NatWest (NWG) 20-F 29 Mar 18 2017 FY Annual report (foreign) Financial data

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