss)/profit for the year | 800 | 9,403 | 4,135 |
IAS 27 | RBSG plc | |||
Consolidating financial information | |||
Increase (decrease) in results of investments using the equity method | 92 | 142 | 379 |
Increase (decrease) in net assets | (6,631) | (6,108) | |
IAS 27 | RBS plc | |||
Consolidating financial information | |||
Increase (decrease) in results of investments using the equity method | 934 | (1,316) | £ (875) |
Increase (decrease) in net assets | £ (9,319) | £ (10,119) |
Consolidating financial info200
Consolidating financial information - Statement of comprehensive income (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidating financial information | |||
(Loss)/profit for the year | £ 1,415 | £ (5,248) | £ (1,185) |
Items that do not qualify for reclassification | |||
Profit/(loss) on remeasurement of retirement benefit schemes | 90 | (1,049) | (73) |
Loss on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk | (126) | ||
Tax (charge)/credit | (10) | 288 | 306 |
Total - Items that do not qualify for reclassification | (46) | (761) | 233 |
Items that do qualify for reclassification | |||
Available-for-sale financial assets | 26 | (94) | 44 |
Cash flow hedges | (1,069) | 765 | (700) |
Currency translation | 100 | 1,263 | (1,181) |
Tax (charge)/credit | 256 | (106) | 108 |
Total - Items that do qualify for reclassification | (687) | 1,828 | (1,729) |
Other comprehensive (loss)/income after tax | (733) | 1,067 | (1,496) |
Total comprehensive (loss)/income for the year | 682 | (4,181) | (2,681) |
Attributable to: | |||
Non-controlling interests | 52 | 121 | 370 |
Preference shareholders | 234 | 260 | 297 |
Paid-in equity holders | 394 | 244 | 88 |
Dividend access share | 1,193 | ||
Ordinary shareholders | 2 | (5,999) | (3,436) |
Total comprehensive (loss)/income for the year | 682 | (4,181) | (2,681) |
Inter segment/consolidation adjustments | |||
Consolidating financial information | |||
(Loss)/profit for the year | 800 | 9,403 | 4,135 |
Items that do qualify for reclassification | |||
Available-for-sale financial assets | 315 | (326) | 63 |
Cash flow hedges | (417) | 615 | (287) |
Currency translation | 112 | 644 | (1,029) |
Tax (charge)/credit | 105 | (149) | 92 |
Total - Items that do qualify for reclassification | 115 | 784 | (1,161) |
Other comprehensive (loss)/income after tax | 115 | 784 | (1,161) |
Total comprehensive (loss)/income for the year | 915 | 10,187 | 2,974 |
Attributable to: | |||
Non-controlling interests | 52 | 34 | 447 |
Preference shareholders | (23) | (44) | |
Paid-in equity holders | 4 | 9 | 9 |
Ordinary shareholders | 375 | 10,167 | 2,562 |
Total comprehensive (loss)/income for the year | 915 | 10,187 | 2,974 |
RBSG plc | |||
Consolidating financial information | |||
(Loss)/profit for the year | 1,284 | (5,409) | (1,982) |
Items that do qualify for reclassification | |||
Cash flow hedges | (204) | 189 | 40 |
Tax (charge)/credit | 38 | (35) | (8) |
Total - Items that do qualify for reclassification | (166) | 154 | 32 |
Other comprehensive (loss)/income after tax | (166) | 154 | 32 |
Total comprehensive (loss)/income for the year | 1,118 | (5,255) | (1,950) |
Attributable to: | |||
Preference shareholders | 234 | 260 | 297 |
Paid-in equity holders | 390 | 235 | 79 |
Dividend access share | 1,193 | ||
Ordinary shareholders | 494 | (6,943) | (2,326) |
Total comprehensive (loss)/income for the year | 1,118 | (5,255) | (1,950) |
RBS plc | |||
Consolidating financial information | |||
(Loss)/profit for the year | (983) | (3,451) | (1,031) |
Items that do not qualify for reclassification | |||
Profit/(loss) on remeasurement of retirement benefit schemes | 4 | 63 | 84 |
Loss on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk | (68) | ||
Tax (charge)/credit | (18) | (21) | (20) |
Total - Items that do not qualify for reclassification | (82) | 42 | 64 |
Items that do qualify for reclassification | |||
Available-for-sale financial assets | 52 | (61) | 77 |
Cash flow hedges | (424) | (40) | (546) |
Currency translation | (22) | (90) | 54 |
Tax (charge)/credit | 93 | 28 | 45 |
Total - Items that do qualify for reclassification | (301) | (163) | (370) |
Other comprehensive (loss)/income after tax | (383) | (121) | (306) |
Total comprehensive (loss)/income for the year | (1,366) | (3,572) | (1,337) |
Attributable to: | |||
Preference shareholders | 23 | 44 | |
Ordinary shareholders | (1,366) | (3,595) | (1,381) |
Total comprehensive (loss)/income for the year | (1,366) | (3,572) | (1,337) |
Subsidiaries | |||
Consolidating financial information | |||
(Loss)/profit for the year | 314 | (5,791) | (2,307) |
Items that do not qualify for reclassification | |||
Profit/(loss) on remeasurement of retirement benefit schemes | 86 | (1,112) | (157) |
Loss on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk | (58) | ||
Tax (charge)/credit | 8 | 309 | 326 |
Total - Items that do not qualify for reclassification | 36 | (803) | 169 |
Items that do qualify for reclassification | |||
Available-for-sale financial assets | (341) | 293 | (96) |
Cash flow hedges | (24) | 1 | 93 |
Currency translation | 10 | 709 | (206) |
Tax (charge)/credit | 20 | 50 | (21) |
Total - Items that do qualify for reclassification | (335) | 1,053 | (230) |
Other comprehensive (loss)/income after tax | (299) | 250 | (61) |
Total comprehensive (loss)/income for the year | 15 | (5,541) | (2,368) |
Attributable to: | |||
Non-controlling interests | 87 | (77) | |
Ordinary shareholders | 499 | (5,628) | (2,291) |
Total comprehensive (loss)/income for the year | £ 15 | £ (5,541) | £ (2,368) |
Consolidating financial info201
Consolidating financial information - Balance sheet (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | |||
Cash and balances at central banks | £ 98,337 | £ 74,250 | £ 79,404 |
Loans and advances to banks | 30,251 | 30,138 | |
Loans and advances to customers | 349,919 | 351,950 | |
Debt securities | 78,933 | 72,522 | |
Equity shares | 450 | 703 | |
Settlement balances | 2,517 | 5,526 | |
Derivatives | 160,843 | 246,981 | |
Intangible assets | 6,543 | 6,480 | |
Property, plant and equipment | 4,602 | 4,590 | |
Deferred tax | 1,740 | 1,803 | |
Prepayments, accrued income and other assets | 3,726 | 3,700 | |
Assets of disposal groups | 195 | 13 | |
Total assets | 738,056 | 798,656 | 815,408 |
Liabilities | |||
Deposits by banks | 46,898 | 38,556 | |
Customer accounts | 398,036 | 380,968 | |
Debt securities in issue | 30,559 | 27,245 | |
Settlement balances | 2,844 | 3,645 | |
Short positions | 28,527 | 22,077 | |
Derivatives | 154,506 | 236,475 | |
Provisions for liabilities and charges | 7,757 | 12,836 | |
Accruals and other liabilities | 6,392 | 6,991 | |
Retirement benefit liabilities | 129 | 363 | |
Deferred tax | 583 | 662 | |
Subordinated liabilities | 12,722 | 19,419 | |
Liabilities of disposal groups | 10 | 15 | 2,980 |
Total liabilities | 688,963 | 749,252 | 761,261 |
Non-controlling interests | 763 | 795 | |
Owners' equity | 48,330 | 48,609 | |
Total equity | 49,093 | 49,404 | £ 54,147 |
Total liabilities and equity | 738,056 | 798,656 | |
Inter segment/consolidation adjustments | |||
Assets | |||
Cash and balances at central banks | 61,537 | ||
Loans and advances to banks | (10,713) | (167,412) | |
Loans and advances to customers | 89,793 | (27,304) | |
Debt securities | 43,178 | (11,586) | |
Equity shares | 153 | (937) | |
Investments in Group undertakings | (48,375) | (81,899) | |
Settlement balances | (61) | (828) | |
Derivatives | (4,426) | (11,180) | |
Intangible assets | 6,012 | 5,393 | |
Property, plant and equipment | 1,376 | (4) | |
Deferred tax | 214 | (129) | |
Prepayments, accrued income and other assets | 760 | (347) | |
Assets of disposal groups | (269,038) | (591) | |
Total assets | (129,590) | (296,824) | |
Liabilities | |||
Deposits by banks | 100,725 | (152,606) | |
Customer accounts | 57,853 | (39,478) | |
Debt securities in issue | 7,858 | (2,402) | |
Settlement balances | (44) | (828) | |
Short positions | (232) | (104) | |
Derivatives | (4,165) | (11,180) | |
Provisions for liabilities and charges | 2,046 | ||
Accruals and other liabilities | 2,119 | (136) | |
Retirement benefit liabilities | 18 | 5 | |
Deferred tax | (106) | (83) | |
Subordinated liabilities | 8,268 | (11,908) | |
Liabilities of disposal groups | (228,027) | ||
Total liabilities | (53,687) | (218,720) | |
Non-controlling interests | 632 | 312 | |
Owners' equity | (76,535) | (78,416) | |
Total equity | (75,903) | (78,104) | |
Total liabilities and equity | (129,590) | (296,824) | |
RBSG plc | |||
Assets | |||
Loans and advances to banks | 14,503 | 28,867 | |
Loans and advances to customers | 10,480 | 97 | |
Debt securities | 104 | 398 | |
Equity shares | 3 | ||
Investments in Group undertakings | 47,559 | 44,608 | |
Derivatives | 163 | 373 | |
Prepayments, accrued income and other assets | 50 | 70 | |
Total assets | 72,862 | 74,413 | |
Liabilities | |||
Deposits by banks | 944 | ||
Debt securities in issue | 9,202 | 6,832 | |
Derivatives | 284 | 260 | |
Provisions for liabilities and charges | 127 | 875 | |
Accruals and other liabilities | 165 | 73 | |
Deferred tax | 146 | 44 | |
Subordinated liabilities | 7,977 | 10,668 | |
Total liabilities | 17,901 | 19,696 | |
Owners' equity | 54,961 | 54,717 | |
Total equity | 54,961 | 54,717 | |
Total liabilities and equity | 72,862 | 74,413 | |
RBS plc | |||
Assets | |||
Cash and balances at central banks | 93 | 70,615 | |
Loans and advances to banks | 18,814 | 39,018 | |
Loans and advances to customers | 45,658 | 160,191 | |
Debt securities | 27,334 | 67,669 | |
Equity shares | 50 | 298 | |
Investments in Group undertakings | 496 | 35,169 | |
Settlement balances | 1,640 | 4,707 | |
Derivatives | 162,005 | 251,476 | |
Intangible assets | 521 | ||
Property, plant and equipment | 5 | 1,523 | |
Deferred tax | 165 | 272 | |
Prepayments, accrued income and other assets | 591 | 1,563 | |
Assets of disposal groups | 269,038 | 591 | |
Total assets | 525,889 | 633,613 | |
Liabilities | |||
Deposits by banks | 18,304 | 139,288 | |
Customer accounts | 37,097 | 142,218 | |
Debt securities in issue | 12,362 | 18,881 | |
Settlement balances | 1,411 | 2,774 | |
Short positions | 26,207 | 17,590 | |
Derivatives | 155,098 | 240,898 | |
Provisions for liabilities and charges | 2,230 | 4,884 | |
Accruals and other liabilities | 479 | 3,269 | |
Retirement benefit liabilities | 52 | 65 | |
Deferred tax | 100 | ||
Subordinated liabilities | 17,870 | ||
Liabilities of disposal groups | 228,027 | ||
Total liabilities | 481,367 | 587,737 | |
Owners' equity | 44,522 | 45,876 | |
Total equity | 44,522 | 45,876 | |
Total liabilities and equity | 525,889 | 633,613 | |
Subsidiaries | |||
Assets | |||
Cash and balances at central banks | 36,707 | 3,635 | |
Loans and advances to banks | 7,647 | 129,665 | |
Loans and advances to customers | 203,988 | 218,966 | |
Debt securities | 8,317 | 16,041 | |
Equity shares | 244 | 1,342 | |
Investments in Group undertakings | 320 | 2,122 | |
Settlement balances | 938 | 1,647 | |
Derivatives | 3,101 | 6,312 | |
Intangible assets | 531 | 566 | |
Property, plant and equipment | 3,221 | 3,071 | |
Deferred tax | 1,361 | 1,660 | |
Prepayments, accrued income and other assets | 2,325 | 2,414 | |
Assets of disposal groups | 195 | 13 | |
Total assets | 268,895 | 387,454 | |
Liabilities | |||
Deposits by banks | (72,131) | 50,930 | |
Customer accounts | 303,086 | 278,228 | |
Debt securities in issue | 1,137 | 3,934 | |
Settlement balances | 1,477 | 1,699 | |
Short positions | 2,552 | 4,591 | |
Derivatives | 3,289 | 6,497 | |
Provisions for liabilities and charges | 3,354 | 7,077 | |
Accruals and other liabilities | 3,629 | 3,785 | |
Retirement benefit liabilities | 59 | 293 | |
Deferred tax | 443 | 701 | |
Subordinated liabilities | (3,523) | 2,789 | |
Liabilities of disposal groups | 10 | 15 | |
Total liabilities | 243,382 | 360,539 | |
Non-controlling interests | 131 | 483 | |
Owners' equity | 25,382 | 26,432 | |
Total equity | 25,513 | 26,915 | |
Total liabilities and equity | £ 268,895 | £ 387,454 |
Consolidating financial info202
Consolidating financial information - Cash flow statement (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidating financial information | |||
Net cash flows from operating activities | £ 38,741 | £ (3,650) | £ 918 |
Net cash flows from investing activities | (6,482) | (4,359) | (4,866) |
Net cash flows from financing activities | (8,208) | (5,107) | (940) |
Effects of exchange rate changes on cash and cash equivalents | (16) | 8,094 | 576 |
Net cash outflow | 24,035 | (5,022) | (4,312) |
Cash and cash equivalents at 1 January | 98,570 | 103,592 | 107,904 |
Cash and cash equivalents at 31 December | £ 122,605 | 98,570 | 103,592 |
Ownership percentage of trust (as a percent) | 100.00% | ||
Inter segment/consolidation adjustments | |||
Consolidating financial information | |||
Net cash flows from operating activities | £ 2,724 | 2,506 | (13,995) |
Net cash flows from investing activities | (4,238) | (440) | 802 |
Net cash flows from financing activities | 4,718 | 11,839 | 691 |
Effects of exchange rate changes on cash and cash equivalents | 1,013 | (3,604) | (341) |
Net cash outflow | 4,217 | 10,301 | (12,843) |
Cash and cash equivalents at 1 January | (91,129) | (101,430) | (88,587) |
Cash and cash equivalents at 31 December | (86,912) | (91,129) | (101,430) |
RBSG plc | |||
Consolidating financial information | |||
Net cash flows from operating activities | 4,973 | (3,026) | 3,593 |
Net cash flows from investing activities | (2,078) | 2,538 | (183) |
Net cash flows from financing activities | (3,831) | (1,445) | (1,518) |
Effects of exchange rate changes on cash and cash equivalents | (14) | 122 | 9 |
Net cash outflow | (950) | (1,811) | 1,901 |
Cash and cash equivalents at 1 January | 1,195 | 3,006 | 1,105 |
Cash and cash equivalents at 31 December | 245 | 1,195 | 3,006 |
RBS plc | |||
Consolidating financial information | |||
Net cash flows from operating activities | (74,357) | 3,098 | 5,488 |
Net cash flows from investing activities | (2,077) | (4,495) | 2,456 |
Net cash flows from financing activities | (9,668) | (13,459) | (3,276) |
Effects of exchange rate changes on cash and cash equivalents | 87 | 7,316 | 575 |
Net cash outflow | (86,015) | (7,540) | 5,243 |
Cash and cash equivalents at 1 January | 99,073 | 106,613 | 101,370 |
Cash and cash equivalents at 31 December | 13,058 | 99,073 | 106,613 |
Subsidiaries | |||
Consolidating financial information | |||
Net cash flows from operating activities | 105,401 | (6,228) | 5,832 |
Net cash flows from investing activities | 1,911 | (1,962) | (7,941) |
Net cash flows from financing activities | 573 | (2,042) | 3,163 |
Effects of exchange rate changes on cash and cash equivalents | (1,102) | 4,260 | 333 |
Net cash outflow | 106,783 | (5,972) | 1,387 |
Cash and cash equivalents at 1 January | 89,431 | 95,403 | 94,016 |
Cash and cash equivalents at 31 December | £ 196,214 | £ 89,431 | £ 95,403 |