Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Registrant Name | ROYAL BANK OF SCOTLAND GROUP PLC |
Entity Incorporation, State or Country Code | X0 |
Document Period End Date | Dec. 31, 2019 |
Entity Interactive Data Current | Yes |
Entity Well-known Seasoned Issuer | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Central Index Key | 0000844150 |
Amendment Flag | false |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Ordinary shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 12,093,909,192 |
11% Cumulative Preference Shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 500,000 |
5 1/2% Cumulative Preference Shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 400,000 |
Non-cumulative preference shares of US$0.01 | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 10,130 |
Consolidated income statement
Consolidated income statement - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated income statement | |||
Interest receivable | £ 11,375 | £ 11,049 | £ 11,034 |
Interest payable | (3,328) | (2,393) | (2,047) |
Net interest income | 8,047 | 8,656 | 8,987 |
Fees and commissions receivable | 3,359 | 3,218 | 3,338 |
Fees and commissions payable | (848) | (861) | (883) |
Income from trading activities | 932 | 1,507 | 634 |
Loss on redemption of own debt | (7) | ||
Other operating income | 2,763 | 882 | 1,064 |
Non-interest income | 6,206 | 4,746 | 4,146 |
Total income | 14,253 | 13,402 | 13,133 |
Staff costs | (4,018) | (4,122) | (4,676) |
Premises and equipment | (1,259) | (1,383) | (1,565) |
Other administrative expenses | (2,828) | (3,372) | (3,323) |
Depreciation and amortisation | (1,176) | (731) | (808) |
Impairment of other intangible assets | (44) | (37) | (29) |
Operating expenses | (9,325) | (9,645) | (10,401) |
Profit before impairment losses | 4,928 | 3,757 | 2,732 |
Impairment losses | (696) | (398) | (493) |
Operating profit before tax | 4,232 | 3,359 | 2,239 |
Tax charge | (432) | (1,208) | (731) |
Profit for the year | 3,800 | 2,151 | 1,508 |
Attributable to: | |||
Ordinary shareholders | 3,133 | 1,622 | 752 |
Preference shareholders | 39 | 182 | 234 |
Paid-in equity holders | 367 | 355 | 487 |
Non-controlling interests | 261 | (8) | 35 |
Profit for the year | £ 3,800 | £ 2,151 | £ 1,508 |
Per ordinary share | |||
Earnings per ordinary share | £ 0.26 | £ 0.135 | £ 0.063 |
Earnings per ordinary share - fully diluted | £ 0.259 | £ 0.134 | £ 0.063 |
Consolidated statement of compr
Consolidated statement of comprehensive income - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Consolidated statement of comprehensive income | ||||
Profit for the year | £ 3,800 | £ 2,151 | £ 1,508 | |
Items that do not qualify for reclassification | ||||
- contributions in preparation for ring-fencing (1) | [1] | (2,053) | ||
- other movements | (142) | 86 | 90 | |
(Loss)/profit on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk | (189) | 200 | (126) | |
FVOCI financial assets | (71) | 48 | ||
Tax | 28 | 502 | (10) | |
Total - Items that do not qualify for reclassification | (374) | (1,217) | (46) | |
Items that do qualify for reclassification | ||||
FVOCI financial assets | (14) | 7 | 26 | |
Cash flow hedges | 294 | (581) | (1,069) | |
Currency translation | (1,836) | 310 | 100 | |
Tax | (170) | 189 | 256 | |
Total - Items that do qualify for reclassification | (1,726) | (75) | (687) | |
Other comprehensive loss after tax | (2,100) | (1,292) | (733) | |
Total comprehensive income/(loss) for the year | 1,700 | 859 | 775 | |
Attributable to: | ||||
Ordinary shareholders | 1,044 | 305 | 2 | |
Preference shareholders | 39 | 182 | 234 | |
Paid-in equity holders | 367 | 355 | 487 | |
Non-controlling interests | 250 | 17 | 52 | |
Total comprehensive income/(loss) for the year | £ 1,700 | £ 859 | £ 775 | |
[1] | On 17 April 2018 RBS Group agreed a Memorandum of Understanding (MoU) with the Trustees of the RBS Group Pension Fund in connection with the requirements of ring-fencing. NWM Plc could not continue to be a participant in the Main section and separate arrangements were required for its employees. Under the MoU, NWB Plc made a contribution of £2 billion on 9 October 2018 to strengthen funding of the Main section in recognition of the changes in covenant. Also under the MoU, NWM Plc made a £53 million contribution to the NWM section in Q1 2019 |
Consolidated statement of com_2
Consolidated statement of comprehensive income (Parenthetical) - GBP (£) £ in Millions | Oct. 09, 2018 | Mar. 31, 2019 |
NWB Plc | ||
Disclosure of transactions between related parties [line items] | ||
Contribution under the MoU to strengthen funding of the Main section | £ 2,000 | |
NWM Plc | ||
Disclosure of transactions between related parties [line items] | ||
Contribution under the MoU to strengthen funding of the Main section | £ 53 |
Consolidated balance sheet
Consolidated balance sheet - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets | |||
Cash and balances at central banks | £ 77,858 | £ 88,897 | |
Trading assets | 76,745 | 75,119 | |
Derivatives | 150,029 | 133,349 | |
Settlement balances | 4,387 | 2,928 | |
Loans to banks - amortised cost | 10,689 | 12,947 | |
Loans to customers - amortised cost | 326,947 | 305,089 | |
Securities subject to repurchase agreements | 4,269 | 9,890 | |
Other financial assets excluding securities subject to repurchase agreements | 57,183 | 49,595 | |
Other financial assets | 61,452 | 59,485 | |
Intangible assets | 6,622 | 6,616 | |
Other assets | 8,310 | 9,805 | |
Total assets | 723,039 | 694,235 | |
Liabilities | |||
Bank deposits | 20,493 | 23,297 | |
Customer deposits | 369,247 | 360,914 | |
Settlement balances | 4,069 | 3,066 | |
Trading liabilities | 73,949 | 72,350 | |
Derivatives | 146,879 | 128,897 | |
Other financial liabilities | 45,220 | 39,732 | |
Subordinated liabilities | 9,979 | 10,535 | |
Other liabilities | 9,647 | 8,954 | |
Total liabilities | 679,483 | 647,745 | |
Ordinary shareholders' interests | 38,993 | 41,182 | |
Other owners' interests | 4,554 | 4,554 | |
Owners' equity | 43,547 | 45,736 | |
Non-controlling interests | 9 | 754 | |
Total equity | 43,556 | 46,490 | [1] |
Total liabilities and equity | £ 723,039 | £ 694,235 | |
[1] | Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. |
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 | FVOCI reserve | Cash flow hedging reserve | Foreign exchange reserve | Capital redemption reserve | Retained earnings | Own shares held | Owners' equity | Non-controlling interests | Ordinary shareholders | Preference shareholders | Total | ||||||||||||
At 1 January at Dec. 31, 2016 | £ 11,823 | £ 4,582 | £ 25,693 | £ 10,881 | £ 238 | [1] | £ 1,030 | £ 2,888 | £ 4,542 | £ (12,936) | [2] | £ (132) | [2] | £ 795 | [2] | ||||||||||||
Ordinary shares issued | 142 | 235 | |||||||||||||||||||||||||
Profit attributable to ordinary shareholders and other equity owners | [2] | 1,473 | |||||||||||||||||||||||||
Equity preference dividends paid | [2] | (234) | |||||||||||||||||||||||||
Paid-in equity dividends paid | [2] | (487) | |||||||||||||||||||||||||
Redemption of debt preference shares | [3] | 748 | (748) | [2] | |||||||||||||||||||||||
Redemption/reclassification of paid-in equity | (524) | [4] | (196) | [2] | |||||||||||||||||||||||
Unrealised (losses)/gains | 202 | ||||||||||||||||||||||||||
Realised gains | (176) | ||||||||||||||||||||||||||
Tax | (9) | ||||||||||||||||||||||||||
Amount recognized in equity | [5] | (277) | |||||||||||||||||||||||||
Amount transferred from equity to earnings | [6] | (792) | |||||||||||||||||||||||||
Tax | 266 | ||||||||||||||||||||||||||
Retranslation of net assets | 111 | ||||||||||||||||||||||||||
Foreign currency gains/(losses) on hedges of net assets | (6) | ||||||||||||||||||||||||||
Tax | (1) | ||||||||||||||||||||||||||
Recycled to profit or loss on disposal of businesses | [7] | (22) | |||||||||||||||||||||||||
Other movements | [2] | 90 | |||||||||||||||||||||||||
Remeasurement of the retirement benefit schemes, tax | [2] | (28) | |||||||||||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit, gross | [2] | (126) | |||||||||||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit, tax | [2] | 18 | |||||||||||||||||||||||||
Shares issued under employee share schemes | [2] | (5) | 161 | ||||||||||||||||||||||||
Share based payments | [2] | (22) | |||||||||||||||||||||||||
Own shares acquired | [2] | (72) | |||||||||||||||||||||||||
Currency translation adjustments and other movements | 17 | [2] | £ 832 | ||||||||||||||||||||||||
Profit/(loss) attributable to non-controlling interests | [2] | 35 | |||||||||||||||||||||||||
Dividends paid | [2] | (25) | |||||||||||||||||||||||||
Capital reduction | [8] | (25,789) | £ (4,542) | 30,331 | [2] | ||||||||||||||||||||||
Equity withdrawn and disposals | [2],[9] | (59) | |||||||||||||||||||||||||
At 31 December at Dec. 31, 2017 | 11,965 | 4,058 | [2] | 887 | 10,881 | 255 | [1] | 227 | [10] | 2,970 | [10] | 17,130 | [2] | (43) | [2] | £ 48,330 | [2] | 763 | [2] | £ 41,707 | [2] | £ 2,565 | [2] | 49,093 | [2] | ||
Ordinary shares issued | 84 | 140 | |||||||||||||||||||||||||
Implementation of IFRS 9 on 1 January 2018 | 34 | (105) | [1],[2] | ||||||||||||||||||||||||
Profit attributable to ordinary shareholders and other equity owners | [2] | 2,159 | |||||||||||||||||||||||||
Equity preference dividends paid | [2] | (182) | |||||||||||||||||||||||||
Paid-in equity dividends paid | [2] | (355) | |||||||||||||||||||||||||
Ordinary dividends paid | [2] | (241) | |||||||||||||||||||||||||
Redemption of equity preference shares | [2],[11] | (2,805) | |||||||||||||||||||||||||
Unrealised (losses)/gains | 97 | ||||||||||||||||||||||||||
Realised gains | (42) | ||||||||||||||||||||||||||
Tax | (1) | ||||||||||||||||||||||||||
Amount recognized in equity | [5] | (63) | |||||||||||||||||||||||||
Amount transferred from equity to earnings | [6] | (518) | |||||||||||||||||||||||||
Tax | 163 | ||||||||||||||||||||||||||
Retranslation of net assets | 195 | ||||||||||||||||||||||||||
Foreign currency gains/(losses) on hedges of net assets | (33) | ||||||||||||||||||||||||||
Tax | 23 | ||||||||||||||||||||||||||
Recycled to profit or loss on disposal of businesses | [7] | 123 | |||||||||||||||||||||||||
Realised gains in period on FVOCI equity shares | [2] | 6 | |||||||||||||||||||||||||
contributions in preparation for ring-fencing | [2],[12] | (2,053) | |||||||||||||||||||||||||
Other movements | [2] | 86 | |||||||||||||||||||||||||
Remeasurement of the retirement benefit schemes, tax | [2] | 539 | |||||||||||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit, gross | [2] | 200 | |||||||||||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit, tax | [2] | (33) | |||||||||||||||||||||||||
Shares issued under employee share schemes | [2] | (2) | 87 | ||||||||||||||||||||||||
Share based payments | [2] | (32) | |||||||||||||||||||||||||
Own shares acquired | [2] | (65) | |||||||||||||||||||||||||
Currency translation adjustments and other movements | 25 | [2] | (415) | ||||||||||||||||||||||||
Profit/(loss) attributable to non-controlling interests | [2] | (8) | |||||||||||||||||||||||||
Dividends paid | [2] | (5) | |||||||||||||||||||||||||
Equity withdrawn and disposals | [2],[9] | (21) | |||||||||||||||||||||||||
At 31 December at Dec. 31, 2018 | 12,049 | 4,058 | [2] | 1,027 | 10,881 | 343 | [1] | (191) | [10] | 3,278 | [10] | 14,312 | [2] | (21) | [2] | 45,736 | [2] | 754 | [2] | 41,182 | [2] | 496 | [2] | 46,490 | [2] | ||
Ordinary shares issued | 45 | 67 | |||||||||||||||||||||||||
Implementation of IFRS 16 on 1 January 2019 | [13] | (187) | |||||||||||||||||||||||||
Profit attributable to ordinary shareholders and other equity owners | 3,539 | ||||||||||||||||||||||||||
Equity preference dividends paid | (39) | ||||||||||||||||||||||||||
Paid-in equity dividends paid | (367) | ||||||||||||||||||||||||||
Ordinary dividends paid | (3,018) | ||||||||||||||||||||||||||
Unrealised (losses)/gains | (107) | ||||||||||||||||||||||||||
Realised gains | (90) | ||||||||||||||||||||||||||
Tax | (8) | ||||||||||||||||||||||||||
Amount recognized in equity | [5] | 573 | |||||||||||||||||||||||||
Amount transferred from equity to earnings | [6] | (279) | |||||||||||||||||||||||||
Tax | (68) | ||||||||||||||||||||||||||
Retranslation of net assets | (428) | ||||||||||||||||||||||||||
Foreign currency gains/(losses) on hedges of net assets | 83 | ||||||||||||||||||||||||||
Tax | (110) | ||||||||||||||||||||||||||
Recycled to profit or loss on disposal of businesses | [7] | (1,480) | |||||||||||||||||||||||||
Realised gains in period on FVOCI equity shares | 112 | ||||||||||||||||||||||||||
Other movements | (142) | ||||||||||||||||||||||||||
Remeasurement of the retirement benefit schemes, tax | 24 | ||||||||||||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit, gross | (189) | ||||||||||||||||||||||||||
Changes in fair value of credit in financial liabilities designated at fair value through profit, tax | 20 | ||||||||||||||||||||||||||
Shares issued under employee share schemes | (6) | 39 | |||||||||||||||||||||||||
Share based payments | (113) | ||||||||||||||||||||||||||
Own shares acquired | (60) | ||||||||||||||||||||||||||
Currency translation adjustments and other movements | (11) | (949) | |||||||||||||||||||||||||
Profit/(loss) attributable to non-controlling interests | 261 | ||||||||||||||||||||||||||
Dividends paid | (5) | ||||||||||||||||||||||||||
Equity raised | [14] | 45 | |||||||||||||||||||||||||
Equity withdrawn and disposals | [9] | (1,035) | |||||||||||||||||||||||||
At 31 December at Dec. 31, 2019 | £ 12,094 | £ 4,058 | £ 1,094 | £ 10,881 | £ 138 | £ 35 | [10] | £ 1,343 | [10] | £ 13,946 | £ (42) | £ 43,547 | £ 9 | £ 38,993 | £ 496 | £ 43,556 | |||||||||||
[1] | Years ended 31 December 2019 and 31 December 2018 prepared under IFRS 9. Year ended 31 December 2017 prepared under IAS 39. | ||||||||||||||||||||||||||
[2] | Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. | ||||||||||||||||||||||||||
[3] | During 2017, non-cumulative US dollar preference shares were redeemed at their original issue price of US$1.1 billion. The nominal value of £0.3 million was credited to the capital redemption reserve; share premium increased by £0.7 billion in respect of the premium received on issue, with a corresponding decrease in retained earnings. | ||||||||||||||||||||||||||
[4] | Paid-in equity reclassified to liabilities as a result of the call of US$564 million and CAD321 million EMTN notes in August 2017 (redeemed in October 2017) and the call of RBS Capital Trust D in March 2017 (redeemed in June 2017). | ||||||||||||||||||||||||||
[5] | The amount credited to the cash flow hedging reserve comprised £585 million (2018 - £166 million debit) in relation to interest rate hedges lesser debit of £12 million (2018 - £103 million credit) in relation to foreign exchange hedges. | ||||||||||||||||||||||||||
[6] | The cash flow hedging reserve was reduced by £243 million in relation to interest rate hedges (2018 - £493 million) credited net interest income and reduced by £36 million (2018 - £25 million) in relation to foreign exchange hedging which was credited to net interest income. | ||||||||||||||||||||||||||
[7] | Includes £290 million recycled on completion of the Alawwal bank merger in June 2019 (with a further £48m shown in Tax), £1,102 million recycled on the subsequent liquidation of RFS Holdings B.V. (with a further £65m shown in Tax), and £67m attributable to the capital repayment by UBI DAC. The Alawwal bank merger resulted in the derecognition of the associate investment in Alawwal bank and recognition of a new investment in SABB held at FVOCI. The recycling gains arising from the liquidation of RFS Holdings B.V. and capital repayment by UBIDAC, have been calculated using the step-by-step method in IFRIC 16 ‘Hedges of a Net Investment in a Foreign Operation’ and by reference to the absolute reduction in ownership interest respectively. Amount recycled also includes £2,661 million related with historical hedge relationship taken to non interest income. | ||||||||||||||||||||||||||
[8] | On 15 June 2017, the Court of Session approved a reduction of RBSG plc’s capital so that the amounts which stood to the credit of share premium account and capital redemption reserve were transferred to retained earnings. | ||||||||||||||||||||||||||
[9] | Distribution to RFS Holdings B.V. consortium members on completion of the Alawwal bank merger. | ||||||||||||||||||||||||||
[10] | The hedging element of the cash flow hedging reserve and foreign exchange reserve relates mainly to de-designated hedges. | ||||||||||||||||||||||||||
[11] | During 2018, non-cumulative US dollar, Euro and Sterling preference shares were redeemed. | ||||||||||||||||||||||||||
[12] | On 17 April 2018 RBS Group agreed a Memorandum of Understanding (MoU) with the Trustees of the RBS Group Pension Fund in connection with the requirements of ring-fencing. NWM Plc could not continue to be a participant in the Main section and separate arrangements were required for its employees. Under the MoU, NWB Plc made a contribution of £2 billion on 9 October 2018 to strengthen funding of the Main section in recognition of the changes in covenant. Also under the MoU, NWM Plc made a £53 million contribution to the NWM section in Q1 2019. | ||||||||||||||||||||||||||
[13] | Year ended 31 December 2019 prepared under IFRS 16 Leases. Years ended 31 December 2018 and 31 December 2017 prepared under IAS 17 Leases. Refer to Note 22 for further information on the impact of IFRS 16 implementation. | ||||||||||||||||||||||||||
[14] | Capital injection from RFS Holdings B.V. consortium members. |
Consolidated statement of cha_2
Consolidated statement of changes in equity (Parenthetical) £ in Millions, $ in Billions | Oct. 09, 2018GBP (£) | Jun. 30, 2019GBP (£) | Mar. 31, 2019GBP (£) | Dec. 31, 2019USD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2018GBP (£) |
Original issue price of non-cumulative preference shares | $ | $ 1.1 | |||||
Nominal value | £ 0.3 | |||||
Increase (decrease) in equity | 700 | |||||
RFS Holdings | ||||||
Gains on disposals of investments | £ 1,102 | |||||
Income tax relating to completion of Alawwal bank merger | 65 | |||||
UBI DAC | ||||||
Capital repayment | 67 | 67 | ||||
Interest rate hedges | ||||||
Gains (losses) on cash flow hedges, before tax | 585 | £ 166 | ||||
Reclassification adjustments on cash flow hedges, before tax | 36 | 25 | ||||
Net investment hedging | ||||||
Gains (losses) on cash flow hedges, before tax | 12 | 103 | ||||
Reclassification adjustments on cash flow hedges, before tax | 243 | £ 493 | ||||
Foreign exchange reserve | RFS Holdings | ||||||
Gains on disposals of investments | £ 1,102 | |||||
Nat West Bank | ||||||
Funding contribution to retirement benefit schemes | £ 2,000 | |||||
NWM Plc | ||||||
Funding contribution to retirement benefit schemes | £ 53 | |||||
Alawwal bank merger | ||||||
Gains on disposals of investments | 290 | |||||
Income tax relating to completion of Alawwal bank merger | 48 | |||||
Derecognition of investments | £ 2,661 |
Consolidated cash flow statemen
Consolidated cash flow statement - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Cash flows from operating activities | ||||
Operating profit before tax | £ 4,232 | £ 3,359 | £ 2,239 | |
Interest on subordinated liabilities | 483 | 461 | 572 | |
Interest on treasury bills and debt securities | (854) | (534) | (330) | |
Impairment losses /(releases) on loans to banks and customers | 366 | (496) | (647) | |
Profit on sale of subsidiaries and associates | (2,224) | (155) | ||
Loss/(gain) on sale of other financial assets | 22 | (34) | (226) | |
(Gain)/loss on sale of property, plant and equipment | (58) | (50) | (75) | |
Defined benefit pension schemes | 188 | 308 | 375 | |
Charges and releases on provisions | 1,243 | 1,333 | 1,930 | |
Depreciation, amortisation and impairment of assets | 1,489 | 768 | 837 | |
Change in fair value taken to profit or loss of subordinated liabilities | 317 | (243) | (144) | |
Change in fair value taken to profit or loss of MRELs | 539 | (59) | (167) | |
Interest on MRELs | 645 | 415 | 244 | |
Loss on redemption of own debt | 7 | |||
Change in fair value taken to profit or loss of other financial assets | (280) | 585 | ||
Elimination of foreign exchange differences | 949 | 415 | (832) | |
Other non-cash items | (272) | 1,872 | (9) | |
Net cash flows from trading activities | 6,785 | 8,100 | 3,619 | |
Decrease/(increase) in net loans to banks | 3,563 | (1,923) | (206) | |
(Increase)/decrease in net loans to customers | (22,312) | 4,675 | 2,672 | |
(Increase)/decrease in trading assets | (659) | 7,543 | ||
(Increase)/decrease in derivative assets | (16,680) | 27,494 | 86,138 | |
(Increase)/decrease in settlement balance assets | (1,459) | (411) | 3,009 | |
Decrease/(increase) in other financial assets | 924 | 518 | (1,319) | |
Decrease/(increase) in other assets | 707 | 541 | (31) | |
(Decrease)/increase in banks deposits | (2,804) | (7,099) | 8,341 | |
Increase/(decrease) in customer deposits | 8,333 | (1,064) | 17,108 | |
Increase/(decrease) in trading liabilities | 1,599 | (9,630) | ||
Increase/(decrease) in derivative liabilities | 17,982 | (25,609) | (81,969) | |
Increase/(decrease) in settlement balance liabilities | 1,003 | 222 | 5,649 | |
Increase/(decrease) in other financial liabilities | 2,871 | 2,366 | 956 | |
(Decrease)/increase in other liabilities | (2,677) | (12,080) | (7,735) | |
Changes in operating assets and liabilities | (9,609) | (14,457) | 32,613 | |
Income taxes paid | (278) | (466) | (520) | |
Net cash flows from operating activities | [1] | (3,102) | (6,823) | 35,712 |
Cash flows from investing activities | ||||
Sale and maturity of other financial assets | 19,990 | 11,832 | 11,656 | |
Purchase of other financial assets | (21,345) | (19,516) | (17,212) | |
Interest on other financial assets | 854 | 534 | 330 | |
Sale of property, plant and equipment | 428 | 264 | 405 | |
Purchase of property, plant and equipment | (559) | (619) | (1,132) | |
Net investment in business interests and intangible assets | (84) | (489) | (199) | |
Net cash flows from investing activities | (716) | (7,994) | (6,152) | |
Cash flows from financing activities | ||||
Issue of ordinary shares | 17 | 144 | 306 | |
Redemption of other equity instruments | (2,826) | (779) | ||
Own shares acquired | (21) | |||
Own shares disposed | 22 | 89 | ||
Issue of subordinated liabilities | 577 | |||
Redemption of subordinated liabilities | (1,108) | (2,258) | (5,747) | |
Redemption of debt preference shares | (748) | |||
Service cost of other equity instruments | (3,429) | (803) | (612) | |
Interest on subordinated liabilities | (510) | (566) | (717) | |
Issuance of MRELs | 3,640 | 6,996 | 3,612 | |
Redemption and maturity of MRELs | (1,285) | (774) | ||
Interest on MRELs | (428) | (237) | (139) | |
Net cash flows from financing activities | [2] | (2,547) | 472 | (5,509) |
Effects of exchange rate changes on cash and cash equivalents | (1,983) | 676 | (16) | |
Net (decrease)/increase in cash and cash equivalents | (8,348) | (13,669) | 24,035 | |
Cash and cash equivalents at beginning of year | 108,936 | 122,605 | 98,570 | |
Cash and cash equivalents at end of year | £ 100,588 | £ 108,936 | £ 122,605 | |
[1] | Includes interest received of £11,245 million (2018 - £10,927 million, 2017 - £10,946 million) and interest paid of £3,318 million (2018 - £2,511 million, 2017 - £2,300 million). | |||
[2] | 2018 and 2017 have been re-presented to align the balance sheet classification. MREL was previously presented in Operating activities and is now presented in Financing activities. |
Consolidated cash flow statem_2
Consolidated cash flow statement (Parenthetical) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated cash flow statement | |||
Interest received | £ 11,245 | £ 10,927 | £ 10,946 |
Interest paid | £ 3,318 | £ 2,511 | £ 2,300 |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting policies | |
Accounting policies | 1. Presentation of accounts The accounts, set out on pages 198 to 266, including these accounting policies on pages 204 to 208, and the audited sections of the Financial review: Capital and risk management on pages 114 to 191, are prepared on a going concern basis (see the Report of the directors, page 110) and in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and interpretations as issued by the IFRS Interpretations Committee of the IASB and adopted by the European Union (EU) (together IFRS). The significant accounting policies and related judgments are set out below. The Royal Bank of Scotland Group plc (RBSG plc) is incorporated in the UK and registered in Scotland. Its accounts are presented in accordance with the Companies Act 2006. The accounts are presented in the functional currency, pounds sterling. With the exception of certain financial instruments as described in Accounting policies 12 and 20 and investment property, the accounts are presented on a historical cost basis. Accounting policy changes effective 1 January 2019 Adoption of IFRS 16 Refer to Accounting policy 9 and Note 22 for details of the adoption of IFRS 16. Other amendments to IFRS IAS 12 ‘Income taxes’ was revised with effect from 1 January 2019. The income statement now includes any tax relief on the servicing cost of instruments classified as equity. Relief of £67 million was recognised in the statement of changes in equity for the year ended 31 December 2018; this and prior years have been restated. IAS 19 ‘Employee Benefits’ was amended by the IASB in February 2018 to clarify the need to update assumptions whenever there is a plan amendment, curtailment or settlement. This amendment has not affected the accounts. Presentation of interest in suspense recoveries - In March 2019 the IFRS Interpretations Committee (IFRIC) issued an agenda decision on the presentation of unrecognised interest when a credit-impaired financial asset (commonly referred to as a ‘Stage 3’ financial asset) is subsequently paid in full or is no longer credit-impaired. This concluded that the difference arising from the additional interest recovered must be recognised as a reversal of impairment rather than within interest revenue. This affects both recognition and the reversal of the expected credit loss (ECL) allowance. RBS Group changed its accounting policy in line with the IFRIC decision. Hence, the gross carrying amount of the financial assets within the scope of the provisions of the decision, as well as the associated ECL allowance on the balance sheet have been adjusted by £460 million and the comparative period restated by £455 million with no effect on equity. The coverage ratio for the current and comparative periods have been adjusted and restated accordingly. In addition, until 1 January 2019, interest in suspense recoveries were presented as a component of interest receivable within Net interest income. From 1 January 2019 interest in suspense recoveries are presented within Impairment losses and amounted to £64 million for the year ended 31 December 2019. Comparatives have not been restated on the grounds of materiality. IAS 39 ‘Financial Instruments: Recognition and Measurement’, IFRS 9 ‘Financial Instruments’ and IFRS 7 ‘Financial Instruments: Disclosures’ - In September 2019, the IASB published amendments to address the issues arising from the replacement of existing IBOR based interest rate benchmarks with alternative nearly risk-free interest rates (RFRs) in the context of hedge accounting. These amendments allow hedging relationships affected by the IBOR reform to be accounted for as continuing hedges. RBS has early adopted these amendments for the annual reporting period ending on 31 December 2019. The amendments provide relief on key areas of hedge accounting most notably the hedge effectiveness assessment and the ability to identify LIBOR-based cash flows for the purpose of designation (re-designation) during the period of the Reform. Additional disclosures are shown in Note 10. IFRIC decision - Disclosure of change in liabilities arising from financing activities (IAS 7 statement of cash flows) – Following the IFRIC decision on how changes in liabilities should be presented in the cash flow statement, RBS has revised its presentation of financing activities and applied this to the cash flow statement. 2. Basis of consolidation The consolidated accounts incorporate the financial statements of RBSG plc and entities (including certain structured entities) that give access to variable returns and that are controlled by RBS Group. Control is assessed by reference to our ability to enforce our will on the other entity, typically through voting rights. 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 or expense relates to financial instruments measured at amortised cost and debt instruments classified as fair value through OCI using the effective interest rate method, the effective part of any related accounting hedging instruments, and finance lease income recognised at a constant periodic rate of return before tax on the net investment on the lease. Negative effective interest accruing to financial assets is presented in interest payable. Other interest relating to financial instruments measured at fair value is recognised as part of the movement in fair value. Fees in respect of services are recognised as the right to consideration accrues through the performance of each distinct service obligation 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. 4. Assets held for sale A non-current asset (or disposal group) is classified as held for sale if RBS Group will recover its carrying amount principally through a sale transaction rather than through continuing use and is measured at the lower of its carrying amount or fair value less cost to sell. 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 RBS Group or by RBSG plc shares. RBS Group operates a number of share-based compensation schemes under which it awards RBSG plc shares and share options to its employees. Such awards are generally subject to vesting conditions. Variable compensation that is settled in cash or debt instruments is charged to profit or loss on a straight-line basis over the vesting period, taking account of forfeiture and clawback criteria. Contributions to defined contribution pension schemes are recognised in profit or loss as employee service costs accrue. For defined benefit pension schemes, the net of the recognisable scheme assets and obligations is reported in the balance sheet. The defined benefit obligation is measured on an actuarial basis. The charge to profit or loss for pension costs (mainly the service cost and the net interest on the net defined benefit asset or liability) is recognised in operating expenses. Actuarial gains and losses (i.e. gains and/or 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. The difference between scheme assets and scheme liabilities, the net defined benefit asset or liability, is recognised in the balance sheet subject to the asset celling test which requires the net defined benefit surplus to be limited to the present value of any economic benefits available to RBS Group in the form of refunds from the plan or reduced contributions to it. 6. Intangible assets and goodwill Intangible assets acquired by RBS Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to profit or loss over the assets’ estimated useful 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. 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 the net fair value of the subsidiary’s identifiable assets, liabilities and contingent liabilities. Goodwill is measured at initial cost less any subsequent impairment losses. The gain or loss on the disposal of a subsidiary includes the carrying value of any related goodwill. 7. Impairment of intangible assets, rights of use and property, plant and equipment At each balance sheet date, RBS Group assesses whether there is any indication that its intangible assets, rights of use or property, plant and equipment are impaired. If any such indication exists, RBS 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. The recoverable amount of an asset that does not generate cash flows that are independent from those of other assets or groups of assets, is determined as part of 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 RBS 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 or 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. An impairment loss is recognised if the recoverable amount of an intangible or tangible asset is less than its carrying value. The carrying value of the asset is reduced by the amount of the loss and a charge recognised in profit or 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. 8. Foreign currencies Transactions in foreign currencies are recorded in the functional currency 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 20). 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 non-monetary financial assets classified as fair value through OCI, 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. 9. Leases RBS Group has adopted IFRS 16 ‘Leases’ with effect from 1 January 2019, replacing IAS 17 ‘Leases’. RBS Group has applied IFRS 16 on a modified retrospective basis without restating prior years. The effect is set out in Note 22. As lessor Finance lease contracts are those which transfer substantially all the risks and rewards of ownership of an asset to a customer. All other contracts with customers to lease assets are classified as operating leases. Loans to customers include finance lease receivables measured at the net investment in the lease, comprising the minimum lease payments and any unguaranteed residual value discounted at the interest rate implicit in the lease. Interest receivable includes finance lease income recognised at a constant periodic rate of return before tax on the net investment. 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 other operating 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. As lessee On entering a new lease contract, RBS Group recognises a right of use asset and a lease liability to pay future rentals. The liability is measured at the present value of future lease payments discounted at the applicable incremental borrowing rate. The right of use asset is depreciated over the shorter of the term of the lease and the useful economic life, subject to review for impairment. Short term and low value leased assets are expensed on a systematic basis. 10. Provisions and contingent liabilities RBS 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 RBS Group has a constructive obligation to restructure. An obligation exists when RBS 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. RBS Group recognises any onerous cost of the present obligation under a contract as a provision. An onerous cost is the unavoidable cost of meeting RBS Group’s contractual obligations that exceed the expected economic benefits. When RBS Group vacates a leasehold property, the right of use asset would be tested for impairment and a provision may be recognised for the ancillary occupancy costs, such as rates. 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. 11. 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. The tax consequences of servicing equity instruments are recognised in the income statement. 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 to the extent their recovery is probable. 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 RBS 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 RBS Group company or on RBS 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. Accounting for taxes is judgmental and carries a degree of uncertainty because tax law is subject to interpretation, which might be questioned by the relevant tax authority. RBS Group recognises the most likely current and deferred tax liability or asset, assessed for uncertainty using consistent judgments and estimates. Current and deferred tax assets are only recognised where their recovery is deemed probable, and current and deferred tax liabilities are recognised at the amount that represents the best estimate of the probable outcome having regard to their acceptance by the tax authorities. 12. Financial instruments Financial instruments are classified either by product, by business model or by reference to the IFRS default classification. Classification by product relies on specific designation criteria which are applicable to certain classes of financial assets or circumstances where accounting mismatches would otherwise arise. Classification by business model reflects how RBS Group manages its financial assets to generate cash flows. A business model assessment determines if cash flows result from holding financial assets to collect the contractual cash flows, from selling those financial assets, or both. The product classifications apply to financial assets that are either designated at fair value through profit or loss (DFV), or to equity investments designated as at fair value through other comprehensive income (FVOCI). Financial assets may also be irrevocably designated at fair value through profit or loss upon initial recognition if such designation eliminates, or significantly reduces, accounting mismatch. In all other instances, fair value through profit or loss (MFVTPL) is the default classification and measurement category for financial assets. Regular way purchases of financial assets classified as amortised cost are recognised on the settlement date; all other regular way transactions in financial assets are recognised on the trade date. Business model assessment of assets is made at portfolio level, being the level at which they are managed to achieve a predefined business objective. This is expected to result in the most consistent classification of assets because it aligns with the stated objectives of the portfolio, its risk management, manager’s remuneration and the ability to monitor sales of assets from a portfolio. Most financial assets are within ‘held to collect’ business models, and have contractual cash flows that comprise solely payments of principal and interest and therefore measured at amortised cost. Certain financial assets are managed under a business model of both ‘held to collect and sell’ and have contractual cash flows comprising solely of payments of principal and interest, and are measured at fair value through other comprehensive income (‘FVOCI’). The contractual terms of a facility; any leverage features; prepayment and extension terms; and triggers that might reset the effective rate of interest; are considered in determining whether cash flows comprise solely payments of principal and interest. All financial instruments are measured at fair value on initial recognition. All liabilities not subsequently measured at fair value are measured at amortised cost. 13. Impairment: expected credit losses At each balance sheet date each financial asset or portfolio of loans measured at amortised cost or at fair value through other comprehensive income, issued financial guarantee and loan commitment is assessed for impairment and presented as impairments in the income statement. Loss allowances are forward-looking, based on 12 month expected credit losses where there has not been a significant increase in credit risk rating, otherwise allowances are based on lifetime expected losses. Expected credit losses are a probability-weighted estimate of credit losses. The probability is determined by the risk of default which is applied to the cash flow estimates. In the absence of a change in credit rating, allowances are recognised when there is a reduction in the net present value of expected cash flows. On a significant increase in credit risk, allowances are recognised without a change in the expected cash flows, although typically expected cash flows do change also; and expected credit losses are adjusted from 12 month to lifetime expectations. Judgement is exercised as follows: · Models – in certain low default portfolios, Basel parameter estimates are also applied for IFRS 9. · Non-modelled portfolios , mainly in Private Banking, RBSI and Lombard, use a standardised capital requirement under Basel II. Under IFRS 9, they have bespoke treatments for the identification of significant increase in credit risk. Benchmark PDs, EADs and LGDs are reviewed annually for appropriateness. The ECL calculation is based on expected future cash flows, which is typically applied at a portfolio level. · Multiple economic scenarios (MES) – the central, or base, scenario is most critical to the ECL calculation, independent of the method used to generate a range of alternative outcomes and their probabilities. · Significant increase in credit risk - IFRS 9 requires that at each reporting date, an entity shall assess whether the credit risk on an account has increased significantly since initial recognition. Part of this assessment requires a comparison to be made between the current lifetime PD (i.e. the current probability of default over the remaining lifetime) with the equivalent lifetime PD as determined at the date of initial recognition. On restructuring a financial asset without causing derecognition of the original asset, the revised cash flows are used in re-estimating the credit loss. Where restructuring causes derecognition of the original financial asset, the fair value of the replacement asset is used as the closing cash flow of the original asset. 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 RBS Group’s interest in equity shares following the exchange is such that RBS Group controls an entity, that entity is consolidated. Impaired loans are written off and therefore derecognised from the balance sheet when RBS 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 the 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 RBS 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 · Commercial loans: write offs are determined in the light of individual circumstances; the period does not exceed five years. · Business loans are generally written off within five years. 14. Financial guarantee contracts Under a financial guarantee contract, RBS 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 13. Amortisation is calculated so as to recognise fees receivable in profit or loss over the period of the guarantee. 15. Loan commitments Provision is made for expected credit loss on loan commitments, other than those classified as held-for-trading. Syndicated loan commitments in excess of the level of lending under the commitment approved for retention by RBS Group are classified as held-for-trading and measured at fair value through profit or loss. 16. 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. Conversely, an asset is not derecognised by a contract under which RBS Group retains substantially all the risks and rewards of ownership. If substantially all the risks and rewards have been neither retained nor transferred, RBS Group does not derecognise an asset over which it has retained control but limits its recognition to the extent of its continuing involvement. A financial liability is removed from the balance sheet when the obligation is discharged, or is cancelled, or expires. 17. 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 RBS 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 RBS 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. Sale and repurchase transactions that are not accounted for at fair value through profit or loss are measured at amortised cost. The difference between the consideration paid or received and the repurchase or resale price is treated as interest and recognised in interest income or interest expense over the life of the transaction. 18. Netting Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, RBS 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. RBS 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. 19. Capital instruments RBS 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 RBS Group after the deduction of liabilities. The components of a compound financial instrument issued by RBS 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 RBSG plc purchased by RBS 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 2006. On the sale or re-issue of treasury shares the consideration received and related tax are credited to equity, net of any directly attributable incremental costs. 20. Derivatives and hedging Derivative financial instruments are initially recognised, and subsequently measured, at fair value. RBS Group’s approach to determining the fair value of financial instruments is set out in the Critical accounting policies section and key sources of estimation uncertainty entitled Fair value - financial instruments; further details are given in Notes 10 and 12 on the accounts. A derivative embedded in a financial liability 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. RBS 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 (net investment hedges). Hedge relationships are formally designated and documented at inception in line with the requirements of IAS 39 Financial instruments - Recognition and measurement . The documentation identifies the hedged item, the hedging instrument and details of the risk that is being hedged and the way in which effectiveness will be assessed at inception a |
Net interest income
Net interest income | 12 Months Ended |
Dec. 31, 2019 | |
Net interest income | |
Net interest income | 1 Net interest income £m £m £m Loans to banks - amortised cost 726 522 277 Loans to customers - amortised cost 9,795 9,993 10,409 Other financial assets 854 534 348 Interest receivable (1) 11,375 11,049 11,034 Balances with banks 319 250 175 Customer deposits: demand 282 223 99 Customer deposits: savings 771 510 445 Customer deposits: other time 203 116 179 Other financial liabilities 1,102 791 554 Subordinated liabilities 483 461 572 Internal funding of trading businesses 168 42 23 Interest payable (1) 3,328 2,393 2,047 Net interest income 8,047 8,656 8,987 Note: (1) Negative interest on loans is classed as interest payable and on customer deposits is classed as interest receivable. Interest income on financial instruments measured at amortised cost and debt instruments classified as FVOCI is measured using the effective interest rate which allocates the interest income or interest expense over the expected life of the asset or liability at the rate that exactly discounts all estimated future cash flows to equal 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. Included in interest receivable is finance lease income which is recognised at a constant periodic rate of return before tax on the net investment. |
Non-interest income
Non-interest income | 12 Months Ended |
Dec. 31, 2019 | |
Non-interest income | |
Non-interest income | 2 Non-interest income £m £m £m Net fees and commissions 2,511 2,357 2,455 Loss on redemption of own debt — — (7) Income from trading activities Foreign exchange 448 643 525 Interest rate 532 695 (50) Credit 32 45 197 Changes in fair value of own debt and derivative liabilities attributable to own credit risk - debt securities in issue (60) 72 12 - derivative liabilities (20) 20 (81) Equities, commodities and other — 32 31 932 1,507 634 Other operating income Operating lease and other rental income 250 256 276 Changes in the fair value of financial assets and liabilities designated at fair value through profit or loss (17) (26) 60 Changes in fair value of other financial assets at fair value through profit or loss 58 18 — Hedge ineffectiveness 48 (65) 39 Profit/(loss) on disposal of amortised cost assets 42 44 (35) (Loss)/profit on disposal of fair value through other comprehensive income assets (22) 34 226 Profit on sale of property, plant and equipment 58 50 75 Share of (losses)/profits of associated entities (14) 83 104 Profit/(loss) on disposal of subsidiaries and associates (1) 2,224 (72) 245 Other income (2) 136 560 74 2,763 882 1,064 6,206 4,746 4,146 Notes: (1) Includes a gain of £444 million (€523 million), a legacy liability release of £256 million and an FX recycling gain of £290 million on completion of the Alawwal bank merger in June 2019; £1,102 million of FX recycling gains arising on the liquidation of RFS Holdings BV and £67 million in relation to the capital repayment in UBI DAC. The recycling gains and capital repayment have been calculated using the step-by-step method in IFRIC 16 and by reference to the proportion of equity applied to the FX translation reserve. (2) Includes income from activities other than banking. 2018 includes insurance recoveries of £357 million. |
Operating expenses
Operating expenses | 12 Months Ended |
Dec. 31, 2019 | |
Operating expenses | |
Operating expenses | 3 Operating expenses £m £m £m Salaries 2,513 2,560 2,750 Bonus awards 299 225 298 Temporary and contract costs 401 442 430 Social security costs 300 307 318 Pension costs 303 401 Other 202 187 413 Staff costs 4,018 4,122 4,676 Premises and equipment (1) 1,259 1,383 1,565 UK bank levy (2) 134 179 215 Depreciation and amortisation (3) 1,176 731 808 Other administrative expenses (4) 2,694 3,193 3,108 Administrative expenses 5,263 5,486 5,696 Impairment of goodwill and other intangible assets 44 37 29 9,325 9,645 10,401 Notes: (1) Includes a £161 million charge relating to the reduction in property portfolio. (2) Includes a prior period rebate of £31 million. (3) Includes a £292 million charge relating to the reduction in property portfolio. (4) Includes litigation and conduct costs, net of amounts recovered. Refer to Notes 20 and 26 for further details. The average number of persons employed, rounded to the nearest hundred, during the year, excluding temporary staff,was 64,200 (2018 - 67,600; 2017 - 73,400). The average number of temporary employees during 2019 was 4,100 (2018 - 4,000; 2017 - 5,000). The number of persons employed at 31 December, excluding temporary staff, by reportable segment, was as follows: UK Personal Banking 21,800 23,400 19,500 Ulster Bank RoI 2,700 2,900 2,600 Commercial Banking 10,100 10,200 6,900 Private Banking 1,900 1,900 1,500 RBS International 1,600 1,600 1,600 NatWest Markets 5,000 4,500 5,300 Central items & other 19,800 20,900 32,300 Total 62,900 65,400 69,700 UK 44,600 46,600 51,200 USA 400 500 500 Europe 4,100 4,100 4,200 Rest of the World 13,800 14,200 13,800 Total 62,900 65,400 69,700 Effective from 1 January 2019, Business Banking was transferred from UK Personal & Business Banking (UK PBB) to Commercial Banking. Concurrent with the transfer, UK PBB was renamed UK Personal Banking. Comparatives have been re-stated. Share-based payments As described in the Remuneration report, RBS 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 2020 to 2024 Deferred performance awards All Awards of ordinary shares Continuing employment or leavers in certain circumstances 2020 to 2026 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 2020 to 2026 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 2019 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; expected 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 2019 2018 2017 Average Shares Average Shares Average Shares exercise price under option exercise price under option exercise price under option £ (million) £ (million) £ (million) At 1 January 2.18 75 2.38 60 2.46 56 Granted 1.78 25 1.89 28 2.27 21 Exercised 2.83 (4) 2.44 (4) 2.46 (3) Cancelled 2.25 (12) 2.46 (9) 2.49 (14) At 31 December 2.01 84 2.18 75 2.38 60 Options are exercisable within six months of vesting; 3.2 million options were exercisable at 31 December 2019 (2018 – 4.9 million; 2017 – 3.7 million). The weighted average share price at the date of exercise of options was £2.49 (2018 - £2.13; 2017 - £2.77). At 31 December 2019, exercise prices ranged from £1.68 to £2.91 (2018 - £1.68 to £3.43; 2017 - £1.68 to £4.34) and the remaining average contractual life was 2.7years (2018 - 2.9 years; 2017 – 2.9 years). The fair value of options granted in 2019 was £11 million (2018 - £21 million; 2017 - £21 million). Deferred performance awards 2019 2018 2017 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January 233 92 264 101 296 102 Granted 110 42 156 59 152 63 Forfeited (10) (4) (21) (8) (11) (4) Vested (137) (54) (166) (60) (173) (60) At 31 December 196 76 233 92 264 101 The awards granted in 2019 vest in equal tranches on their anniversaries, predominantly over three years. Long-term incentives 2019 2018 2017 Value at Shares Options Value at Shares Options Value at Shares Options grant awarded over shares grant awarded over shares grant awarded over shares £m (million) (million) £m (million) (million) £m (million) (million) At 1 January 85 32 2 102 37 2 119 38 4 Granted 15 6 — 12 5 — 35 15 — Vested/exercised (12) (4) — (5) (2) — (22) (7) — Lapsed (25) (9) (2) (24) (8) — (30) (9) (2) At 31 December 63 25 — 85 32 2 102 37 2 The market value of awards vested/exercised in 2019 was £10 million (2018 - £5 million; 2017 - £22 million). There are no vested options of shares exercisable up to 2020 (2018 - 2 million; 2017 – 2 million). Bonus awards The following tables analyse RBS Group’s bonus awards for 2019. Change £m £m % Non-deferred cash awards (1) 40 37 8 Total non-deferred bonus awards 40 37 8 Deferred bond awards 184 191 (4) Deferred share awards 83 107 (22) Total deferred bonus awards 267 298 (10) Total bonus awards (2) 307 335 (8) Bonus awards as a % of operating profit before tax (3) 7 % 9 % Proportion of bonus awards that are deferred 87 % 89 % of which - deferred bond awards 69 % 64 % - deferred share awards 31 % 36 % Reconciliation of bonus awards to income statement charge £m £m £m Bonus awarded 307 335 342 Less: deferral of charge for amounts awarded for current year (110) (130) (133) Income statement charge for amounts awarded in current year 197 205 209 Add: current year charge for amounts deferred from prior years 127 86 96 Less: forfeiture of amounts deferred from prior years (25) (66) (7) Income statement charge for amounts deferred from prior years 102 20 89 Income statement charge for bonus awards (2) 299 225 298 Actual Expected and beyond Year in which income statement charge is expected to be taken for deferred bonus awards £m £m £m £m £m Bonus awards deferred from 2017 and earlier 96 86 31 14 5 Bonus awards deferred from 2018 — — 96 16 14 Less: forfeiture of amounts deferred from prior years (7) (66) (25) — — Bonus awards for 2019 deferred — — — 78 32 89 20 102 108 51 Notes: (1) Cash awards are limited to £2,000 for all employees. (2) Excludes other performance related compensation. (3) Operating profit before tax and bonus expense. |
Segmental analysis
Segmental analysis | 12 Months Ended |
Dec. 31, 2019 | |
Segmental analysis | |
Segmental analysis | 4 Segmental analysis 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). Effective from 1 January 2019 Business Banking was transferred from UK Personal & Business Banking (UK PBB) to Commercial Banking, as the nature of the business, including distribution channels, products and customers were more closely aligned to the Commercial Banking business. Following the transfer, UK PBB was renamed UK Personal Banking. Comparatives have been restated. Reportable operating segments The reportable operating segments are as follows: UK Personal Banking serves individuals and mass affluent customers in the UK and includes Ulster Bank customers in Northern Ireland. Ulster Bank RoI serves individuals and businesses in the Republic of Ireland (RoI). Commercial Banking serves start-up, SME, commercial and corporate customers in the UK. Private Banking serves UK connected high net worth individuals and their business interests. RBS International (RBSI) serves retail, commercial, and corporate customers in the Channel Islands, Isle of Man and Gibraltar, and financial institution customers in those same locations in addition to the UK and Luxembourg. NatWest Markets helps global financial institutions and corporates manage their financial risks and achieve their short and long-term financial goals while navigating changing markets and regulation. 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 Net fees Other Depreciation Impairment interest and non-interest Total Operating and (losses)/ Operating income commissions income income expenses amortisation releases profit/(loss) 2019 £m £m £m £m £m £m £m £m UK Personal Banking 4,130 696 40 4,866 (3,618) — (393) 855 Ulster Bank RoI 400 109 58 567 (552) — 34 49 Commercial Banking 2,842 1,312 164 4,318 (2,458) (142) (391) 1,327 Private Banking 521 226 30 777 (482) (4) 6 297 RBS International 478 106 26 610 (254) (10) (2) 344 NatWest Markets (188) 85 1,445 1,342 (1,406) (12) 51 (25) Central items & other (136) (23) 1,932 1,773 621 (1,008) (1) 1,385 Total 8,047 2,511 3,695 14,253 (8,149) (1,176) (696) 4,232 Net Net fees Other Depreciation Impairment interest and non-interest Total Operating and (losses)/ Operating income commissions income income expenses amortisation releases profit/(loss) 2018* £m £m £m £m £m £m £m £m UK Personal Banking 4,283 692 79 5,054 (2,867) — (339) 1,848 Ulster Bank RoI 444 91 75 610 (583) — (15) 12 Commercial Banking 2,855 1,283 464 4,602 (2,362) (125) (147) 1,968 Private Banking 518 228 29 775 (476) (2) 6 303 RBS International 466 101 27 594 (254) (6) 2 336 NatWest Markets 112 (33) 1,363 1,442 (1,589) (15) 92 (70) Central items & other (22) (5) 352 325 (783) (583) 3 (1,038) Total 8,656 2,357 2,389 13,402 (8,914) (731) (398) 3,359 *2018 and 2017 data has been restated for the business re-segmentation. 2017* UK Personal Banking 4,342 724 216 5,282 (3,241) — (207) 1,834 Ulster Bank RoI 421 94 89 604 (676) — (60) (132) Commercial Banking 3,074 1,405 200 4,679 (2,458) (144) (390) 1,687 Private Banking 464 179 35 678 (529) — (6) 143 RBS International 325 42 22 389 (217) (2) (3) 167 NatWest Markets 203 24 823 1,050 (2,250) 49 174 (977) Central items & other 158 (13) 306 451 (222) (711) (1) (483) Total 8,987 2,455 1,691 13,133 (9,593) (808) (493) 2,239 *2018 and 2017 data has been restated for the business re-segmentation. 2019 2018* 2017* 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 Banking 6,161 62 6,223 6,188 63 6,251 6,406 39 6,445 Ulster Bank RoI 616 6 622 668 — 668 676 (4) 672 Commercial Banking 4,347 139 4,486 4,576 89 4,665 4,532 79 4,611 Private Banking 703 241 944 681 195 876 585 143 728 RBS International 639 19 658 506 148 654 309 119 428 NatWest Markets 2,516 558 3,074 1,882 916 2,798 1,408 809 2,217 Central items & other 3,447 (1,025) 2,422 2,155 (1,411) 744 2,147 (1,185) 962 Total 18,429 — 18,429 16,656 — 16,656 16,063 — 16,063 *2018 and 2017 data has been restated for the business re-segmentation. 2019 2018* 2017* 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 Banking 4,834 32 4,866 5,021 33 5,054 5,265 17 5,282 Ulster Bank RoI 562 5 567 613 (3) 610 609 (5) 604 Commercial Banking 4,814 (496) 4,318 5,079 (477) 4,602 5,051 (372) 4,679 Private Banking 631 146 777 655 120 775 594 84 678 RBS International 603 7 610 469 125 594 281 108 389 NatWest Markets 1,664 (322) 1,342 1,510 (68) 1,442 1,077 (27) 1,050 Central items & other 1,145 628 1,773 55 270 325 256 195 451 Total 14,253 — 14,253 13,402 — 13,402 13,133 — 13,133 *2018 and 2017 data has been restated for the business re-segmentation. UK Personal Ulster Commercial Private RBS NatWest Central items Analysis of net fees and commissions Banking Bank RoI Banking Banking International Markets & other Total 2019 £m £m £m £m £m £m £m £m Fees and commissions receivable - Payment services 292 61 658 33 27 24 — 1,095 - Credit and debit card fees 427 28 154 12 2 — — 623 - Lending (credit facilities) 356 14 415 2 32 82 — 901 - Brokerage 55 8 — 5 — 96 — 164 - Investment management, trustee and fiduciary services 44 3 3 186 41 1 — 278 - Trade finance — 2 95 1 4 3 — 105 - Underwriting fees — — — — — 170 — 170 - Other 2 5 90 27 2 69 (172) 23 Total 1,176 121 1,415 266 108 445 (172) 3,359 Fees and commissions payable (480) (12) (103) (40) (2) (360) 149 (848) Net fees and commissions 696 109 1,312 226 106 85 (23) 2,511 2018* Fees and commissions receivable - Payment services 227 34 556 33 25 3 — 878 - Credit and debit card fees 402 22 175 13 — — — 612 - Lending (credit facilities) 408 29 415 2 29 88 — 971 - Brokerage 62 6 — 5 — 85 — 158 - Investment management, trustee and fiduciary services 49 4 — 191 42 — — 286 - Trade finance — 2 122 1 4 3 — 132 - Underwriting fees 13 — 17 — — 144 — 174 - Other 2 1 60 16 2 67 (141) 7 Total 1,163 98 1,345 261 102 390 (141) 3,218 Fees and commissions payable (471) (7) (62) (33) (1) (423) 136 (861) Net fees and commissions 692 91 1,283 228 101 (33) (5) 2,357 *2018 and 2017 data has been restated for the business re-segmentation. 2017* Fees and commissions receivable - Payment services 194 30 543 37 24 1 — 829 - Credit and debit card fees 451 27 175 12 — — — 665 - Lending (credit facilities) 436 30 497 2 10 83 2 1,060 - Brokerage 69 10 — 6 — 63 — 148 - Investment management, trustee and fiduciary services 72 4 35 133 4 1 — 249 - Trade finance — 2 164 1 3 3 — 173 - Underwriting fees — — — — — 157 — 157 - Other 1 — 51 15 2 132 (144) 57 Total 1,223 103 1,465 206 43 440 (142) 3,338 Fees and commissions payable (499) (9) (60) (27) (1) (416) 129 (883) Net fees and commissions 724 94 1,405 179 42 24 (13) 2,455 *2018 and 2017 data has been restated for the business re-segmentation . 2019 2018* 2017* Assets Liabilities Assets Liabilities Assets Liabilities £m £m £m £m £m £m UK Personal Banking 182,305 153,999 171,011 148,792 166,560 145,104 Ulster Bank RoI 25,385 21,012 25,193 21,189 24,564 19,853 Commercial Banking 165,399 140,863 166,478 139,804 173,621 143,450 Private Banking 23,304 28,610 21,983 28,554 20,290 27,049 RBS International 31,738 30,330 28,398 27,663 25,867 29,077 NatWest Markets 263,885 246,907 244,531 227,399 277,886 248,553 Central items & other 31,023 57,762 36,641 54,344 49,268 75,877 Total 723,039 679,483 694,235 647,745 738,056 688,963 *2018 and 2017 data has been restated for the business re-segmentation. Segmental analysis of goodwill is as follows: UK Personal Commercial Private RBS Banking Banking Banking International Total £m £m £m £m £m At 1 January 2018* 2,653 2,606 — 300 5,559 Acquisitions 48 — — — 48 Inter-segment transfers (9) — 9 — — At 31 December 2018* 2,692 2,606 9 300 5,607 At 31 December 2019 2,692 2,606 9 300 5,607 *2018 data has been restated for the business re-segmentation. 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 2019 £m £m £m £m £m Total revenue 16,925 228 1,148 128 18,429 Interest receivable 10,923 — 417 35 11,375 Interest payable (3,255) — (70) (3) (3,328) Net fees and commissions 2,191 37 211 72 2,511 Income from trading activities 727 148 49 8 932 Other operating income 2,305 13 436 9 2,763 Total income 12,891 198 1,043 121 14,253 Operating profit/(loss) before tax 3,543 186 421 82 4,232 Total assets 648,056 33,121 40,010 1,852 723,039 Total liabilities 613,151 31,715 33,539 1,078 679,483 Net assets attributable to equity owners and non-controlling interests 34,905 1,406 6,471 774 43,556 Contingent liabilities and commitments 114,422 — 10,571 2 124,995 2018 Total revenue 15,351 300 838 167 16,656 Interest receivable 10,589 — 430 30 11,049 Interest payable (2,366) — (26) (1) (2,393) Net fees and commissions 2,183 12 102 60 2,357 Income from trading activities 1,308 124 68 7 1,507 Other operating income 467 119 229 67 882 Total income 12,181 255 803 163 13,402 Operating profit/(loss) before tax 3,805 (718) 150 122 3,359 Total assets 624,228 32,573 34,441 2,993 694,235 Total liabilities 588,185 31,329 27,183 1,048 647,745 Net assets attributable to equity owners and non-controlling interests 36,043 1,244 7,258 1,945 46,490 Contingent liabilities and commitments 121,267 — 5,408 208 126,883 2017* Total revenue 15,011 192 655 205 16,063 Interest receivable 10,556 7 435 36 11,034 Interest payable (1,945) (11) (89) (2) (2,047) Net fees and commissions 2,192 97 113 53 2,455 Income from trading activities 570 83 (24) 5 634 Other operating income 806 22 121 108 1,057 Total income 12,179 198 556 200 13,133 Operating profit/(loss) before tax 3,230 (580) (485) 74 2,239 Total assets 662,314 38,485 34,280 2,977 738,056 Total liabilities 626,103 36,564 25,171 1,125 688,963 Net assets attributable to equity owners and non-controlling interests 36,211 1,921 9,109 1,852 49,093 Contingent liabilities and commitments 128,127 78 7,823 22 136,050 |
Pensions
Pensions | 12 Months Ended |
Dec. 31, 2019 | |
Pensions | |
Pensions | 5 Pensions Defined contribution schemes RBS Group sponsors a number of defined contribution pension schemes in different territories, which new employees are offered the opportunity to join. Defined benefit schemes RBS 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 section”) 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 for over ten years, although current members continue to build up additional pension benefits, currently subject to 2% maximum annual salary inflation, while they remain employed by RBS Group. The Main section corporate trustee is RBS Pension Trustee Limited (the Trustee), a wholly owned subsidiary of NWB Plc, Principal Employer of the Main section. 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 RBS 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 RBS Group’s other pension schemes. Investment strategy The assets of the Main section, which is typical of other group schemes, represent 90% of plan assets at 31 December 2019 (2018 - 90%) and are invested in a diversified portfolio as shown below. The Main section employs derivative instruments to achieve a desired asset class exposure and to reduce the section’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. 2019 2018 Major classes of plan assets as a percentage of Quoted Unquoted Total Quoted Unquoted Total total plan assets of the Main section % % % % % % Equities 3.9 4.8 8.7 3.7 5.2 8.9 Index linked bonds 47.8 — 47.8 40.1 — 40.1 Government bonds 9.3 — 9.3 12.9 — 12.9 Corporate and other bonds 11.6 5.0 16.6 12.2 5.2 17.4 Real estate — 4.8 4.8 — 5.5 5.5 Derivatives — 7.8 7.8 — 6.1 6.1 Cash and other assets — 5.0 5.0 — 9.1 9.1 72.6 27.4 100.0 68.9 31.1 100.0 The Main section’s holdings of derivative instruments are summarised in the table below: 2019 2018 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps 16 909 1,094 13 347 502 Interest rate swaps 57 6,407 2,992 55 8,132 5,362 Currency forwards 9 215 42 10 22 164 Equity and bond call options 1 122 — 1 277 — Equity and bond put options 5 3 1 4 3 1 Other 3 124 13 4 1,027 1,092 Swaps have been executed at prevailing market rates and within standard market bid/offer spreads with a number of counterparty banks, including NWB Plc. At 31 December 2019, the gross notional value of the swaps was £75 billion (2018 - £72 billion) and had a net positive fair value of £3,340 million (2018 - £2,557 million) against which the banks had posted approximately 110% collateral. The schemes do not invest directly in RBS Group but can have exposure to RBS Group. The trustees of the respective UK schemes are responsible for ensuring that indirect investments in RBS Group do not exceed the 5% regulatory limit. Main section All schemes Present value Asset Net Present value Asset Net Fair of defined ceiling/ pension Fair of defined ceiling/ pension value of benefit minimum (asset)/ value of benefit minimum (asset)/ plan assets obligation funding (1) liability plan assets obligation funding (1) liability Changes in value of net pension (asset)/liability £m £m £m £m £m £m £m £m At 1 January 2018 44,652 37,937 6,715 — 49,746 42,378 7,105 (263) Currency translation and other adjustments — — — — 20 17 (1) (4) Income statement 1,123 1,143 171 191 1,242 1,371 179 308 Statement of comprehensive income (1,891) (1,396) 1,532 2,027 (2,090) (1,630) 1,507 1,967 Contributions by employer 2,218 — — (2,218) 2,363 — — (2,363) Contributions by plan participants and other scheme members 7 7 — — 12 12 — — Liabilities extinguished upon settlement — — — — (259) (259) — — Transfer of pension assets and liabilities from Main section (276) (198) (78) — — — — — Benefits paid (2,027) (2,027) — — (2,282) (2,282) — — At 1 January 2019 43,806 35,466 8,340 — 48,752 39,607 8,790 (355) Currency translation and other adjustments — — — — (85) (76) — 9 Income statement Net interest expense 1,245 1,003 242 — 1,374 1,109 255 (10) Current service cost — 140 — 140 — 193 — 193 Past service cost — 13 — 13 — 15 — 15 Gain on curtailments or settlements — — — — — (10) — (10) 1,245 1,156 242 153 1,374 1,307 255 188 Statement of comprehensive income Return on plan assets excluding recognised interest income 3,021 — — (3,021) 3,556 — — (3,556) Experience gains and losses — (275) — (275) — (279) — (279) Effect of changes in actuarial financial assumptions — 5,565 — 5,565 — 6,189 — 6,189 Effect of changes in actuarial demographic assumptions — (465) — (465) — (482) — (482) Asset ceiling adjustments — — (1,696) (1,696) — — (1,730) (1,730) 3,021 4,825 (1,696) 108 3,556 5,428 (1,730) 142 Contributions by employer 261 — — (261) 473 — — (473) Contributions by plan participants and other scheme members 10 10 — — 15 15 — — Liabilities extinguished upon settlement — — — — (188) (194) — (6) Benefits paid (1,788) (1,788) — — (1,972) (1,972) — — At 31 December 2019 46,555 39,669 6,886 — 51,925 44,115 7,315 (495) Notes: (1) RBS 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 RBS 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 section, where the surplus is not recognised. (2) RBS Group expects to make contributions to the Main section of £247 million in 2020. Additional contributions of up to £500 million will be paid to the Main section, should RBS Group make distributions in 2020, in line with the ring-fencing agreement with the Trustee. All schemes Amounts recognised on the balance sheet £m £m Fund assets at fair value 51,925 48,752 Present value of fund liabilities 44,115 39,607 Funded status 7,810 9,145 Asset ceiling/minimum funding 7,315 8,790 495 355 Net pension asset/(liability) comprises £m £m Net assets of schemes in surplus (included in Other assets, Note 17) 614 520 Net liabilities of schemes in deficit (included in Other liabilities, Note 20) (119) (165) 495 355 Funding and contributions by RBS Group In the UK, the trustees of defined benefit pension schemes are required to perform funding valuations every three years. The trustees and the sponsor, 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 RBS Group sponsors defined benefit pension schemes. The last funding valuation of the Main section was at 31 December 2017 and next funding valuation is due at 31 December 2020, to be agreed by 31 March 2022. The triennial funding valuation of the Main section as at 31 December 2017 determined the funding level to be 96%, pension liabilities to be £47 billion and the deficit to be £2 billion, which was eliminated by a £2 billion cash payment in October 2018. The average cost of the future service of current members is 44% of salary before administrative expenses and contributions from those members. In 2018, the Group recognised an updated estimate of the impact of guaranteed minimum pension equalisation (£102m) following the clarity provided by the October 2018 Court ruling and the impact of any future conversion exercise. This has been revised in 2019 to reflect changes in financial assumptions. Assumptions Placing a value on RBS Group’s defined benefit pension schemes’ liabilities requires RBS Group’s management to make a number of assumptions, with the support of independent actuaries. The ultimate cost of the defined benefit obligations depends 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 section are shown below: Principal IAS 19 actuarial assumptions Principal assumptions of 2017 triennial valuation % % Discount rate 2.1 2.9 Fixed interest swap yield curve plus 0.8% per annum Inflation assumption (RPI) 2.9 3.2 RPI swap yield curve Rate of increase in salaries 1.8 1.8 Rate of increase in deferred pensions 3.0 3.1 Rate of increase in pensions in payment 2.8 2.9 Modelled allowance for relevant caps and floors Lump sum conversion rate at retirement 20 20 % Longevity at age 60: years years Current pensioners Males 26.9 27.2 Females 28.7 29.0 Future pensioners, currently aged 40 Males 28.2 28.4 Females 30.2 30.5 Discount rate The IAS 19 valuation uses a single discount rate set by reference to the yield on a basket of ‘high quality’ sterling corporate bonds. For the triennial valuation discounting is by reference to a yield curve. The weighted average duration of the Main section’s defined benefit obligation at 31 December 2019 is 21 years (2018 – 20 years). Significant judgement is required when setting the criteria for bonds to be included in the basket of bonds that is used to determine the discount rate used in the IAS 19 valuations. 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. Sensitivity to the main assumptions is presented below. The chart below shows the projected benefit payment pattern for the Main section in nominal terms. These cashflows are based on the most recent formal actuarial valuation, effective 31 December 2017. The larger outflow in the first four years represents the expected level of transfers out to 31 December 2021. The table below shows how the net pension asset of the Main section would change if the key assumptions used were changed independently. In practice the variables have a degree of correlation and do not move completely in isolation. (Decrease)/ (Decrease)/ Increase in increase in increase in net pension value of value of assets/ assets liabilities (obligations) 2019 £m £m £m 0.25% increase in interest rates/discount rate (2,330) (1,973) (357) 0.25% increase in inflation 1,923 1,394 529 0.25% increase in credit spreads (5) (1,973) 1,968 Longevity increase of one year — 1,706 (1,706) 0.25% additional rate of increase in pensions in payment — 1,326 (1,326) Increase in equity values of 10% (1) 430 — 430 2018 0.25% increase in interest rates/discount rate (2,214) (1,644) (570) 0.25% increase in inflation 1,487 1,199 288 0.25% increase in credit spreads (5) (1,644) 1,639 Longevity increase of one year — 1,414 (1,414) 0.25% additional rate of increase in pensions in payment — 1,215 (1,215) Increase in equity values of 10% (1) 419 — 419 Note: (1) The funded status is most sensitive to movements in credit spreads and longevity. The table below shows the combined change in the funded status of the Main section as a result of larger movements in these assumptions, assuming no changes in other assumptions. Change in life expectancies -2 years -1 years No change + 1 year + 2 years 2019 £bn £bn £bn £bn £bn Change in credit spreads +50 bps 6.9 5.4 3.9 2.3 0.8 No change 3.6 1.7 — (1.7) (3.6) -50 bps (0.2) (2.3) (4.4) (6.5) (8.7) 2018 Change in credit spreads +50 bps 5.8 4.5 3.2 1.9 0.7 No change 3.0 1.4 — (1.4) (3.0) -50 bps (0.4) (2.1) (3.8) (5.5) (7.3) The defined benefit obligation of the Main section is attributable to the different classes of scheme members in the following proportions: Membership category % % Active members 13.6 12.9 Deferred members 49.7 48.6 Pensioners and dependants 36.7 38.5 100.0 100.0 The experience history of RBS Group schemes is shown below: Main section All schemes History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets 46,555 43,806 44,652 43,824 30,703 51,925 48,752 49,746 49,229 34,708 Present value of plan obligations 39,669 35,466 37,937 38,851 30,966 44,115 39,607 42,378 43,990 35,152 Net surplus/(deficit) 6,886 8,340 6,715 4,973 (263) 7,810 9,145 7,368 5,239 (444) Experience gains/(losses) on plan liabilities 275 (122) (107) 658 233 279 (81) (93) 794 258 Experience gains/(losses) on plan assets 3,021 (1,891) 1,580 8,562 (415) 3,556 (2,090) 1,728 9,254 (458) Actual return on plan assets 4,266 (768) 2,735 9,872 703 4,930 (848) 3,013 10,708 749 Actual return on plan assets 9.7 % (1.7) % 6.2 % 32.2 % 2.3 % 10.1 % (1.7) % 6.1 % 30.9 % 2.2 % |
Auditor's remuneration
Auditor's remuneration | 12 Months Ended |
Dec. 31, 2019 | |
Auditor's remuneration | |
Auditor's remuneration | 6 Auditor’s remuneration Amounts paid to RBS 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, RBS Group selects the supplier best placed to meet its requirements. RBS Group’s auditors are permitted to tender for such work in competition with other firms where the work is permissible under audit independence rules. Amounts paid to RBS Group's auditors for statutory audit and other services are set out below: £m £m £m Fees payable for : - the audit of RBS Group’s annual accounts (1) 3.8 3.5 4.0 - the audit of RBSG plc's subsidiaries (1) 25.7 27.5 22.9 - audit-related assurance services (1,2) 3.2 2.9 4.3 Total audit and audit-related assurance services fees 32.7 33.9 31.2 Other assurance services 1.2 1.3 1.7 Corporate finance services (3) 0.6 0.2 0.2 Total other services 1.8 1.5 1.9 Notes: (1) The 2019 audit fee was approved by the Group Audit Committee. At 31 December 2019, £16 million has been billed in and paid in respect of the 2019 RBS Group audit fees. (2) Comprises fees of £1.1 million (2018 - £1.1 million) in relation to reviews of interim financial information, £1.4 million (2018 - £1.1 million) in respect of reports to RBS Group’s regulators in the UK and overseas, and £0.7 million (2018 - £0.7 million) in relation to non-statutory audit opinions. (3) Comprises fees of £0.6 million (2018 - £0.2 million) in respect of work performed by the auditors as reporting accountants on debt and equity issuances undertaken by RBS Group. |
Tax
Tax | 12 Months Ended |
Dec. 31, 2019 | |
Tax | |
Tax | 7 Tax 2018* 2017* £m £m £m Current tax Charge for the year (673) (1,025) (925) Over provision in respect of prior years 122 125 227 (551) (900) (698) Deferred tax Credit/(charge) for the year 38 (280) 108 Increase/(reduction) in the carrying value of deferred tax assets 62 7 (30) Over/(under) provision in respect of prior years 19 (35) (111) Tax charge for the year (432) (1,208) (731) *Restated for IAS12 ‘Income taxes’. Refer to Accounting policy 1, Other amendments to IFRS. The actual tax charge differs from the expected tax charge computed by applying the standard rate of UK corporation tax of 19% (2018 – 19%; 2017 – 19.25%) as follows: 2018 * 2017* £m £m £m Expected tax charge (804) (638) (431) Losses and temporary differences in year where no deferred tax asset recognised (4) (55) (303) Foreign profits taxed at other rates 23 (8) 104 UK tax rate change impact — — (7) Items not allowed for tax: - losses on disposals and write-downs (71) (44) (69) - UK bank levy (26) (38) (45) - regulatory and legal actions (165) (203) (56) - other disallowable items (62) (63) (110) Non-taxable items: - Alawwal bank merger gain disposal 215 — — - FX recycling on the liquidation of RFS Holdings 279 — — - other non-taxable items 80 47 134 Taxable foreign exchange movements (1) (27) 27 Losses brought forward and utilised 27 14 11 Increase/(decrease) in the carrying value of deferred tax assets in respect of: - UK losses 129 7 (30) - Ireland losses (67) — — Banking surcharge (199) (357) (165) Tax on paid-in equity 73 67 93 Adjustments in respect of prior years (1) 141 90 116 Actual tax charge (432) (1,208) (731) *Restated for IAS12 ‘Income taxes’. Refer to Accounting policy 1, Other amendments to IFRS. Note: (1) 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. Judgment: Tax contingencies RBS Group’s income tax charge and its provisions for income taxes necessarily involve a 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. RBS 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 charges in the period when the matter is resolved. Deferred tax £m £m Deferred tax asset (1,011) (1,412) Deferred tax liability 266 454 Net deferred tax asset (745) (958) Tax Accelerated losses capital Expense Financial carried Pension allowances provisions instruments forward Other Total £m £m £m £m £m £m £m At 1 January 2018 (393) 192 (266) 198 (939) 51 (1,157) Implementation of IFRS 9 on 1 January 2018 — — — 16 — — 16 (Credit)/charge to income statement (40) 22 121 154 5 46 308 (Credit)/charge to other comprehensive income (95) 1 — (23) — 33 (84) Currency translation and other adjustments — 5 (14) 4 (2) (34) (41) At 1 January 2019 (528) 220 (159) 349 (936) 96 (958) Implementation of IFRS16 on 1 January 2019 — — — — — (60) (60) Acquisitions and disposals of subsidiaries (1) (1) — 18 — — 16 Charge/(credit) to income statement 28 (43) 41 (81) (28) (36) (119) Charge/(credit) to other comprehensive income 362 — — 30 — (20) 372 Currency translation and other adjustments — (4) — (1) 13 (4) 4 At 31 December 2019 (139) 172 (118) 315 (951) (24) (745) 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 - NWM Plc 75 151 - NWB Plc 530 505 - RBS Plc 150 — - Ulster Bank Limited 15 19 Total 770 675 Overseas tax losses carried forward - Ulster Bank Ireland DAC 181 261 951 936 Critical accounting policy: Deferred Tax RBS Group has recognised a deferred tax asset of £1,011 million (31 December 2018 - £1,412 million) principally comprises losses that arose in the UK, temporary differences, and a deferred tax liability of £266 million (31 December 2018 - £454 million). This includes amounts recognised in respect of UK trading losses of £770 million (31 December 2018 - £675 million). Deferred tax assets are recognised to the extent that it is probable that there will be future taxable profits to recover them. Judgment - RBS Group has considered the carrying value of deferred tax assets and concluded that, based on management’s estimates, sufficient taxable profits will be generated in future years to recover recognised deferred tax assets. Estimate - These estimates are partly based on forecast performance beyond the horizon for management’s detailed plans. They have regard to inherent uncertainties, such as Brexit and climate change. The deferred tax asset in NWM Group is supported by way of future reversing temporary timing differences on which deferred tax liabilities are recognised at 31 December 2019. UK tax losses – Under UK tax rules, tax losses can be carried forward indefinitely. As the recognised tax losses in RBS Group arose prior to 1 April 2015, credit in future periods is given against 25% of profits at the main rate of UK corporation tax, excluding the Banking Surcharge 8% rate introduced by The Finance (No. 2) Act 2015. Deferred tax assets and liabilities at 31 December 2019 take into account the reduced rates in respect of tax losses and temporary differences and where appropriate, the banking surcharge inclusive rate in respect of other banking temporary differences. NWM Plc - NWM Plc expects that the balance of recognised deferred tax asset at 31 December 2019 of £75 million (2018 - £151 million) in respect of tax losses amounting to approximately £400 million will be recovered by the end of 2025. The movement in the current financial year reflects a £76 million decrease in the carrying value of the deferred tax asset, driven primarily by a decrease in forecast future taxable profits as a result of the strategic review of the NWM franchise. During the year, agreement was reached to transfer tax losses of £5,438 million to NWB Plc and RBS plc, as a consequence of the ring fencing regulations. Of the losses remaining, £5,109 million have not been recognised in the deferred tax balance at 31 December 2019; such losses will be available to offset 25% of future taxable profits in excess of those forecast in the closing deferred tax asset. NWB Plc – A deferred tax asset of £530 million has been recognised in respect of total losses of £3,109 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. NWB Plc returned to tax profitability during 2015 and expects the deferred tax asset to be consumed by future taxable profits by the end of 2025. During the year, losses of £881 million were transferred from NWM Plc as a consequence of the ring fencing regulations. These losses have not been recognised in the deferred tax balance at 31 December 2019. RBS plc – A deferred tax asset of £206 million was recognised in respect of losses transferred of £1,161 million from NatWest Markets Plc as a consequence of the ring fencing regulations , with £56 million of the deferred tax asset utilised to reduce current tax expense, leaving a balance of recognised deferred tax asset at 31 December 2019 of £150 million recovered by the end of 2025. The remaining losses transferred of £3,396 million have not been recognised in the deferred tax balance at 31 December 2019; such losses will be available to offset 25% of future taxable profits. Overseas tax losses UBI DAC – A deferred tax asset of £181 million has been recognised in respect of losses of £1,447 million of total losses of £8,334 million carried forward at 31 December 2019. The losses arose principally as a result of significant impairment charges between 2008 and 2013 during challenging economic conditions in the Republic of Ireland. The movement in the current financial year reflects a £67m reduction in the carrying value of the deferred tax asset and £:€ exchange differences. As UBIDAC continues to operate in a small open economy subject to short term volatility and extended non-performing loan realisation periods the company expects, in assessing its deferred tax asset on tax losses, that they will be consumed by future taxable profits by the end of 2028. NatWest Market N.V. (NWM N.V.) - NWM N.V. Group management has considered that there are significant changes to NWM N.V. Group's activities compared to prior years as NWM N.V. has re-purposed its banking licence and new business was transferred to NWM N.V. during 2019. NWM N.V. Group management did not recognise deferred tax asset in respect of losses carried forward at 31 December 2019 due to the implications from the wider strategic review of the NWM franchise and the uncertainty in respect of Brexit. Unrecognised deferred tax Deferred tax assets of £4,653 million (2018 - £5,118 million; 2017 - £6,356, million) have not been recognised in respect of tax losses and other temporary differences carried forward of £23,555 million (2018 - £25,597 million; 2017 - £30,049 million) in jurisdictions where doubt exists over the availability of future taxable profits. Of these losses and other temporary differences, £839 million expire within five years and £4,798 million thereafter. The balance of tax losses and other temporary differences carried forward has no expiry date. Deferred tax liabilities of £262 million (2018 - £257 million; 2017 - £255 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. Changes to UK tax legislation largely exempts from UK tax, overseas dividends received on or after 1 July 2009. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share | |
Earnings per share | 8 Earnings per share £m £m £m Earnings Profit attributable to ordinary shareholders 3,133 1,622 752 Weighted average number of shares (millions) Weighted average number of ordinary shares outstanding during the year 12,067 12,009 11,867 Effect of dilutive share options and convertible securities 35 52 69 Diluted weighted average number of ordinary shares outstanding during the year 12,102 12,061 11,936 |
Trading assets and liabilities
Trading assets and liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Trading assets and liabilities | |
Trading assets and liabilities | 9 Trading assets and liabilities Trading assets and liabilities comprise assets and liabilities held at fair value in trading portfolios. Assets £m £m Loans Reverse repos 24,095 24,759 Collateral given 20,579 19,036 Other loans 1,947 1,308 Total loans 46,621 45,103 Securities Central and local government - UK 4,897 6,834 - US 5,458 4,689 - other 14,902 13,498 Financial institutions and Corporate 4,867 4,995 Total securities 30,124 30,016 Total 76,745 75,119 Liabilities Deposits Repos 27,885 25,645 Collateral received 21,509 20,187 Other deposits 1,606 1,788 Total deposits 51,000 47,620 Debt securities in issue 1,762 903 Short positions 21,187 23,827 Total 73,949 72,350 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Derivatives | |
Derivatives | 10 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. 2019 2018 Notional Assets Liabilities Notional Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts 3,750 44,792 47,141 3,426 36,545 38,230 Interest rate contracts 11,293 104,957 99,331 10,536 96,410 90,444 Credit derivatives 17 280 359 16 346 208 Equity and commodity contracts 3 — 48 1 48 15 150,029 146,879 133,349 128,897 RBS applies hedge accounting to manage the following risks; interest rate, foreign exchange and net investment in foreign operations. RBS’s interest rate hedging relate to the management of RBS’s non-trading structural interest rate risk, caused by the mismatch between fixed interest rates and floating interest rates. 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. Cash flow hedges of interest rate risk relate to exposures to the variability in future interest payments and receipts due to the movement of benchmark interest rates on forecast transactions and on recognised financial assets and financial liabilities. This variability in cash flows is hedged by interest rate swaps , fixing the hedged cash flows. For these cash flow hedge relationships, the hedged items are actual and forecast variable interest rate cash flows arising from financial assets and financial liabilities with interest rates linked to the relevant benchmark rate LIBOR, EURIBOR, SONIA, the Bank of England Official Bank Rate or the European Central Bank Refinance Rate. The variability in cash flows due to movements in the relevant benchmark rate is hedged; this risk component is identified using the risk management systems of RBS. This risk component comprises the majority of cash flow variability risk. Fair value hedges of interest rate risk involve interest rate swaps transforming the fixed interest rate risk in recognised financial assets and financial liabilities to floating. The hedged risk is the risk of changes in the hedged item’s fair value attributable to changes in the benchmark interest rate embedded in the hedged item. The significant embedded benchmarks are LIBOR, EURIBOR and SONIA. This risk component is identified using the risk management systems of RBS. This risk component comprises the majority of the hedged items fair value risk. RBS hedges the exchange rate risk of its net investment in foreign currency denominated operations with currency borrowings and forward foreign exchange contracts. RBS reviews the value of the investments’ net assets, executing hedges where appropriate to reduce the sensitivity of capital ratios to foreign exchange rate movement. Hedge accounting relationships will be designated where required. Exchange rate risk also arises in RBS where payments are denominated in different currencies than the functional currency. Residual risk positions are hedged with forward foreign exchange contracts. Exposure to the variability in future payments due to the movement of foreign exchange rates is hedged, fixing the exchange rate the payments will be settled in. The derivatives are documented as cash flow hedges. For all cash flow hedging and fair value hedge relationships RBS determines that there is an adequate level of offsetting between the hedged item and hedging instrument by assessing the initial and ongoing effectiveness by comparing movements in the fair value of the expected highly probable forecast interest cash flows/ fair value of the hedged item attributable to the hedged risk 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 determines to be appropriate. RBS uses either the actual ratio between the hedged item and hedging instrument(s) or one that minimises hedge ineffectiveness to establish the hedge ratio for hedge accounting. A number of the current cash flow and fair value hedges of interest rate risk will be directly affected by interest rate benchmark reform; RBS Group currently considers all of these relationships that mature post 31 December 2021 to be directly affected. As at 31 December 2019 the exact transition date of affected hedge accounting relationships is not known. The disclosures are prepared on these assumptions where the amendments made to IAS39 paragraphs 102D-102N and 108G are applied. The disclosures made for the notional of hedging instruments and risk exposures affected by interest rate benchmark reform contain information for both the hedging instrument and hedged risks even if only one of these will be directly impacted by the reform. RBS is managing the process to transition to alternative benchmark rates in the following ways: · reviewed or is in the process of reviewing the fall-back language for IBOR linked instruments · continues to liaise with regulators, standard setters, industry groups and customers on other relevant matters as the transition to risk free rates progresses · is in the process of adjusting its products, processes and information systems to deal with the expected effects of the discontinuation of IBOR most notably the transition and calculation rules. Further details on the transition from IBOR based rates to risk free rates are in the Capital and risk management section on page 185. Included in the table above are derivatives held for hedging purposes as follows: 2019 2018 Changes in fair Changes in fair value used for value used for Notional Assets Liabilities hedge ineffectiveness (1) Notional Assets Liabilities hedge ineffectiveness (1) £bn £m £m £m £bn £m £m £m Fair value hedging Interest rate contracts 65.1 1,186 2,641 (585) 60.0 965 2,061 (7) Cash flow hedging Interest rate contracts 148.4 1,450 833 366 149.7 1,148 872 (770) Exchange rate contracts 12.3 66 8 (59) 12.5 106 — — Net investment hedging Exchange rate contracts 0.4 — 4 8 2.0 32 10 — 226.2 2,702 3,486 (270) 224.2 2,251 2,943 (777) IFRS netting — (2,500) (3,464) — — (1,893) (2,922) — — 202 22 — — 358 21 — Note: (1) The change in fair value used for hedge ineffectiveness includes instruments that were decrecognised in the year. The notional of hedging instruments affected by interest rate benchmark reform is as follows: £bn Fair value hedging - LIBOR 40.2 - EURIBOR 11.1 Cash flow hedging - LIBOR 44.2 - EURIBOR 3.4 - SONIA The following table shows the period in which the hedging contract ends: 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 20+ years Total 2019 £bn £bn £bn £bn £bn £bn £bn £bn Fair value hedging Hedging assets - Interest rate risk 0.6 1.6 8.1 5.5 12.5 4.4 4.3 37.0 Hedging liabilities - Interest rate risk — 0.5 6.3 12.7 6.6 2.0 — 28.1 Cash flow hedging Hedging assets Interest rate risk 4.8 11.4 31.7 10.7 12.2 — — 70.8 Average fixed interest rate (%) 1.10 0.97 1.20 1.78 1.44 3.12 — 1.11 Hedging liabilities Interest rate risk 1.9 22.0 45.2 5.3 2.4 0.8 — 77.6 Average fixed interest rate (%) 0.83 1.01 0.87 1.32 1.12 4.31 — 0.98 Exchange rate risk — 1.9 6.2 3.1 1.1 — — 12.3 Average USD - £ rate — 1.56 1.30 1.30 1.44 — — 1.35 Average INR - £ rate — 88.64 94.01 — — — — 93.11 Net investment hedging Exchange rate risk 0.1 0.3 — — — — — 0.4 Principal currency hedges Average SEK - £ rate 12.27 12.10 — — — — — 12.21 Average DKK - £ rate 8.78 — — — — — — 8.78 Average NOK - £ rate 12.36 — — — — — — 12.36 2018 Fair value hedging Hedging assets - Interest rate risk 1.0 1.8 11.0 4.9 7.8 3.7 3.8 34.0 Hedging liabilities - Interest rate risk — 2.0 7.5 10.0 4.6 1.9 — 26.0 Cash flow hedging Hedging assets Interest rate risk 3.9 10.9 47.8 8.7 10.5 — — 81.8 Average fixed interest rate (%) 1.87 1.44 1.13 2.00 1.43 — — 1.33 Hedging liabilities Interest rate risk 8.6 18.9 34.1 5.1 0.4 0.8 — 67.9 Average fixed interest rate (%) 0.54 0.56 1.07 1.34 3.96 4.31 — 0.94 Exchange rate risk — — 5.8 4.7 2.0 — — 12.5 Average USD - £ rate — — 1.32 1.37 1.50 — — 1.37 Net investment hedging Exchange rate risk 1.2 0.6 0.2 — — — — 2.0 The table below analyses assets and liabilities subject to hedging derivatives. Changes in fair value Impact on hedged Carrying value Impact on hedged used as a basis to items ceased to be of hedged items included determine adjusted for assets and liabilities in carrying value ineffectiveness (1) hedging gains or losses 2019 £m £m £m £m Fair value hedging - interest rate Loans to banks and customers - amortised cost 6,716 1,023 165 86 Other financial assets - securities 35,796 1,274 1,474 — Total 42,512 2,297 1,639 86 Other financial liabilities - debt securities in issue 26,811 830 (807) 30 Subordinated liabilities 5,398 (275) (222) 24 Total 32,209 555 (1,029) 54 Cash flow hedging - interest rate Loans to banks and customers - amortised cost 69,254 — (566) — Other financial assets - securities 2,275 — (16) — Total 71,529 — (582) — Cash flow hedging - interest rate (2) Bank and customer deposits 75,837 — 225 — Other financial liabilities - debt securities in issue 1,009 — 14 — Cash flow hedging - exchange rate Other financial liabilities - debt securities in issue 12,264 — 59 — Subordinated liabilities — — — — Total 89,110 — 298 — 2018 Fair value hedging - interest rate Loans to banks and customers - amortised cost 6,197 875 (62) 91 Other financial assets - securities 31,879 362 108 10 Total 38,076 1,237 46 101 Other financial liabilities - debt securities in issue 23,289 (19) (7) — Subordinated liabilities 2,359 22 15 — Total 25,648 3 8 — Fair value hedging - exchange rate Other financial assets - securities 3 — — — Cash flow hedging - interest rate Loans to banks and customers - amortised cost 81,880 — 686 Bank and customer deposits 67,854 — (28) — Cash flow hedging - exchange rate Other financial liabilities - debt securities in issue 5,590 — — Subordinated liabilities 6,902 — — — Total 162,226 — 658 — Notes: (1) The change in fair value used for hedge ineffectiveness instruments derecognised in the year. (2) Comparative period balances are nil. The following risk exposures will be affected by interest rate benchmark reform (notional, hedged adjustment): Hedged Notional adjustment £bn £m Fair value hedging - LIBOR 42.0 908 - EURIBOR 12.7 93 Cash flow hedging - LIBOR 9.6 (115) - EURIBOR 3.3 (46) - BOE Base rate 34.7 (172) - ECB REFI rate 0.1 0 - SONIA 0.1 0 Hedge ineffectiveness recognised in other operating income comprises: £m £m £m Fair value hedging Gains/(losses) on the hedged items attributable to the hedged risk 610 54 (48) (Losses)/gains on the hedging instruments (585) (7) 78 Fair value hedging ineffectiveness 25 47 30 Cash flow hedging - Interest rate risk 23 (112) 9 Cash flow hedging ineffectiveness 23 (112) 9 Total 48 (65) 39 The main sources of ineffectiveness for interest rate risk hedge accounting relationships are: · The effect of the counterparty credit risk on the fair value of the interest rate swap which is not reflected in the fair value of the hedged item attributable to the change in interest rate (fair value hedge). · Differences in the repricing basis between the hedging instrument and hedged cash flows (cash flow hedge); and · Upfront present values on the hedging derivatives where hedge accounting relationships have been designated after the trade date (cash flow hedge and fair value hedge). Additional information on cash flow hedging and hedging of net assets can be found in the Statement of Changes in Equity. |
Financial instruments - classif
Financial instruments - classification | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments - classification | |
Financial instruments - classification | 11 Financial instruments – classification The following tables analyse financial assets and liabilities in accordance with the categories of financial instruments on an IFRS 9 basis. Assets and liabilities outside the scope of IFRS 9 are shown within other assets and other liabilities. Amortised Other MFVTPL(1) FVOCI (2) cost assets Total Assets £m £m £m £m £m Cash and balances at central banks 77,858 77,858 Trading assets 76,745 76,745 Derivatives (3) 150,029 150,029 Settlement balances 4,387 4,387 Loans to banks - amortised cost (4) 10,689 10,689 Loans to customers - amortised cost 326,947 326,947 Other financial assets 715 49,283 11,454 61,452 Intangible assets 6,622 6,622 Other assets 8,310 8,310 31 December 2019 227,489 49,283 431,335 14,932 723,039 Amortised Other MFVPL(1) FVOCI (3) cost assets Total £m £m £m £m £m Cash and balances at central banks 88,897 88,897 Trading assets 75,119 75,119 Derivatives (3) 133,349 133,349 Settlement balances 2,928 2,928 Loans to banks - amortised cost (4) 12,947 12,947 Loans to customers - amortised cost 305,089 305,089 Other financial assets 1,638 46,077 11,770 59,485 Intangible assets 6,616 6,616 Other assets 9,805 9,805 31 December 2018 210,106 46,077 421,631 16,421 694,235 Held-for- Amortised Other trading DFV (5) cost liabilities Total Liabilities £m £m £m £m £m Bank deposits (6) 20,493 20,493 Customer deposits 369,247 369,247 Settlement balances 4,069 4,069 Trading liabilities 73,949 73,949 Derivatives (7) 146,879 146,879 Other financial liabilities (8) 2,258 42,962 45,220 Subordinated liabilities 724 9,255 9,979 Other liabilities (9) 2,206 7,441 9,647 31 December 2019 220,828 2,982 448,232 7,441 679,483 Bank deposits (6) 23,297 23,297 Customer deposits 360,914 360,914 Settlement balances 3,066 3,066 Trading liabilities 72,350 72,350 Derivatives (7) 128,897 128,897 Other financial liabilities (8) 2,840 36,892 39,732 Subordinated liabilities 867 9,668 10,535 Other liabilities 2,218 6,736 8,954 31 December 2018 201,247 3,707 436,055 6,736 647,745 Notes: (1) Mandatory fair value through profit or loss. (2) Fair value through other comprehensive income (3) Includes net hedging derivatives of £202 million (2018 - 358 million). (4) Includes items in the course of collection from other banks of £50 million (2018 - £484 million). (5) Designated as at fair value through profit or loss. (6) Includes items in the course of transmission to other banks of £2 million (2018 - £125 million). (7) Includes net hedging derivatives of £22 million (2018 - £22 million). (8) The carrying amount of other customer accounts designated as at fair value through profit or loss is nil (2018 - £26 million) higher than the principal amount. (9) Includes lease liabilities. RBS Group's financial assets and liabilities include: £m £m Reverse repos Trading assets 24,095 24,759 Loans to banks - amortised cost 165 3,539 Loans to customers - amortised cost 10,649 9 Repos Bank deposits 2,597 941 Customer deposits 1,765 3,774 Trading liabilities 27,885 25,645 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 agreements together with financial collateral received or given. Instruments which can be offset Potential for offset not recognised by IFRS Effect of Net amount after Instruments master netting Other the effect of netting outside IFRS Balance and similar Cash financial agreements and netting Balance Gross offset sheet agreements collateral collateral related collateral agreements sheet total 2019 £m £m £m £m £m £m £m £m £m Derivative assets 158,850 (10,913) 147,937 (122,697) (18,685) (4,292) 2,263 2,092 150,029 Derivative liabilities 154,396 (11,724) 142,672 (122,697) (17,296) (1,276) 1,403 4,207 146,879 Net position (1) 4,454 811 5,265 — (1,389) (3,016) 860 (2,115) 3,150 Trading reverse repos 52,007 (28,720) 23,287 (562) — (22,262) 463 808 24,095 Trading repos 54,131 (28,720) 25,411 (562) — (24,808) 41 2,474 27,885 Net position (2,124) — (2,124) — — 2,546 422 (1,666) (3,790) 2018 Derivative assets 136,329 (5,041) 131,288 (106,762) (17,937) (4,469) 2,120 2,061 133,349 Derivative liabilities 133,965 (6,776) 127,189 (106,762) (15,227) (3,466) 1,734 1,708 128,897 Net position (1) 2,364 1,735 4,099 — (2,710) (1,003) 386 353 4,452 Trading reverse repos 53,148 (31,376) 21,772 (762) — (21,000) 10 2,987 24,759 Trading repos 55,864 (31,376) 24,488 (762) — (23,726) — 1,157 25,645 Net position (2,716) — (2,716) — — 2,726 10 1,830 (886) Note: (1) The net IFRS offset balance of £811 million (2018 - £1,735 million) relates to variation margin netting reflected on other balance sheet lines. |
Financial instruments - valuati
Financial instruments - valuation | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments - classification | |
Financial instruments - valuation | 12 Financial instruments – valuation Critical accounting policy: Fair value - financial instruments In accordance with Accounting policies 12 and 20, financial instruments classified as mandatory fair value through profit or loss, held-for-trading or designated as at fair value through profit or loss and financial assets classified as fair value through other comprehensive income 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, RBS Group maximises the use of relevant observable inputs and minimises the use of unobservable inputs. Modelled approaches may be used to measure instruments classed as level 2 or 3. Estimation expertise is required in the selection, implementation and calibration of appropriate models. The resulting modelled valuations are considered for accuracy and reliability. Portfolio level adjustments consistent with IFRS 13 are raised to incorporate counterparty credit risk, funding and margining risks. Expert judgement is used in the initial measurement of modelled products by control teams. Where RBS 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 RBS 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 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 below. 2019 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 £m £m £m £m £m £m Assets Trading assets Loans — 46,172 449 — 44,983 120 Securities 20,865 8,704 555 22,003 7,312 701 Derivatives — 148,800 1,229 — 131,513 1,836 Other financial assets Loans — 307 58 — 768 136 Securities 41,044 8,326 263 40,132 6,172 507 Total financial assets held at fair value 61,909 212,309 2,554 62,135 190,748 3,300 Liabilities Trading liabilities Deposits — 50,944 56 — 47,243 377 Debt securities in issue — 1,703 59 — 791 112 Short positions 15,565 5,622 — 18,941 4,886 — Derivatives — 145,818 1,061 — 127,709 1,188 Other financial liabilities Debt securities in issue — 2,117 141 — 2,348 280 Other deposits — — — — 212 — Subordinated liabilities — 724 — — 867 — Total financial liabilities held at fair value 15,565 206,928 1,317 18,941 184,056 1,957 Notes: (1) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instrument was transferred. There were no significant transfers between level 1 and level 2. (2) For an analysis of debt securities held at mandatorily fair value through profit or loss by issuer as well as ratings and derivatives, by type and contract, refer to Capital and Risk management – Credit risk. (3) 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. Fair value hierarchy Financial Instruments carried at fair value have been classified under the IFRS fair value hierarchy as follows. Level 1 – instruments valued using unadjusted quoted prices in active and liquid markets, for identical financial instruments. Examples include government bonds, listed equity shares and certain exchange-traded derivatives. Level 2 - instruments valued using valuation techniques that have observable inputs. Examples include 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, certain money market securities, 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. Examples include cash instruments which trade infrequently, certain syndicated and commercial mortgage loans, certain emerging markets and derivatives with unobservable model inputs. 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 are valued directly from a price input typically on a position by position basis and include cash, equities and most debt securities. 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 third-party benchmarking 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. Valuation control 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. Independent price verification (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. Where measurement differences are identified through the IPV process these are grouped by fair value level and quality of data. If the size of the difference exceeds defined thresholds adjustment to independent levels are made. IPV takes place at least each monthly, for all fair value positions. The IPV control includes formalised reporting and escalation of any valuation differences in breach of established thresholds. 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 Model Risk team. Valuation Committees are made up of valuation specialists and senior business representatives from various functions and oversees pricing, reserving and valuations issues. These committees meet 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 Valuation Committees and to discuss other relevant matters of including prudential valuation. 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 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. 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. RBS 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. 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. When valuing financial instruments in the trading book, adjustments are made to mid-market valuations to cover bid-offer spread, funding and credit risk. These adjustments are presented in the table below: Adjustment £m £m Funding – FVA 244 250 Credit – CVA 386 419 Bid – Offer 165 238 Product and deal specific 238 327 1,033 1,234 The reduction in valuation reserves was primarily driven by a combination of market moves, trade close-out activity and risk reduction together with a reallocation of product and deal specific reserves that are now included within modelled trade valuations. Funding valuation adjustment (FVA) FVA represents an estimate of the adjustment that a market participant would make to incorporate funding costs and benefits that arise in relation to derivative exposures. FVA is calculated as a portfolio level adjustment and can result in either a funding charge or funding benefit. Funding levels are applied to estimated potential future exposures. For uncollateralised derivatives, the modelling of the exposure is consistent with the approach used in the calculation of CVA, and the counterparty contingent nature of the exposure is reflected in the calculation. For collateralised derivatives, the exposure reflects initial margin posting requirements. Credit valuation adjustments (CVA) CVA represents 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. 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 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 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. 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. Product and deal specific 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 2019, net gains of £88 million (2018 - £59 million) were carried forward. During the year, net gains of £183 million (2018 - £151 million) were deferred and £154 million (2018 - £148 million) were recognised in the income statement. Where system generated valuations do not accurately recover market prices, manuals valuation adjustments are applied either at a position or portfolio level. Manual adjustments are subject to the scrutiny of independent control teams and are subject to monthly review by senior management. 12 Financial instruments - valuation: Level 3 ranges of unobservable inputs 2019 2018 Financial instrument Valuation Technique Unobservable inputs Units Low High Low High Trading assets and Other financial assets Loans Price-based Price % — 101 — 132 Credit Spreads Credit spread bps 53 101 — — Debt securities Price-based Price % — 246 — 154 Equity Shares Price-based Price GBP — 25,914 — 24,181 Price % — 80 — — Valuation Discount factor % 6 9 8 11 Fund NAV % 80 120 80 120 Trading liabilities and Other financial liabilities Deposits DCF based on recoveries Correlation % — — (45) 99 Interest rate % — — (0.36) 1.74 Price-based Price % — 98 — — Yield analysis Day count Number 65 95 — — Debt securities in issue Price-based Price CCY 44 JPY 146 EUR 21 JPY 136 EUR Valuation Fund NAV GBP — — — 622 Derivative assets and liabilities Credit derivatives DCF based on recoveries Credit spreads bps 6 500 18 500 Option pricing Correlation % (50) 80 (50) 80 Volatility % 27 80 47 80 Upfront points % — 99 — 100 Recovery rate % 10 40 10 40 Price-based Price % — — 90 110 Interest rate & FX Option pricing Correlation % (50) 99 (45) 99 derivatives Volatility % 19 70 1 76 Constant Prepayment Rate % 2 15 — — Mean Reversion % — 92 — — Equity derivatives Option pricing Correlation % (53) 87 (57) 92 Forward Points — — 864 7,106 Volatility % — — 11 23 Notes: (1) The table above presents the range of values for significant inputs used in the valuation of level 3 assets and liabilities. The range represents the highest and lowest values of the input parameters and therefore is not a measure of parameter uncertainty. 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, their 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. (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. (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, values may be 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 (NAV). Similarly for equity or bond fund investments, prices may be estimated from valuation or credit statements using NAV or similar measures. (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) Mean reversion: a measure of how much a rate reverts to its mean level. (11) Constant prepayment rate: the rate is used to reflect how fast a pool of assets pay down. (12) Day count: yield analysis on deposits are calculated using day count as an input, referring to the maturity of the deposit. (13) RBS does not have any material liabilities measured at fair value that are issued with an inseparable third party credit enhancement. 12 Financial instruments – valuation: 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. IFRS requires extra disclosures in respect of level 3 instruments. 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 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 be level 3. This hurdle rate is that used in the IPV process to determine the IPV quality rating. However, where an instrument is generally considered to be illiquid, but regular quotes from market participants exist, these instruments may be classified as level 2 depending on frequency of quotes, other available pricing and whether the quotes are used as part of the IPV process or not. For some instruments with a wide number of available price sources, there may be differing quality of available information and there may be a wide range of prices from different sources. In these situations the highest quality source is used to determine the classification of the asset. For example, a tradable quote would be considered a better source than a consensus price. 2019 2018 Level 3 Favourable Unfavourable Level 3 Favourable Unfavourable £m £m £m £m £m £m Assets Trading assets Loans 449 10 (10) 120 10 (10) Securities 555 — — 701 20 (10) Derivatives Interest rate 1,015 160 (160) 1,487 120 (120) Foreign exchange 98 10 (10) 130 10 (10) Other 116 10 (10) 219 10 (20) Other financial assets Loans 58 — — 136 10 (20) Securities 263 80 (20) 507 50 (30) 2,554 270 (210) 3,300 230 (220) Liabilities Trading liabilities Deposits 56 — — 377 40 (40) Debt securities in issue 59 — — 112 10 (10) Derivatives Interest rate 630 70 (70) 808 70 (70) Foreign exchange 222 10 (10) 279 10 (10) Other 209 20 (10) 101 — (10) Other financial liabilities - debt securities in issue 141 10 (10) 280 10 (10) 1,317 110 (100) 1,957 140 (150) 12 Financial instruments – valuation: level 3 sensitivities The level 3 sensitivities presented above 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. Reasonably plausible alternative assumptions of unobservable inputs are determined based on a specified target level of certainty of 90%. The assessments recognise different favourable and unfavourable valuation movements where appropriate. Each unobservable input within a product is considered separately and sensitivity is reported on an additive basis. Alternative assumptions are determined with reference to all available evidence including consideration of the following: quality of independent pricing information taking into account consistency between different sources, variation over time, perceived tradability or otherwise of available quotes; consensus service dispersion ranges; volume of trading activity and market bias (e.g. one-way inventory); day 1 profit or loss arising on new trades; number and nature of market participants; market conditions; modelling consistency in the market; size and nature of risk; length of holding of position; and market intelligence. Other considerations Whilst certain inputs used to calculate CVA, FVA and own credit adjustments are not based on observable market data, the uncertainty of the inputs is not considered to have a significant effect on the net valuation of the related derivative portfolios and issued debt. The classification of the derivative portfolios and issued debt is not determined by the observability of these inputs and any related sensitivity does not form part of the level 3 sensitivities presented. Level 3 The following table shows the movement in level 3 assets and liabilities in the year. 2019 2018 Trading Other financial Total Total Trading Other financial Total Total assets (2) assets (3) assets liabilities assets (2) assets (3) assets liabilities £m £m £m £m £m £m £m £m At 1 January 2,657 643 3,300 1,957 2,692 530 3,222 2,187 Amounts recorded in the income statement (1) (418) (1) (419) 162 (147) 178 31 (344) Amounts recorded in the statement of comprehensive income — 86 86 — — 23 23 — Level 3 transfers in 492 2 494 104 1,307 19 1,326 419 Level 3 transfers out (857) (59) (916) (588) (624) (1) (625) (231) Issuances — — — 46 — — — 47 Purchases 1,121 15 1,136 532 871 16 887 401 Settlements (218) (38) (256) (429) (512) (3) (515) (204) Sales (541) (326) (867) (466) (930) (125) (1,055) (316) Foreign exchange and other adjustments (3) (1) (4) (1) — 6 6 (2) At 31 December 2,233 321 2,554 1,317 2,657 643 3,300 1,957 Amounts recorded in the income statement in respect of balances held at year end - unrealised (421) 8 (413) 110 (134) 158 24 (330) - realised — — — — (2) 6 4 — Notes: (1) There were £596 million net losses on trading assets and liabilities (2018 - £185 million gains) recorded in income from trading activities. Net gains on other instruments of £15 million (2018 – £190 million) were recorded in other operating income and interest income as appropriate. (2) Trading assets comprise assets held at fair value in trading portfolios. (3) Other financial assets comprise fair value through other comprehensive income, designated as at fair value through profit or loss and other fair value through profit or loss. 12 Financial instruments: fair value of financial instruments not carried at fair value The following table shows the carrying value and fair value of financial instruments carried at amortised cost on the balance sheet. Items where fair value approximates Carrying Fair value hierarchy level carrying value value Fair value Level 1 Level 2 Level 3 2019 £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 77.9 — — — — — Settlement balances 4.4 — — — — — Loans to banks — 10.7 10.7 — 6.2 4.5 Loans to customers — 326.9 324.0 — 11.0 3 |
Financial instruments - maturit
Financial instruments - maturity analysis | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments - classification | |
Financial instruments - maturity analysis | 13 Financial instruments - maturity analysis Remaining maturity The following table shows the residual maturity of financial instruments, based on contractual date of maturity. 2019 2018 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 77,858 — 77,858 88,897 — 88,897 Trading assets 51,825 24,920 76,745 49,094 26,025 75,119 Derivatives 40,798 109,231 150,029 28,503 104,846 133,349 Settlement balances 4,387 — 4,387 2,928 — 2,928 Loans to banks - amortised cost 10,676 13 10,689 12,833 114 12,947 Loans to customers - amortised cost 77,742 249,205 326,947 67,354 237,735 305,089 Other financial assets 10,187 51,265 61,452 11,681 47,804 59,485 Liabilities Bank deposits 9,286 11,207 20,493 7,438 15,859 23,297 Customer deposits 367,098 2,149 369,247 359,148 1,766 360,914 Settlement balances 4,069 — 4,069 3,066 — 3,066 Trading liabilities 53,047 20,902 73,949 50,668 21,682 72,350 Derivatives 41,276 105,603 146,879 29,028 99,869 128,897 Other financial liabilities 11,915 33,305 45,220 8,240 31,492 39,732 Subordinated liabilities 160 9,819 9,979 299 10,236 10,535 Lease liabilities 194 1,629 1,823 — — — Assets and liabilities by contractual cash flow maturity The tables show on the following page, 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. The maturity of guarantees and commitments is based on the earliest possible date they would be drawn in order to evaluate RBS Group's liquidity position. MFVTPL assets of £227.3 billion (2018 - £209.7 billion) and HFT liabilities of £220.8 billion (2018 - £201.2 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 2019 £m £m £m £m £m £m Assets by contractual maturity Cash and balances at central banks 77,858 — — — — — Settlement balances 4,387 — — — — — Loans to banks - amortised cost 9,659 1,032 5 — — — Other financial assets (1) 4,619 6,644 16,287 9,857 15,766 5,081 Total maturing assets 96,523 7,676 16,292 9,857 15,766 5,081 Loans to customers - amortised cost 48,793 36,108 70,957 51,667 66,453 79,174 Finance lease 72 289 920 646 802 653 Derivatives held for hedging 33 7 63 103 56 42 145,421 44,080 88,232 62,273 83,077 84,950 Liabilities by contractual maturity Bank deposits 7,269 2,017 11,297 38 — — Settlement balance 4,069 — — — — — Other financial liabilities 4,810 7,602 11,849 13,935 9,426 328 Subordinated liabilities 21 541 3,295 5,270 327 1,700 Other liabilities (2) 2,109 — — — — — Total maturing liabilities 18,278 10,160 26,441 19,243 9,753 2,028 Customer deposits 358,359 8,773 2,105 22 23 17 Lease liabilities 54 140 313 249 457 571 Derivatives held for hedging 9 22 50 40 59 46 376,700 19,095 28,909 19,554 10,292 2,662 Guarantees and commitments notional amount Guarantees (3) 2,757 — — — — — Commitments (4) 117,228 — — — — — 119,985 — — — — — 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2018 £m £m £m £m £m £m Assets by contractual maturity Cash and balances at central banks 88,897 — — — — — Settlement balances 2,928 — — — — — Loans to banks - amortised cost 11,920 925 106 — — — Other financial assets (1) 4,451 7,397 14,138 11,279 11,826 2,744 Total maturing assets 108,196 8,322 14,244 11,279 11,826 2,744 Loans to customers - amortised cost 42,953 31,719 65,486 51,319 66,149 78,902 Finance lease 143 368 955 520 829 641 Derivatives held for hedging 40 98 184 95 49 34 151,332 40,507 80,869 63,213 78,853 82,321 Liabilities by contractual maturity Bank deposits 7,417 21 13,785 2,003 — 59 Settlement balances 3,066 — — — — — Other financial liabilities 1,736 7,226 10,724 11,658 9,316 2,029 Subordinated liabilities 131 637 1,476 7,532 1,737 1,422 Other liabilities (2) 2,152 — — — — — Total maturing liabilities 14,502 7,884 25,985 21,193 11,053 3,510 Customer deposits 351,054 8,114 1,727 14 6 26 Derivatives held for hedging 15 30 94 35 53 45 365,571 16,028 27,806 21,242 11,112 3,581 Guarantees and commitments notional amount Guarantees (3) 3,952 — — — — — Commitments (4) 116,843 — — — — — 120,795 — — — — — Notes: (1) Other financial assets excludes equity shares. (2) Other liabilities include notes in circulation. (3) 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. (4) 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. |
Loan impairment provisions
Loan impairment provisions | 12 Months Ended |
Dec. 31, 2019 | |
Loan impairment provisions | |
Loan impairment provisions | 14 Loan impairment provisions Loan exposure and impairment metrics The table below summarises loans and related credit impairment measures on an IFRS 9 basis. 2018* £m £m Loans - amortised cost Stage 1 305,502 285,985 Stage 2 27,868 26,097 Stage 3 6,598 8,174 Of which: individual 2,051 2,860 Of which: collective 4,547 5,314 339,968 320,256 ECL provisions (1) - Stage 1 322 297 - Stage 2 752 772 - Stage 3 2,718 2,782 Of which: individual 796 850 Of which: collective 1,922 1,932 3,792 3,851 ECL provision coverage (2,3) - Stage 1 (%) 0.11 0.10 - Stage 2 (%) 2.70 2.96 - Stage 3 (%) 41.19 34.03 1.12 1.20 Impairment losses ECL charge (4) 696 398 Stage 1 (212) (143) Stage 2 318 292 Stage 3 590 249 Of which: individual 303 94 Of which: collective 287 155 ECL loss rate - annualised (basis points) (3) 20.47 12.43 Amounts written off 792 1,494 Of which: individual 372 272 Of which: collective 420 1,222 *2018 data has been restated for a change to presentation of unrecognised interest. Refer to Accounting policy 1, Other amendments to IFRS, for further details. Notes: (1) Includes £4 million (2018 - £5 million) related to assets classified as FVOCI. (2) ECL provisions coverage is calculated as ECL provisions divided by loans – amortised cost. (3) ECL provisions coverage and ECL loss rates are calculated on third party loans and related ECL provisions and charge respectively. (4) Includes a £2 million charge (2018 - £3 million charge) related to other financial assets, of which at a £1 million release (2018 - £1 million charge) related to assets classified as FVOCI; and nil (2018 - £31 million release) related to contingent liabilities. (5) The table above shows gross loans only and excludes amounts that are outside the scope of the ECL framework. Refer to page 144 for Financial instruments within the scope of the IFRS 9 ECL framework for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling £76.1 billion and debt securities of £59.4 billion (2018 – £87.2 billion and £57.0 billion respectively). Credit risk enhancement and mitigation For information on Credit risk enhancement and mitigation held as security, refer to Capital and risk management – credit risk. Critical accounting policy: Loan impairment provisions The loan impairment provisions have been established in accordance with IFRS 9. Accounting policy 13 sets out how the expected loss approach is applied. At 31 December 2019, customer loan impairment provisions amounted to £3,792 million (2018 - £3,851 million). A loan is impaired when there is objective evidence that the cash flows will not occur in the manner expected when the loan was advanced. Such evidence includes, changes in the credit rating of a borrower, the failure to make payments in accordance with the loan agreement, significant reduction in the value of any security, breach of limits or covenants, 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. The measurement of credit impairment under the IFRS expected loss model depends on management's assessment of any potential deterioration in the creditworthiness of the borrower, its modelling of expected performance and the application of economic forecasts. All three elements require judgments that are potentially significant to the estimate of impairment losses. Further information and sensitivity analyses are on Page 143. IFRS 9 ECL model design principles To meet IFRS 9 requirements, PD, LGD and EAD used in ECL calculations must be: · Unbiased - material regulatory conservatism has been removed to produce unbiased model estimates. · Point-in-time - recognise current economic conditions. · Forward-looking - incorporated into PD estimates and, where appropriate, EAD and LGD estimates. · For the life of the loan - all PD, LGD and EAD models produce term structures to allow a lifetime calculation for assets in Stage 2 and Stage 3. IFRS 9 requires that at each reporting date, an entity shall assess whether the credit risk on an account has increased significantly since initial recognition. Part of this assessment requires a comparison to be made between the current lifetime PD (i.e. the probability of default over the remaining lifetime at the reporting date) with the equivalent lifetime PD as determined at the date of initial recognition. The general approach for the IFRS 9 LGD models is to leverage corresponding Basel LGD models with bespoke adjustments to ensure estimates are unbiased and where relevant forward-looking. For wholesale, while conversion ratios in the historical data show temporal variations, these cannot be sufficiently explained by the CCI measure (unlike in the case of PD and some LGD models) and are presumed to be driven to a larger extent by exposure management practices. Therefore point-in-time best estimates measures for EAD are derived by estimating the regulatory model specification on a rolling five year window. Approach for multiple economic scenarios (MES) The base scenario plays a greater part in the calculation of ECL than the approach to MES. |
Other financial assets
Other financial assets | 12 Months Ended |
Dec. 31, 2019 | |
Other financial assets | |
Other financial assets | 15 Other financial assets Debt securities Central and local government Other Equity Other UK US Other debt Total shares loans Total 2019 £m £m £m £m £m £m £m £m Mandatory fair value through profit or loss — — — 305 305 45 365 715 Fair value through other comprehensive income 18,437 13,981 8,786 7,130 48,334 949 — 49,283 Amortised cost 5,411 242 120 5,681 11,454 — — 11,454 Total 23,848 14,223 8,906 13,116 60,093 994 365 61,452 2018 Mandatory fair value through profit or loss — — — 669 669 65 904 1,638 Fair value through other comprehensive income 17,192 11,767 11,329 5,306 45,594 483 — 46,077 Amortised cost 6,928 264 120 4,458 11,770 — — 11,770 Total 24,120 12,031 11,449 10,433 58,033 548 904 59,485 On 16 June 2019, Alawwal bank and SABB were legally combined as part of a statutory merger. Alawwal bank’s assets and liabilities were absorbed by SABB. The transaction was executed through a share swap, with Alawwal bank’s shareholders receiving SABB shares for each Alawwal bank share. £595 million of the 2019 balance pertains to the transfer of ownership from Alawwal bank to SABB. Dividends on FVOCI equity shares during the year included approximately £15 million in relation to the equity holding in SABB and certain other dividends which were not individually significant. There were no material dividends received in relation to equity shares disposed during the year. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets | |
Intangible assets | 16 Intangible assets 2019 2018 Goodwill Other (1) Total Goodwill Other (1) Total Cost £m £m £m £m £m £m At 1 January 18,164 2,024 20,188 18,039 2,259 20,298 Currency translation and other adjustments (180) 2 (178) 77 9 86 Acquisition of subsidiaries 1 — 1 48 2 50 Additions — 380 380 — 364 364 Disposals and write-off of fully amortised assets (2) (8,005) (113) (8,118) — (610) (610) At 31 December 9,980 2,293 12,273 18,164 2,024 20,188 Accumulated amortisation and impairment At 1 January 12,558 1,014 13,572 12,481 1,274 13,755 Currency translation and other adjustments (180) 1 (179) 77 5 82 Disposals and write-off of fully amortised assets (8,005) (72) (8,077) — (573) (573) Charge for the year — 291 291 — 271 271 Impairment of goodwill and other intangible assets — 44 44 — 37 37 At 31 December 4,373 1,278 5,651 12,558 1,014 13,572 Net book value at 31 December 5,607 1,015 6,622 5,606 1,010 6,616 Notes: (1) Principally internally generated software. (2) Goodwill that arose on the acquisition of ABN AMRO Holding N.V.. Intangible assets other than goodwill are reviewed for indicators of impairment. In 2019 £44 million (2018 - £37 million) of previously capitalised software was impaired primarily as a result of software which is no longer expected to yield future economic benefit. RBS Group’s goodwill acquired in business combinations analysed by reportable segment is in Note 4, Segmental analysis. It is reviewed annually at 31 December for impairment. No impairment was indicated at 31 December 2019 or 2018. 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 RBS Group’s capital targets. In 2018, the methodology was enhanced to reflect legal entity changes in RBS Group. Consequently certain corporate assets, represented primarily by bonds and liquidity assets in Treasury, are no longer considered to be directly attributable or directly available to the CGUs. These assets are, therefore, not included in the carrying value of the CGUs, resulting in an increase in the available headroom for some CGUs. 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. The recoverable amounts for all CGUs at 31 December 2019 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. Critical accounting policy: Goodwill Critical estimates Impairment testing involves a number of judgemental areas: the preparation of cash flow forecasts for periods that are beyond the normal requirements of management reporting; the assessment of discount rates appropriate to each business; estimation of the fair value of the CGUs; and the valuation of separable assets of each business whose goodwill is reviewed. The sensitivity to the more significant variables in each assessment is presented below. The table below has not been restated for the re-segmentation which transferred Business Banking from UK Personal & Business Banking to Commercial Banking. The impact was a transfer of £0.7 billion goodwill from UK Personal & Business Banking (now UK Personal Banking) to Commercial Banking. This re-segmentation has improved the headroom of Commercial Banking (including Business Banking) by approximatively £4.2 billion and reduced the headroom of UK Personal Banking by the equivalent amount without generating any impairment of the goodwill in the CGUs impacted. Consequential impact of 1% Consequential impact of 5% Break Assumptions Recoverable adverse movement 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 2019 £bn % % £bn £bn £bn £bn £bn % UK Personal Banking 2.7 1.6 13.3 8.7 (2.2) (1.0) (2.1) (0.9) 16.3 Commercial Banking 2.6 1.6 13.4 4.1 (1.8) (0.7) (2.1) (1.1) 12.7 RBS International 0.3 1.6 12.0 2.1 (0.5) (0.3) (0.4) (1.2) 16.8 31 December 2018 UK Personal & Business Banking 3.4 1.8 13.1 14.4 (2.2) (1.4) (4.0) (1.7) 27.7 Commercial & Private Banking 1.9 1.8 13.0 4.5 (1.2) (0.8) (2.3) (1.0) 17.6 RBS International 0.3 1.8 12.9 0.7 (0.2) (0.2) (0.4) (0.1) 18.5 |
Other assets
Other assets | 12 Months Ended |
Dec. 31, 2019 | |
Other assets | |
Other assets | 17 Other assets £m £m Property, plant and equipment 4,928 4,351 Deferred tax (Note 7) 1,011 1,412 Assets of disposal groups (1) 66 1,404 Prepayments 380 435 Accrued income 275 317 Interests in associates (2) 436 404 Pension schemes in net surplus (Note 5) 614 520 Tax recoverable 46 37 Other assets 554 925 Other assets 8,310 9,805 Notes: (1) Includes interest in Alawwal bank of nil (2018 - £1,179 million). (2) Includes interest in Business Growth Fund £424 million (2018 - £387 million). |
Other financial liabilities
Other financial liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other financial liabilities | |
Other financial liabilities | 18 Other financial liabilities £m £m Customer deposits designated as at fair value through profit or loss — 212 Debt securities in issue - designated as at fair value through profit or loss 2,258 2,628 - amortised cost 42,962 36,892 Total 45,220 39,732 |
Subordinated liabilities
Subordinated liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Subordinated liabilities | |
Subordinated liabilities | 19 Subordinated liabilities £m £m Dated loan capital 7,775 8,262 Undated loan capital 2,058 2,127 Preference shares 146 146 9,979 10,535 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. Capital New issue treatment £m £m The Royal Bank of Scotland Group plc US$750 million 3.754% dated notes 2029 Tier 2 577 — 577 — Redemptions The Royal Bank of Scotland Group plc US$350 million 4.70% dated notes 2018 Ineligible — 267 €1,000 million 3.63% dated notes 2024 (callable March 2019) Tier 2 855 — 855 267 NatWest Markets Plc €2,000 million 6.934% dated notes 2018 Tier 2 — 1,743 £103 million 9.5% undated subordinated bonds 2018 (callable August 2018) Ineligible — 103 £35 million 5.5% fixed rate undated subordinated notes (callable December 2019) Ineligible 35 — 35 1,846 NatWest Plc SEK 90 million floating rate notes 2019 Tier 1 8 — 8 — NWM N.V. and subsidiaries US$500 million 4.65% dated notes 2018 Tier 2 — 141 US$16 million floating rate notes 2019 Tier 2 10 2 US$71.8 million floating rate notes 2019 Tier 2 56 — €250 million 4.70% notes 2019 (partial redemption) Tier 2 145 — 211 143 |
Other liabilities
Other liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other liabilities | |
Other liabilities | 20 Other liabilities £m £m Retirement benefit liabilities (Note 5) 119 165 Deferred tax (Note 7) 266 454 Notes in circulation 2,109 2,152 Current tax 132 100 Accruals 1,125 1,047 Deferred income 362 451 Lease liabilities (Note 22) (3) 1,823 — Other liabilities 1,034 1,581 Provisions for liabilities and charges 2,677 3,004 9,647 8,954 Payment Other Litigation protection customer and other insurance(1) redress regulatory Other(2) Total Provisions for liabilities and charges £m £m £m £m £m At 1 January 2019 695 536 783 990 3,004 Implementation of IFRS 16 on 1 January 2019 (3) — — — (170) (170) ECL impairment charge — — — 29 29 Transfer (to)/from accruals and other liabilities — (3) — 15 12 Currency translation and other movements — (15) (6) (19) (40) Transfer — 35 (35) — — Charge to income statement 900 141 88 434 1,563 Releases to income statement — (48) (111) (161) (320) Provisions utilised (439) (332) (293) (337) (1,401) At 31 December 2019 1,156 314 426 781 2,677 Notes: (1) The balance at 31 December 2019 includes provisions held in relation to offers made in 2018 and earlier years of £97 million. (2) Materially comprises provisions relating to property closures and restructuring costs. (3) Refer to Note 22 for further information on the impact of IFRS 16 implementation. There are uncertainties as to the eventual cost of redress in relation to certain of the provisions contained in the table above. Assumptions relating to these are inherently uncertain and the ultimate financial impact may be different from the amount provided. Payment protection insurance An additional provision of £0.9 billion was taken during 2019, reflecting greater than predicted complaints volumes in the lead up to the 29 August 2019 deadline for making new PPI complaints. RBS Group has made provisions totalling £6.2 billion to date for PPI claims, of which £5.0 billion had been utilised by 31 December 2019. The table below shows the sensitivity of the provision to reasonable changes in the principle assumptions in relation to claims which are still being processed,all other assumptions remaining the same. RBS Group has received 4.9 million claims at the 29 August 2019 deadline. Sensitivity Consequential Claims change in processed as at Claims still Change in provision Assumption 31 December 2019 to process assumption £m Average redress (1) £ 1,631 £ 1,552 +/- £150 +/- 74 No PPI % (2) 28 % 60 % +/- 3% +/- 13 Uphold rate (3) 85 % 94 % +/- 2% +/- 16 Notes: (1) Average redress for PPI (mis-sale) and Plevin (commission ) pay-outs. (2) No PPI % relates to those cases where no PPI policy exists. (3) Average uphold rate per customer initiated claims received directly by RBS Group, including those received via claims management companies, to end of timebar for both PPI (mis-sale) and Plevin (commission), excluding those for which no PPI policy exists. Background information for all material provisions is given in Note 26. Critical accounting policy: Provisions for liabilities Judgment is involved in determining whether an obligation exists, and in estimating the probability, timing and amount of any outflows. Where RBS 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. Estimates - 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. Any difference between the final outcome and the amounts provided will affect the reported results in the period when the matter is resolved. |
Share capital and other equity
Share capital and other equity | 12 Months Ended |
Dec. 31, 2019 | |
Share capital and other equity | |
Share capital and other equity | 21 Share capital and other equity Number of shares Allotted, called up and fully paid £m £m 000s 000s Ordinary shares of £1 12,094 12,049 12,093,909 12,048,605 Non-cumulative preference shares of US$0.01 (1) — — 10 10 Cumulative preference shares of £1 1 1 900 900 Note: (1) No shares were redeemed in 2019. (2018 – 26 million shares with a total nominal value of £0.2 million were redeemed). Number of Movement in allotted, called up and fully paid ordinary shares £m shares - 000s At 1 January 2018 11,965 11,964,565 Shares issued 84 84,040 At 1 January 2019 12,049 12,048,605 Shares issued 45 45,304 At 31 December 2019 12,094 12,093,909 Ordinary shares There is no authorised share capital under the company’s constitution. At 31 December 2019, the directors had authority granted at the 2019 Annual General Meeting to issue up to £605 million nominal of ordinary shares other than by pre-emption to existing shareholders. On 6 February 2019 RBS held a General Meeting and shareholders approved a special resolution to give authority for the company to make off-market purchases of ordinary shares from HM Treasury (or its nominee) at such times as the directors may determine is appropriate. Full details of the proposal are set out in the Circular and Notice of General Meeting. This authority was renewed at the Annual General Meeting in 2019 and shareholders will be asked to renew this authorisation at the Annual General Meeting in 2020. In the three years to 31 December 2019, the percentage increase in issued share capital due to non pre-emptive issuance (excluding employee share schemes) for cash was 1.42%. In addition, the company issued 45 million ordinary shares of £1 each in connection with employee share plans. In 2019 RBS paid an interim dividend of £241 million, or 2.0p per ordinary share (2018 - £241 million, or 2.0p per ordinary share) and a special dividend of £1,449 million, or 12.0p per ordinary share (2018 - nil). In addition, the company announced that the directors have recommended a final dividend of £364 million, or 3.0p per ordinary share (2018 - £422 million, or 3.5p per ordinary share), and a further special dividend of £606 million, or 5.0p per ordinary share (2018 - £904 million, or 7.5p per ordinary share), which are both subject to shareholders’ approval at the Annual General Meeting on 29 April 2020. If approved, payment will be made on 4 May 2020 to shareholders on the register at the close of business on 27 March 2020. The ex-dividend date will be 26 March 2020. Other securities Additional Tier 1 Notes issued by RBS having the legal form of debt are classified as equity under IFRS. Capital recognised for regulatory purposes cannot be redeemed without Prudential Regulation Authority consent. This includes ordinary shares, preference shares and additional Tier 1 Notes. 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 their holders to periodic non-cumulative cash dividends at specified fixed rates for each series payable out of distributable profits of the company. The company may redeem some or all of the non-cumulative preference shares from time to time at the rates detailed in the table below plus dividends otherwise payable for the then current dividend period to the date of redemption. Number of shares Redemption Redemption Non-cumulative preference shares classified as equity in issue Interest rate date on or after price per share Shares of US$0.01 - Series U 10,130 floating 29 September 2017 US$100,000 Note: (1) Preference shares where distributions are discretionary are classified as equity. 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 most recent dividend payment due on the series U non-cumulative dollar 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. Paid-in equity - comprises equity instruments issued by the company other than those legally constituted as shares. £m £m £m Additional Tier 1 notes (1) US$2.0 billion 7.5% notes callable August 2020 (2) 1,278 1,278 1,278 US$1.15 billion 8% notes callable August 2025 (2) 734 734 734 US$2.65 billion 8.625% notes callable August 2021 (3) 2,046 2,046 2,046 4,058 4,058 4,058 Notes: (1) The coupons on these notes are non-cumulative and payable at the company’s discretion. In the event RBS 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. Merger reserve - the merger reserve comprises the premium on shares issued to acquire NatWest, less goodwill amortisation charged under previous GAAP. 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 2019, 15 million ordinary shares of £1 each of the company (2018 - 8 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 24 million ordinary shares and delivered 17 million ordinary shares in satisfaction of the exercise of options and the vesting of share awards under the employee share plans. In future, the company is intending to use shares purchased by the RBS Group Employee Share Ownership Trust and any available treasury shares to satisfy obligations under its 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, 2019 | |
Leases | |
Leases | 22 Leases RBS Group has adopted IFRS 16 Leases retrospectively from 1 January 2019 on a modified retrospective basis without restating prior periods.The impact on RBS Group’s balance sheet and retained earnings is shown below: £bn Retained earnings at 1 January 2019 14.3 Loans to customers - Finance leases 0.2 Other assets - Net right of use assets 1.3 - Recognition of lease liabilities (1.9) - Provision for onerous leases 0.2 Other liabilities (1.7) Net impact on retained earnings (0.2) Retained earnings at 1 January 2019 14.1 On adoption of IFRS 16, RBS Group recognised right of use assets and lease liabilities in relation to leases which has been previously classified as operating leases under IAS17 Leases subject to certain practical expedients as allowed by the standard (see below). The following practical expedients permitted by the standard were used: · A single discount rate has been applied to a portfolio of lease with reasonably similar characteristics. · The accounting for operating leases with a remaining lease term of 12 months at 1 January 2019 for non property leases. · Exclusion of initial direct costs from the measurement of the right of use asset at the date of initial application. · Reliance on assessment of onerous provisions under IAS 37 Provisions, Contingent Liabilities and Contingent Assets for the purposes of impairment. · The use of hindsight where contracts contain options to extend or terminate the lease in determining the lease term. The lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 January 2019. The weighted average of lessee’s incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 2.3%. £m Operating lease commitments at 31 December 2018 2,689 Adjustments as a result of different treatment of extension and termination options (134) Discounted using the incremental borrowing rate (684) Other 5 Lease liabilities recognised as at 1 January 2019 on adoption of IFRS 16 1,876 Lessees £m Amounts recognised in consolidated income statement Interest payable (44) Depreciation (1) (224) Rental expense on short term leases (4) Income from subleasing right of use assets 9 Rental expense in respect of operating leases in 2018 was £233 million. £m Amounts recognised on balance sheet Right of use assets included in property, plant and equipment (2) 1,162 Additions to right of use assets 135 Lease liabilities (3) (1,823) The total cash outflow for leases is £222 million. Notes: (1) Includes impairment of right of use assets of £86 million. (2) Includes right of use asset for plant and equipment of £23 million and depreciation of £5 million. (3) Contractual cashflows of lease liabilities is shown in Note 13. £m Operating leases Minimum rentals payable under non-cancellable leases (1) - within 1 year 232 - after 1 year but within 5 years 736 - after 5 years 1,721 2,689 Note: (1) Lessor A cting as a lessor, RBS Group 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. £m Amounts included in consolidated income statement Finance leases Finance income on the net investment in leases 314 Operating leases Lease income 27 £m Amount recievable under finance leases Within 1 year 3,388 1 to 2 years 2,229 2 to 3 years 1,733 3 to 4 years 758 4 to 5 years 682 After 5 years 1,758 Lease payments total 10,548 Unguaranteed residual values (215) Future drawdowns (30) Unearned income (1,196) Present value of lease payments 9,107 Impairments (110) Net investment in finance leases 8,997 2018 Finance lease contracts and hire purchase agreements Gross Present value Other Future Present amounts adjustments movements Drawdowns value £m £m £m £m £m Within 1 year 3,237 (208) (123) (70) 2,836 1 to 5 years 4,566 (370) (100) — 4,096 After 5 years 1,935 (710) (38) — 1,187 Total 9,738 (1,288) (261) (70) 8,119 The total present value of finance lease contracts and hire purchase agreements excludes £62m of impairment allowance. The following tables show undiscounted lease receivables from operating leases: £m Amounts recievable under operating leases Within 1 year 154 1 to 2 years 123 2 to 3 years 83 3 to 4 years 48 4 to 5 years 17 After 5 years 12 Total 437 £m Within 1 year 139 1 to 5 years 325 After 5 years 49 Total 513 Nature of operating lease assets on the balance sheet £m £m Transportation 334 313 Cars and light commercial vehicles 24 11 Other 295 285 653 609 Residual value exposures The table below gives details of the unguaranteed residual value included in the carrying value of finance lease receivables and operating lease assets. 2018 Year in which residual value will be recovered After 1 year After 2 years Within 1 but within but within After 5 year 2 years 5 years years Total £m £m £m £m £m Operating leases - transportation 25 15 94 14 148 - cars and light commercial vehicles 1 1 2 — 4 - other 26 19 37 10 92 Finance lease contracts 68 32 67 38 205 Hire purchase agreements 55 2 — — 57 175 69 200 62 506 |
Structured entities
Structured entities | 12 Months Ended |
Dec. 31, 2019 | |
Structured entities | |
Structured entities | 23 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 Group balance sheet. 2019 2018 Debt securities in issue Debt securities in issue Held by third Held by Held by third Held by Asset type Assets parties RBS (1) Total Assets parties RBS (1) Total £m £m £m £m £m £m £m £m Mortgages - RoI 2,221 468 1,917 2,385 2,817 778 2,239 3,017 Cash deposits 156 — — — 221 2,377 3,038 Note: (1) Debt securities retained by RBS may be pledged with central banks. Other credit risk transfer securitisations RBS also transfers credit risk on originated loans and mortgages without the transfer of assets to an SE. As part of this, RBS enters into credit derivative and financial guarantee contracts with consolidated SEs. At 31 December 2019, debt securities in issue by such SEs (and held by third parties) were £673 million (2018 - £596 million). The associated loans and mortgages at 31 December 2019 were £9,001 million (2018 - £8,402 million). Covered debt programme Group companies have assigned loans to customers and debt investments to bankruptcy remote limited liability partnerships to provide security for issues of debt securities. RBS retains all of the risks and rewards of these assets and continues to recognise them. The partnerships are consolidated by RBS and the related covered bonds included within other financial liabilities. At 31 December 2019, £9,630 million ( 2018 - £9,446) of loans to customers and £280 million (2018 - £478 million) of debt investments provided security for debt securities in issue and other borrowing of £7,241 million (2018 - £6,627 million). Lending of own issued securities RBS Group has issued, retained, and lent debt securities under securities lending arrangements. Under standard terms in the UK and US markets, the recipient has an unrestricted right to sell or repledge collateral, subject to returning equivalent securities on maturity of the transaction. RBS Group retains all of the risks and rewards of own issued liabilities lent under such arrangements and does not recognise them. At 31 December 2019, £1,704 million secured and £424 million unsecured (2018 - £526 million secured, £424 million unsecured) of own issued liabilities have been retained and lent under securities lending arrangements. At 31 December 2019,£1,745 million (2018 - £551 million) of loans and other debt instruments provided security for secured own issued liabilities that have been retained and lent under securities lending arrangements. Unconsolidated structured entities RBS’s interests in unconsolidated structured entities are analysed below. 2019 2018 Asset backed Investment Asset backed Investment securitisation funds securitisation funds vehicles and other Total vehicles and other Total £m £m £m £m £m £m Trading assets and derivatives Trading assets 760 52 812 621 148 769 Derivative assets 196 24 220 200 47 247 Derivative liabilities (154) (4) (158) (156) (49) (205) Total 802 72 874 665 146 811 Non trading assets Loans to customers 1,544 636 2,180 1,972 536 2,508 Other financial assets 5,373 107 5,480 4,521 — 4,521 Total 6,917 743 7,660 6,493 536 7,029 Liquidity facilities/loan commitments 1,619 297 1,916 2,138 213 2,351 Guarantees — — — 3 10 13 Maximum exposure 9,338 1,112 10,450 9,299 905 10,204 |
Asset transfers
Asset transfers | 12 Months Ended |
Dec. 31, 2019 | |
Asset transfers | |
Asset transfers | 24 Asset transfers Transfers that do not qualify for derecognition RBS enters into securities repurchase, lending and total return transactions in accordance with normal market practice which includes the provision of additional collateral if necessary. Under standard terms in the UK and US markets, the recipient has an unrestricted right to sell or repledge collateral, subject to returning equivalent securities on settlement of the transaction. Securities sold under repurchase transactions and transactions with the substance of securities repurchase agreements 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 transactions included on the balance sheet, are set out below. All of these securities could be sold or repledged by the holder. The following assets have failed derecognition (1) £m £m Trading assets 23,247 14,020 Other financial assets 4,269 9,890 27,516 23,910 Note: (1) Associated liabilities were £27,342 million (2018 - £23,222 million). Assets pledged as collateral RBS Group pledges collateral with its counterparties in respect of derivative liabilities and bank and stock borrowings. Assets pledged against liabilities £m £m Trading assets 27,918 35,571 Loans to banks - amortised cost 39 1,050 Loans to customers - amortised cost 17,920 25,930 Other financial assets (1) 4,688 713 50,565 63,264 Note : (1) |
Capital resources
Capital resources | 12 Months Ended |
Dec. 31, 2019 | |
Capital resources | |
Capital resources | 25 Capital resources Under Capital Requirements Regulation (CRR), regulators within the European Union monitor capital on a legal entity basis, with local transitional arrangements on the phasing in of end-point CRR. The capital resources based on the PRA transitional basis for RBSG plc are set out below. PRA transitional basis £m £m Shareholders’ equity (excluding non-controlling interests) Shareholders’ equity 43,547 45,736 Preference shares - equity (496) (496) Other equity instruments (4,058) 41,182 Regulatory adjustments and deductions Own credit (118) (405) Defined benefit pension fund adjustment (474) (394) Cash flow hedging reserve (35) 191 Deferred tax assets (757) (740) Prudential valuation adjustments (431) (494) Goodwill and other intangible assets (6,622) (6,616) Expected losses less impairments (167) (654) Foreseeable ordinary and special dividends (968) (1,326) Foreseeable charges (365) — Other regulatory adjustments (2) (105) (9,939) (10,543) CET1 capital 29,054 30,639 Additional Tier 1 (AT1) capital Qualifying instruments and related share premium 4,051 4,051 Qualifying instruments and related share premium subject to phase out 1,366 1,393 Qualifying instruments issued by subsidiaries and held by third parties subject to phase out 140 140 AT1 capital 5,557 5,584 Tier 1 capital 34,611 36,223 Qualifying Tier 2 capital Qualifying instruments and related share premium 4,867 6,386 Qualifying instruments issued by subsidiaries and held by third parties 1,345 1,565 Tier 2 capital 6,212 7,951 Total regulatory capital 40,823 44,174 It is RBS Group 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 Group 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 Group has complied with the PRA’s capital requirements throughout the year. A number of subsidiaries and sub-groups within RBS Group, 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 Group 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, 2019 | |
Memorandum items | |
Memorandum items | 26 Memorandum items Contingent liabilities and commitments The 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 1,015 427 218 1,097 2,757 3,952 Other contingent liabilities 1,134 600 161 583 2,478 3,052 Standby facilities, credit lines and other commitments 59,878 21,054 31,664 7,164 119,760 119,879 Contingent liabilities and commitments 62,027 22,081 32,043 8,844 124,995 126,883 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 Group’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 Group’s normal credit approval processes. Guarantees – RBS Group gives guarantees on behalf of customers. A financial guarantee represents an irrevocable undertaking that RBS Group will meet a customer’s specified obligations to third party if the customer fails to do so. The maximum amount that RBS Group could be required to pay under a guarantee is its principal amount as disclosed in the table above. RBS Group expects most guarantees it provides 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 Group 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 Group 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 Capital expenditure on property, plant and equipment 20 17 Contracts to purchase goods or services (1) 614 541 634 558 Note: (1) Of which due within 1 year: £285 million (2018 - £253 million). Trustee and other fiduciary activities In its capacity as trustee or other fiduciary role, RBS 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 RBS Group’s financial statements. RBS Group earned fee income of £250 million (2018 - £257 million; 2017 - £244 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 had 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 has now repaid all outstanding loans with the final £4.7 billion being repaid in June 2018. The loan was 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. RBS Group has accrued £1.8 million for its share of estimated FSCS levies. Litigation, investigations and reviews RBSG plc and certain members of RBS 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 Group 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. 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 Group'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 Group 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. There are situations where RBS Group 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 Group 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 Group has recognised. Where (and as far as) liability cannot be reasonably estimated, no provision has been recognised. RBS Group 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 RBS Group's litigation, investigations and reviews, see the Risk Factor relating to legal, regulatory and governmental actions and investigations set out on page 297. Litigation Residential mortgage-backed securities (RMBS) litigation in the US RBS Group companies continue to defend RMBS-related claims in the US in which plaintiffs allege 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 RMBS were issued. The remaining RMBS lawsuits against RBS Group companies consist of cases filed by the Federal Home Loan Bank of Seattle and the Federal Deposit Insurance Corporation that together involve the issuance of less than US$1billion of RMBS issued primarily from 2005 to 2007. A case filed by the Federal Home Loan Bank of Boston was settled during 2019. In addition, NatWest Markets Securities Inc. ('NWMSI') previously agreed to settle a purported RMBS class action entitled New Jersey Carpenters Health Fund v. Novastar Mortgage Inc. et al. for US$55.3 million. This was paid into escrow pending court approval of the settlement, which was granted on 11 March 2019, but which is now the subject of an appeal by a class member who does not want to participate in the settlement. London Interbank Offered Rate (LIBOR) and other rates litigation NWM Plc and certain other members of RBS Group, including RBSG plc, are defendants in a number of class actions and individual claims pending in the United States District Court for the Southern District of New York (SDNY) with respect to the setting of LIBOR and certain other benchmark interest rates. The complaints allege that certain members of RBS Group and other panel banks 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. Several class actions relating to USD LIBOR, as well as more than two dozen non-class actions concerning USD LIBOR, are part of a co-ordinated proceeding in the SDNY. In December 2016, the SDNY held that it lacks personal jurisdiction over NWM Plc with respect to certain claims. As a result of that decision, all RBS Group companies have been dismissed from each of the USD LIBOR-related class actions (including class actions on behalf of over-the-counter plaintiffs, exchange-based purchaser plaintiffs, bondholder plaintiffs, and lender plaintiffs), but seven non-class cases in the co-ordinated proceeding remain pending against RBS Group defendants. The dismissal of RBS Group companies for lack of personal jurisdiction is the subject of a pending appeal to the United States Court of Appeals for the Second Circuit. In September 2019, RBS Group companies reached a settlement in principle to resolve the class action on behalf of bondholder plaintiffs (those who held bonds issued by non-defendants on which interest was paid from 2007 to 2010 at a rate expressly tied to USD LIBOR). The settlement is subject to documentation and court approval. The amount of the settlement is covered by an existing provision. Among the non-class claims dismissed by the SDNY in December 2016 were claims that the Federal Deposit Insurance Corporation (FDIC) had asserted on behalf of certain failed US banks. In July 2017, the FDIC, on behalf of 39 failed US banks, commenced substantially similar claims against RBS Group companies and others in the High Court of Justice of England and Wales. The action alleges that the defendants breached English and European competition law, as well as asserting common law claims of fraud under US law. In addition, there are two class actions relating to JPY LIBOR and Euroyen TIBOR, both pending before the same judge in the SDNY. In the first class action, which relates to Euroyen TIBOR futures contracts, the court dismissed the plaintiffs' antitrust claims in March 2014, but declined to dismiss their claims under the Commodity Exchange Act for price manipulation. The Commodity Exchange Act claims are now the subject of a further motion to dismiss on the ground that they are impermissibly extraterritorial.The second class action relates to other derivatives allegedly tied to JPY LIBOR and Euroyen TIBOR. The court dismissed that case in March 2017 on the ground that the plaintiffs lack standing. The plaintiffs have commenced an appeal of that decision. In addition to the above, five other class action complaints were filed against RBS Group companies in the SDNY, each relating to a different reference rate. The SDNY dismissed all claims against NWM Plc in the case relating to Euribor for lack of personal jurisdiction in February 2017. The SDNY dismissed, for various reasons, the case relating to the Singapore Interbank Offered Rate and Singapore Swap Offer Rate on 26 July 2019, the case relating to Pound Sterling LIBOR on 16 August 2019, and the case relating to Swiss Franc LIBOR on 16 September 2019. Plaintiffs are appealing each of these four dismissals to the United States Court of Appeals for the Second Circuit. In the fifth class action, which relates to the Australian Bank Bill Swap Reference Rate, the SDNY dismissed all claims against RBS Group companies for lack of personal jurisdiction on 26 November 2018, but plaintiffs have filed an amended complaint, which is the subject of a further motion to dismiss. NWM Plc has also been named as a defendant in a motion to certify a class action relating to LIBOR in the Tel Aviv District Court in Israel. NWM Plc has filed a motion for cancellation of service. If the motion is successful then the current action will be brought to an end, although the claimants may seek to re-raise the claim in the future. If the motion is unsuccessful, or the claimants seek to re-raise the claims at a later date, NWM Plc may seek to file other potentially dispositive motions. NWM Plc was defending a claim for £446.7 million in the High Court of Justice of England and Wales brought by London Bridge Holdings Ltd and others,which was settled on confidential terms in November 2019 without admission of liability. Details of UK litigation claims in relation to the alleged mis-sale of interest rate hedging products (IRHPs) involving LIBOR-related allegations are set out under 'Interest rate hedging products and similar litigation' on page 254. In January 2019, a class action antitrust complaint was filed in the SDNY alleging that the defendants (USD ICE LIBOR panel banks and affiliates) have conspired to suppress USD ICE LIBOR from 2014 to the present by submitting incorrect information to ICE about their borrowing costs. The RBS Group defendants are RBSG plc, NWM Plc, NWMSI, and NWB Plc. A motion to dismiss was filed by the defendants in August 2019, and remains pending before the court. FX antitrust litigation NWM Plc, NWMSI and / or RBSG plc, are defendants in several cases relating to NWM Plc's foreign exchange (FX) business, each of which is pending before the same federal judge in the SDNY. In 2015, NWM Plc paid US$255 million to settle the consolidated antitrust class action on behalf of persons who entered into over-the-counter FX transactions with defendants or who traded FX instruments on exchanges. That settlement received final court approval in August 2018. On 7 November 2018, some members of the settlement class who opted out of the settlement filed their own non-class complaint in the SDNY asserting antitrust claims against NWM Plc, NWMSI and other banks. On 31 December 2018, some of the same claimants, as well as others, filed proceedings in the High Court of Justice of England and Wales, asserting competition claims against NWM Plc and several other banks. The claim was served on 25 April 2019. Two other FX-related class actions remain pending in the SDNY. First, there is a class action on behalf of 'consumers and end-user businesses,' which is proceeding against NWM Plc in the discovery phase following the SDNY's denial of the defendants' motions to dismiss in March 2018. Second, there is a class action on behalf of 'indirect purchasers' of FX instruments (which plaintiffs define as persons who transacted FX instruments with retail foreign exchange dealers that transacted directly with defendant banks). In January 2020, the parties in this case reached a settlement subject to agreement on non-monetary terms, documentation, and court approval. A provision has been established to cover the amount that NWM Plc would pay pursuant to the settlement. On 27 May 2019, a class action was filed in the Federal Court of Australia against NWM Plc and other banks on behalf of persons who bought or sold currency through FX spots or forwards between 1 January 2008 and 15 October 2013 with a total transaction value exceeding AUS $0.5 million. RBSG plc has been named in the action as a ‘cartel party’, but is not a defendant. The claim was served on 28 June 2019. On 29 July and 11 December 2019, two separate applications seeking opt-out collective proceedings orders were filed in the UK Competition Appeal Tribunal ('the CAT') against RBSG plc, NWM Plc and other banks. Both applications have been brought on behalf of persons who, between 18 December 2007 and 31 January 2013, entered into a relevant FX spot or outright forward transaction in the EEA with a relevant financial institution or on an electronic communications network. It is anticipated that the CAT will determine which of the two opt-out applications should be permitted to represent the class. Two motions to certify FX-related class actions have been filed in the Tel Aviv District Court in Israel. RBSG plc and NWMSI have been named as defendants in the first motion. RBS plc has been named in the second. These motions have been consolidated but not yet served on the named RBS Group companies. Certain other foreign exchange transaction related claims have been or may be threatened. RBS Group cannot predict whether any of these claims will be pursued, but expects that some may. Government securities antitrust litigation NWMSI and certain other US broker-dealers are defendants in a consolidated antitrust class action pending in the SDNY on behalf of persons who transacted in US Treasury securities or derivatives based on such instruments, including futures and options. The plaintiffs allege that 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 defendants’ motion to dismiss this matter remains pending. Class action antitrust claims commenced in March 2019 are pending in the SDNY against NWM Plc, NWMSI and other banks in respect of Euro-denominated bonds issued by European central banks (EGBs). The complaints allege a conspiracy among dealers of EGBs to widen the bid-ask spreads they quoted to customers, thereby increasing the prices customers paid for the EGBs or decreasing the prices at which customers sold the bonds. The class consists of those who purchased or sold EGBs in the US between 2007 and 2012. The defendants have filed a motion to dismiss this matter, which remains pending. Swaps antitrust litigation NWM Plc and other members of RBS Group, including RBSG plc, as well as a number of other interest rate swap dealers, are defendants in several cases pending in the SDNY alleging violations of the US antitrust laws in the market for interest rate swaps. There is a consolidated class action complaint on behalf of persons who entered into interest rate swaps with the defendants, as well as non-class action claims by three swap execution facilities (TeraExchange, Javelin, and trueEx). The plaintiffs allege that the swap execution facilities would have successfully established exchange-like trading of interest rate swaps if the defendants had not unlawfully conspired to prevent that from happening through boycotts and other means. Fact discovery in these cases is complete, and the class plaintiffs have filed a motion for class certification, which as of January 2020 is fully briefed. In addition, in June 2017, TeraExchange filed a complaint against RBS Group companies, including RBSG plc, as well as a number of other credit default swap dealers, in the SDNY. TeraExchange alleges it would have established exchange-like trading of credit default swaps if the defendant dealers had not engaged in an unlawful antitrust conspiracy. On 1 October 2018, the court dismissed all claims against RBS Group companies. Madoff NWM N.V. is a defendant in two actions filed by Irving Picard, as trustee for the bankruptcy estates of Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, in bankruptcy court in New York. In both cases, the trustee alleges that certain transfers received by NWM N.V. amounted to fraudulent conveyances that should be clawed back for the benefit of the Madoff estate. In the primary action, filed in December 2010, the trustee is asking the bankruptcy court for leave to file an amended complaint, seeking to clawback a total of US$276.3 million in redemptions that NWM N.V. allegedly received from certain Madoff feeder funds and certain swap counterparties. NWM N.V. is opposing the motion for leave to file an amended complaint and otherwise will seek dismissal of the claims. In the second action, filed in October 2011, the trustee seeks to recover an additional US$21.8 million . In November 2016, the bankruptcy court dismissed this case on international comity grounds, and that decision was appealed. On 25 February 2019, the United States Court of Appeals for the Second Circuit reversed the bankruptcy court’s decision. If the U.S. Supreme Court declines to review the matter, the case will return to the bankruptcy court for further proceedings. Interest rate hedging products and similar litigation RBS Group is dealing with a number of active litigation claims in the UK in relation to the alleged mis-selling of interest rate hedging products (IRHPs). In general, claimants allege that the relevant IRHPs were mis-sold to them, with some also alleging that misrepresentations were made in relation to LIBOR. Claims have been brought by customers who were considered under the UK Financial Conduct Authority (FCA) redress programme for IRHPs, as well as customers who were outside of the scope of that programme, which was closed to new entrants in March 2015. RBS Group remains exposed to potential claims from customers who were either ineligible to be considered for redress or who are dissatisfied with their redress offers. Separately, NWM Plc is defending claims filed in France by three French local authorities relating to structured interest rate swaps. NWM N.V. was named as a co-defendant in two of the three claims. The plaintiffs allege, among other things, that the swaps are void for being illegal transactions, that they were mis-sold, and that information / advisory duties were breached. One of the three claims is being appealed to the Supreme Court, one is being remitted from the Supreme Court to the Court of Appeal for reconsideration of one aspect, and one remains to be heard before the lower court. Tax dispute HMRC issued a tax assessment in 2012 against RBSG plc for approximately £86 million regarding a value-added-tax ('VAT') matter in relation to the trading of European Union Allowances ('EUAs') by a joint venture subsidiary in 2009. RBSG plc has lodged an appeal, which is still to be heard, before the First-tier Tribunal (Tax), a specialist tax tribunal, challenging the assessment (the 'Tax Dispute'). In the event that the assessment is upheld, interest and costs would be payable, and a penalty of up to 100 per cent of the VAT held to have been legitimately denied by HMRC could also be levied. Separately, NWM Plc is a named defendant in civil proceedings before the High Court of Justice of England and Wales brought in 2015 by ten companies (all in liquidation) (the 'Liquidated Companies') and their respective liquidators (together, 'the Claimants'). The Liquidated Companies previously traded in EUAs in 2009 and are alleged to be defaulting traders within (or otherwise connected to) the EUA supply chains forming the subject of the Tax Dispute. The Claimants claim approximately £71.4 million plus interest and costs and allege that NWM Plc dishonestly assisted the directors of the Liquidated Companies in the breach of their statutory duties and/or knowingly participated in the carrying on of the business of the Liquidated Companies with intent to defraud creditors. The trial in that matter concluded on 20 July 2018 and judgment is awaited. US Anti-Terrorism Act litigation NWB Plc is defending lawsuits filed in the United States District Court for the Eastern District of New York by a number of US nationals (or their estates, survivors, or heirs) who were victims of terrorist attacks in Israel. The plaintiffs allege that NWB Plc is liable for damages arising from those attacks pursuant to the US Anti-Terrorism Act because NWB Plc previously maintained bank accounts and transferred funds for the Palestine Relief & Development Fund, an organisation which plaintiffs allege solicited funds for Hamas, the alleged perpetrator of the attacks. In October 2017, the trial court dismissed claims against NWB Plc with respect to two of the 18 terrorist attacks at issue. In March 2018, the trial court granted a request by NWB Plc for leave to file a renewed summary judgment motion in respect of the remaining claims, and in March 2019, the court granted summary judgment in favour of NWB Plc. The plaintiffs have commenced an appeal of the judgment to the United States Court of Appeals for the Second Circuit. NWM N.V. and certain other financial institutions, are defendants in several actions pending in the United States District Courts for the Eastern and Southern Districts of New York, filed by a number of US nationals (or their estates, survivors, or heirs), most of whom are or were US military personnel, who were killed or injured in attacks in Iraq between 2003 and 2011. NWM Plc is also a defendant in some of these cases. The attacks at issue in the cases were allegedly perpetrated by Hezbollah and certain Iraqi terror cells allegedly funded by the Islamic Republic of Iran. According to the plaintiffs’ allegations, the defendants are liable for damages arising from the attacks because they allegedly conspired with Iran and certain Iranian banks to assist Iran in transferring money to Hezbollah and the Iraqi terror cells, in violation of the US Anti-Terrorism Act, by agreeing to engage in ‘stripping’ of transactions initiated by the Iranian banks so that the Iranian nexus to the transactions would not be detected. The first of these actions was filed in the United States District Court for the Eastern District of New York in November 2014. On 16 September 2019, the district court dismissed the case, finding that the claims were deficient for several reasons, including lack of sufficient allegations as to the alleged conspiracy and causation. The plaintiffs are appealing the decision to the United States Court of Appeals for the Second Circuit. Another action, filed in the SDNY in 2017, was dismissed on 28 March 2019 on similar grounds. The dismissal is subject to re-pleading by the plaintiffs or appeal. Other follow-on actions that are substantially similar to the two that have now been dismissed are pending in the same courts. Securities underwriting litigation NWMSI is an underwriter defendant in several securities class actions in the US in which plaintiffs generally allege that an issuer of public debt or equity securities, as well as the underwriters of the securities (including NWMSI), are liable to purchasers for misrepresentations and omissions made in connection with the offering of such securities. Investigations and reviews RBS Group's businesses and financial condition can be affected by the actions of various governmental and regulatory authorities in the UK, the US, the EU and elsewhere. RBS Group has engaged, and will continue to engage, in discussions with relevant governmental and regulatory authorities, including in the UK, the US, the EU and elsewhere, on an ongoing and regular basis, and in response to informal and formal inquiries or investigations, regarding operational, systems and control evaluations and issues including those related to compliance with applicable laws and regulations, including consumer protection, business conduct, competition / anti-trust, anti-bribery, anti-money laundering and sanctions regimes. The NatWest Markets business in particular has been providing, and continues to provide, information regarding a variety of matters, including, for example, the setting of benchmark rates and related derivatives trading, conduct in the foreign exchange market, and various issues relating to the issuance, underwriting, and sales and trading of fixed-income securities, including structured products and government securities, some of which have resulted, and others of which may result, in investigations or proceedings. Any matters discussed or identified during such discussions and inquiries may result in, among other things, further inquiry or investigation, other action being taken by governmental and regulatory authorities, increased costs being incurred by RBS Group, remediation of systems and controls, public or private censure, restriction of RBS Group's business activities and/or fines. Any of the events or circumstances mentioned in this paragraph or below could have a material adverse effect on RBS Group, its business, authorisations and licences, reputation, results of operations or the price of securities issued by it. RBS Group is co-operating fully with the investigations and reviews described below. US investigations relating to fixed-income securities In the US, RBS Group companies have in recent years been involved in investigations relating to, among other things, issuance, underwriting and trading in RMBS and other mortgage-backed securities and collateralised debt obligations (CDOs). Investigations by the US Department of Justice (DoJ) and several state attorneys general relating to the issuance and underwriting of RMBS were previously resolved. Certain other state attorneys general have sought information regarding similar issues, and RBS Group is aware that at least one such investigation is ongoing. In October 2017, NWMSI entered into a non-prosecution agreement (NPA) with the United States Attorney for the District of Connecticut (USAO) in connection with alleged misrepresentations to counterparties relating to secondary trading in various forms of asset-backed securities. In the NPA, the USAO agreed not to file criminal charges relating to certain conduct and information described in the NPA , conditioned on NWMSI and affiliated companies complying with the NPA's reporting and conduct requirements during its term, including by not engaging in conduct during the NPA that the USAO determines was a felony under federal or state law or a violation of the anti-fraud provisions of the United States securities law. The RBS Group’s NatWest Markets business is currently responding to a separate criminal investigation by the USAO concerning unrelated securities trading in 2018 by certain former traders of NWM Plc, involving alleged spoofing, which was reported in connection with the NPA. In January 2020, the NPA was extended for a fourth time (for three additional months) to accommodate advanced discussions with the USAO and the DoJ concerning potential resolution of the criminal investigation into alleged spoofing as well as the impact of that conduct and any such resolution on the status of the NPA and the potential consequences thereof. The duration and outcome of these matters remain uncertain, including in respect of whether settlement may be reached. Material adverse collateral consequences, in addition to further substantial costs and the recognition of further provisions may occur depending on the outcome of the investigation, as further described in the Risk Factor relating to legal, regulatory and governmental actions and investigations set out on page 297. Foreign exchange related investigations In May and June 2019, RBSG plc and NWM Plc reached settlements totalling approximately EUR 275 million in connection with the EC and certain other related competition law investigations into FX trading. The aggregate amount was fully covered by existing provisions in NWM Plc. NWM Plc continues to co-operate with ongoing investigations from competition authorities on similar issues relating to past FX trading. The exact timing and amount of future financial penalties, related risks and collateral consequences remain uncertain and may be material. In 2014 and 2015, NWM Plc paid significant penalties to resolve |
Analysis of the net investment
Analysis of the net investment in business interests and intangible assets | 12 Months Ended |
Dec. 31, 2019 | |
Analysis of the net investment in business interests and intangible assets | |
Analysis of the net investment in business interests and intangible assets | 27 Analysis of the net investment in business interests and intangible assets Acquisitions and disposals £m £m £m Fair value given for businesses acquired(1) (55) (113) (131) Additional investment in associates (9) — Net outflow of cash in respect of acquisitions (55) (122) (131) Net assets/(liabilities) sold 351 — 177 Non-cash consideration — — (15) Profit on disposal — — 155 Net cash and cash equivalents disposed — — — Net inflow/(outflow) of cash in respect of disposals 351 — 317 Dividends received from associates — 5 (1) Cash expenditure on intangible assets (380) (372) (384) Net (outflow)/inflow (84) (489) (199) Note: (1) 2019 includes the purchase of Free agent. |
Analysis of changes in financin
Analysis of changes in financing during the year | 12 Months Ended |
Dec. 31, 2019 | |
Analysis of changes in financing during the year | |
Analysis of changes in financing during the year | 28 Analysis of changes in financing during the year Share capital, share premium, paid-in equity and merger reserve Subordinated liabilities MRELs £m £m £m £m £m £m £m £m £m At 1 January 28,015 27,791 52,979 10,535 12,722 19,419 16,821 9,202 6,832 Issue of ordinary shares 17 144 306 — — — — — — Redemption of paid-in equity — — (720) — — — — — — Issue of subordinated liabilities — — — 577 — — — — — Redemption of subordinated liabilities — — — (1,108) (2,258) (5,747) — — — Interest on subordinated liabilities — — — (510) (566) (717) — — — Issue of MRELs — — — — — — 3,640 6,996 3,612 Maturity/redemption of MRELs — — — — — — (1,285) — (774) Interest on MRELs — — — — — — (428) (237) (139) Net cash (outflow)/inflow from financing 17 144 (414) (1,041) (2,824) (6,464) 1,927 6,759 2,699 Transfer to retained earnings — — (25,789) — — — — — — Ordinary shares issued in respect of employee share schemes 95 80 71 — — — — — — Redemption of debt preference shares — — 748 — — — — — — Other adjustments including foreign exchange — — 196 485 637 (233) 501 860 (329) At 31 December 28,127 28,015 27,791 9,979 10,535 12,722 19,249 16,821 9,202 |
Analysis of cash and cash equiv
Analysis of cash and cash equivalents | 12 Months Ended |
Dec. 31, 2019 | |
Analysis of cash and cash equivalents | |
Analysis of cash and cash equivalents | 29 Analysis of cash and cash equivalents £m £m £m At 1 January - cash 88,897 98,337 88,414 - cash equivalents 20,039 24,268 10,156 108,936 122,605 98,570 Net cash outflow (8,348) (13,669) 24,035 At 31 December 100,588 108,936 122,605 Comprising: Cash and balances at central banks 77,858 88,897 98,337 Treasury bills and debt securities 1,064 83 427 Net loans to banks 21,666 19,956 23,841 Cash and cash equivalents 100,588 108,936 122,605 Note: (1) Includes cash collateral posted with bank counterparties in respect of derivative liabilities of £7,570 million (2018 - £7,302 million; 2017 - £6,683 million). Certain members of RBS Group 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 £1.0bn £0.9bn £0.6bn De Nederlandsche Bank €0.1bn €0.1bn €0.1bn |
Directors and key management re
Directors and key management remuneration | 12 Months Ended |
Dec. 31, 2019 | |
Directors' and key management remuneration | |
Directors' and key management remuneration | 30 Directors' and key management remuneration Directors' remuneration £000 £000 Non Executive Directors 1,881 2,001 Chairman and executive directors- emoluments 4,783 4,657 6,664 6,658 Amounts receivable under long-term incentive plans and share option plans 741 — Total 7,405 6,658 No directors accrued benefits under defined benefit schemes or money purchase schemes during 2019 and 2018. 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 are 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 22,067 20,316 Post-employment benefits 401 82 Share-based payments 2,435 — 24,903 20,398 A new board and committee operating model was introduced in 2018 in order to align with UK ring-fencing requirements. The definition of key management has been revised and now comprises members of the RBSG plc and NWH Ltd Boards, members of the RBSG plc and NWH Ltd Executive Committees, and the Chief Executives of NatWest Markets Plc and RBS International (Holdings) Limited. This is on the basis that these individuals have been identified as Persons Discharging Managerial Responsibilities of RBSG plc under the new governance structure. |
Transactions with directors and
Transactions with directors and key management | 12 Months Ended |
Dec. 31, 2019 | |
Transactions with directors and key management | |
Transactions with directors and key management | 31 Transactions with directors and key management At 31 December 2019, amounts outstanding in relation to transactions, arrangements and agreements entered into by authorised institutions in RBS Group, as defined in UK legislation, were £741,550 in respect of loans to seven persons who were directors of the company at any time during the financial period. For the purposes of IAS 24 ‘Related Party Disclosures’, key management comprise directors of the company and Persons Discharging Managerial Responsibilities (PDMRs) of RBSG plc under the new governance structure. The captions in the RBS Group's primary financial statements include the following amounts attributable, in aggregate, to key management: £000 £000 Loans to customers 1,662 1,544 Customer deposits 37,727 31,361 Key management have banking relationships with RBS 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, 2019 | |
Related parties | |
Related parties | 32 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 Government 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 RBS Group. In 2015, HM Treasury sold 630 million of RBSG plc’s ordinary shares and a further 925 million in June 2018. At 31 December 2019, HM Treasury’s holding in the company’s ordinary shares was 62.1%. RBS 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 (Note 7) and value added tax; national insurance contributions; local authority rates; and regulatory fees and levies (including the bank levy (Note 3) and FSCS levies (Note 26) together with banking transactions such as loans and deposits undertaken in the normal course of banker-customer relationships. Bank of England facilities RBS Group may participate in a number of schemes operated by the Bank of England in the normal course of business. Members of RBS Group that are UK authorised institutions are required to maintain non-interest bearing (cash ratio) deposits with the Bank of England amounting to 0.324% 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. RBS Group provides guarantees for certain subsidiary liabilities to the Bank of England. 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. 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 RBS 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, 2019 | |
Post balance sheet events | |
Post balance sheet events | 33 Post balance sheet events RBS Group intends to refocus the NatWest Markets business and estimates it will incur exit, restructuring and disposal costs of around £0.6 billion in 2020. This estimate may be revised as plans to refocus the business are finalised. |
Consolidating financial informa
Consolidating financial information | 12 Months Ended |
Dec. 31, 2019 | |
Consolidating financial information | |
Consolidating financial information | 34 Consolidating financial information NatWest Markets Plc ('NWM Plc') is a wholly owned subsidiary of The Royal Bank of Scotland Group plc ('RBSG plc') and was 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. NWM 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; · NWM Plc on a stand-alone basis as issuer; · Non-guarantor Subsidiaries of RBSG plc and NWM Plc on a combined basis ('Subsidiaries'); · Consolidation adjustments; and · RBSG plc consolidated amounts ('RBS Group'). Under IAS 27, RBSG plc and NWM Plc account for investments in their subsidiary undertakings at cost less impairment. 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 increase NWM Plc in the information below by £811 million and £149 million respectively for the year ended 31 December 2019 (decrease £332 million and increase £1,546 million, respectively, for the year ended 31 December 2018). The net assets of RBSG plc would be decreased and NWM Plc increased in the information below by £10,240 million and £276 million respectively at 31 December 2019 (decreased by £8,651 million and increased by £165 million respectively at 31 December 2018). NWM Plc Disposal groups and discontinued operations NatWest Holdings Limited In preparation for ring-fencing, the transfer of the NWM Plc Personal Banking (PB), Commercial & Private Banking (CPB) and certain parts of Central items and NatWest Markets to subsidiaries of NatWest Holdings Limited was completed on 30 April 2018. Accordingly, all of the NWM Plc activities to be undertaken by NatWest Holdings Limited and its subsidiaries are classified as disposal groups in the NWM Plc accounts at 30 June 2018 and presented as discontinued operations. On 29 June 2018, the distribution of NatWest Holdings Limited by NWM Plc to RBSG Plc was approved and accounted for as income by RBSG plc. Income statement Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2019 £m £m £m £m £m Net interest income (628) (127) 8,368 434 8,047 Non-interest income 3,467 815 3,186 (1,262) 6,206 Total income 2,839 688 11,554 (828) 14,253 Operating expenses (42) (1,101) (8,049) (133) (9,325) Impairment releases/(losses) 2 50 (785) 37 (696) Operating profit/(loss) before tax 2,799 (363) 2,720 (924) 4,232 Tax (71) 94 (863) 408 (432) Profit/(loss) from continuing operations 2,728 (269) 1,857 (516) 3,800 Profit/(loss) from discontinued operations, net of tax — — — — — Profit/(loss) for the year 2,728 (269) 1,857 (516) 3,800 Attributable to: Ordinary shareholders 2,322 (329) 1,539 (399) 3,133 Preference shareholders 39 — — — 39 Paid-in equity holders 367 60 315 (375) 367 Non-controlling interests — — 2,728 (269) 1,857 (516) 3,800 Statement of comprehensive income Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2019 £m £m £m £m £m Profit/(loss) for the year 2,728 (269) 1,857 (516) 3,800 Items that do not qualify for reclassification Remeasurement of retirement benefit schemes - other movements — (49) (93) — (142) Changes in fair value of credit in financial liabilities designated at FVTPL due to own credit risk — (71) (118) — (189) Fair value through other comprehensive income (FVOCI) financial assets — (164) 93 — (71) Tax — 32 (4) — 28 — (252) (122) — (374) Items that do qualify for reclassification Fair value through other comprehensive income (FVOCI) financial assets — 20 (25) (9) (14) Cash flow hedges (21) 28 317 (30) 294 Currency translation — (32) 742 (2,546) (1,836) Tax 5 (4) (79) (92) (170) (16) 12 955 (2,677) (1,726) Other comprehensive (loss)/income after tax (16) (240) 833 (2,677) (2,100) Total comprehensive income/(loss) for the year 2,712 (509) 2,690 (3,193) 1,700 Total comprehensive income/(loss) is attributable to: Ordinary shareholders 2,306 (569) 2,372 (3,065) 1,044 Preference shareholders 39 — — — 39 Paid-in equity holders 367 60 315 (375) 367 Non - controlling interests — — (3) 247 250 2,712 (509) 2,690 (3,193) 1,700 Income statement Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2018* £m £m £m £m £m Net interest income (368) (239) 8,028 1,235 8,656 Non-interest income 2,794 1,002 3,740 (2,790) 4,746 Total income 2,426 763 11,768 (1,555) 13,402 Operating expenses (85) (1,262) (6,855) (1,443) (9,645) Impairment releases/(losses) 1 89 (429) (59) (398) Operating profit/(loss) before tax 2,342 (410) 4,484 (3,057) 3,359 Tax 149 51 (1,276) (132) (1,208) Profit/(loss) from continuing operations 2,491 (359) 3,208 (3,189) 2,151 Profit/(loss) from discontinued operations, net of tax — 54 — (54) — Profit/(loss) for the year 2,491 (305) 3,208 (3,243) 2,151 Attributable to: Ordinary shareholders 1,954 (305) 3,246 (3,273) 1,622 Preference shareholders 182 — — — 182 Paid-in equity holders 355 — — — 355 Non-controlling interests — — (38) 30 (8) 2,491 (305) 3,208 (3,243) 2,151 Statement of comprehensive income Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2018* £m £m £m £m £m Profit/(loss)for the year 2,491 (305) 3,208 (3,243) 2,151 Items that do not qualify for reclassification Remeasurement of retirement benefit schemes -contributions in preparation for ring-fencing (1) — (53) (2,000) — (2,053) -other movements — (9) 95 — 86 Changes in fair value of credit in financial liabilities designated at FVTPL due to own credit risk — 121 79 — 200 Fair value through other comprehensive income (FVOCI) financial assets — 22 28 (2) 48 Tax — (24) 526 — 502 — 57 (1,272) (2) (1,217) Items that do qualify for reclassification Fair value through other comprehensive income (FVOCI) financial assets — (339) 808 (462) 7 Cash flow hedges 78 223 (550) (332) (581) Currency translation — 168 (2,488) 2,630 310 Tax (15) 36 40 128 189 63 88 (2,190) 1,964 (75) Other comprehensive income/(loss) after tax 63 145 (3,462) 1,962 (1,292) Total comprehensive income/(loss) for the year 2,554 (160) (254) (1,281) 859 Total comprehensive income/(loss) is attributable to: Ordinary shareholders 2,017 (160) (151) (1,401) 305 Preference shareholders 182 — — — 182 Paid-in equity holders 355 — — — 355 Non-controlling interests — — (103) 120 17 2,554 (160) (254) (1,281) 859 *Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. Income statement Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2017* £m £m £m £m £m Net interest income 203 (26) 6,157 2,653 8,987 Non-interest income 1,390 909 (674) 2,521 4,146 Total income 1,593 883 5,483 5,174 13,133 Operating expenses (122) (1,601) (3,946) (4,732) (10,401) Impairment releases/(losses) — 77 (370) (200) (493) Operating profit/(loss) before tax 1,471 (641) 1,167 242 2,239 Tax (94) 168 (853) 48 (731) Profit/(loss) from continuing operations 1,377 (473) 314 290 1,508 (Loss)/profit from discontinued operations, net of tax — (510) — 510 — Profit/(loss) for the year 1,377 (983) 314 800 1,508 Attributable to: Ordinary shareholders 660 (983) 309 766 752 Preference shareholders 234 — — — 234 Paid-in equity holders 483 — — 4 487 Non-controlling interests — — 5 30 35 1,377 (983) 314 800 1,508 Statement of comprehensive income Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2017* £m £m £m £m £m Profit/(loss)for the year 1,377 (983) 314 800 1,508 Items that do not qualify for reclassification Profit on remeasurement of retirement benefit schemes — 4 86 — 90 Loss on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk — (68) (58) — (126) Tax — (18) 8 — (10) — (82) 36 — (46) Items that do qualify for reclassification Available-for-sale financial assets — 52 (341) 315 26 Cash flow hedges (204) (424) (24) (417) (1,069) Currency translation — (22) 495 (373) 100 Tax 38 93 20 105 256 (166) (301) 150 (370) (687) Other comprehensive (loss)/income after tax (166) (383) 186 (370) (733) Total comprehensive income/(loss) for the year 1,211 (1,366) 500 430 775 Total comprehensive income/(loss) is attributable to: Non-controlling interests — — — 52 52 Preference shareholders 234 — — — 234 Paid-in equity holders 483 — — 4 487 Ordinary shareholders 494 (1,366) 500 374 2 1,211 (1,366) 500 430 775 *Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. Balance sheet Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group At 31 December 2019 £m £m £m £m £m Assets Cash and balances at central banks — 9,953 67,905 — 77,858 Trading assets — 57,768 18,980 (3) 76,745 Derivatives 979 147,458 6,507 (4,915) 150,029 Settlement balances — 3,353 1,034 — 4,387 Loans to banks - amortised cost — 238 10,437 14 10,689 Loans to customers - amortised cost — 6,910 320,050 (13) 326,947 Amount due from holding company and fellow subsidiaries 25,018 7,145 10,157 (42,320) — Other financial assets 277 11,636 49,816 (277) 61,452 Intangible assets — — 6,320 302 6,622 Other assets 55,809 3,592 9,583 (60,674) 8,310 Total assets 82,083 248,053 500,789 (107,886) 723,039 Liabilities Bank deposits — 2,038 18,456 (1) 20,493 Customer deposits — 2,247 366,998 2 369,247 Amount due to holding company and fellow subsidiaries 439 16,858 25,023 (42,320) — Settlement balances — 2,648 1,421 — 4,069 Trading liabilities — 53,576 20,376 (3) 73,949 Derivatives 711 142,390 8,695 (4,917) 146,879 Other financial liabilities 19,331 16,880 9,091 (82) 45,220 Subordinated liabilities 7,647 590 1,885 (143) 9,979 Other liabilities 168 1,195 8,454 (170) 9,647 Total liabilities 28,296 238,422 460,399 (47,634) 679,483 Owners' equity 53,787 9,631 40,381 (60,252) 43,547 Non-controlling interests — — 9 — 9 Total equity 53,787 9,631 40,390 (60,252) 43,556 Total liabilities and equity 82,083 248,053 500,789 (107,886) 723,039 Balance sheet Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group At 31 December 2018 £m £m £m £m £m Assets Cash and balances at central banks — 11,095 77,802 — 88,897 Trading assets — 61,990 13,228 (99) 75,119 Derivatives 543 134,291 1,232 (2,717) 133,349 Settlement balances — 1,421 1,507 — 2,928 Loans to banks - amortised cost — 454 12,527 (34) 12,947 Loans to customers - amortised cost — 7,908 297,200 (19) 305,089 Amount due from holding company and fellow subsidiaries 22,791 11,800 16,877 (51,468) — Other financial assets 241 10,995 48,481 (232) 59,485 Intangible assets — — 6,314 302 6,616 Other assets 56,773 2,087 10,968 (60,023) 9,805 Total assets 80,348 242,041 486,136 (114,290) 694,235 Liabilities Bank deposits — 2,777 20,596 (76) 23,297 Customer deposits — 2,390 358,531 (7) 360,914 Amount due to holding company and fellow subsidiaries 635 23,505 27,328 (51,468) — Settlement balances — 1,977 1,089 — 3,066 Trading liabilities — 54,540 17,909 (99) 72,350 Derivatives 445 129,974 1,195 (2,717) 128,897 Other financial liabilities 16,821 15,621 7,283 7 39,732 Subordinated liabilities 7,941 658 2,059 (123) 10,535 Other liabilities 119 1,677 7,719 (561) 8,954 Total liabilities 25,961 233,119 443,709 (55,044) 647,745 Owners’ equity 54,387 8,922 42,416 (59,989) 45,736 Non-controlling interests — — 11 743 754 Total equity 54,387 8,922 42,427 (59,246) 46,490 Total liabilities and equity 80,348 242,041 486,136 (114,290) 694,235 Cash flow statement Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2019 £m £m £m £m £m Net cash flows from operating activities 4,376 (1,068) (8,955) 2,545 (3,102) Net cash flows from investing activities 21 892 117 (1,746) (716) Net cash flows from financing activities (4,164) (606) (1,156) 3,379 (2,547) Effects of exchange rate changes on cash and cash equivalents (1) (835) (1,207) 60 (1,983) Net increase/(decrease) in cash and cash equivalents 232 (1,617) (11,201) 4,238 (8,348) Cash and cash equivalents at 1 January 2019 307 24,575 91,337 (7,283) 108,936 Cash and cash equivalents at 31 December 2019 539 22,958 80,136 (3,045) 100,588 Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2018 £m £m £m £m £m Net cash flows from operating activities 16,620 (6,480) (82,094) 65,131 (6,823) Net cash flows from investing activities (9,481) 18,335 (32,532) 15,684 (7,994) Net cash flows from financing activities (1) (7,078) (670) 9,184 (964) 472 Effects of exchange rate changes on cash and cash equivalents 1 332 565 (222) 676 Net (decrease)/increase in cash and cash equivalents 62 11,517 (104,877) 79,629 (13,669) Cash and cash equivalents at 1 January 2018 245 13,058 196,214 (86,912) 122,605 Cash and cash equivalents at 31 December 2018 307 24,575 91,337 (7,283) 108,936 Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2017 £m £m £m £m £m Net cash flows from operating activities 2,030 (74,357) 105,315 2,724 35,712 Net cash flows from investing activities (2,078) (2,077) 2,241 (4,238) (6,152) Net cash flows from financing activities (1) (888) (9,668) 329 4,718 (5,509) Effects of exchange rate changes on cash and cash equivalents (14) 87 (1,102) 1,013 (16) Net (decrease)/increase in cash and cash equivalents (950) (86,015) 106,783 4,217 24,035 Cash and cash equivalents at 1 January 2017 1,195 99,073 89,431 (91,129) 98,570 Cash and cash equivalents at 31 December 2017 245 13,058 196,214 (86,912) 122,605 Note: (1) 2018 and 2017 have been re-presented to align the balance sheet classification. MREL was previously presented in Operating activities and is now presented in Financing activities. Trust preferred securities RBS Group has issued trust preferred securities through trusts 100% owned by RBS Group (through partnership interests) 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, RBS 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 RBS Group. For those securities that were classified as subordinated liabilities, RBS Group’s outstanding instruments with the trusts are classified as subordinated liabilities. |
Accounting policies ( Policies)
Accounting policies ( Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting policies | |
Presentation of accounts | 1. Presentation of accounts The accounts, set out on pages 198 to 266, including these accounting policies on pages 204 to 208, and the audited sections of the Financial review: Capital and risk management on pages 114 to 191, are prepared on a going concern basis (see the Report of the directors, page 110) and in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and interpretations as issued by the IFRS Interpretations Committee of the IASB and adopted by the European Union (EU) (together IFRS). The significant accounting policies and related judgments are set out below. The Royal Bank of Scotland Group plc (RBSG plc) is incorporated in the UK and registered in Scotland. Its accounts are presented in accordance with the Companies Act 2006. The accounts are presented in the functional currency, pounds sterling. With the exception of certain financial instruments as described in Accounting policies 12 and 20 and investment property, the accounts are presented on a historical cost basis. Accounting policy changes effective 1 January 2019 Adoption of IFRS 16 Refer to Accounting policy 9 and Note 22 for details of the adoption of IFRS 16. Other amendments to IFRS IAS 12 ‘Income taxes’ was revised with effect from 1 January 2019. The income statement now includes any tax relief on the servicing cost of instruments classified as equity. Relief of £67 million was recognised in the statement of changes in equity for the year ended 31 December 2018; this and prior years have been restated. IAS 19 ‘Employee Benefits’ was amended by the IASB in February 2018 to clarify the need to update assumptions whenever there is a plan amendment, curtailment or settlement. This amendment has not affected the accounts. Presentation of interest in suspense recoveries - In March 2019 the IFRS Interpretations Committee (IFRIC) issued an agenda decision on the presentation of unrecognised interest when a credit-impaired financial asset (commonly referred to as a ‘Stage 3’ financial asset) is subsequently paid in full or is no longer credit-impaired. This concluded that the difference arising from the additional interest recovered must be recognised as a reversal of impairment rather than within interest revenue. This affects both recognition and the reversal of the expected credit loss (ECL) allowance. RBS Group changed its accounting policy in line with the IFRIC decision. Hence, the gross carrying amount of the financial assets within the scope of the provisions of the decision, as well as the associated ECL allowance on the balance sheet have been adjusted by £460 million and the comparative period restated by £455 million with no effect on equity. The coverage ratio for the current and comparative periods have been adjusted and restated accordingly. In addition, until 1 January 2019, interest in suspense recoveries were presented as a component of interest receivable within Net interest income. From 1 January 2019 interest in suspense recoveries are presented within Impairment losses and amounted to £64 million for the year ended 31 December 2019. Comparatives have not been restated on the grounds of materiality. IAS 39 ‘Financial Instruments: Recognition and Measurement’, IFRS 9 ‘Financial Instruments’ and IFRS 7 ‘Financial Instruments: Disclosures’ - In September 2019, the IASB published amendments to address the issues arising from the replacement of existing IBOR based interest rate benchmarks with alternative nearly risk-free interest rates (RFRs) in the context of hedge accounting. These amendments allow hedging relationships affected by the IBOR reform to be accounted for as continuing hedges. RBS has early adopted these amendments for the annual reporting period ending on 31 December 2019. The amendments provide relief on key areas of hedge accounting most notably the hedge effectiveness assessment and the ability to identify LIBOR-based cash flows for the purpose of designation (re-designation) during the period of the Reform. Additional disclosures are shown in Note 10. IFRIC decision - Disclosure of change in liabilities arising from financing activities (IAS 7 statement of cash flows) – Following the IFRIC decision on how changes in liabilities should be presented in the cash flow statement, RBS has revised its presentation of financing activities and applied this to the cash flow statement. |
Basis of consolidation | 2. Basis of consolidation The consolidated accounts incorporate the financial statements of RBSG plc and entities (including certain structured entities) that give access to variable returns and that are controlled by RBS Group. Control is assessed by reference to our ability to enforce our will on the other entity, typically through voting rights. 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 or expense relates to financial instruments measured at amortised cost and debt instruments classified as fair value through OCI using the effective interest rate method, the effective part of any related accounting hedging instruments, and finance lease income recognised at a constant periodic rate of return before tax on the net investment on the lease. Negative effective interest accruing to financial assets is presented in interest payable. Other interest relating to financial instruments measured at fair value is recognised as part of the movement in fair value. Fees in respect of services are recognised as the right to consideration accrues through the performance of each distinct service obligation 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. |
Assets held for sale and discontinued operations | 4. Assets held for sale A non-current asset (or disposal group) is classified as held for sale if RBS Group will recover its carrying amount principally through a sale transaction rather than through continuing use and is measured at the lower of its carrying amount or fair value less cost to sell. |
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 RBS Group or by RBSG plc shares. RBS Group operates a number of share-based compensation schemes under which it awards RBSG plc shares and share options to its employees. Such awards are generally subject to vesting conditions. Variable compensation that is settled in cash or debt instruments is charged to profit or loss on a straight-line basis over the vesting period, taking account of forfeiture and clawback criteria. Contributions to defined contribution pension schemes are recognised in profit or loss as employee service costs accrue. For defined benefit pension schemes, the net of the recognisable scheme assets and obligations is reported in the balance sheet. The defined benefit obligation is measured on an actuarial basis. The charge to profit or loss for pension costs (mainly the service cost and the net interest on the net defined benefit asset or liability) is recognised in operating expenses. Actuarial gains and losses (i.e. gains and/or 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. The difference between scheme assets and scheme liabilities, the net defined benefit asset or liability, is recognised in the balance sheet subject to the asset celling test which requires the net defined benefit surplus to be limited to the present value of any economic benefits available to RBS Group in the form of refunds from the plan or reduced contributions to it. |
Intangible assets and goodwill | 6. Intangible assets and goodwill Intangible assets acquired by RBS Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to profit or loss over the assets’ estimated useful 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. 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 the net fair value of the subsidiary’s identifiable assets, liabilities and contingent liabilities. Goodwill is measured at initial cost less any subsequent impairment losses. The gain or loss on the disposal of a subsidiary includes the carrying value of any related goodwill. |
Impairment of intangible assets, right of use and property, plant and equipment | 7. Impairment of intangible assets, rights of use and property, plant and equipment At each balance sheet date, RBS Group assesses whether there is any indication that its intangible assets, rights of use or property, plant and equipment are impaired. If any such indication exists, RBS 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. The recoverable amount of an asset that does not generate cash flows that are independent from those of other assets or groups of assets, is determined as part of 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 RBS 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 or 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. An impairment loss is recognised if the recoverable amount of an intangible or tangible asset is less than its carrying value. The carrying value of the asset is reduced by the amount of the loss and a charge recognised in profit or 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. |
Foreign currencies | 8. Foreign currencies Transactions in foreign currencies are recorded in the functional currency 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 20). 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 non-monetary financial assets classified as fair value through OCI, 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 | 9. Leases RBS Group has adopted IFRS 16 ‘Leases’ with effect from 1 January 2019, replacing IAS 17 ‘Leases’. RBS Group has applied IFRS 16 on a modified retrospective basis without restating prior years. The effect is set out in Note 22. As lessor Finance lease contracts are those which transfer substantially all the risks and rewards of ownership of an asset to a customer. All other contracts with customers to lease assets are classified as operating leases. Loans to customers include finance lease receivables measured at the net investment in the lease, comprising the minimum lease payments and any unguaranteed residual value discounted at the interest rate implicit in the lease. Interest receivable includes finance lease income recognised at a constant periodic rate of return before tax on the net investment. 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 other operating 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. As lessee On entering a new lease contract, RBS Group recognises a right of use asset and a lease liability to pay future rentals. The liability is measured at the present value of future lease payments discounted at the applicable incremental borrowing rate. The right of use asset is depreciated over the shorter of the term of the lease and the useful economic life, subject to review for impairment. Short term and low value leased assets are expensed on a systematic basis. |
Provisions | 10. Provisions and contingent liabilities RBS 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 RBS Group has a constructive obligation to restructure. An obligation exists when RBS 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. RBS Group recognises any onerous cost of the present obligation under a contract as a provision. An onerous cost is the unavoidable cost of meeting RBS Group’s contractual obligations that exceed the expected economic benefits. When RBS Group vacates a leasehold property, the right of use asset would be tested for impairment and a provision may be recognised for the ancillary occupancy costs, such as rates. 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 | 11. 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. The tax consequences of servicing equity instruments are recognised in the income statement. 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 to the extent their recovery is probable. 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 RBS 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 RBS Group company or on RBS 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. Accounting for taxes is judgmental and carries a degree of uncertainty because tax law is subject to interpretation, which might be questioned by the relevant tax authority. RBS Group recognises the most likely current and deferred tax liability or asset, assessed for uncertainty using consistent judgments and estimates. Current and deferred tax assets are only recognised where their recovery is deemed probable, and current and deferred tax liabilities are recognised at the amount that represents the best estimate of the probable outcome having regard to their acceptance by the tax authorities. |
Financial instruments | 12. Financial instruments Financial instruments are classified either by product, by business model or by reference to the IFRS default classification. Classification by product relies on specific designation criteria which are applicable to certain classes of financial assets or circumstances where accounting mismatches would otherwise arise. Classification by business model reflects how RBS Group manages its financial assets to generate cash flows. A business model assessment determines if cash flows result from holding financial assets to collect the contractual cash flows, from selling those financial assets, or both. The product classifications apply to financial assets that are either designated at fair value through profit or loss (DFV), or to equity investments designated as at fair value through other comprehensive income (FVOCI). Financial assets may also be irrevocably designated at fair value through profit or loss upon initial recognition if such designation eliminates, or significantly reduces, accounting mismatch. In all other instances, fair value through profit or loss (MFVTPL) is the default classification and measurement category for financial assets. Regular way purchases of financial assets classified as amortised cost are recognised on the settlement date; all other regular way transactions in financial assets are recognised on the trade date. Business model assessment of assets is made at portfolio level, being the level at which they are managed to achieve a predefined business objective. This is expected to result in the most consistent classification of assets because it aligns with the stated objectives of the portfolio, its risk management, manager’s remuneration and the ability to monitor sales of assets from a portfolio. Most financial assets are within ‘held to collect’ business models, and have contractual cash flows that comprise solely payments of principal and interest and therefore measured at amortised cost. Certain financial assets are managed under a business model of both ‘held to collect and sell’ and have contractual cash flows comprising solely of payments of principal and interest, and are measured at fair value through other comprehensive income (‘FVOCI’). The contractual terms of a facility; any leverage features; prepayment and extension terms; and triggers that might reset the effective rate of interest; are considered in determining whether cash flows comprise solely payments of principal and interest. All financial instruments are measured at fair value on initial recognition. All liabilities not subsequently measured at fair value are measured at amortised cost. |
Impairment | 13. Impairment: expected credit losses At each balance sheet date each financial asset or portfolio of loans measured at amortised cost or at fair value through other comprehensive income, issued financial guarantee and loan commitment is assessed for impairment and presented as impairments in the income statement. Loss allowances are forward-looking, based on 12 month expected credit losses where there has not been a significant increase in credit risk rating, otherwise allowances are based on lifetime expected losses. Expected credit losses are a probability-weighted estimate of credit losses. The probability is determined by the risk of default which is applied to the cash flow estimates. In the absence of a change in credit rating, allowances are recognised when there is a reduction in the net present value of expected cash flows. On a significant increase in credit risk, allowances are recognised without a change in the expected cash flows, although typically expected cash flows do change also; and expected credit losses are adjusted from 12 month to lifetime expectations. Judgement is exercised as follows: · Models – in certain low default portfolios, Basel parameter estimates are also applied for IFRS 9. · Non-modelled portfolios , mainly in Private Banking, RBSI and Lombard, use a standardised capital requirement under Basel II. Under IFRS 9, they have bespoke treatments for the identification of significant increase in credit risk. Benchmark PDs, EADs and LGDs are reviewed annually for appropriateness. The ECL calculation is based on expected future cash flows, which is typically applied at a portfolio level. · Multiple economic scenarios (MES) – the central, or base, scenario is most critical to the ECL calculation, independent of the method used to generate a range of alternative outcomes and their probabilities. · Significant increase in credit risk - IFRS 9 requires that at each reporting date, an entity shall assess whether the credit risk on an account has increased significantly since initial recognition. Part of this assessment requires a comparison to be made between the current lifetime PD (i.e. the current probability of default over the remaining lifetime) with the equivalent lifetime PD as determined at the date of initial recognition. On restructuring a financial asset without causing derecognition of the original asset, the revised cash flows are used in re-estimating the credit loss. Where restructuring causes derecognition of the original financial asset, the fair value of the replacement asset is used as the closing cash flow of the original asset. 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 RBS Group’s interest in equity shares following the exchange is such that RBS Group controls an entity, that entity is consolidated. Impaired loans are written off and therefore derecognised from the balance sheet when RBS 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 the 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 RBS 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 · Commercial loans: write offs are determined in the light of individual circumstances; the period does not exceed five years. · Business loans are generally written off within five years. |
Financial guarantee contracts | 14. Financial guarantee contracts Under a financial guarantee contract, RBS 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 13. Amortisation is calculated so as to recognise fees receivable in profit or loss over the period of the guarantee. |
Loan commitments | 15. Loan commitments Provision is made for expected credit loss on loan commitments, other than those classified as held-for-trading. Syndicated loan commitments in excess of the level of lending under the commitment approved for retention by RBS Group are classified as held-for-trading and measured at fair value through profit or loss. |
Derecognition | 16. 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. Conversely, an asset is not derecognised by a contract under which RBS Group retains substantially all the risks and rewards of ownership. If substantially all the risks and rewards have been neither retained nor transferred, RBS Group does not derecognise an asset over which it has retained control but limits its recognition to the extent of its continuing involvement. A financial liability is removed from the balance sheet when the obligation is discharged, or is cancelled, or expires. |
Sale and repurchase transactions | 17. 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 RBS 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 RBS 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. Sale and repurchase transactions that are not accounted for at fair value through profit or loss are measured at amortised cost. The difference between the consideration paid or received and the repurchase or resale price is treated as interest and recognised in interest income or interest expense over the life of the transaction. |
Netting | 18. Netting Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, RBS 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. RBS 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 | 19. Capital instruments RBS 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 RBS Group after the deduction of liabilities. The components of a compound financial instrument issued by RBS 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 RBSG plc purchased by RBS 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 2006. On the sale or re-issue of treasury shares the consideration received and related tax are credited to equity, net of any directly attributable incremental costs. |
Derivatives and hedging | 20. Derivatives and hedging Derivative financial instruments are initially recognised, and subsequently measured, at fair value. RBS Group’s approach to determining the fair value of financial instruments is set out in the Critical accounting policies section and key sources of estimation uncertainty entitled Fair value - financial instruments; further details are given in Notes 10 and 12 on the accounts. A derivative embedded in a financial liability 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. RBS 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 (net investment hedges). Hedge relationships are formally designated and documented at inception in line with the requirements of IAS 39 Financial instruments - Recognition and measurement . The documentation identifies the hedged item, the hedging instrument and details of 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 RBS 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 discontinuation 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 | 21. Associates and joint ventures An associate is an entity over which RBS 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 RBS Group’s share of net assets. |
Cash and cash equivalents | 22. 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. |
Shares in Group entities | 23. Shares in Group entities RBSG plc’s investments in its subsidiaries are stated at cost less any impairment. |
Critical accounting policies and key sources of estimation uncertainty | Critical accounting policies and key sources of estimation uncertainty The reported results of RBS 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 RBS 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 RBS 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 RBS Group would affect its reported results Critical accounting policy Note Deferred tax Fair value - financial instruments Loan impairment provisions Goodwill Provisions for liabilities and charges |
Future accounting developments | Future accounting developments International Financial Reporting Standards A number of IFRSs and amendments to IFRS were in issue at 31 December 2019 that would affect RBS Group from 1 January 2020 or later: · The amendments to IAS 1 ‘Presentation of Financial Statements’ and IAS 8 ‘Accounting Policy, Changes in Accounting Estimates and Errors’ on the definition of material were issued in October 2018 and are effective for annual periods beginning on or after 1 January 2020 with earlier application permitted. The amendments are aimed at improving the understanding of the existing requirements rather than to significantly impact current materiality judgements. They provide a new definition of material which shall be used to assess whether information, either individually or in combination with other information, is material in the context of the financial statements. · The amendments to IFRS 3 ‘Business Combinations’ which clarify the definition of a Business were issued in October 2018, are effective for annual reporting periods beginning on or after 1 January 2020 and apply prospectively with earlier application permitted. They clarify the minimum requirements for a business; remove the assessment of whether market participants are capable of replacing any missing elements; add guidance to help entities assess whether an acquired process is substantive; narrow the definitions of a business and of outputs; and introduce an optional fair value concentration test. · Effective in 2022 - 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, subject to IASB’s approval of a deferral until 1 January 2022. RBS Group is assessing the effect of adopting these standards on its financial statements |
Accounting policies (Tables)
Accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting policies | |
Schedule of estimated useful economic lives | Computer software 3 to 12 years Other acquired intangibles 5 to 10 years |
Net interest income (Tables)
Net interest income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Net interest income | |
Schedule of Net interest income | £m £m £m Loans to banks - amortised cost 726 522 277 Loans to customers - amortised cost 9,795 9,993 10,409 Other financial assets 854 534 348 Interest receivable (1) 11,375 11,049 11,034 Balances with banks 319 250 175 Customer deposits: demand 282 223 99 Customer deposits: savings 771 510 445 Customer deposits: other time 203 116 179 Other financial liabilities 1,102 791 554 Subordinated liabilities 483 461 572 Internal funding of trading businesses 168 42 23 Interest payable (1) 3,328 2,393 2,047 Net interest income 8,047 8,656 8,987 Note: (1) Negative interest on loans 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, 2019 | |
Non-interest income | |
Schedule of Non-interest income | £m £m £m Net fees and commissions 2,511 2,357 2,455 Loss on redemption of own debt — — (7) Income from trading activities Foreign exchange 448 643 525 Interest rate 532 695 (50) Credit 32 45 197 Changes in fair value of own debt and derivative liabilities attributable to own credit risk - debt securities in issue (60) 72 12 - derivative liabilities (20) 20 (81) Equities, commodities and other — 32 31 932 1,507 634 Other operating income Operating lease and other rental income 250 256 276 Changes in the fair value of financial assets and liabilities designated at fair value through profit or loss (17) (26) 60 Changes in fair value of other financial assets at fair value through profit or loss 58 18 — Hedge ineffectiveness 48 (65) 39 Profit/(loss) on disposal of amortised cost assets 42 44 (35) (Loss)/profit on disposal of fair value through other comprehensive income assets (22) 34 226 Profit on sale of property, plant and equipment 58 50 75 Share of (losses)/profits of associated entities (14) 83 104 Profit/(loss) on disposal of subsidiaries and associates (1) 2,224 (72) 245 Other income (2) 136 560 74 2,763 882 1,064 6,206 4,746 4,146 Notes: (1) Includes a gain of £444 million (€523 million), a legacy liability release of £256 million and an FX recycling gain of £290 million on completion of the Alawwal bank merger in June 2019; £1,102 million of FX recycling gains arising on the liquidation of RFS Holdings BV and £67 million in relation to the capital repayment in UBI DAC. The recycling gains and capital repayment have been calculated using the step-by-step method in IFRIC 16 and by reference to the proportion of equity applied to the FX translation reserve. (2) Includes income from activities other than banking. 2018 includes insurance recoveries of £357 million. |
Operating expenses (Tables)
Operating expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Operating expenses | |
Schedule of operating expenses | £m £m £m Salaries 2,513 2,560 2,750 Bonus awards 299 225 298 Temporary and contract costs 401 442 430 Social security costs 300 307 318 Pension costs 303 401 Other 202 187 413 Staff costs 4,018 4,122 4,676 Premises and equipment (1) 1,259 1,383 1,565 UK bank levy (2) 134 179 215 Depreciation and amortisation (3) 1,176 731 808 Other administrative expenses (4) 2,694 3,193 3,108 Administrative expenses 5,263 5,486 5,696 Impairment of goodwill and other intangible assets 44 37 29 9,325 9,645 10,401 Notes: (1) Includes a £161 million charge relating to the reduction in property portfolio. (2) Includes a prior period rebate of £31 million. (3) Includes a £292 million charge relating to the reduction in property portfolio. (4) Includes litigation and conduct costs, net of amounts recovered. Refer to Notes 20 and 26 for further details. |
Schedule of employees in continuing operations | UK Personal Banking 21,800 23,400 19,500 Ulster Bank RoI 2,700 2,900 2,600 Commercial Banking 10,100 10,200 6,900 Private Banking 1,900 1,900 1,500 RBS International 1,600 1,600 1,600 NatWest Markets 5,000 4,500 5,300 Central items & other 19,800 20,900 32,300 Total 62,900 65,400 69,700 UK 44,600 46,600 51,200 USA 400 500 500 Europe 4,100 4,100 4,200 Rest of the World 13,800 14,200 13,800 Total 62,900 65,400 69,700 |
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 2020 to 2024 Deferred performance awards All Awards of ordinary shares Continuing employment or leavers in certain circumstances 2020 to 2026 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 2020 to 2026 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 bonus awards | Change £m £m % Non-deferred cash awards (1) 40 37 8 Total non-deferred bonus awards 40 37 8 Deferred bond awards 184 191 (4) Deferred share awards 83 107 (22) Total deferred bonus awards 267 298 (10) Total bonus awards (2) 307 335 (8) Bonus awards as a % of operating profit before tax (3) 7 % 9 % Proportion of bonus awards that are deferred 87 % 89 % of which - deferred bond awards 69 % 64 % - deferred share awards 31 % 36 % Notes: (1) Cash awards are limited to £2,000 for all employees. (2) Excludes other performance related compensation. (3) Operating profit before tax and bonus expense. |
Schedule of reconciliation of bonus awards | Reconciliation of bonus awards to income statement charge £m £m £m Bonus awarded 307 335 342 Less: deferral of charge for amounts awarded for current year (110) (130) (133) Income statement charge for amounts awarded in current year 197 205 209 Add: current year charge for amounts deferred from prior years 127 86 96 Less: forfeiture of amounts deferred from prior years (25) (66) (7) Income statement charge for amounts deferred from prior years 102 20 89 Income statement charge for bonus awards (2) 299 225 298 Notes: (2) Excludes other performance related compensation. |
Schedule of income statement charge expected to be taken for bonus awards | Actual Expected and beyond Year in which income statement charge is expected to be taken for deferred bonus awards £m £m £m £m £m Bonus awards deferred from 2017 and earlier 96 86 31 14 5 Bonus awards deferred from 2018 — — 96 16 14 Less: forfeiture of amounts deferred from prior years (7) (66) (25) — — Bonus awards for 2019 deferred — — — 78 32 89 20 102 108 51 Notes: (1) Cash awards are limited to £2,000 for all employees. (2) Excludes other performance related compensation. (3) Operating profit before tax and bonus expense. |
Sharesave | |
Operating expenses | |
Schedule of share-based compensation | Sharesave 2019 2018 2017 Average Shares Average Shares Average Shares exercise price under option exercise price under option exercise price under option £ (million) £ (million) £ (million) At 1 January 2.18 75 2.38 60 2.46 56 Granted 1.78 25 1.89 28 2.27 21 Exercised 2.83 (4) 2.44 (4) 2.46 (3) Cancelled 2.25 (12) 2.46 (9) 2.49 (14) At 31 December 2.01 84 2.18 75 2.38 60 |
Deferred performance awards | |
Operating expenses | |
Schedule of share-based compensation | Deferred performance awards 2019 2018 2017 Value at Shares Value at Shares Value at Shares grant awarded grant awarded grant awarded £m (million) £m (million) £m (million) At 1 January 233 92 264 101 296 102 Granted 110 42 156 59 152 63 Forfeited (10) (4) (21) (8) (11) (4) Vested (137) (54) (166) (60) (173) (60) At 31 December 196 76 233 92 264 101 |
Long-term incentives | |
Operating expenses | |
Schedule of share-based compensation | Long-term incentives 2019 2018 2017 Value at Shares Options Value at Shares Options Value at Shares Options grant awarded over shares grant awarded over shares grant awarded over shares £m (million) (million) £m (million) (million) £m (million) (million) At 1 January 85 32 2 102 37 2 119 38 4 Granted 15 6 — 12 5 — 35 15 — Vested/exercised (12) (4) — (5) (2) — (22) (7) — Lapsed (25) (9) (2) (24) (8) — (30) (9) (2) At 31 December 63 25 — 85 32 2 102 37 2 |
Segmental analysis (Tables)
Segmental analysis (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segmental analysis | |
Schedule of operating segments | Net Net fees Other Depreciation Impairment interest and non-interest Total Operating and (losses)/ Operating income commissions income income expenses amortisation releases profit/(loss) 2019 £m £m £m £m £m £m £m £m UK Personal Banking 4,130 696 40 4,866 (3,618) — (393) 855 Ulster Bank RoI 400 109 58 567 (552) — 34 49 Commercial Banking 2,842 1,312 164 4,318 (2,458) (142) (391) 1,327 Private Banking 521 226 30 777 (482) (4) 6 297 RBS International 478 106 26 610 (254) (10) (2) 344 NatWest Markets (188) 85 1,445 1,342 (1,406) (12) 51 (25) Central items & other (136) (23) 1,932 1,773 621 (1,008) (1) 1,385 Total 8,047 2,511 3,695 14,253 (8,149) (1,176) (696) 4,232 Net Net fees Other Depreciation Impairment interest and non-interest Total Operating and (losses)/ Operating income commissions income income expenses amortisation releases profit/(loss) 2018* £m £m £m £m £m £m £m £m UK Personal Banking 4,283 692 79 5,054 (2,867) — (339) 1,848 Ulster Bank RoI 444 91 75 610 (583) — (15) 12 Commercial Banking 2,855 1,283 464 4,602 (2,362) (125) (147) 1,968 Private Banking 518 228 29 775 (476) (2) 6 303 RBS International 466 101 27 594 (254) (6) 2 336 NatWest Markets 112 (33) 1,363 1,442 (1,589) (15) 92 (70) Central items & other (22) (5) 352 325 (783) (583) 3 (1,038) Total 8,656 2,357 2,389 13,402 (8,914) (731) (398) 3,359 *2018 and 2017 data has been restated for the business re-segmentation. 2017* UK Personal Banking 4,342 724 216 5,282 (3,241) — (207) 1,834 Ulster Bank RoI 421 94 89 604 (676) — (60) (132) Commercial Banking 3,074 1,405 200 4,679 (2,458) (144) (390) 1,687 Private Banking 464 179 35 678 (529) — (6) 143 RBS International 325 42 22 389 (217) (2) (3) 167 NatWest Markets 203 24 823 1,050 (2,250) 49 174 (977) Central items & other 158 (13) 306 451 (222) (711) (1) (483) Total 8,987 2,455 1,691 13,133 (9,593) (808) (493) 2,239 *2018 and 2017 data has been restated for the business re-segmentation. 2019 2018* 2017* 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 Banking 6,161 62 6,223 6,188 63 6,251 6,406 39 6,445 Ulster Bank RoI 616 6 622 668 — 668 676 (4) 672 Commercial Banking 4,347 139 4,486 4,576 89 4,665 4,532 79 4,611 Private Banking 703 241 944 681 195 876 585 143 728 RBS International 639 19 658 506 148 654 309 119 428 NatWest Markets 2,516 558 3,074 1,882 916 2,798 1,408 809 2,217 Central items & other 3,447 (1,025) 2,422 2,155 (1,411) 744 2,147 (1,185) 962 Total 18,429 — 18,429 16,656 — 16,656 16,063 — 16,063 *2018 and 2017 data has been restated for the business re-segmentation. 2019 2018* 2017* 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 Banking 4,834 32 4,866 5,021 33 5,054 5,265 17 5,282 Ulster Bank RoI 562 5 567 613 (3) 610 609 (5) 604 Commercial Banking 4,814 (496) 4,318 5,079 (477) 4,602 5,051 (372) 4,679 Private Banking 631 146 777 655 120 775 594 84 678 RBS International 603 7 610 469 125 594 281 108 389 NatWest Markets 1,664 (322) 1,342 1,510 (68) 1,442 1,077 (27) 1,050 Central items & other 1,145 628 1,773 55 270 325 256 195 451 Total 14,253 — 14,253 13,402 — 13,402 13,133 — 13,133 *2018 and 2017 data has been restated for the business re-segmentation. UK Personal Ulster Commercial Private RBS NatWest Central items Analysis of net fees and commissions Banking Bank RoI Banking Banking International Markets & other Total 2019 £m £m £m £m £m £m £m £m Fees and commissions receivable - Payment services 292 61 658 33 27 24 — 1,095 - Credit and debit card fees 427 28 154 12 2 — — 623 - Lending (credit facilities) 356 14 415 2 32 82 — 901 - Brokerage 55 8 — 5 — 96 — 164 - Investment management, trustee and fiduciary services 44 3 3 186 41 1 — 278 - Trade finance — 2 95 1 4 3 — 105 - Underwriting fees — — — — — 170 — 170 - Other 2 5 90 27 2 69 (172) 23 Total 1,176 121 1,415 266 108 445 (172) 3,359 Fees and commissions payable (480) (12) (103) (40) (2) (360) 149 (848) Net fees and commissions 696 109 1,312 226 106 85 (23) 2,511 2018* Fees and commissions receivable - Payment services 227 34 556 33 25 3 — 878 - Credit and debit card fees 402 22 175 13 — — — 612 - Lending (credit facilities) 408 29 415 2 29 88 — 971 - Brokerage 62 6 — 5 — 85 — 158 - Investment management, trustee and fiduciary services 49 4 — 191 42 — — 286 - Trade finance — 2 122 1 4 3 — 132 - Underwriting fees 13 — 17 — — 144 — 174 - Other 2 1 60 16 2 67 (141) 7 Total 1,163 98 1,345 261 102 390 (141) 3,218 Fees and commissions payable (471) (7) (62) (33) (1) (423) 136 (861) Net fees and commissions 692 91 1,283 228 101 (33) (5) 2,357 *2018 and 2017 data has been restated for the business re-segmentation. 2017* Fees and commissions receivable - Payment services 194 30 543 37 24 1 — 829 - Credit and debit card fees 451 27 175 12 — — — 665 - Lending (credit facilities) 436 30 497 2 10 83 2 1,060 - Brokerage 69 10 — 6 — 63 — 148 - Investment management, trustee and fiduciary services 72 4 35 133 4 1 — 249 - Trade finance — 2 164 1 3 3 — 173 - Underwriting fees — — — — — 157 — 157 - Other 1 — 51 15 2 132 (144) 57 Total 1,223 103 1,465 206 43 440 (142) 3,338 Fees and commissions payable (499) (9) (60) (27) (1) (416) 129 (883) Net fees and commissions 724 94 1,405 179 42 24 (13) 2,455 *2018 and 2017 data has been restated for the business re-segmentation . 2019 2018* 2017* Assets Liabilities Assets Liabilities Assets Liabilities £m £m £m £m £m £m UK Personal Banking 182,305 153,999 171,011 148,792 166,560 145,104 Ulster Bank RoI 25,385 21,012 25,193 21,189 24,564 19,853 Commercial Banking 165,399 140,863 166,478 139,804 173,621 143,450 Private Banking 23,304 28,610 21,983 28,554 20,290 27,049 RBS International 31,738 30,330 28,398 27,663 25,867 29,077 NatWest Markets 263,885 246,907 244,531 227,399 277,886 248,553 Central items & other 31,023 57,762 36,641 54,344 49,268 75,877 Total 723,039 679,483 694,235 647,745 738,056 688,963 *2018 and 2017 data has been restated for the business re-segmentation. Segmental analysis of goodwill is as follows: UK Personal Commercial Private RBS Banking Banking Banking International Total £m £m £m £m £m At 1 January 2018* 2,653 2,606 — 300 5,559 Acquisitions 48 — — — 48 Inter-segment transfers (9) — 9 — — At 31 December 2018* 2,692 2,606 9 300 5,607 At 31 December 2019 2,692 2,606 9 300 5,607 *2018 data has been restated for the business re-segmentation. |
Schedule of geographical segments | UK USA Europe RoW Total 2019 £m £m £m £m £m Total revenue 16,925 228 1,148 128 18,429 Interest receivable 10,923 — 417 35 11,375 Interest payable (3,255) — (70) (3) (3,328) Net fees and commissions 2,191 37 211 72 2,511 Income from trading activities 727 148 49 8 932 Other operating income 2,305 13 436 9 2,763 Total income 12,891 198 1,043 121 14,253 Operating profit/(loss) before tax 3,543 186 421 82 4,232 Total assets 648,056 33,121 40,010 1,852 723,039 Total liabilities 613,151 31,715 33,539 1,078 679,483 Net assets attributable to equity owners and non-controlling interests 34,905 1,406 6,471 774 43,556 Contingent liabilities and commitments 114,422 — 10,571 2 124,995 2018 Total revenue 15,351 300 838 167 16,656 Interest receivable 10,589 — 430 30 11,049 Interest payable (2,366) — (26) (1) (2,393) Net fees and commissions 2,183 12 102 60 2,357 Income from trading activities 1,308 124 68 7 1,507 Other operating income 467 119 229 67 882 Total income 12,181 255 803 163 13,402 Operating profit/(loss) before tax 3,805 (718) 150 122 3,359 Total assets 624,228 32,573 34,441 2,993 694,235 Total liabilities 588,185 31,329 27,183 1,048 647,745 Net assets attributable to equity owners and non-controlling interests 36,043 1,244 7,258 1,945 46,490 Contingent liabilities and commitments 121,267 — 5,408 208 126,883 2017* Total revenue 15,011 192 655 205 16,063 Interest receivable 10,556 7 435 36 11,034 Interest payable (1,945) (11) (89) (2) (2,047) Net fees and commissions 2,192 97 113 53 2,455 Income from trading activities 570 83 (24) 5 634 Other operating income 806 22 121 108 1,057 Total income 12,179 198 556 200 13,133 Operating profit/(loss) before tax 3,230 (580) (485) 74 2,239 Total assets 662,314 38,485 34,280 2,977 738,056 Total liabilities 626,103 36,564 25,171 1,125 688,963 Net assets attributable to equity owners and non-controlling interests 36,211 1,921 9,109 1,852 49,093 Contingent liabilities and commitments 128,127 78 7,823 22 136,050 |
Pensions (Tables)
Pensions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Pensions | |
Major classes of plan assets as a percentage of total plan assets | 2019 2018 Major classes of plan assets as a percentage of Quoted Unquoted Total Quoted Unquoted Total total plan assets of the Main section % % % % % % Equities 3.9 4.8 8.7 3.7 5.2 8.9 Index linked bonds 47.8 — 47.8 40.1 — 40.1 Government bonds 9.3 — 9.3 12.9 — 12.9 Corporate and other bonds 11.6 5.0 16.6 12.2 5.2 17.4 Real estate — 4.8 4.8 — 5.5 5.5 Derivatives — 7.8 7.8 — 6.1 6.1 Cash and other assets — 5.0 5.0 — 9.1 9.1 72.6 27.4 100.0 68.9 31.1 100.0 |
Summary of derivative instruments | 2019 2018 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps 16 909 1,094 13 347 502 Interest rate swaps 57 6,407 2,992 55 8,132 5,362 Currency forwards 9 215 42 10 22 164 Equity and bond call options 1 122 — 1 277 — Equity and bond put options 5 3 1 4 3 1 Other 3 124 13 4 1,027 1,092 |
Changes in value of net pension liability | Main section All schemes Present value Asset Net Present value Asset Net Fair of defined ceiling/ pension Fair of defined ceiling/ pension value of benefit minimum (asset)/ value of benefit minimum (asset)/ plan assets obligation funding (1) liability plan assets obligation funding (1) liability Changes in value of net pension (asset)/liability £m £m £m £m £m £m £m £m At 1 January 2018 44,652 37,937 6,715 — 49,746 42,378 7,105 (263) Currency translation and other adjustments — — — — 20 17 (1) (4) Income statement 1,123 1,143 171 191 1,242 1,371 179 308 Statement of comprehensive income (1,891) (1,396) 1,532 2,027 (2,090) (1,630) 1,507 1,967 Contributions by employer 2,218 — — (2,218) 2,363 — — (2,363) Contributions by plan participants and other scheme members 7 7 — — 12 12 — — Liabilities extinguished upon settlement — — — — (259) (259) — — Transfer of pension assets and liabilities from Main section (276) (198) (78) — — — — — Benefits paid (2,027) (2,027) — — (2,282) (2,282) — — At 1 January 2019 43,806 35,466 8,340 — 48,752 39,607 8,790 (355) Currency translation and other adjustments — — — — (85) (76) — 9 Income statement Net interest expense 1,245 1,003 242 — 1,374 1,109 255 (10) Current service cost — 140 — 140 — 193 — 193 Past service cost — 13 — 13 — 15 — 15 Gain on curtailments or settlements — — — — — (10) — (10) 1,245 1,156 242 153 1,374 1,307 255 188 Statement of comprehensive income Return on plan assets excluding recognised interest income 3,021 — — (3,021) 3,556 — — (3,556) Experience gains and losses — (275) — (275) — (279) — (279) Effect of changes in actuarial financial assumptions — 5,565 — 5,565 — 6,189 — 6,189 Effect of changes in actuarial demographic assumptions — (465) — (465) — (482) — (482) Asset ceiling adjustments — — (1,696) (1,696) — — (1,730) (1,730) 3,021 4,825 (1,696) 108 3,556 5,428 (1,730) 142 Contributions by employer 261 — — (261) 473 — — (473) Contributions by plan participants and other scheme members 10 10 — — 15 15 — — Liabilities extinguished upon settlement — — — — (188) (194) — (6) Benefits paid (1,788) (1,788) — — (1,972) (1,972) — — At 31 December 2019 46,555 39,669 6,886 — 51,925 44,115 7,315 (495) Notes: (1) RBS 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 RBS 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 section, where the surplus is not recognised. (2) RBS Group expects to make contributions to the Main section of £247 million in 2020. Additional contributions of up to £500 million will be paid to the Main section, should RBS Group make distributions in 2020, in line with the ring-fencing agreement with the Trustee. All schemes Amounts recognised on the balance sheet £m £m Fund assets at fair value 51,925 48,752 Present value of fund liabilities 44,115 39,607 Funded status 7,810 9,145 Asset ceiling/minimum funding 7,315 8,790 495 355 Net pension asset/(liability) comprises £m £m Net assets of schemes in surplus (included in Other assets, Note 17) 614 520 Net liabilities of schemes in deficit (included in Other liabilities, Note 20) (119) (165) 495 355 |
Principal actuarial assumptions | Principal IAS 19 actuarial assumptions Principal assumptions of 2017 triennial valuation % % Discount rate 2.1 2.9 Fixed interest swap yield curve plus 0.8% per annum Inflation assumption (RPI) 2.9 3.2 RPI swap yield curve Rate of increase in salaries 1.8 1.8 Rate of increase in deferred pensions 3.0 3.1 Rate of increase in pensions in payment 2.8 2.9 Modelled allowance for relevant caps and floors Lump sum conversion rate at retirement 20 20 % Longevity at age 60: years years Current pensioners Males 26.9 27.2 Females 28.7 29.0 Future pensioners, currently aged 40 Males 28.2 28.4 Females 30.2 30.5 |
Sensitivities of the present value of defined benefit obligations | (Decrease)/ (Decrease)/ Increase in increase in increase in net pension value of value of assets/ assets liabilities (obligations) 2019 £m £m £m 0.25% increase in interest rates/discount rate (2,330) (1,973) (357) 0.25% increase in inflation 1,923 1,394 529 0.25% increase in credit spreads (5) (1,973) 1,968 Longevity increase of one year — 1,706 (1,706) 0.25% additional rate of increase in pensions in payment — 1,326 (1,326) Increase in equity values of 10% (1) 430 — 430 2018 0.25% increase in interest rates/discount rate (2,214) (1,644) (570) 0.25% increase in inflation 1,487 1,199 288 0.25% increase in credit spreads (5) (1,644) 1,639 Longevity increase of one year — 1,414 (1,414) 0.25% additional rate of increase in pensions in payment — 1,215 (1,215) Increase in equity values of 10% (1) 419 — 419 Note: (1) The funded status is most sensitive to movements in credit spreads and longevity. The table below shows the combined change in the funded status of the Main section as a result of larger movements in these assumptions, assuming no changes in other assumptions. Change in life expectancies -2 years -1 years No change + 1 year + 2 years 2019 £bn £bn £bn £bn £bn Change in credit spreads +50 bps 6.9 5.4 3.9 2.3 0.8 No change 3.6 1.7 — (1.7) (3.6) -50 bps (0.2) (2.3) (4.4) (6.5) (8.7) 2018 Change in credit spreads +50 bps 5.8 4.5 3.2 1.9 0.7 No change 3.0 1.4 — (1.4) (3.0) -50 bps (0.4) (2.1) (3.8) (5.5) (7.3) |
Different classes of scheme members proportions | The defined benefit obligation of the Main section is attributable to the different classes of scheme members in the following proportions: Membership category % % Active members 13.6 12.9 Deferred members 49.7 48.6 Pensioners and dependants 36.7 38.5 100.0 100.0 |
History of defined benefit schemes | Main section All schemes History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets 46,555 43,806 44,652 43,824 30,703 51,925 48,752 49,746 49,229 34,708 Present value of plan obligations 39,669 35,466 37,937 38,851 30,966 44,115 39,607 42,378 43,990 35,152 Net surplus/(deficit) 6,886 8,340 6,715 4,973 (263) 7,810 9,145 7,368 5,239 (444) Experience gains/(losses) on plan liabilities 275 (122) (107) 658 233 279 (81) (93) 794 258 Experience gains/(losses) on plan assets 3,021 (1,891) 1,580 8,562 (415) 3,556 (2,090) 1,728 9,254 (458) Actual return on plan assets 4,266 (768) 2,735 9,872 703 4,930 (848) 3,013 10,708 749 Actual return on plan assets 9.7 % (1.7) % 6.2 % 32.2 % 2.3 % 10.1 % (1.7) % 6.1 % 30.9 % 2.2 % |
Auditor's remuneration (Tables)
Auditor's remuneration (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Auditor's remuneration | |
Schedule of auditor's remuneration | £m £m £m Fees payable for : - the audit of RBS Group’s annual accounts (1) 3.8 3.5 4.0 - the audit of RBSG plc's subsidiaries (1) 25.7 27.5 22.9 - audit-related assurance services (1,2) 3.2 2.9 4.3 Total audit and audit-related assurance services fees 32.7 33.9 31.2 Other assurance services 1.2 1.3 1.7 Corporate finance services (3) 0.6 0.2 0.2 Total other services 1.8 1.5 1.9 Notes: (1) The 2019 audit fee was approved by the Group Audit Committee. At 31 December 2019, £16 million has been billed in and paid in respect of the 2019 RBS Group audit fees. (2) Comprises fees of £1.1 million (2018 - £1.1 million) in relation to reviews of interim financial information, £1.4 million (2018 - £1.1 million) in respect of reports to RBS Group’s regulators in the UK and overseas, and £0.7 million (2018 - £0.7 million) in relation to non-statutory audit opinions. (3) Comprises fees of £0.6 million (2018 - £0.2 million) in respect of work performed by the auditors as reporting accountants on debt and equity issuances undertaken by RBS Group. |
Tax (Tables)
Tax (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Tax | |
Schedule of current and deferred tax expense | 2018* 2017* £m £m £m Current tax Charge for the year (673) (1,025) (925) Over provision in respect of prior years 122 125 227 (551) (900) (698) Deferred tax Credit/(charge) for the year 38 (280) 108 Increase/(reduction) in the carrying value of deferred tax assets 62 7 (30) Over/(under) provision in respect of prior years 19 (35) (111) Tax charge for the year (432) (1,208) (731) *Restated for IAS12 ‘Income taxes’. Refer to Accounting policy 1, Other amendments to IFRS. |
Schedule of reconciliation of actual tax charge from the expected tax charge | 2018 * 2017* £m £m £m Expected tax charge (804) (638) (431) Losses and temporary differences in year where no deferred tax asset recognised (4) (55) (303) Foreign profits taxed at other rates 23 (8) 104 UK tax rate change impact — — (7) Items not allowed for tax: - losses on disposals and write-downs (71) (44) (69) - UK bank levy (26) (38) (45) - regulatory and legal actions (165) (203) (56) - other disallowable items (62) (63) (110) Non-taxable items: - Alawwal bank merger gain disposal 215 — — - FX recycling on the liquidation of RFS Holdings 279 — — - other non-taxable items 80 47 134 Taxable foreign exchange movements (1) (27) 27 Losses brought forward and utilised 27 14 11 Increase/(decrease) in the carrying value of deferred tax assets in respect of: - UK losses 129 7 (30) - Ireland losses (67) — — Banking surcharge (199) (357) (165) Tax on paid-in equity 73 67 93 Adjustments in respect of prior years (1) 141 90 116 Actual tax charge (432) (1,208) (731) *Restated for IAS12 ‘Income taxes’. Refer to Accounting policy 1, Other amendments to IFRS. Note: (1) 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. |
Schedule of deferred tax asset and liability | £m £m Deferred tax asset (1,011) (1,412) Deferred tax liability 266 454 Net deferred tax asset (745) (958) |
Schedule of net deferred tax asset | Tax Accelerated losses capital Expense Financial carried Pension allowances provisions instruments forward Other Total £m £m £m £m £m £m £m At 1 January 2018 (393) 192 (266) 198 (939) 51 (1,157) Implementation of IFRS 9 on 1 January 2018 — — — 16 — — 16 (Credit)/charge to income statement (40) 22 121 154 5 46 308 (Credit)/charge to other comprehensive income (95) 1 — (23) — 33 (84) Currency translation and other adjustments — 5 (14) 4 (2) (34) (41) At 1 January 2019 (528) 220 (159) 349 (936) 96 (958) Implementation of IFRS16 on 1 January 2019 — — — — — (60) (60) Acquisitions and disposals of subsidiaries (1) (1) — 18 — — 16 Charge/(credit) to income statement 28 (43) 41 (81) (28) (36) (119) Charge/(credit) to other comprehensive income 362 — — 30 — (20) 372 Currency translation and other adjustments — (4) — (1) 13 (4) 4 At 31 December 2019 (139) 172 (118) 315 (951) (24) (745) |
Schedule of recognised deferred tax assets in respect of tax losses | £m £m UK tax losses carried forward - NWM Plc 75 151 - NWB Plc 530 505 - RBS Plc 150 — - Ulster Bank Limited 15 19 Total 770 675 Overseas tax losses carried forward - Ulster Bank Ireland DAC 181 261 951 936 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share | |
Schedule of earnings per share | £m £m £m Earnings Profit attributable to ordinary shareholders 3,133 1,622 752 Weighted average number of shares (millions) Weighted average number of ordinary shares outstanding during the year 12,067 12,009 11,867 Effect of dilutive share options and convertible securities 35 52 69 Diluted weighted average number of ordinary shares outstanding during the year 12,102 12,061 11,936 |
Trading assets and liabilities
Trading assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Trading assets and liabilities | |
Schedule of trading assets and liabilities | Assets £m £m Loans Reverse repos 24,095 24,759 Collateral given 20,579 19,036 Other loans 1,947 1,308 Total loans 46,621 45,103 Securities Central and local government - UK 4,897 6,834 - US 5,458 4,689 - other 14,902 13,498 Financial institutions and Corporate 4,867 4,995 Total securities 30,124 30,016 Total 76,745 75,119 Liabilities Deposits Repos 27,885 25,645 Collateral received 21,509 20,187 Other deposits 1,606 1,788 Total deposits 51,000 47,620 Debt securities in issue 1,762 903 Short positions 21,187 23,827 Total 73,949 72,350 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivatives | |
The summary of actual movements in the fair value of the hedged items attributable to the hedged risk | 2019 2018 Notional Assets Liabilities Notional Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts 3,750 44,792 47,141 3,426 36,545 38,230 Interest rate contracts 11,293 104,957 99,331 10,536 96,410 90,444 Credit derivatives 17 280 359 16 346 208 Equity and commodity contracts 3 — 48 1 48 15 150,029 146,879 133,349 128,897 |
The schedule of derivatives held for hedging purposes | 2019 2018 Changes in fair Changes in fair value used for value used for Notional Assets Liabilities hedge ineffectiveness (1) Notional Assets Liabilities hedge ineffectiveness (1) £bn £m £m £m £bn £m £m £m Fair value hedging Interest rate contracts 65.1 1,186 2,641 (585) 60.0 965 2,061 (7) Cash flow hedging Interest rate contracts 148.4 1,450 833 366 149.7 1,148 872 (770) Exchange rate contracts 12.3 66 8 (59) 12.5 106 — — Net investment hedging Exchange rate contracts 0.4 — 4 8 2.0 32 10 — 226.2 2,702 3,486 (270) 224.2 2,251 2,943 (777) IFRS netting — (2,500) (3,464) — — (1,893) (2,922) — — 202 22 — — 358 21 — Note: (1) The change in fair value used for hedge ineffectiveness includes instruments that were decrecognised in the year. |
Schedule of notional of hedging instruments affected by interest rate benchmark reform (SONIA not subject to reform) | £bn Fair value hedging - LIBOR 40.2 - EURIBOR 11.1 Cash flow hedging - LIBOR 44.2 - EURIBOR 3.4 - SONIA |
The schedule of period in which the hedging contracts ends | 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 20+ years Total 2019 £bn £bn £bn £bn £bn £bn £bn £bn Fair value hedging Hedging assets - Interest rate risk 0.6 1.6 8.1 5.5 12.5 4.4 4.3 37.0 Hedging liabilities - Interest rate risk — 0.5 6.3 12.7 6.6 2.0 — 28.1 Cash flow hedging Hedging assets Interest rate risk 4.8 11.4 31.7 10.7 12.2 — — 70.8 Average fixed interest rate (%) 1.10 0.97 1.20 1.78 1.44 3.12 — 1.11 Hedging liabilities Interest rate risk 1.9 22.0 45.2 5.3 2.4 0.8 — 77.6 Average fixed interest rate (%) 0.83 1.01 0.87 1.32 1.12 4.31 — 0.98 Exchange rate risk — 1.9 6.2 3.1 1.1 — — 12.3 Average USD - £ rate — 1.56 1.30 1.30 1.44 — — 1.35 Average INR - £ rate — 88.64 94.01 — — — — 93.11 Net investment hedging Exchange rate risk 0.1 0.3 — — — — — 0.4 Principal currency hedges Average SEK - £ rate 12.27 12.10 — — — — — 12.21 Average DKK - £ rate 8.78 — — — — — — 8.78 Average NOK - £ rate 12.36 — — — — — — 12.36 2018 Fair value hedging Hedging assets - Interest rate risk 1.0 1.8 11.0 4.9 7.8 3.7 3.8 34.0 Hedging liabilities - Interest rate risk — 2.0 7.5 10.0 4.6 1.9 — 26.0 Cash flow hedging Hedging assets Interest rate risk 3.9 10.9 47.8 8.7 10.5 — — 81.8 Average fixed interest rate (%) 1.87 1.44 1.13 2.00 1.43 — — 1.33 Hedging liabilities Interest rate risk 8.6 18.9 34.1 5.1 0.4 0.8 — 67.9 Average fixed interest rate (%) 0.54 0.56 1.07 1.34 3.96 4.31 — 0.94 Exchange rate risk — — 5.8 4.7 2.0 — — 12.5 Average USD - £ rate — — 1.32 1.37 1.50 — — 1.37 Net investment hedging Exchange rate risk 1.2 0.6 0.2 — — — — 2.0 |
The schedule of assets and liabilities subject to hedging derivatives | Changes in fair value Impact on hedged Carrying value Impact on hedged used as a basis to items ceased to be of hedged items included determine adjusted for assets and liabilities in carrying value ineffectiveness (1) hedging gains or losses 2019 £m £m £m £m Fair value hedging - interest rate Loans to banks and customers - amortised cost 6,716 1,023 165 86 Other financial assets - securities 35,796 1,274 1,474 — Total 42,512 2,297 1,639 86 Other financial liabilities - debt securities in issue 26,811 830 (807) 30 Subordinated liabilities 5,398 (275) (222) 24 Total 32,209 555 (1,029) 54 Cash flow hedging - interest rate Loans to banks and customers - amortised cost 69,254 — (566) — Other financial assets - securities 2,275 — (16) — Total 71,529 — (582) — Cash flow hedging - interest rate (2) Bank and customer deposits 75,837 — 225 — Other financial liabilities - debt securities in issue 1,009 — 14 — Cash flow hedging - exchange rate Other financial liabilities - debt securities in issue 12,264 — 59 — Subordinated liabilities — — — — Total 89,110 — 298 — 2018 Fair value hedging - interest rate Loans to banks and customers - amortised cost 6,197 875 (62) 91 Other financial assets - securities 31,879 362 108 10 Total 38,076 1,237 46 101 Other financial liabilities - debt securities in issue 23,289 (19) (7) — Subordinated liabilities 2,359 22 15 — Total 25,648 3 8 — Fair value hedging - exchange rate Other financial assets - securities 3 — — — Cash flow hedging - interest rate Loans to banks and customers - amortised cost 81,880 — 686 Bank and customer deposits 67,854 — (28) — Cash flow hedging - exchange rate Other financial liabilities - debt securities in issue 5,590 — — Subordinated liabilities 6,902 — — — Total 162,226 — 658 — Notes: (1) The change in fair value used for hedge ineffectiveness instruments derecognised in the year. (2) Comparative period balances are nil. |
Schedule of risk exposures will be affected by interest rate benchmark reform (notional, fair value) | Hedged Notional adjustment £bn £m Fair value hedging - LIBOR 42.0 908 - EURIBOR 12.7 93 Cash flow hedging - LIBOR 9.6 (115) - EURIBOR 3.3 (46) - BOE Base rate 34.7 (172) - ECB REFI rate 0.1 0 - SONIA 0.1 0 |
Summary of hedge ineffectiveness recognized in other operating income | £m £m £m Fair value hedging Gains/(losses) on the hedged items attributable to the hedged risk 610 54 (48) (Losses)/gains on the hedging instruments (585) (7) 78 Fair value hedging ineffectiveness 25 47 30 Cash flow hedging - Interest rate risk 23 (112) 9 Cash flow hedging ineffectiveness 23 (112) 9 Total 48 (65) 39 |
Financial instruments - class_2
Financial instruments - classification (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments - classification | |
Schedule of classification for financial assets and liabilities | Amortised Other MFVTPL(1) FVOCI (2) cost assets Total Assets £m £m £m £m £m Cash and balances at central banks 77,858 77,858 Trading assets 76,745 76,745 Derivatives (3) 150,029 150,029 Settlement balances 4,387 4,387 Loans to banks - amortised cost (4) 10,689 10,689 Loans to customers - amortised cost 326,947 326,947 Other financial assets 715 49,283 11,454 61,452 Intangible assets 6,622 6,622 Other assets 8,310 8,310 31 December 2019 227,489 49,283 431,335 14,932 723,039 Amortised Other MFVPL(1) FVOCI (3) cost assets Total £m £m £m £m £m Cash and balances at central banks 88,897 88,897 Trading assets 75,119 75,119 Derivatives (3) 133,349 133,349 Settlement balances 2,928 2,928 Loans to banks - amortised cost (4) 12,947 12,947 Loans to customers - amortised cost 305,089 305,089 Other financial assets 1,638 46,077 11,770 59,485 Intangible assets 6,616 6,616 Other assets 9,805 9,805 31 December 2018 210,106 46,077 421,631 16,421 694,235 Held-for- Amortised Other trading DFV (5) cost liabilities Total Liabilities £m £m £m £m £m Bank deposits (6) 20,493 20,493 Customer deposits 369,247 369,247 Settlement balances 4,069 4,069 Trading liabilities 73,949 73,949 Derivatives (7) 146,879 146,879 Other financial liabilities (8) 2,258 42,962 45,220 Subordinated liabilities 724 9,255 9,979 Other liabilities (9) 2,206 7,441 9,647 31 December 2019 220,828 2,982 448,232 7,441 679,483 Bank deposits (6) 23,297 23,297 Customer deposits 360,914 360,914 Settlement balances 3,066 3,066 Trading liabilities 72,350 72,350 Derivatives (7) 128,897 128,897 Other financial liabilities (8) 2,840 36,892 39,732 Subordinated liabilities 867 9,668 10,535 Other liabilities 2,218 6,736 8,954 31 December 2018 201,247 3,707 436,055 6,736 647,745 Notes: (1) Mandatory fair value through profit or loss. (2) Fair value through other comprehensive income (3) Includes net hedging derivatives of £202 million (2018 - 358 million). (4) Includes items in the course of collection from other banks of £50 million (2018 - £484 million). (5) Designated as at fair value through profit or loss. (6) Includes items in the course of transmission to other banks of £2 million (2018 - £125 million). (7) Includes net hedging derivatives of £22 million (2018 - £22 million). (8) The carrying amount of other customer accounts designated as at fair value through profit or loss is nil (2018 - £26 million) higher than the principal amount. (9) Includes lease liabilities. |
Schedule of financial assets and liabilities | £m £m Reverse repos Trading assets 24,095 24,759 Loans to banks - amortised cost 165 3,539 Loans to customers - amortised cost 10,649 9 Repos Bank deposits 2,597 941 Customer deposits 1,765 3,774 Trading liabilities 27,885 25,645 |
Schedule of financial assets and liabilities that are offset on the balance sheet | Instruments which can be offset Potential for offset not recognised by IFRS Effect of Net amount after Instruments master netting Other the effect of netting outside IFRS Balance and similar Cash financial agreements and netting Balance Gross offset sheet agreements collateral collateral related collateral agreements sheet total 2019 £m £m £m £m £m £m £m £m £m Derivative assets 158,850 (10,913) 147,937 (122,697) (18,685) (4,292) 2,263 2,092 150,029 Derivative liabilities 154,396 (11,724) 142,672 (122,697) (17,296) (1,276) 1,403 4,207 146,879 Net position (1) 4,454 811 5,265 — (1,389) (3,016) 860 (2,115) 3,150 Trading reverse repos 52,007 (28,720) 23,287 (562) — (22,262) 463 808 24,095 Trading repos 54,131 (28,720) 25,411 (562) — (24,808) 41 2,474 27,885 Net position (2,124) — (2,124) — — 2,546 422 (1,666) (3,790) 2018 Derivative assets 136,329 (5,041) 131,288 (106,762) (17,937) (4,469) 2,120 2,061 133,349 Derivative liabilities 133,965 (6,776) 127,189 (106,762) (15,227) (3,466) 1,734 1,708 128,897 Net position (1) 2,364 1,735 4,099 — (2,710) (1,003) 386 353 4,452 Trading reverse repos 53,148 (31,376) 21,772 (762) — (21,000) 10 2,987 24,759 Trading repos 55,864 (31,376) 24,488 (762) — (23,726) — 1,157 25,645 Net position (2,716) — (2,716) — — 2,726 10 1,830 (886) Note: (1) The net IFRS offset balance of £811 million (2018 - £1,735 million) relates to variation margin netting reflected on other balance sheet lines. |
Financial instruments - valua_2
Financial instruments - valuation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments - classification | |
Schedule of financial assets and liabilities at fair value by valuation hierarchy | 2019 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 £m £m £m £m £m £m Assets Trading assets Loans — 46,172 449 — 44,983 120 Securities 20,865 8,704 555 22,003 7,312 701 Derivatives — 148,800 1,229 — 131,513 1,836 Other financial assets Loans — 307 58 — 768 136 Securities 41,044 8,326 263 40,132 6,172 507 Total financial assets held at fair value 61,909 212,309 2,554 62,135 190,748 3,300 Liabilities Trading liabilities Deposits — 50,944 56 — 47,243 377 Debt securities in issue — 1,703 59 — 791 112 Short positions 15,565 5,622 — 18,941 4,886 — Derivatives — 145,818 1,061 — 127,709 1,188 Other financial liabilities Debt securities in issue — 2,117 141 — 2,348 280 Other deposits — — — — 212 — Subordinated liabilities — 724 — — 867 — Total financial liabilities held at fair value 15,565 206,928 1,317 18,941 184,056 1,957 Notes: (1) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instrument was transferred. There were no significant transfers between level 1 and level 2. (2) For an analysis of debt securities held at mandatorily fair value through profit or loss by issuer as well as ratings and derivatives, by type and contract, refer to Capital and Risk management – Credit risk. (3) 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. |
Schedule of financial instruments valuation adjustments | Adjustment £m £m Funding – FVA 244 250 Credit – CVA 386 419 Bid – Offer 165 238 Product and deal specific 238 327 1,033 1,234 |
Schedule of valuation techniques for unobservable inputs of level 3 financial instruments | 2019 2018 Financial instrument Valuation Technique Unobservable inputs Units Low High Low High Trading assets and Other financial assets Loans Price-based Price % — 101 — 132 Credit Spreads Credit spread bps 53 101 — — Debt securities Price-based Price % — 246 — 154 Equity Shares Price-based Price GBP — 25,914 — 24,181 Price % — 80 — — Valuation Discount factor % 6 9 8 11 Fund NAV % 80 120 80 120 Trading liabilities and Other financial liabilities Deposits DCF based on recoveries Correlation % — — (45) 99 Interest rate % — — (0.36) 1.74 Price-based Price % — 98 — — Yield analysis Day count Number 65 95 — — Debt securities in issue Price-based Price CCY 44 JPY 146 EUR 21 JPY 136 EUR Valuation Fund NAV GBP — — — 622 Derivative assets and liabilities Credit derivatives DCF based on recoveries Credit spreads bps 6 500 18 500 Option pricing Correlation % (50) 80 (50) 80 Volatility % 27 80 47 80 Upfront points % — 99 — 100 Recovery rate % 10 40 10 40 Price-based Price % — — 90 110 Interest rate & FX Option pricing Correlation % (50) 99 (45) 99 derivatives Volatility % 19 70 1 76 Constant Prepayment Rate % 2 15 — — Mean Reversion % — 92 — — Equity derivatives Option pricing Correlation % (53) 87 (57) 92 Forward Points — — 864 7,106 Volatility % — — 11 23 Notes: (1) The table above presents the range of values for significant inputs used in the valuation of level 3 assets and liabilities. The range represents the highest and lowest values of the input parameters and therefore is not a measure of parameter uncertainty. 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, their 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. (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. (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, values may be 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 (NAV). Similarly for equity or bond fund investments, prices may be estimated from valuation or credit statements using NAV or similar measures. (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) Mean reversion: a measure of how much a rate reverts to its mean level. (11) Constant prepayment rate: the rate is used to reflect how fast a pool of assets pay down. (12) Day count: yield analysis on deposits are calculated using day count as an input, referring to the maturity of the deposit. (13) RBS does not have any material liabilities measured at fair value that are issued with an inseparable third party credit enhancement. |
Schedule financial instruments carried at fair value on the balance sheet by valuation sensitivities for level 3 balances | 2019 2018 Level 3 Favourable Unfavourable Level 3 Favourable Unfavourable £m £m £m £m £m £m Assets Trading assets Loans 449 10 (10) 120 10 (10) Securities 555 — — 701 20 (10) Derivatives Interest rate 1,015 160 (160) 1,487 120 (120) Foreign exchange 98 10 (10) 130 10 (10) Other 116 10 (10) 219 10 (20) Other financial assets Loans 58 — — 136 10 (20) Securities 263 80 (20) 507 50 (30) 2,554 270 (210) 3,300 230 (220) Liabilities Trading liabilities Deposits 56 — — 377 40 (40) Debt securities in issue 59 — — 112 10 (10) Derivatives Interest rate 630 70 (70) 808 70 (70) Foreign exchange 222 10 (10) 279 10 (10) Other 209 20 (10) 101 — (10) Other financial liabilities - debt securities in issue 141 10 (10) 280 10 (10) 1,317 110 (100) 1,957 140 (150) |
Schedule of movement in level 3 assets and liabilities | 2019 2018 Trading Other financial Total Total Trading Other financial Total Total assets (2) assets (3) assets liabilities assets (2) assets (3) assets liabilities £m £m £m £m £m £m £m £m At 1 January 2,657 643 3,300 1,957 2,692 530 3,222 2,187 Amounts recorded in the income statement (1) (418) (1) (419) 162 (147) 178 31 (344) Amounts recorded in the statement of comprehensive income — 86 86 — — 23 23 — Level 3 transfers in 492 2 494 104 1,307 19 1,326 419 Level 3 transfers out (857) (59) (916) (588) (624) (1) (625) (231) Issuances — — — 46 — — — 47 Purchases 1,121 15 1,136 532 871 16 887 401 Settlements (218) (38) (256) (429) (512) (3) (515) (204) Sales (541) (326) (867) (466) (930) (125) (1,055) (316) Foreign exchange and other adjustments (3) (1) (4) (1) — 6 6 (2) At 31 December 2,233 321 2,554 1,317 2,657 643 3,300 1,957 Amounts recorded in the income statement in respect of balances held at year end - unrealised (421) 8 (413) 110 (134) 158 24 (330) - realised — — — — (2) 6 4 — Notes: (1) There were £596 million net losses on trading assets and liabilities (2018 - £185 million gains) recorded in income from trading activities. Net gains on other instruments of £15 million (2018 – £190 million) were recorded in other operating income and interest income as appropriate. (2) Trading assets comprise assets held at fair value in trading portfolios. (3) Other financial assets comprise fair value through other comprehensive income, designated as at fair value through profit or loss and other fair value through profit or 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 hierarchy level carrying value value Fair value Level 1 Level 2 Level 3 2019 £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 77.9 — — — — — Settlement balances 4.4 — — — — — Loans to banks — 10.7 10.7 — 6.2 4.5 Loans to customers — 326.9 324.0 — 11.0 313.0 Other financial assets - securities — 11.5 11.6 5.9 2.8 2.9 Financial liabilities Bank deposits 4.1 16.4 16.5 — 12.2 4.3 Customer deposits 312.4 56.8 56.9 — 7.5 49.4 Settlement balances 4.1 — — — — — Other financial liabilities - debt securities in issue — 43.0 43.7 — 38.5 5.2 Subordinated liabilities — 9.3 10.0 — 9.9 0.1 Other liabilities - notes in circulation 2.2 — — — — — 2018 Financial assets Cash and balances at central banks 88.9 — — — — — Settlement balances 2.9 — — — — — Loans to banks 0.5 12.4 12.4 — 9.2 3.2 Loans to customers — 305.1 301.7 — 0.5 301.2 Other financial assets - securities — 11.8 11.8 7.3 3.0 1.5 Financial liabilities Bank deposits 4.2 19.1 18.5 — 13.9 4.6 Customer deposits 307.1 53.8 54.6 — 10.4 44.2 Settlement balances 3.1 — — — — — Other financial liabilities - debt securities in issue — 36.9 38.6 — 36.9 1.7 Subordinated liabilities — 9.7 10.0 — 9.9 0.1 Other liabilities - notes in circulation 2.2 — — — — — |
Financial Instruments - matur_2
Financial Instruments - maturity analysis (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments - classification | |
Schedule of residual maturity of financial instruments | 2019 2018 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 77,858 — 77,858 88,897 — 88,897 Trading assets 51,825 24,920 76,745 49,094 26,025 75,119 Derivatives 40,798 109,231 150,029 28,503 104,846 133,349 Settlement balances 4,387 — 4,387 2,928 — 2,928 Loans to banks - amortised cost 10,676 13 10,689 12,833 114 12,947 Loans to customers - amortised cost 77,742 249,205 326,947 67,354 237,735 305,089 Other financial assets 10,187 51,265 61,452 11,681 47,804 59,485 Liabilities Bank deposits 9,286 11,207 20,493 7,438 15,859 23,297 Customer deposits 367,098 2,149 369,247 359,148 1,766 360,914 Settlement balances 4,069 — 4,069 3,066 — 3,066 Trading liabilities 53,047 20,902 73,949 50,668 21,682 72,350 Derivatives 41,276 105,603 146,879 29,028 99,869 128,897 Other financial liabilities 11,915 33,305 45,220 8,240 31,492 39,732 Subordinated liabilities 160 9,819 9,979 299 10,236 10,535 Lease liabilities 194 1,629 1,823 — — — |
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 2019 £m £m £m £m £m £m Assets by contractual maturity Cash and balances at central banks 77,858 — — — — — Settlement balances 4,387 — — — — — Loans to banks - amortised cost 9,659 1,032 5 — — — Other financial assets (1) 4,619 6,644 16,287 9,857 15,766 5,081 Total maturing assets 96,523 7,676 16,292 9,857 15,766 5,081 Loans to customers - amortised cost 48,793 36,108 70,957 51,667 66,453 79,174 Finance lease 72 289 920 646 802 653 Derivatives held for hedging 33 7 63 103 56 42 145,421 44,080 88,232 62,273 83,077 84,950 Liabilities by contractual maturity Bank deposits 7,269 2,017 11,297 38 — — Settlement balance 4,069 — — — — — Other financial liabilities 4,810 7,602 11,849 13,935 9,426 328 Subordinated liabilities 21 541 3,295 5,270 327 1,700 Other liabilities (2) 2,109 — — — — — Total maturing liabilities 18,278 10,160 26,441 19,243 9,753 2,028 Customer deposits 358,359 8,773 2,105 22 23 17 Lease liabilities 54 140 313 249 457 571 Derivatives held for hedging 9 22 50 40 59 46 376,700 19,095 28,909 19,554 10,292 2,662 Guarantees and commitments notional amount Guarantees (3) 2,757 — — — — — Commitments (4) 117,228 — — — — — 119,985 — — — — — 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2018 £m £m £m £m £m £m Assets by contractual maturity Cash and balances at central banks 88,897 — — — — — Settlement balances 2,928 — — — — — Loans to banks - amortised cost 11,920 925 106 — — — Other financial assets (1) 4,451 7,397 14,138 11,279 11,826 2,744 Total maturing assets 108,196 8,322 14,244 11,279 11,826 2,744 Loans to customers - amortised cost 42,953 31,719 65,486 51,319 66,149 78,902 Finance lease 143 368 955 520 829 641 Derivatives held for hedging 40 98 184 95 49 34 151,332 40,507 80,869 63,213 78,853 82,321 Liabilities by contractual maturity Bank deposits 7,417 21 13,785 2,003 — 59 Settlement balances 3,066 — — — — — Other financial liabilities 1,736 7,226 10,724 11,658 9,316 2,029 Subordinated liabilities 131 637 1,476 7,532 1,737 1,422 Other liabilities (2) 2,152 — — — — — Total maturing liabilities 14,502 7,884 25,985 21,193 11,053 3,510 Customer deposits 351,054 8,114 1,727 14 6 26 Derivatives held for hedging 15 30 94 35 53 45 365,571 16,028 27,806 21,242 11,112 3,581 Guarantees and commitments notional amount Guarantees (3) 3,952 — — — — — Commitments (4) 116,843 — — — — — 120,795 — — — — — Notes: (1) Other financial assets excludes equity shares. (2) Other liabilities include notes in circulation. (3) 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. (4) 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. |
Loan impairment provisions (Tab
Loan impairment provisions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Loan impairment provisions | |
Schedule of loan exposure and impairment metrics | 2018* £m £m Loans - amortised cost Stage 1 305,502 285,985 Stage 2 27,868 26,097 Stage 3 6,598 8,174 Of which: individual 2,051 2,860 Of which: collective 4,547 5,314 339,968 320,256 ECL provisions (1) - Stage 1 322 297 - Stage 2 752 772 - Stage 3 2,718 2,782 Of which: individual 796 850 Of which: collective 1,922 1,932 3,792 3,851 ECL provision coverage (2,3) - Stage 1 (%) 0.11 0.10 - Stage 2 (%) 2.70 2.96 - Stage 3 (%) 41.19 34.03 1.12 1.20 Impairment losses ECL charge (4) 696 398 Stage 1 (212) (143) Stage 2 318 292 Stage 3 590 249 Of which: individual 303 94 Of which: collective 287 155 ECL loss rate - annualised (basis points) (3) 20.47 12.43 Amounts written off 792 1,494 Of which: individual 372 272 Of which: collective 420 1,222 *2018 data has been restated for a change to presentation of unrecognised interest. Refer to Accounting policy 1, Other amendments to IFRS, for further details. Notes: (1) Includes £4 million (2018 - £5 million) related to assets classified as FVOCI. (2) ECL provisions coverage is calculated as ECL provisions divided by loans – amortised cost. (3) ECL provisions coverage and ECL loss rates are calculated on third party loans and related ECL provisions and charge respectively. (4) Includes a £2 million charge (2018 - £3 million charge) related to other financial assets, of which at a £1 million release (2018 - £1 million charge) related to assets classified as FVOCI; and nil (2018 - £31 million release) related to contingent liabilities. (5) The table above shows gross loans only and excludes amounts that are outside the scope of the ECL framework. Refer to page 144 for Financial instruments within the scope of the IFRS 9 ECL framework for further details. Other financial assets within the scope of the IFRS 9 ECL framework were cash and balances at central banks totalling £76.1 billion and debt securities of £59.4 billion (2018 – £87.2 billion and £57.0 billion respectively). |
Other financial assets (Tables)
Other financial assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other financial assets | |
Schedule of other financial assets | Debt securities Central and local government Other Equity Other UK US Other debt Total shares loans Total 2019 £m £m £m £m £m £m £m £m Mandatory fair value through profit or loss — — — 305 305 45 365 715 Fair value through other comprehensive income 18,437 13,981 8,786 7,130 48,334 949 — 49,283 Amortised cost 5,411 242 120 5,681 11,454 — — 11,454 Total 23,848 14,223 8,906 13,116 60,093 994 365 61,452 2018 Mandatory fair value through profit or loss — — — 669 669 65 904 1,638 Fair value through other comprehensive income 17,192 11,767 11,329 5,306 45,594 483 — 46,077 Amortised cost 6,928 264 120 4,458 11,770 — — 11,770 Total 24,120 12,031 11,449 10,433 58,033 548 904 59,485 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets | |
Schedule of Intangible assets | 2019 2018 Goodwill Other (1) Total Goodwill Other (1) Total Cost £m £m £m £m £m £m At 1 January 18,164 2,024 20,188 18,039 2,259 20,298 Currency translation and other adjustments (180) 2 (178) 77 9 86 Acquisition of subsidiaries 1 — 1 48 2 50 Additions — 380 380 — 364 364 Disposals and write-off of fully amortised assets (2) (8,005) (113) (8,118) — (610) (610) At 31 December 9,980 2,293 12,273 18,164 2,024 20,188 Accumulated amortisation and impairment At 1 January 12,558 1,014 13,572 12,481 1,274 13,755 Currency translation and other adjustments (180) 1 (179) 77 5 82 Disposals and write-off of fully amortised assets (8,005) (72) (8,077) — (573) (573) Charge for the year — 291 291 — 271 271 Impairment of goodwill and other intangible assets — 44 44 — 37 37 At 31 December 4,373 1,278 5,651 12,558 1,014 13,572 Net book value at 31 December 5,607 1,015 6,622 5,606 1,010 6,616 Notes: (1) Principally internally generated software. (2) Goodwill that arose on the acquisition of ABN AMRO Holding N.V.. |
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 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 2019 £bn % % £bn £bn £bn £bn £bn % UK Personal Banking 2.7 1.6 13.3 8.7 (2.2) (1.0) (2.1) (0.9) 16.3 Commercial Banking 2.6 1.6 13.4 4.1 (1.8) (0.7) (2.1) (1.1) 12.7 RBS International 0.3 1.6 12.0 2.1 (0.5) (0.3) (0.4) (1.2) 16.8 31 December 2018 UK Personal & Business Banking 3.4 1.8 13.1 14.4 (2.2) (1.4) (4.0) (1.7) 27.7 Commercial & Private Banking 1.9 1.8 13.0 4.5 (1.2) (0.8) (2.3) (1.0) 17.6 RBS International 0.3 1.8 12.9 0.7 (0.2) (0.2) (0.4) (0.1) 18.5 |
Other assets (Tables)
Other assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other assets | |
Schedule of other assets | £m £m Property, plant and equipment 4,928 4,351 Deferred tax (Note 7) 1,011 1,412 Assets of disposal groups (1) 66 1,404 Prepayments 380 435 Accrued income 275 317 Interests in associates (2) 436 404 Pension schemes in net surplus (Note 5) 614 520 Tax recoverable 46 37 Other assets 554 925 Other assets 8,310 9,805 Notes: (1) Includes interest in Alawwal bank of nil (2018 - £1,179 million). (2) Includes interest in Business Growth Fund £424 million (2018 - £387 million). |
Other financial liabilities (Ta
Other financial liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other financial liabilities | |
Schedule of other financial liabilities | £m £m Customer deposits designated as at fair value through profit or loss — 212 Debt securities in issue - designated as at fair value through profit or loss 2,258 2,628 - amortised cost 42,962 36,892 Total 45,220 39,732 |
Subordinated liabilities (Table
Subordinated liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Subordinated liabilities | |
Schedule of subordinated liabilities | £m £m Dated loan capital 7,775 8,262 Undated loan capital 2,058 2,127 Preference shares 146 146 9,979 10,535 |
Schedule of contractual maturity of subordinated liabilities | Capital New issue treatment £m £m The Royal Bank of Scotland Group plc US$750 million 3.754% dated notes 2029 Tier 2 577 — 577 — Redemptions The Royal Bank of Scotland Group plc US$350 million 4.70% dated notes 2018 Ineligible — 267 €1,000 million 3.63% dated notes 2024 (callable March 2019) Tier 2 855 — 855 267 NatWest Markets Plc €2,000 million 6.934% dated notes 2018 Tier 2 — 1,743 £103 million 9.5% undated subordinated bonds 2018 (callable August 2018) Ineligible — 103 £35 million 5.5% fixed rate undated subordinated notes (callable December 2019) Ineligible 35 — 35 1,846 NatWest Plc SEK 90 million floating rate notes 2019 Tier 1 8 — 8 — NWM N.V. and subsidiaries US$500 million 4.65% dated notes 2018 Tier 2 — 141 US$16 million floating rate notes 2019 Tier 2 10 2 US$71.8 million floating rate notes 2019 Tier 2 56 — €250 million 4.70% notes 2019 (partial redemption) Tier 2 145 — 211 143 |
Other liabilities (Tables)
Other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other liabilities | |
Schedule of other liabilities | £m £m Retirement benefit liabilities (Note 5) 119 165 Deferred tax (Note 7) 266 454 Notes in circulation 2,109 2,152 Current tax 132 100 Accruals 1,125 1,047 Deferred income 362 451 Lease liabilities (Note 22) (3) 1,823 — Other liabilities 1,034 1,581 Provisions for liabilities and charges 2,677 3,004 9,647 8,954 |
Schedule for provisions for liabilities and charges | Payment Other Litigation protection customer and other insurance(1) redress regulatory Other(2) Total Provisions for liabilities and charges £m £m £m £m £m At 1 January 2019 695 536 783 990 3,004 Implementation of IFRS 16 on 1 January 2019 (3) — — — (170) (170) ECL impairment charge — — — 29 29 Transfer (to)/from accruals and other liabilities — (3) — 15 12 Currency translation and other movements — (15) (6) (19) (40) Transfer — 35 (35) — — Charge to income statement 900 141 88 434 1,563 Releases to income statement — (48) (111) (161) (320) Provisions utilised (439) (332) (293) (337) (1,401) At 31 December 2019 1,156 314 426 781 2,677 Notes: (1) The balance at 31 December 2019 includes provisions held in relation to offers made in 2018 and earlier years of £97 million. (2) Materially comprises provisions relating to property closures and restructuring costs. (3) Refer to Note 22 for further information on the impact of IFRS 16 implementation. |
Schedule of the sensitivity of the provision | Sensitivity Consequential Claims change in processed as at Claims still Change in provision Assumption 31 December 2019 to process assumption £m Average redress (1) £ 1,631 £ 1,552 +/- £150 +/- 74 No PPI % (2) 28 % 60 % +/- 3% +/- 13 Uphold rate (3) 85 % 94 % +/- 2% +/- 16 Notes: (1) Average redress for PPI (mis-sale) and Plevin (commission ) pay-outs. (2) No PPI % relates to those cases where no PPI policy exists. (3) Average uphold rate per customer initiated claims received directly by RBS Group, including those received via claims management companies, to end of timebar for both PPI (mis-sale) and Plevin (commission), excluding those for which no PPI policy exists. |
Share capital and other equity
Share capital and other equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share capital and other equity | |
Schedule of allotted, called up and fully paid shares | Number of shares Allotted, called up and fully paid £m £m 000s 000s Ordinary shares of £1 12,094 12,049 12,093,909 12,048,605 Non-cumulative preference shares of US$0.01 (1) — — 10 10 Cumulative preference shares of £1 1 1 900 900 Note: (1) No shares were redeemed in 2019. (2018 – 26 million shares with a total nominal value of £0.2 million were redeemed). |
Schedule of movement in allotted, called up and fully paid ordinary shares | Number of Movement in allotted, called up and fully paid ordinary shares £m shares - 000s At 1 January 2018 11,965 11,964,565 Shares issued 84 84,040 At 1 January 2019 12,049 12,048,605 Shares issued 45 45,304 At 31 December 2019 12,094 12,093,909 |
Schedule of non-cumulative preference shares | Number of shares Redemption Redemption Non-cumulative preference shares classified as equity in issue Interest rate date on or after price per share Shares of US$0.01 - Series U 10,130 floating 29 September 2017 US$100,000 Note: (1) Preference shares where distributions are discretionary are classified as equity. |
Schedule of other equity instruments | £m £m £m Additional Tier 1 notes (1) US$2.0 billion 7.5% notes callable August 2020 (2) 1,278 1,278 1,278 US$1.15 billion 8% notes callable August 2025 (2) 734 734 734 US$2.65 billion 8.625% notes callable August 2021 (3) 2,046 2,046 2,046 4,058 4,058 4,058 Notes: (1) The coupons on these notes are non-cumulative and payable at the company’s discretion. In the event RBS 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. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of impact on the Group's balance sheet and retained earnings | £bn Retained earnings at 1 January 2019 14.3 Loans to customers - Finance leases 0.2 Other assets - Net right of use assets 1.3 - Recognition of lease liabilities (1.9) - Provision for onerous leases 0.2 Other liabilities (1.7) Net impact on retained earnings (0.2) Retained earnings at 1 January 2019 14.1 |
Summary of most significant differences between the IAS 17 lease commitments and the lease liabilities recognised on transition to IFRS 16 | £m Operating lease commitments at 31 December 2018 2,689 Adjustments as a result of different treatment of extension and termination options (134) Discounted using the incremental borrowing rate (684) Other 5 Lease liabilities recognised as at 1 January 2019 on adoption of IFRS 16 1,876 |
Schedule of amounts recognized in consolidated income and balance sheet | £m Amounts recognised in consolidated income statement Interest payable (44) Depreciation (1) (224) Rental expense on short term leases (4) Income from subleasing right of use assets 9 Rental expense in respect of operating leases in 2018 was £233 million. £m Amounts recognised on balance sheet Right of use assets included in property, plant and equipment (2) 1,162 Additions to right of use assets 135 Lease liabilities (3) (1,823) The total cash outflow for leases is £222 million. Notes: (1) Includes impairment of right of use assets of £86 million. (2) Includes right of use asset for plant and equipment of £23 million and depreciation of £5 million. (3) Contractual cashflows of lease liabilities is shown in Note 13. |
Schedule of minimum rentals payable under non-cancellable leases for lessee leases | £m Operating leases Minimum rentals payable under non-cancellable leases (1) - within 1 year 232 - after 1 year but within 5 years 736 - after 5 years 1,721 2,689 Note: (1) |
Schedule of amounts included in consolidated income statement for lessor leases | £m Amounts included in consolidated income statement Finance leases Finance income on the net investment in leases 314 Operating leases Lease income 27 |
Schedule of amount receivable under finance leases | £m Amount recievable under finance leases Within 1 year 3,388 1 to 2 years 2,229 2 to 3 years 1,733 3 to 4 years 758 4 to 5 years 682 After 5 years 1,758 Lease payments total 10,548 Unguaranteed residual values (215) Future drawdowns (30) Unearned income (1,196) Present value of lease payments 9,107 Impairments (110) Net investment in finance leases 8,997 |
Schedule of minimum amounts receivable under non-cancellable leases | 2018 Finance lease contracts and hire purchase agreements Gross Present value Other Future Present amounts adjustments movements Drawdowns value £m £m £m £m £m Within 1 year 3,237 (208) (123) (70) 2,836 1 to 5 years 4,566 (370) (100) — 4,096 After 5 years 1,935 (710) (38) — 1,187 Total 9,738 (1,288) (261) (70) 8,119 |
Schedule of undiscounted lease receipts from operating leases | £m Amounts recievable under operating leases Within 1 year 154 1 to 2 years 123 2 to 3 years 83 3 to 4 years 48 4 to 5 years 17 After 5 years 12 Total 437 £m Within 1 year 139 1 to 5 years 325 After 5 years 49 Total 513 |
Schedule of nature of operating lease assets on the balance sheet | Nature of operating lease assets on the balance sheet £m £m Transportation 334 313 Cars and light commercial vehicles 24 11 Other 295 285 653 609 |
Schedule of residual value exposures | 2018 Year in which residual value will be recovered After 1 year After 2 years Within 1 but within but within After 5 year 2 years 5 years years Total £m £m £m £m £m Operating leases - transportation 25 15 94 14 148 - cars and light commercial vehicles 1 1 2 — 4 - other 26 19 37 10 92 Finance lease contracts 68 32 67 38 205 Hire purchase agreements 55 2 — — 57 175 69 200 62 506 |
Structured entities (Tables)
Structured entities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Structured entities | |
Schedule of analyses the asset categories of own-asset securitisations transferred assets continue to be recorded on RBS's balance sheet | 2019 2018 Debt securities in issue Debt securities in issue Held by third Held by Held by third Held by Asset type Assets parties RBS (1) Total Assets parties RBS (1) Total £m £m £m £m £m £m £m £m Mortgages - RoI 2,221 468 1,917 2,385 2,817 778 2,239 3,017 Cash deposits 156 — — — 221 2,377 3,038 Note: (1) Debt securities retained by RBS may be pledged with central banks. |
Schedule of RBS's interest in unconsolidated structured entities | 2019 2018 Asset backed Investment Asset backed Investment securitisation funds securitisation funds vehicles and other Total vehicles and other Total £m £m £m £m £m £m Trading assets and derivatives Trading assets 760 52 812 621 148 769 Derivative assets 196 24 220 200 47 247 Derivative liabilities (154) (4) (158) (156) (49) (205) Total 802 72 874 665 146 811 Non trading assets Loans to customers 1,544 636 2,180 1,972 536 2,508 Other financial assets 5,373 107 5,480 4,521 — 4,521 Total 6,917 743 7,660 6,493 536 7,029 Liquidity facilities/loan commitments 1,619 297 1,916 2,138 213 2,351 Guarantees — — — 3 10 13 Maximum exposure 9,338 1,112 10,450 9,299 905 10,204 |
Asset transfers (Tables)
Asset transfers (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Asset transfers | |
Schedule of Assets subject to securities repurchase agreements or security lending transactions | The following assets have failed derecognition (1) £m £m Trading assets 23,247 14,020 Other financial assets 4,269 9,890 27,516 23,910 Note: (1) Associated liabilities were £27,342 million (2018 - £23,222 million). |
Schedule of assets pledged as collateral | Assets pledged against liabilities £m £m Trading assets 27,918 35,571 Loans to banks - amortised cost 39 1,050 Loans to customers - amortised cost 17,920 25,930 Other financial assets (1) 4,688 713 50,565 63,264 Note : (1) |
Capital resources (Tables)
Capital resources (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Capital resources | |
Schedule of regulatory capital | PRA transitional basis £m £m Shareholders’ equity (excluding non-controlling interests) Shareholders’ equity 43,547 45,736 Preference shares - equity (496) (496) Other equity instruments (4,058) 41,182 Regulatory adjustments and deductions Own credit (118) (405) Defined benefit pension fund adjustment (474) (394) Cash flow hedging reserve (35) 191 Deferred tax assets (757) (740) Prudential valuation adjustments (431) (494) Goodwill and other intangible assets (6,622) (6,616) Expected losses less impairments (167) (654) Foreseeable ordinary and special dividends (968) (1,326) Foreseeable charges (365) — Other regulatory adjustments (2) (105) (9,939) (10,543) CET1 capital 29,054 30,639 Additional Tier 1 (AT1) capital Qualifying instruments and related share premium 4,051 4,051 Qualifying instruments and related share premium subject to phase out 1,366 1,393 Qualifying instruments issued by subsidiaries and held by third parties subject to phase out 140 140 AT1 capital 5,557 5,584 Tier 1 capital 34,611 36,223 Qualifying Tier 2 capital Qualifying instruments and related share premium 4,867 6,386 Qualifying instruments issued by subsidiaries and held by third parties 1,345 1,565 Tier 2 capital 6,212 7,951 Total regulatory capital 40,823 44,174 |
Memorandum items (Tables)
Memorandum items (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 1,015 427 218 1,097 2,757 3,952 Other contingent liabilities 1,134 600 161 583 2,478 3,052 Standby facilities, credit lines and other commitments 59,878 21,054 31,664 7,164 119,760 119,879 Contingent liabilities and commitments 62,027 22,081 32,043 8,844 124,995 126,883 |
Schedule of contractual obligations for future expenditure not provided for in the accounts | £m £m Capital expenditure on property, plant and equipment 20 17 Contracts to purchase goods or services (1) 614 541 634 558 Note: (1) Of which due within 1 year: £285 million (2018 - £253 million). |
Analysis of the net investmen_2
Analysis of the net investment in business interests and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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(1) (55) (113) (131) Additional investment in associates (9) — Net outflow of cash in respect of acquisitions (55) (122) (131) Net assets/(liabilities) sold 351 — 177 Non-cash consideration — — (15) Profit on disposal — — 155 Net cash and cash equivalents disposed — — — Net inflow/(outflow) of cash in respect of disposals 351 — 317 Dividends received from associates — 5 (1) Cash expenditure on intangible assets (380) (372) (384) Net (outflow)/inflow (84) (489) (199) Note: (1) 2019 includes the purchase of Free agent. |
Analysis of changes in financ_2
Analysis of changes in financing during the year (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 MRELs £m £m £m £m £m £m £m £m £m At 1 January 28,015 27,791 52,979 10,535 12,722 19,419 16,821 9,202 6,832 Issue of ordinary shares 17 144 306 — — — — — — Redemption of paid-in equity — — (720) — — — — — — Issue of subordinated liabilities — — — 577 — — — — — Redemption of subordinated liabilities — — — (1,108) (2,258) (5,747) — — — Interest on subordinated liabilities — — — (510) (566) (717) — — — Issue of MRELs — — — — — — 3,640 6,996 3,612 Maturity/redemption of MRELs — — — — — — (1,285) — (774) Interest on MRELs — — — — — — (428) (237) (139) Net cash (outflow)/inflow from financing 17 144 (414) (1,041) (2,824) (6,464) 1,927 6,759 2,699 Transfer to retained earnings — — (25,789) — — — — — — Ordinary shares issued in respect of employee share schemes 95 80 71 — — — — — — Redemption of debt preference shares — — 748 — — — — — — Other adjustments including foreign exchange — — 196 485 637 (233) 501 860 (329) At 31 December 28,127 28,015 27,791 9,979 10,535 12,722 19,249 16,821 9,202 |
Analysis of cash and cash equ_2
Analysis of cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Analysis of cash and cash equivalents | |
Schedule of the analysis of cash and cash equivalents | £m £m £m At 1 January - cash 88,897 98,337 88,414 - cash equivalents 20,039 24,268 10,156 108,936 122,605 98,570 Net cash outflow (8,348) (13,669) 24,035 At 31 December 100,588 108,936 122,605 Comprising: Cash and balances at central banks 77,858 88,897 98,337 Treasury bills and debt securities 1,064 83 427 Net loans to banks 21,666 19,956 23,841 Cash and cash equivalents 100,588 108,936 122,605 Note: (1) Includes cash collateral posted with bank counterparties in respect of derivative liabilities of £7,570 million (2018 - £7,302 million; 2017 - £6,683 million). |
Schedule of bank balances required by law or regulation to be maintained | Bank of England £1.0bn £0.9bn £0.6bn De Nederlandsche Bank €0.1bn €0.1bn €0.1bn |
Directors and key management _2
Directors and key management remuneration (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Directors' and key management remuneration | |
Schedule of directors' remuneration | Directors' remuneration £000 £000 Non Executive Directors 1,881 2,001 Chairman and executive directors- emoluments 4,783 4,657 6,664 6,658 Amounts receivable under long-term incentive plans and share option plans 741 — Total 7,405 6,658 |
Schedule of compensation of key management | £000 £000 Short-term benefits 22,067 20,316 Post-employment benefits 401 82 Share-based payments 2,435 — 24,903 20,398 |
Transactions with directors a_2
Transactions with directors and key management (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Transactions with directors and key management | |
Schedule of transactions with directors and key management | £000 £000 Loans to customers 1,662 1,544 Customer deposits 37,727 31,361 |
Consolidating financial infor_2
Consolidating financial information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Consolidating financial information | |
Schedule of Consolidating financial information | Income statement Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2019 £m £m £m £m £m Net interest income (628) (127) 8,368 434 8,047 Non-interest income 3,467 815 3,186 (1,262) 6,206 Total income 2,839 688 11,554 (828) 14,253 Operating expenses (42) (1,101) (8,049) (133) (9,325) Impairment releases/(losses) 2 50 (785) 37 (696) Operating profit/(loss) before tax 2,799 (363) 2,720 (924) 4,232 Tax (71) 94 (863) 408 (432) Profit/(loss) from continuing operations 2,728 (269) 1,857 (516) 3,800 Profit/(loss) from discontinued operations, net of tax — — — — — Profit/(loss) for the year 2,728 (269) 1,857 (516) 3,800 Attributable to: Ordinary shareholders 2,322 (329) 1,539 (399) 3,133 Preference shareholders 39 — — — 39 Paid-in equity holders 367 60 315 (375) 367 Non-controlling interests — — 2,728 (269) 1,857 (516) 3,800 Statement of comprehensive income Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2019 £m £m £m £m £m Profit/(loss) for the year 2,728 (269) 1,857 (516) 3,800 Items that do not qualify for reclassification Remeasurement of retirement benefit schemes - other movements — (49) (93) — (142) Changes in fair value of credit in financial liabilities designated at FVTPL due to own credit risk — (71) (118) — (189) Fair value through other comprehensive income (FVOCI) financial assets — (164) 93 — (71) Tax — 32 (4) — 28 — (252) (122) — (374) Items that do qualify for reclassification Fair value through other comprehensive income (FVOCI) financial assets — 20 (25) (9) (14) Cash flow hedges (21) 28 317 (30) 294 Currency translation — (32) 742 (2,546) (1,836) Tax 5 (4) (79) (92) (170) (16) 12 955 (2,677) (1,726) Other comprehensive (loss)/income after tax (16) (240) 833 (2,677) (2,100) Total comprehensive income/(loss) for the year 2,712 (509) 2,690 (3,193) 1,700 Total comprehensive income/(loss) is attributable to: Ordinary shareholders 2,306 (569) 2,372 (3,065) 1,044 Preference shareholders 39 — — — 39 Paid-in equity holders 367 60 315 (375) 367 Non - controlling interests — — (3) 247 250 2,712 (509) 2,690 (3,193) 1,700 Income statement Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2018* £m £m £m £m £m Net interest income (368) (239) 8,028 1,235 8,656 Non-interest income 2,794 1,002 3,740 (2,790) 4,746 Total income 2,426 763 11,768 (1,555) 13,402 Operating expenses (85) (1,262) (6,855) (1,443) (9,645) Impairment releases/(losses) 1 89 (429) (59) (398) Operating profit/(loss) before tax 2,342 (410) 4,484 (3,057) 3,359 Tax 149 51 (1,276) (132) (1,208) Profit/(loss) from continuing operations 2,491 (359) 3,208 (3,189) 2,151 Profit/(loss) from discontinued operations, net of tax — 54 — (54) — Profit/(loss) for the year 2,491 (305) 3,208 (3,243) 2,151 Attributable to: Ordinary shareholders 1,954 (305) 3,246 (3,273) 1,622 Preference shareholders 182 — — — 182 Paid-in equity holders 355 — — — 355 Non-controlling interests — — (38) 30 (8) 2,491 (305) 3,208 (3,243) 2,151 Statement of comprehensive income Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2018* £m £m £m £m £m Profit/(loss)for the year 2,491 (305) 3,208 (3,243) 2,151 Items that do not qualify for reclassification Remeasurement of retirement benefit schemes -contributions in preparation for ring-fencing (1) — (53) (2,000) — (2,053) -other movements — (9) 95 — 86 Changes in fair value of credit in financial liabilities designated at FVTPL due to own credit risk — 121 79 — 200 Fair value through other comprehensive income (FVOCI) financial assets — 22 28 (2) 48 Tax — (24) 526 — 502 — 57 (1,272) (2) (1,217) Items that do qualify for reclassification Fair value through other comprehensive income (FVOCI) financial assets — (339) 808 (462) 7 Cash flow hedges 78 223 (550) (332) (581) Currency translation — 168 (2,488) 2,630 310 Tax (15) 36 40 128 189 63 88 (2,190) 1,964 (75) Other comprehensive income/(loss) after tax 63 145 (3,462) 1,962 (1,292) Total comprehensive income/(loss) for the year 2,554 (160) (254) (1,281) 859 Total comprehensive income/(loss) is attributable to: Ordinary shareholders 2,017 (160) (151) (1,401) 305 Preference shareholders 182 — — — 182 Paid-in equity holders 355 — — — 355 Non-controlling interests — — (103) 120 17 2,554 (160) (254) (1,281) 859 *Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. Income statement Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2017* £m £m £m £m £m Net interest income 203 (26) 6,157 2,653 8,987 Non-interest income 1,390 909 (674) 2,521 4,146 Total income 1,593 883 5,483 5,174 13,133 Operating expenses (122) (1,601) (3,946) (4,732) (10,401) Impairment releases/(losses) — 77 (370) (200) (493) Operating profit/(loss) before tax 1,471 (641) 1,167 242 2,239 Tax (94) 168 (853) 48 (731) Profit/(loss) from continuing operations 1,377 (473) 314 290 1,508 (Loss)/profit from discontinued operations, net of tax — (510) — 510 — Profit/(loss) for the year 1,377 (983) 314 800 1,508 Attributable to: Ordinary shareholders 660 (983) 309 766 752 Preference shareholders 234 — — — 234 Paid-in equity holders 483 — — 4 487 Non-controlling interests — — 5 30 35 1,377 (983) 314 800 1,508 Statement of comprehensive income Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2017* £m £m £m £m £m Profit/(loss)for the year 1,377 (983) 314 800 1,508 Items that do not qualify for reclassification Profit on remeasurement of retirement benefit schemes — 4 86 — 90 Loss on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk — (68) (58) — (126) Tax — (18) 8 — (10) — (82) 36 — (46) Items that do qualify for reclassification Available-for-sale financial assets — 52 (341) 315 26 Cash flow hedges (204) (424) (24) (417) (1,069) Currency translation — (22) 495 (373) 100 Tax 38 93 20 105 256 (166) (301) 150 (370) (687) Other comprehensive (loss)/income after tax (166) (383) 186 (370) (733) Total comprehensive income/(loss) for the year 1,211 (1,366) 500 430 775 Total comprehensive income/(loss) is attributable to: Non-controlling interests — — — 52 52 Preference shareholders 234 — — — 234 Paid-in equity holders 483 — — 4 487 Ordinary shareholders 494 (1,366) 500 374 2 1,211 (1,366) 500 430 775 *Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. Balance sheet Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group At 31 December 2019 £m £m £m £m £m Assets Cash and balances at central banks — 9,953 67,905 — 77,858 Trading assets — 57,768 18,980 (3) 76,745 Derivatives 979 147,458 6,507 (4,915) 150,029 Settlement balances — 3,353 1,034 — 4,387 Loans to banks - amortised cost — 238 10,437 14 10,689 Loans to customers - amortised cost — 6,910 320,050 (13) 326,947 Amount due from holding company and fellow subsidiaries 25,018 7,145 10,157 (42,320) — Other financial assets 277 11,636 49,816 (277) 61,452 Intangible assets — — 6,320 302 6,622 Other assets 55,809 3,592 9,583 (60,674) 8,310 Total assets 82,083 248,053 500,789 (107,886) 723,039 Liabilities Bank deposits — 2,038 18,456 (1) 20,493 Customer deposits — 2,247 366,998 2 369,247 Amount due to holding company and fellow subsidiaries 439 16,858 25,023 (42,320) — Settlement balances — 2,648 1,421 — 4,069 Trading liabilities — 53,576 20,376 (3) 73,949 Derivatives 711 142,390 8,695 (4,917) 146,879 Other financial liabilities 19,331 16,880 9,091 (82) 45,220 Subordinated liabilities 7,647 590 1,885 (143) 9,979 Other liabilities 168 1,195 8,454 (170) 9,647 Total liabilities 28,296 238,422 460,399 (47,634) 679,483 Owners' equity 53,787 9,631 40,381 (60,252) 43,547 Non-controlling interests — — 9 — 9 Total equity 53,787 9,631 40,390 (60,252) 43,556 Total liabilities and equity 82,083 248,053 500,789 (107,886) 723,039 Balance sheet Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group At 31 December 2018 £m £m £m £m £m Assets Cash and balances at central banks — 11,095 77,802 — 88,897 Trading assets — 61,990 13,228 (99) 75,119 Derivatives 543 134,291 1,232 (2,717) 133,349 Settlement balances — 1,421 1,507 — 2,928 Loans to banks - amortised cost — 454 12,527 (34) 12,947 Loans to customers - amortised cost — 7,908 297,200 (19) 305,089 Amount due from holding company and fellow subsidiaries 22,791 11,800 16,877 (51,468) — Other financial assets 241 10,995 48,481 (232) 59,485 Intangible assets — — 6,314 302 6,616 Other assets 56,773 2,087 10,968 (60,023) 9,805 Total assets 80,348 242,041 486,136 (114,290) 694,235 Liabilities Bank deposits — 2,777 20,596 (76) 23,297 Customer deposits — 2,390 358,531 (7) 360,914 Amount due to holding company and fellow subsidiaries 635 23,505 27,328 (51,468) — Settlement balances — 1,977 1,089 — 3,066 Trading liabilities — 54,540 17,909 (99) 72,350 Derivatives 445 129,974 1,195 (2,717) 128,897 Other financial liabilities 16,821 15,621 7,283 7 39,732 Subordinated liabilities 7,941 658 2,059 (123) 10,535 Other liabilities 119 1,677 7,719 (561) 8,954 Total liabilities 25,961 233,119 443,709 (55,044) 647,745 Owners’ equity 54,387 8,922 42,416 (59,989) 45,736 Non-controlling interests — — 11 743 754 Total equity 54,387 8,922 42,427 (59,246) 46,490 Total liabilities and equity 80,348 242,041 486,136 (114,290) 694,235 Cash flow statement Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2019 £m £m £m £m £m Net cash flows from operating activities 4,376 (1,068) (8,955) 2,545 (3,102) Net cash flows from investing activities 21 892 117 (1,746) (716) Net cash flows from financing activities (4,164) (606) (1,156) 3,379 (2,547) Effects of exchange rate changes on cash and cash equivalents (1) (835) (1,207) 60 (1,983) Net increase/(decrease) in cash and cash equivalents 232 (1,617) (11,201) 4,238 (8,348) Cash and cash equivalents at 1 January 2019 307 24,575 91,337 (7,283) 108,936 Cash and cash equivalents at 31 December 2019 539 22,958 80,136 (3,045) 100,588 Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2018 £m £m £m £m £m Net cash flows from operating activities 16,620 (6,480) (82,094) 65,131 (6,823) Net cash flows from investing activities (9,481) 18,335 (32,532) 15,684 (7,994) Net cash flows from financing activities (1) (7,078) (670) 9,184 (964) 472 Effects of exchange rate changes on cash and cash equivalents 1 332 565 (222) 676 Net (decrease)/increase in cash and cash equivalents 62 11,517 (104,877) 79,629 (13,669) Cash and cash equivalents at 1 January 2018 245 13,058 196,214 (86,912) 122,605 Cash and cash equivalents at 31 December 2018 307 24,575 91,337 (7,283) 108,936 Consolidation RBSG plc NWM Plc Subsidiaries adjustments RBS Group For the year ended 31 December 2017 £m £m £m £m £m Net cash flows from operating activities 2,030 (74,357) 105,315 2,724 35,712 Net cash flows from investing activities (2,078) (2,077) 2,241 (4,238) (6,152) Net cash flows from financing activities (1) (888) (9,668) 329 4,718 (5,509) Effects of exchange rate changes on cash and cash equivalents (14) 87 (1,102) 1,013 (16) Net (decrease)/increase in cash and cash equivalents (950) (86,015) 106,783 4,217 24,035 Cash and cash equivalents at 1 January 2017 1,195 99,073 89,431 (91,129) 98,570 Cash and cash equivalents at 31 December 2017 245 13,058 196,214 (86,912) 122,605 Note: (1) 2018 and 2017 have been re-presented to align the balance sheet classification. MREL was previously presented in Operating activities and is now presented in Financing activities. |
Accounting policies (Details)
Accounting policies (Details) £ in Millions | Jan. 01, 2019GBP (£) | Dec. 31, 2019GBP (£)item | Dec. 31, 2018GBP (£) |
Disclosure of initial application of standards or interpretations [line items] | |||
Tax Relief on Servicing Cost of Instruments | £ 67 | ||
Derivatives and hedging | |||
Number of types of hedges | item | 3 | ||
Accounting developments | |||
Retaining earnings | £ (14,100) | ||
Other Amendments to IFRS | |||
Disclosure of initial application of standards or interpretations [line items] | |||
Financial assets with associated ECL allowance | £ 460 | £ 455 | |
Impairment losses included in suspense recoveries | £ 64 | ||
Minimum | Credit cards | |||
Financial assets carried at amortised cost | |||
Write off period | 12 months | ||
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 | Retail mortgages | |||
Financial assets carried at amortised cost | |||
Write off period | 5 years | ||
Maximum | Credit cards | |||
Financial assets carried at amortised cost | |||
Write off period | 3 years | ||
Maximum | Overdrafts and other unsecured loans | |||
Financial assets carried at amortised cost | |||
Write off period | 6 years | ||
Maximum | Commercial loans | |||
Financial assets carried at amortised cost | |||
Write off period | 5 years | ||
Maximum | Business loans | |||
Financial assets carried at amortised cost | |||
Write off period | 5 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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net interest income | |||
Loans to banks - amortised cost | £ 726 | £ 522 | £ 277 |
Loans to customers - amortised cost | 9,795 | 9,993 | 10,409 |
Other financial assets | 854 | 534 | 348 |
Interest receivable (1) | 11,375 | 11,049 | 11,034 |
Balances with banks | 319 | 250 | 175 |
Customer deposits: demand | 282 | 223 | 99 |
Customer deposits: savings | 771 | 510 | 445 |
Customer deposits: other time | 203 | 116 | 179 |
Other financial liabilities | 1,102 | 791 | 554 |
Subordinated liabilities | 483 | 461 | 572 |
Internal funding of trading businesses | 168 | 42 | 23 |
Interest payable | 3,328 | 2,393 | 2,047 |
Net interest income | £ 8,047 | £ 8,656 | £ 8,987 |
Non-interest income (Details)
Non-interest income (Details) € in Millions, £ in Millions | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2019GBP (£) | Dec. 31, 2019EUR (€) | Dec. 31, 2019GBP (£) | Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | |
Fees and commissions receivable | |||||
Net fees and commissions | £ 2,511 | £ 2,357 | £ 2,455 | ||
Loss on redemption of own debt | (7) | ||||
Income from trading activities | |||||
Foreign exchange | 448 | 643 | 525 | ||
Interest rate | 532 | 695 | (50) | ||
Credit | 32 | 45 | 197 | ||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||
- debt securities in issue | (60) | 72 | 12 | ||
- derivative liabilities | (20) | 20 | (81) | ||
Equities, commodities and other | 32 | 31 | |||
Income from trading activities | 932 | 1,507 | 634 | ||
Operating lease and other rental income | 250 | 256 | 276 | ||
Changes in the fair value of financial assets and liabilities designated at fair value through profit or loss | (17) | (26) | 60 | ||
Changes in fair value of other financial assets at fair value through profit or loss | 58 | 18 | |||
Hedge ineffectiveness | 48 | (65) | 39 | ||
Profit/(loss) on disposal of amortised cost assets | 42 | 44 | (35) | ||
(Loss)/profit on disposal of fair value through other comprehensive income assets | (22) | 34 | 226 | ||
Profit on sale of property, plant and equipment | 58 | 50 | 75 | ||
Share of (losses)/profits of associated entities | (14) | 83 | 104 | ||
Profit/(loss) on disposal of subsidiaries and associates | 2,224 | (72) | 245 | ||
Other income | 136 | 560 | 74 | ||
Other operating income | 2,763 | 882 | 1,064 | ||
Non-interest income | 6,206 | 4,746 | £ 4,146 | ||
Insurance recoveries | £ 357 | ||||
RFS Holdings | |||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||
Gains on disposals of investments | £ 1,102 | ||||
UBI DAC | |||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||
Capital repayment | 67 | 67 | |||
Alawwal bank merger | |||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||
Profit/(loss) on disposal of subsidiaries and associates | € 523 | 444 | |||
Legacy liability release amount | 256 | ||||
Gains on disposals of investments | £ 290 | ||||
Foreign exchange reserve | RFS Holdings | |||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||
Gains on disposals of investments | 1,102 | ||||
Foreign exchange reserve | Alawwal bank merger | |||||
Changes in fair value of own debt and derivative liabilities attributable to own credit risk | |||||
Profit/(loss) on disposal of subsidiaries and associates | £ 290 |
Operating expenses (Details)
Operating expenses (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating expenses | |||
Salaries | £ 2,513 | £ 2,560 | £ 2,750 |
Bonus awards | 299 | 225 | 298 |
Temporary and contract costs | 401 | 442 | 430 |
Social security costs | 300 | 307 | 318 |
Pension costs | 303 | 401 | 467 |
Other | 202 | 187 | 413 |
Staff costs | 4,018 | 4,122 | 4,676 |
Premises and equipment | 1,259 | 1,383 | 1,565 |
UK bank levy | 134 | 179 | 215 |
Depreciation and amortisation | 1,176 | 731 | 808 |
Other administrative expenses | 2,694 | 3,193 | 3,108 |
Administrative expenses | 5,263 | 5,486 | 5,696 |
Impairment of goodwill and other intangible assets | 44 | 37 | 29 |
Operating expenses | 9,325 | £ 9,645 | £ 10,401 |
Charge relating to reduction in property portfolio, included in lease expenses | 161 | ||
Prior period rebate | 31 | ||
Charge relating to reduction in property portfolio, included in depreciation and amortization | £ 292 |
Operating expenses - Continuing
Operating expenses - Continuing operations (Details) - Continuing Operation [Member] - employee | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number and average number of employees | |||
Average number of employees | 64,200 | 67,600 | 73,400 |
Temporary employees | 4,100 | 4,000 | 5,000 |
Number of employees | 62,900 | 65,400 | 69,700 |
UK | |||
Number and average number of employees | |||
Number of employees | 44,600 | 46,600 | 51,200 |
USA | |||
Number and average number of employees | |||
Number of employees | 400 | 500 | 500 |
Europe | |||
Number and average number of employees | |||
Number of employees | 4,100 | 4,100 | 4,200 |
Rest of the World | |||
Number and average number of employees | |||
Number of employees | 13,800 | 14,200 | 13,800 |
Operating segment | UK Personal & Business Banking | |||
Number and average number of employees | |||
Number of employees | 21,800 | 23,400 | 19,500 |
Operating segment | Ulster Bank RoI | |||
Number and average number of employees | |||
Number of employees | 2,700 | 2,900 | 2,600 |
Operating segment | Commercial Banking | |||
Number and average number of employees | |||
Number of employees | 10,100 | 10,200 | 6,900 |
Operating segment | Private Banking | |||
Number and average number of employees | |||
Number of employees | 1,900 | 1,900 | 1,500 |
Operating segment | RBS International | |||
Number and average number of employees | |||
Number of employees | 1,600 | 1,600 | 1,600 |
Operating segment | NatWest Markets | |||
Number and average number of employees | |||
Number of employees | 5,000 | 4,500 | 5,300 |
Operating segment | Central items & other | |||
Number and average number of employees | |||
Number of employees | 19,800 | 20,900 | 32,300 |
Operating expenses - Share-base
Operating expenses - Share-based payments (Details) £ / shares in Units, £ in Millions, shares in Millions, Options in Millions, EquityInstruments in Millions | 12 Months Ended | ||
Dec. 31, 2019GBP (£)OptionsEquityInstruments£ / sharesshares | Dec. 31, 2018GBP (£)OptionsEquityInstruments£ / sharesshares | Dec. 31, 2017GBP (£)OptionsEquityInstruments£ / sharesshares | |
Sharesave | |||
Average exercise price | |||
At 1 January | £ / shares | £ 2.18 | £ 2.38 | £ 2.46 |
Granted | £ / shares | 1.78 | 1.89 | 2.27 |
Exercised | £ / shares | 2.83 | 2.44 | 2.46 |
Cancelled | £ / shares | 2.25 | 2.46 | 2.49 |
At 31 December | £ / shares | £ 2.01 | £ 2.18 | £ 2.38 |
Shares under option | |||
At 1 January | 75 | 60 | 56 |
Granted | 25 | 28 | 21 |
Exercised | (4) | (4) | (3) |
Cancelled | (12) | (9) | (14) |
At 31 December | 84 | 75 | 60 |
Options exercisable, vesting period | 6 months | ||
Options exercisable | Options | 3.2 | 4.9 | 3.7 |
Exercise price of outstanding share options | £ / shares | £ 2.49 | £ 2.13 | £ 2.77 |
Weighted average remaining contractual life of outstanding share options | 2 years 8 months 12 days | 2 years 10 months 24 days | 2 years 10 months 24 days |
Fair value of options granted | £ 11 | £ 21 | £ 21 |
Sharesave | Minimum | |||
Shares under option | |||
Exercise price of outstanding share options | £ / shares | £ 1.68 | £ 1.68 | £ 1.68 |
Sharesave | Maximum | |||
Shares under option | |||
Exercise price of outstanding share options | £ / shares | £ 2.91 | £ 3.43 | £ 4.34 |
Deferred performance awards | |||
Value at grant | |||
At 1 January | £ 233 | £ 264 | £ 296 |
Granted | 110 | 156 | 152 |
Forfeited | (10) | (21) | (11) |
Vested | (137) | (166) | (173) |
At 31 December | £ 196 | £ 233 | £ 264 |
Shares awarded | |||
At 1 January (in shares) | 92 | 101 | 102 |
Granted (in shares) | 42 | 59 | 63 |
Forfeited (in shares) | (4) | (8) | (4) |
Vested/exercised (in shares) | (54) | (60) | (60) |
At 31 December (in shares) | 76 | 92 | 101 |
Long-term incentives | |||
Value at grant | |||
At 1 January | £ 85 | £ 102 | £ 119 |
Granted | 15 | 12 | 35 |
Vested | (12) | (5) | (22) |
Lapsed | (25) | (24) | (30) |
At 31 December | £ 63 | £ 85 | £ 102 |
Shares awarded | |||
At 1 January (in shares) | EquityInstruments | 32 | 37 | 38 |
Granted (in shares) | EquityInstruments | 6 | 5 | 15 |
Vested/exercised (in shares) | EquityInstruments | (4) | (2) | (7) |
Lapsed (in shares) | EquityInstruments | (9) | (8) | (9) |
At 31 December (in shares) | EquityInstruments | 25 | 32 | 37 |
Options over shares | |||
At 1 January (in shares) | shares | 2 | 2 | 4 |
Lapsed (in shares) | shares | (2) | (2) | |
At 31 December (in shares) | shares | 2 | 2 | |
Market value of awards vested and exercised | £ 10 | £ 5 | £ 22 |
Vested options over shares exercisable | shares | 0 | 2 | 2 |
Operating expenses - Bonus awar
Operating expenses - Bonus awards (Details) - GBP (£) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating expenses | |||
Total Bonus awards | £ 307,000,000 | £ 335,000,000 | £ 342,000,000 |
Bonus awards as a % of operating profit before tax | 7.00% | 9.00% | |
Proportion of bonus awards that are deferred | 87.00% | 89.00% | |
Bonus awards | |||
Operating expenses | |||
Total Bonus awards | £ 307,000,000 | £ 335,000,000 | |
Change % | (8.00%) | ||
Total non-deferred bonus awards | |||
Operating expenses | |||
Total Bonus awards | £ 40,000,000 | 37,000,000 | |
Change % | 8.00% | ||
Non-deferred cash awards | |||
Operating expenses | |||
Total Bonus awards | £ 40,000,000 | 37,000,000 | |
Change % | 8.00% | ||
Total deferred bonus awards | |||
Operating expenses | |||
Total Bonus awards | £ 267,000,000 | 298,000,000 | |
Change % | (10.00%) | ||
Deferred bond awards | |||
Operating expenses | |||
Total Bonus awards | £ 184,000,000 | £ 191,000,000 | |
Change % | (4.00%) | ||
Proportion of bonus awards that are deferred | 69.00% | 64.00% | |
Deferred share awards | |||
Operating expenses | |||
Total Bonus awards | £ 83,000,000 | £ 107,000,000 | |
Change % | (22.00%) | ||
Proportion of bonus awards that are deferred | 31.00% | 36.00% | |
Maximum | Non-deferred cash awards | |||
Operating expenses | |||
Cash awards | £ 2,000 |
Operating expenses - Bonus aw_2
Operating expenses - Bonus awards reconciliation (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating expenses | |||
Bonus Awards | £ 307 | £ 335 | £ 342 |
Less: deferral of charge for amounts awarded for current year | (110) | (130) | (133) |
Income statement charge for amounts awarded in current year | 197 | 205 | 209 |
Add: current year charge for amounts deferred from prior years | 127 | 86 | 96 |
Less: forfeiture of amounts deferred from prior years | (25) | (66) | (7) |
Income statement charge for amounts deferred from prior years | 102 | 20 | 89 |
Income statement charge for bonus awards | £ 299 | £ 225 | £ 298 |
Operating expenses - Bonus aw_3
Operating expenses - Bonus awards - Actual and Expected (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating expenses | |||
Bonus awards deferred from 2017 and earlier | £ 31 | £ 86 | £ 96 |
Bonus awards deferred from 2018 | 96 | ||
Less: forfeiture of amounts deferred from prior years | (25) | (66) | (7) |
Income statement charge for amounts deferred from prior years | 102 | £ 20 | £ 89 |
Less than 12 months | |||
Operating expenses | |||
Bonus awards deferred from 2017 and earlier | 14 | ||
Bonus awards deferred from 2018 | 16 | ||
Bonus awards for 2019 deferred | 78 | ||
Income statement charge for amounts deferred from prior years | 108 | ||
More than 12 months | |||
Operating expenses | |||
Bonus awards deferred from 2017 and earlier | 5 | ||
Bonus awards deferred from 2018 | 14 | ||
Bonus awards for 2019 deferred | 32 | ||
Income statement charge for amounts deferred from prior years | £ 51 |
Segmental analysis - Operating
Segmental analysis - Operating profit/(loss) (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segmental analysis | |||
Net interest income | £ 8,047 | £ 8,656 | £ 8,987 |
Net fees and commissions | 2,511 | 2,357 | 2,455 |
Other non-interest income | 3,695 | 2,389 | 1,691 |
Total income | 14,253 | 13,402 | 13,133 |
Operating expenses | (8,149) | (8,914) | (9,593) |
Depreciation and amortisation | (1,176) | (731) | (808) |
Impairment (losses)/releases | (696) | (398) | (493) |
Operating profit/(loss) | 4,232 | 3,359 | 2,239 |
UK Personal Banking | |||
Segmental analysis | |||
Net interest income | 4,130 | 4,283 | 4,342 |
Net fees and commissions | 696 | 692 | 724 |
Other non-interest income | 40 | 79 | 216 |
Total income | 4,866 | 5,054 | 5,282 |
Operating expenses | (3,618) | (2,867) | (3,241) |
Impairment (losses)/releases | (393) | (339) | (207) |
Operating profit/(loss) | 855 | 1,848 | 1,834 |
Ulster Bank RoI | |||
Segmental analysis | |||
Net interest income | 400 | 444 | 421 |
Net fees and commissions | 109 | 91 | 94 |
Other non-interest income | 58 | 75 | 89 |
Total income | 567 | 610 | 604 |
Operating expenses | (552) | (583) | (676) |
Impairment (losses)/releases | 34 | (15) | (60) |
Operating profit/(loss) | 49 | 12 | (132) |
Commercial Banking | |||
Segmental analysis | |||
Net interest income | 2,842 | 2,855 | 3,074 |
Net fees and commissions | 1,312 | 1,283 | 1,405 |
Other non-interest income | 164 | 464 | 200 |
Total income | 4,318 | 4,602 | 4,679 |
Operating expenses | (2,458) | (2,362) | (2,458) |
Depreciation and amortisation | (142) | (125) | (144) |
Impairment (losses)/releases | (391) | (147) | (390) |
Operating profit/(loss) | 1,327 | 1,968 | 1,687 |
Private Banking | |||
Segmental analysis | |||
Net interest income | 521 | 518 | 464 |
Net fees and commissions | 226 | 228 | 179 |
Other non-interest income | 30 | 29 | 35 |
Total income | 777 | 775 | 678 |
Operating expenses | (482) | (476) | (529) |
Depreciation and amortisation | (4) | (2) | |
Impairment (losses)/releases | 6 | 6 | (6) |
Operating profit/(loss) | 297 | 303 | 143 |
RBS International | |||
Segmental analysis | |||
Net interest income | 478 | 466 | 325 |
Net fees and commissions | 106 | 101 | 42 |
Other non-interest income | 26 | 27 | 22 |
Total income | 610 | 594 | 389 |
Operating expenses | (254) | (254) | (217) |
Depreciation and amortisation | (10) | (6) | (2) |
Impairment (losses)/releases | (2) | 2 | (3) |
Operating profit/(loss) | 344 | 336 | 167 |
NatWest Markets | |||
Segmental analysis | |||
Net interest income | (188) | 112 | 203 |
Net fees and commissions | 85 | (33) | 24 |
Other non-interest income | 1,445 | 1,363 | 823 |
Total income | 1,342 | 1,442 | 1,050 |
Operating expenses | (1,406) | (1,589) | (2,250) |
Depreciation and amortisation | (12) | (15) | 49 |
Impairment (losses)/releases | 51 | 92 | 174 |
Operating profit/(loss) | (25) | (70) | (977) |
Central Items & other | |||
Segmental analysis | |||
Net interest income | (136) | (22) | 158 |
Net fees and commissions | (23) | (5) | (13) |
Other non-interest income | 1,932 | 352 | 306 |
Total income | 1,773 | 325 | 451 |
Operating expenses | 621 | (783) | (222) |
Depreciation and amortisation | (1,008) | (583) | (711) |
Impairment (losses)/releases | (1) | 3 | (1) |
Operating profit/(loss) | £ 1,385 | £ (1,038) | £ (483) |
Segmental analysis - Total reve
Segmental analysis - Total revenue (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segmental analysis | |||
Revenue | £ 18,429 | £ 16,656 | £ 16,063 |
UK Personal Banking | |||
Segmental analysis | |||
Revenue | 6,223 | 6,251 | 6,445 |
Ulster Bank RoI | |||
Segmental analysis | |||
Revenue | 622 | 668 | 672 |
Commercial Banking | |||
Segmental analysis | |||
Revenue | 4,486 | 4,665 | 4,611 |
Private Banking | |||
Segmental analysis | |||
Revenue | 944 | 876 | 728 |
RBS International | |||
Segmental analysis | |||
Revenue | 658 | 654 | 428 |
NatWest Markets | |||
Segmental analysis | |||
Revenue | 3,074 | 2,798 | 2,217 |
Central Items & other | |||
Segmental analysis | |||
Revenue | 2,422 | 744 | 962 |
Operating segment | |||
Segmental analysis | |||
Revenue | 18,429 | 16,656 | 16,063 |
Operating segment | UK Personal Banking | |||
Segmental analysis | |||
Revenue | 6,161 | 6,188 | 6,406 |
Operating segment | Ulster Bank RoI | |||
Segmental analysis | |||
Revenue | 616 | 668 | 676 |
Operating segment | Commercial Banking | |||
Segmental analysis | |||
Revenue | 4,347 | 4,576 | 4,532 |
Operating segment | Private Banking | |||
Segmental analysis | |||
Revenue | 703 | 681 | 585 |
Operating segment | RBS International | |||
Segmental analysis | |||
Revenue | 639 | 506 | 309 |
Operating segment | NatWest Markets | |||
Segmental analysis | |||
Revenue | 2,516 | 1,882 | 1,408 |
Operating segment | Central Items & other | |||
Segmental analysis | |||
Revenue | 3,447 | 2,155 | 2,147 |
Consolidation adjustments | UK Personal Banking | |||
Segmental analysis | |||
Revenue | 62 | 63 | 39 |
Consolidation adjustments | Ulster Bank RoI | |||
Segmental analysis | |||
Revenue | 6 | (4) | |
Consolidation adjustments | Commercial Banking | |||
Segmental analysis | |||
Revenue | 139 | 89 | 79 |
Consolidation adjustments | Private Banking | |||
Segmental analysis | |||
Revenue | 241 | 195 | 143 |
Consolidation adjustments | RBS International | |||
Segmental analysis | |||
Revenue | 19 | 148 | 119 |
Consolidation adjustments | NatWest Markets | |||
Segmental analysis | |||
Revenue | 558 | 916 | 809 |
Consolidation adjustments | Central Items & other | |||
Segmental analysis | |||
Revenue | £ (1,025) | £ (1,411) | £ (1,185) |
Segmental analysis - Net fees a
Segmental analysis - Net fees and commissions (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fees and commissions receivable | |||
Payment services | £ 1,095 | £ 878 | £ 829 |
Credit and debit card fees | 623 | 612 | 665 |
Lending (credit facilities) | 901 | 971 | 1,060 |
Brokerage | 164 | 158 | 148 |
Investment management, trustee and fiduciary services | 278 | 286 | 249 |
Trade finance | 105 | 132 | 173 |
Underwriting fees | 170 | 174 | 157 |
Other | 23 | 7 | 57 |
Fees and commissions receivable | 3,359 | 3,218 | 3,338 |
Fees and commissions payable | (848) | (861) | (883) |
Net fees and commissions | 2,511 | 2,357 | 2,455 |
UK Personal Banking | |||
Fees and commissions receivable | |||
Payment services | 292 | 227 | 194 |
Credit and debit card fees | 427 | 402 | 451 |
Lending (credit facilities) | 356 | 408 | 436 |
Brokerage | 55 | 62 | 69 |
Investment management, trustee and fiduciary services | 44 | 49 | 72 |
Underwriting fees | 13 | ||
Other | 2 | 2 | 1 |
Fees and commissions receivable | 1,176 | 1,163 | 1,223 |
Fees and commissions payable | (480) | (471) | (499) |
Net fees and commissions | 696 | 692 | 724 |
Ulster Bank RoI | |||
Fees and commissions receivable | |||
Payment services | 61 | 34 | 30 |
Credit and debit card fees | 28 | 22 | 27 |
Lending (credit facilities) | 14 | 29 | 30 |
Brokerage | 8 | 6 | 10 |
Investment management, trustee and fiduciary services | 3 | 4 | 4 |
Trade finance | 2 | 2 | 2 |
Other | 5 | 1 | |
Fees and commissions receivable | 121 | 98 | 103 |
Fees and commissions payable | (12) | (7) | (9) |
Net fees and commissions | 109 | 91 | 94 |
Commercial Banking | |||
Fees and commissions receivable | |||
Payment services | 658 | 556 | 543 |
Credit and debit card fees | 154 | 175 | 175 |
Lending (credit facilities) | 415 | 415 | 497 |
Investment management, trustee and fiduciary services | 3 | 35 | |
Trade finance | 95 | 122 | 164 |
Underwriting fees | 17 | ||
Other | 90 | 60 | 51 |
Fees and commissions receivable | 1,415 | 1,345 | 1,465 |
Fees and commissions payable | (103) | (62) | (60) |
Net fees and commissions | 1,312 | 1,283 | 1,405 |
Private Banking | |||
Fees and commissions receivable | |||
Payment services | 33 | 33 | 37 |
Credit and debit card fees | 12 | 13 | 12 |
Lending (credit facilities) | 2 | 2 | 2 |
Brokerage | 5 | 5 | 6 |
Investment management, trustee and fiduciary services | 186 | 191 | 133 |
Trade finance | 1 | 1 | 1 |
Other | 27 | 16 | 15 |
Fees and commissions receivable | 266 | 261 | 206 |
Fees and commissions payable | (40) | (33) | (27) |
Net fees and commissions | 226 | 228 | 179 |
RBS International | |||
Fees and commissions receivable | |||
Payment services | 27 | 25 | 24 |
Credit and debit card fees | 2 | ||
Lending (credit facilities) | 32 | 29 | 10 |
Investment management, trustee and fiduciary services | 41 | 42 | 4 |
Trade finance | 4 | 4 | 3 |
Other | 2 | 2 | 2 |
Fees and commissions receivable | 108 | 102 | 43 |
Fees and commissions payable | (2) | (1) | (1) |
Net fees and commissions | 106 | 101 | 42 |
NatWest Markets | |||
Fees and commissions receivable | |||
Payment services | 24 | 3 | 1 |
Lending (credit facilities) | 82 | 88 | 83 |
Brokerage | 96 | 85 | 63 |
Investment management, trustee and fiduciary services | 1 | 1 | |
Trade finance | 3 | 3 | 3 |
Underwriting fees | 170 | 144 | 157 |
Other | 69 | 67 | 132 |
Fees and commissions receivable | 445 | 390 | 440 |
Fees and commissions payable | (360) | (423) | (416) |
Net fees and commissions | 85 | (33) | 24 |
Central Items & other | |||
Fees and commissions receivable | |||
Lending (credit facilities) | 2 | ||
Other | (172) | (141) | (144) |
Fees and commissions receivable | (172) | (141) | (142) |
Fees and commissions payable | 149 | 136 | 129 |
Net fees and commissions | £ (23) | £ (5) | £ (13) |
Segmental analysis - Total inco
Segmental analysis - Total income (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segmental analysis | |||
Total income | £ 14,253 | £ 13,402 | £ 13,133 |
UK Personal Banking | |||
Segmental analysis | |||
Total income | 4,866 | 5,054 | 5,282 |
Ulster Bank RoI | |||
Segmental analysis | |||
Total income | 567 | 610 | 604 |
Commercial Banking | |||
Segmental analysis | |||
Total income | 4,318 | 4,602 | 4,679 |
Private Banking | |||
Segmental analysis | |||
Total income | 777 | 775 | 678 |
RBS International | |||
Segmental analysis | |||
Total income | 610 | 594 | 389 |
NatWest Markets | |||
Segmental analysis | |||
Total income | 1,342 | 1,442 | 1,050 |
Central Items & other | |||
Segmental analysis | |||
Total income | 1,773 | 325 | 451 |
Operating segment | |||
Segmental analysis | |||
Total income | 14,253 | 13,402 | 13,133 |
Operating segment | UK Personal Banking | |||
Segmental analysis | |||
Total income | 4,834 | 5,021 | 5,265 |
Operating segment | Ulster Bank RoI | |||
Segmental analysis | |||
Total income | 562 | 613 | 609 |
Operating segment | Commercial Banking | |||
Segmental analysis | |||
Total income | 4,814 | 5,079 | 5,051 |
Operating segment | Private Banking | |||
Segmental analysis | |||
Total income | 631 | 655 | 594 |
Operating segment | RBS International | |||
Segmental analysis | |||
Total income | 603 | 469 | 281 |
Operating segment | NatWest Markets | |||
Segmental analysis | |||
Total income | 1,664 | 1,510 | 1,077 |
Operating segment | Central Items & other | |||
Segmental analysis | |||
Total income | 1,145 | 55 | 256 |
Consolidation adjustments | UK Personal Banking | |||
Segmental analysis | |||
Total income | 32 | 33 | 17 |
Consolidation adjustments | Ulster Bank RoI | |||
Segmental analysis | |||
Total income | 5 | (3) | (5) |
Consolidation adjustments | Commercial Banking | |||
Segmental analysis | |||
Total income | (496) | (477) | (372) |
Consolidation adjustments | Private Banking | |||
Segmental analysis | |||
Total income | 146 | 120 | 84 |
Consolidation adjustments | RBS International | |||
Segmental analysis | |||
Total income | 7 | 125 | 108 |
Consolidation adjustments | NatWest Markets | |||
Segmental analysis | |||
Total income | (322) | (68) | (27) |
Consolidation adjustments | Central Items & other | |||
Segmental analysis | |||
Total income | £ 628 | £ 270 | £ 195 |
Segmental analysis - Assets and
Segmental analysis - Assets and Liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Segmental analysis | |||
Assets | £ 723,039 | £ 694,235 | £ 738,056 |
Liabilities | 679,483 | 647,745 | 688,963 |
UK Personal Banking | |||
Segmental analysis | |||
Assets | 182,305 | 171,011 | 166,560 |
Liabilities | 153,999 | 148,792 | 145,104 |
Ulster Bank RoI | |||
Segmental analysis | |||
Assets | 25,385 | 25,193 | 24,564 |
Liabilities | 21,012 | 21,189 | 19,853 |
Commercial Banking | |||
Segmental analysis | |||
Assets | 165,399 | 166,478 | 173,621 |
Liabilities | 140,863 | 139,804 | 143,450 |
Private Banking | |||
Segmental analysis | |||
Assets | 23,304 | 21,983 | 20,290 |
Liabilities | 28,610 | 28,554 | 27,049 |
RBS International | |||
Segmental analysis | |||
Assets | 31,738 | 28,398 | 25,867 |
Liabilities | 30,330 | 27,663 | 29,077 |
NatWest Markets | |||
Segmental analysis | |||
Assets | 263,885 | 244,531 | 277,886 |
Liabilities | 246,907 | 227,399 | 248,553 |
Central Items & other | |||
Segmental analysis | |||
Assets | 31,023 | 36,641 | 49,268 |
Liabilities | £ 57,762 | £ 54,344 | £ 75,877 |
Segmental analysis - Goodwill (
Segmental analysis - Goodwill (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2019GBP (£) | |
Analysis of goodwill | |
Goodwill at beginning of the year | £ 5,607 |
Acquisitions | 48 |
Goodwill at end of the year | 5,607 |
UK Personal Banking | |
Analysis of goodwill | |
Goodwill at beginning of the year | 2,692 |
Acquisitions | 48 |
Inter segment transfers | (9) |
Goodwill at end of the year | 2,692 |
Commercial and Private Banking | |
Analysis of goodwill | |
Goodwill at beginning of the year | 1,900 |
Commercial Banking | |
Analysis of goodwill | |
Goodwill at beginning of the year | 2,606 |
Goodwill at end of the year | 2,606 |
Private Banking | |
Analysis of goodwill | |
Goodwill at beginning of the year | 9 |
Inter segment transfers | 9 |
Goodwill at end of the year | 9 |
RBS International | |
Analysis of goodwill | |
Goodwill at beginning of the year | 300 |
Goodwill at end of the year | £ 300 |
Segmental analysis - Geographic
Segmental analysis - Geographical segments (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Geographical segments | |||||
Total revenue | £ 18,429 | £ 16,656 | £ 16,063 | ||
Interest receivable | 11,375 | 11,049 | 11,034 | ||
Interest payable | (3,328) | (2,393) | (2,047) | ||
Net fees and commissions | 2,511 | 2,357 | 2,455 | ||
Income from trading activities | 932 | 1,507 | 634 | ||
Other operating income | 2,763 | 882 | 1,057 | ||
Total income | 14,253 | 13,402 | 13,133 | ||
Operating profit before tax | 4,232 | 3,359 | 2,239 | ||
Total assets | 723,039 | 694,235 | 738,056 | ||
Total liabilities | 679,483 | 647,745 | 688,963 | ||
Net assets attributable to equity owners and non-controlling interests | 43,556 | 46,490 | [1] | 49,093 | [1] |
Contingent liabilities and commitments | 124,995 | 126,883 | 136,050 | ||
UK | |||||
Geographical segments | |||||
Total revenue | 16,925 | 15,351 | 15,011 | ||
Interest receivable | 10,923 | 10,589 | 10,556 | ||
Interest payable | (3,255) | (2,366) | (1,945) | ||
Net fees and commissions | 2,191 | 2,183 | 2,192 | ||
Income from trading activities | 727 | 1,308 | 570 | ||
Other operating income | 2,305 | 467 | 806 | ||
Total income | 12,891 | 12,181 | 12,179 | ||
Operating profit before tax | 3,543 | 3,805 | 3,230 | ||
Total assets | 648,056 | 624,228 | 662,314 | ||
Total liabilities | 613,151 | 588,185 | 626,103 | ||
Net assets attributable to equity owners and non-controlling interests | 34,905 | 36,043 | 36,211 | ||
Contingent liabilities and commitments | 114,422 | 121,267 | 128,127 | ||
USA | |||||
Geographical segments | |||||
Total revenue | 228 | 300 | 192 | ||
Interest receivable | 7 | ||||
Interest payable | (11) | ||||
Net fees and commissions | 37 | 12 | 97 | ||
Income from trading activities | 148 | 124 | 83 | ||
Other operating income | 13 | 119 | 22 | ||
Total income | 198 | 255 | 198 | ||
Operating profit before tax | 186 | (718) | (580) | ||
Total assets | 33,121 | 32,573 | 38,485 | ||
Total liabilities | 31,715 | 31,329 | 36,564 | ||
Net assets attributable to equity owners and non-controlling interests | 1,406 | 1,244 | 1,921 | ||
Contingent liabilities and commitments | 78 | ||||
Europe | |||||
Geographical segments | |||||
Total revenue | 1,148 | 838 | 655 | ||
Interest receivable | 417 | 430 | 435 | ||
Interest payable | (70) | (26) | (89) | ||
Net fees and commissions | 211 | 102 | 113 | ||
Income from trading activities | 49 | 68 | (24) | ||
Other operating income | 436 | 229 | 121 | ||
Total income | 1,043 | 803 | 556 | ||
Operating profit before tax | 421 | 150 | (485) | ||
Total assets | 40,010 | 34,441 | 34,280 | ||
Total liabilities | 33,539 | 27,183 | 25,171 | ||
Net assets attributable to equity owners and non-controlling interests | 6,471 | 7,258 | 9,109 | ||
Contingent liabilities and commitments | 10,571 | 5,408 | 7,823 | ||
RoW | |||||
Geographical segments | |||||
Total revenue | 128 | 167 | 205 | ||
Interest receivable | 35 | 30 | 36 | ||
Interest payable | (3) | (1) | (2) | ||
Net fees and commissions | 72 | 60 | 53 | ||
Income from trading activities | 8 | 7 | 5 | ||
Other operating income | 9 | 67 | 108 | ||
Total income | 121 | 163 | 200 | ||
Operating profit before tax | 82 | 122 | 74 | ||
Total assets | 1,852 | 2,993 | 2,977 | ||
Total liabilities | 1,078 | 1,048 | 1,125 | ||
Net assets attributable to equity owners and non-controlling interests | 774 | 1,945 | 1,852 | ||
Contingent liabilities and commitments | £ 2 | £ 208 | £ 22 | ||
[1] | Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. |
Pensions (Details)
Pensions (Details) | 12 Months Ended |
Dec. 31, 2019trustee | |
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, 2019 | Dec. 31, 2018 | |
Pensions | ||
Fair value of assets | £ 150,029 | £ 133,349 |
Fair value of liabilities | 146,879 | 128,897 |
Inflation rate swaps | ||
Pensions | ||
Notional amount | 16,000 | 13 |
Fair value of assets | 909 | 347 |
Fair value of liabilities | 1,094 | 502 |
Interest rate | ||
Pensions | ||
Notional amount | 57,000 | 55 |
Fair value of assets | 6,407 | 8,132 |
Fair value of liabilities | 2,992 | 5,362 |
Currency forwards | ||
Pensions | ||
Notional amount | 9,000 | 10 |
Fair value of assets | 215 | 22 |
Fair value of liabilities | 42 | 164 |
Equity and bond call options | ||
Pensions | ||
Notional amount | 1,000 | 1 |
Fair value of assets | 122 | 277 |
Equity and bond put options | ||
Pensions | ||
Notional amount | 5,000 | 4 |
Fair value of assets | 3 | 3 |
Fair value of liabilities | 1 | 1 |
Other | ||
Pensions | ||
Notional amount | 3,000 | 4 |
Fair value of assets | 124 | 1,027 |
Fair value of liabilities | £ 13 | £ 1,092 |
Main Scheme | ||
Pensions | ||
Percentage of total plan assets | 90.00% | 90.00% |
Equities | 8.70% | 8.90% |
Index-linked bonds | 47.80% | 40.10% |
Government bonds | 9.30% | 12.90% |
Corporate and other bonds | 16.60% | 17.40% |
Real estate | 4.80% | 5.50% |
Derivatives | 7.80% | 6.10% |
Cash and other assets | 5.00% | 9.10% |
Total | 100.00% | 100.00% |
Percentage of collateral | 110.00% | |
Maximum percentage of indirect investment by trustees | 5.00% | |
Main Scheme | Swap | ||
Pensions | ||
Notional amount | £ 75,000 | £ 72,000 |
Fair value of assets | £ 3,340 | £ 2,557 |
Quoted | ||
Pensions | ||
Equities | 3.90% | 3.70% |
Index-linked bonds | 47.80% | 40.10% |
Government bonds | 9.30% | 12.90% |
Corporate and other bonds | 11.60% | 12.20% |
Total | 72.60% | 68.90% |
Unquoted | ||
Pensions | ||
Equities | 4.80% | 5.20% |
Corporate and other bonds | 5.00% | 5.20% |
Real estate | 4.80% | 5.50% |
Derivatives | 7.80% | 6.10% |
Cash and other assets | 5.00% | 9.10% |
Total | 27.40% | 31.10% |
Pensions - Changes in value of
Pensions - Changes in value of net pension (assets)/liability (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pensions | |||||
Balance at beginning of year | £ 355 | £ (263) | |||
Currency translation and other adjustments | (9) | (4) | |||
Net interest expense | 10 | ||||
Current service cost | 193 | ||||
Past service cost | 15 | ||||
Gain on curtailments or settlements | (10) | ||||
Income statement | 188 | 308 | |||
Return on plan assets excluding recognised interest income | (3,556) | 2,090 | £ (1,728) | £ (9,254) | £ 458 |
Experience gains and losses | (279) | 81 | 93 | (794) | (258) |
Effect of changes in actuarial financial assumptions | 6,189 | ||||
Effect of changes in actuarial demographic assumptions | (482) | ||||
Asset ceiling adjustments | (1,730) | ||||
Statement of comprehensive income | 142 | 1,967 | |||
Contributions by employer | (473) | (2,363) | |||
Liabilities extinguished upon settlement | (6) | ||||
Balance at end of year | 495 | 355 | (263) | ||
Main Scheme | |||||
Pensions | |||||
Current service cost | 140 | ||||
Past service cost | 13 | ||||
Income statement | 153 | 191 | |||
Return on plan assets excluding recognised interest income | (3,021) | 1,891 | (1,580) | (8,562) | 415 |
Experience gains and losses | (275) | 122 | 107 | £ (658) | £ (233) |
Effect of changes in actuarial financial assumptions | 5,565 | ||||
Effect of changes in actuarial demographic assumptions | (465) | ||||
Asset ceiling adjustments | (1,696) | ||||
Statement of comprehensive income | 108 | 2,027 | |||
Contributions by employer | (261) | (2,218) | |||
Expected contributions to scheme in 2020 | 247 | ||||
Maximum expected additional contributions to scheme in 2020 | 500 | ||||
Fair value of plan assets | |||||
Pensions | |||||
Balance at beginning of year | (48,752) | (49,746) | |||
Currency translation and other adjustments | 85 | (20) | |||
Net interest expense | (1,374) | ||||
Income statement | (1,374) | (1,242) | |||
Return on plan assets excluding recognised interest income | (3,556) | ||||
Statement of comprehensive income | (3,556) | 2,090 | |||
Contributions by employer | (473) | (2,363) | |||
Contributions by plan participants and other scheme members | (15) | (12) | |||
Liabilities extinguished upon settlement | 188 | 259 | |||
Benefits paid | 1,972 | 2,282 | |||
Balance at end of year | (51,925) | (48,752) | (49,746) | ||
Fair value of plan assets | Main Scheme | |||||
Pensions | |||||
Balance at beginning of year | (43,806) | (44,652) | |||
Net interest expense | (1,245) | ||||
Income statement | (1,245) | (1,123) | |||
Return on plan assets excluding recognised interest income | (3,021) | ||||
Statement of comprehensive income | (3,021) | 1,891 | |||
Contributions by employer | (261) | (2,218) | |||
Contributions by plan participants and other scheme members | (10) | (7) | |||
Transfer of pension assets and liabilities from Main section | (276) | ||||
Benefits paid | 1,788 | 2,027 | |||
Balance at end of year | (46,555) | (43,806) | (44,652) | ||
Present value of defined benefit obligation | |||||
Pensions | |||||
Balance at beginning of year | 39,607 | 42,378 | |||
Currency translation and other adjustments | (76) | 17 | |||
Net interest expense | 1,109 | ||||
Current service cost | 193 | ||||
Past service cost | 15 | ||||
Gain on curtailments or settlements | (10) | ||||
Income statement | 1,307 | 1,371 | |||
Experience gains and losses | (279) | ||||
Effect of changes in actuarial financial assumptions | 6,189 | ||||
Effect of changes in actuarial demographic assumptions | (482) | ||||
Statement of comprehensive income | 5,428 | (1,630) | |||
Contributions by plan participants and other scheme members | 15 | 12 | |||
Liabilities extinguished upon settlement | (194) | (259) | |||
Benefits paid | (1,972) | (2,282) | |||
Balance at end of year | 44,115 | 39,607 | 42,378 | ||
Present value of defined benefit obligation | Main Scheme | |||||
Pensions | |||||
Balance at beginning of year | 35,466 | 37,937 | |||
Net interest expense | 1,003 | ||||
Current service cost | 140 | ||||
Past service cost | 13 | ||||
Income statement | 1,156 | 1,143 | |||
Experience gains and losses | (275) | ||||
Effect of changes in actuarial financial assumptions | 5,565 | ||||
Effect of changes in actuarial demographic assumptions | (465) | ||||
Statement of comprehensive income | 4,825 | (1,396) | |||
Contributions by plan participants and other scheme members | 10 | 7 | |||
Transfer of pension assets and liabilities from Main section | (198) | ||||
Benefits paid | (1,788) | (2,027) | |||
Balance at end of year | 39,669 | 35,466 | 37,937 | ||
Asset ceiling/minimum funding | |||||
Pensions | |||||
Balance at beginning of year | 8,790 | 7,105 | |||
Currency translation and other adjustments | 1 | ||||
Net interest expense | 255 | ||||
Income statement | 255 | 179 | |||
Asset ceiling adjustments | (1,730) | ||||
Statement of comprehensive income | 1,730 | (1,507) | |||
Balance at end of year | 7,315 | 8,790 | 7,105 | ||
Asset ceiling/minimum funding | Main Scheme | |||||
Pensions | |||||
Balance at beginning of year | 8,340 | 6,715 | |||
Net interest expense | 242 | ||||
Income statement | 242 | 171 | |||
Asset ceiling adjustments | 1,696 | ||||
Statement of comprehensive income | 1,696 | 1,532 | |||
Transfer of pension assets and liabilities from Main section | (78) | ||||
Balance at end of year | £ 6,886 | £ 8,340 | £ 6,715 |
Pensions - Amounts in the Finan
Pensions - Amounts in the Financial statements (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Pensions | |||||
Fund assets at fair value | £ 51,925 | £ 48,752 | £ 49,746 | £ 49,229 | £ 34,708 |
Present value of fund liabilities | 44,115 | 39,607 | 42,378 | 43,990 | 35,152 |
Funded status | 7,810 | 9,145 | 7,368 | £ 5,239 | £ (444) |
Net assets of schemes in surplus | 614 | 520 | |||
Net liabilities of schemes in deficit | (119) | (165) | |||
Retirement benefit liability | 495 | 355 | (263) | ||
Asset ceiling/minimum funding | |||||
Pensions | |||||
Retirement benefit liability | £ 7,315 | £ 8,790 | £ 7,105 |
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 Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pensions | ||||
Period of funding valuations (in years) | 3 years | |||
Funding level, as percent | 96.00% | |||
Pension liabilities | £ 47,000 | |||
Deficit | £ 2,000 | |||
Cash payment | £ 2,000 | |||
Average cost (as a percent) | 44.00% | |||
Amount of impact of guaranteed minimum pension equalisation | £ 102 | |||
Principal IAS 19 actuarial assumptions | ||||
Pensions | ||||
Discount rate | 2.10% | 2.90% | ||
Inflation assumption (RPI) | 2.90% | 3.20% | ||
Rate of increase in salaries | 1.80% | 1.80% | ||
Rate of increase in deferred pensions | 3.00% | 3.10% | ||
Rate of increase in pensions in payment | 2.80% | 2.90% | ||
Proportion of pension converted to a cash lump sum at retirement | 20.00% | 20.00% | ||
Longevity at age 60 for current pensioners (years), males | 26 years 10 months 24 days | 27 years 2 months 12 days | ||
Longevity at age 60 for current pensioners (years), females | 28 years 8 months 12 days | 29 years | ||
Longevity at age 60 for future pensioners currently aged 40 (years), males | 28 years 2 months 12 days | 28 years 4 months 24 days | ||
Longevity at age 60 for future pensioners currently aged 40 (years), females | 30 years 2 months 12 days | 30 years 6 months | ||
Triennial valuation 2017 | ||||
Pensions | ||||
Discount rate spread | 0.80% | |||
Proportion of pension converted to a cash lump sum at retirement | 18.00% | |||
Longevity at age 60 for current pensioners (years), males | 28 years 1 month 6 days | |||
Longevity at age 60 for current pensioners (years), females | 29 years 8 months 12 days | |||
Longevity at age 60 for future pensioners currently aged 40 (years), males | 29 years 3 months 18 days | |||
Longevity at age 60 for future pensioners currently aged 40 (years), females | 31 years 6 months |
Pensions - Sensitivities of the
Pensions - Sensitivities of the present value of defined benefit obligation (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pensions | ||
Weighted average duration of defined benefit obligation | 21 years | 20 years |
Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.50% | 0.50% |
Decrease in actuarial assumption (as a percent) | 0.50% | 0.50% |
Active members | 13.60% | 12.90% |
Deferred members | 49.70% | 48.60% |
Pensioners and dependants | 36.70% | 38.50% |
Total proportions to the different classes of scheme | 100.00% | 100.00% |
Interest rate/discount rate | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of assets | £ (2,330) | £ (2,214) |
(Decrease)/ increase in value of liabilities | (1,973) | (1,644) |
Increase in net pension assets/ (obligations) | £ (357) | £ (570) |
Inflation | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of assets | £ 1,923 | £ 1,487 |
(Decrease)/ increase in value of liabilities | 1,394 | 1,199 |
Increase in net pension assets/ (obligations) | £ 529 | £ 288 |
Credit spreads | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of assets | £ (5) | £ (5) |
(Decrease)/ increase in value of liabilities | (1,973) | (1,644) |
Increase in net pension assets/ (obligations) | £ 1,968 | 1,639 |
Credit spreads | Actuarial assumption of longevity, decrease by 2 years | Main Scheme | ||
Pensions | ||
Actuarial assumption of longevity decrease | 2 years | |
Increase in net pension assets/ (obligations) | £ 6,900 | 5,800 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | 3,600 | 3,000 |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | £ (200) | (400) |
Credit spreads | Actuarial assumption of longevity, decrease by 1 year | Main Scheme | ||
Pensions | ||
Actuarial assumption of longevity decrease | 1 year | |
Increase in net pension assets/ (obligations) | £ 5,400 | 4,500 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | 1,700 | 1,400 |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | (2,300) | (2,100) |
Credit spreads | Actuarial assumption of longevity, no change | Main Scheme | ||
Pensions | ||
Increase in net pension assets/ (obligations) | 3,900 | 3,200 |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | £ (4,400) | (3,800) |
Credit spreads | Actuarial assumption of longevity, increase by 1 year | Main Scheme | ||
Pensions | ||
Actuarial assumption of longevity increase | 1 year | |
Increase in net pension assets/ (obligations) | £ 2,300 | 1,900 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | (1,700) | (1,400) |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | £ (6,500) | (5,500) |
Credit spreads | Actuarial assumption of longevity, increase by 1 year | Main Scheme | ||
Pensions | ||
Actuarial assumption of longevity increase | 2 years | |
Increase in net pension assets/ (obligations) | £ 800 | 700 |
Net pension assets/obligations, assuming no change in one of the actuarial assumption | (3,600) | (3,000) |
Increase(decrease) in net pension assets/obligations, assuming decrease in one of the actuarial assumption | £ (8,700) | £ (7,300) |
Longevity increase | Main Scheme | ||
Pensions | ||
Actuarial assumption of longevity increase | 1 year | 1 year |
(Decrease)/ increase in value of liabilities | £ 1,706 | £ 1,414 |
Increase in net pension assets/ (obligations) | £ (1,706) | £ (1,414) |
Pension increase | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/ increase in value of liabilities | £ 1,326 | £ 1,215 |
Increase in net pension assets/ (obligations) | £ (1,326) | £ (1,215) |
Equity values | Main Scheme | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 10.00% | 10.00% |
(Decrease)/ increase in value of assets | £ 430 | £ 419 |
Increase in net pension assets/ (obligations) | £ 430 | £ 419 |
Pensions - History of defined b
Pensions - History of defined benefit schemes (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pensions | |||||
Fair value of plan assets | £ 51,925 | £ 48,752 | £ 49,746 | £ 49,229 | £ 34,708 |
Present value of plan obligations | 44,115 | 39,607 | 42,378 | 43,990 | 35,152 |
Funded status | 7,810 | 9,145 | 7,368 | 5,239 | (444) |
Experience gains/(losses) on plan liabilities | 279 | (81) | (93) | 794 | 258 |
Experience gains/(losses) on plan assets | 3,556 | (2,090) | 1,728 | 9,254 | (458) |
Actual return on plan assets | £ 4,930 | £ (848) | £ 3,013 | £ 10,708 | £ 749 |
Actual return on plan assets - % | 10.10% | (1.70%) | 6.10% | 30.90% | 2.20% |
Main Scheme | |||||
Pensions | |||||
Fair value of plan assets | £ 46,555 | £ 43,806 | £ 44,652 | £ 43,824 | £ 30,703 |
Present value of plan obligations | 39,669 | 35,466 | 37,937 | 38,851 | 30,966 |
Funded status | 6,886 | 8,340 | 6,715 | 4,973 | (263) |
Experience gains/(losses) on plan liabilities | 275 | (122) | (107) | 658 | 233 |
Experience gains/(losses) on plan assets | 3,021 | (1,891) | 1,580 | 8,562 | (415) |
Actual return on plan assets | £ 4,266 | £ (768) | £ 2,735 | £ 9,872 | £ 703 |
Actual return on plan assets - % | 9.70% | (1.70%) | 6.20% | 32.20% | 2.30% |
Auditor's remuneration (Details
Auditor's remuneration (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Auditor's remuneration | |||
Fees payable for the audit of RBS Group's annual accounts | £ 3.8 | £ 3.5 | £ 4 |
Fees payable for the audit of RBSG plc's subsidiaries | 25.7 | 27.5 | 22.9 |
Fees payable for audit-related assurance services | 3.2 | 2.9 | 4.3 |
Total audit and audit-related assurance services fees | 32.7 | 33.9 | 31.2 |
Other assurance services | 1.2 | 1.3 | 1.7 |
Corporate finance services | 0.6 | 0.2 | 0.2 |
Total other services | 1.8 | 1.5 | £ 1.9 |
Audit fees paid | 16 | ||
Fees for review of interim financial information | 1.1 | 1.1 | |
Fees for reports to the regulatory | 1.4 | 1.1 | |
Fees for non-statutory audit opinions | 0.7 | 0.7 | |
Fees for the auditors as reporting accountants on debt and equity issuances | £ 0.6 | £ 0.2 |
Tax - Tax charge (Details)
Tax - Tax charge (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax: | |||
Charge for the year | £ (673) | £ (1,025) | £ (925) |
Over provision in respect of prior years | 122 | 125 | 227 |
Total current tax | (551) | (900) | (698) |
Deferred tax: | |||
Credit/(charge) for the year | 38 | (280) | 108 |
Increase/(reduction) in the carrying value of deferred tax assets | 62 | 7 | (30) |
Over/(under) provision in respect of prior years | 19 | (35) | (111) |
Actual tax charge | £ (432) | £ (1,208) | £ (731) |
Tax - Reconciliation (Details)
Tax - Reconciliation (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax reconciliation | |||
UK corporation tax | 19.00% | 19.00% | 19.25% |
Expected tax charge | £ (804) | £ (638) | £ (431) |
Losses and temporary differences in year where no deferred tax asset recognised | (4) | (55) | (303) |
Foreign profits taxed at other rates | 23 | (8) | 104 |
UK tax rate change impact | (7) | ||
Losses on disposals and write-downs | (71) | (44) | (69) |
UK bank levy | (26) | (38) | (45) |
Regulatory and legal actions | (165) | (203) | (56) |
Other disallowable items | (62) | (63) | (110) |
Alawwal bank merger gain disposal | 215 | ||
FX recycling on the liquidation of RFS Holdings | 279 | ||
other | 80 | 47 | 134 |
Taxable foreign exchange movements | (1) | (27) | 27 |
Losses brought forward and utilised | 27 | 14 | 11 |
Banking surcharge | (199) | (357) | (165) |
Tax on paid-in equity | 73 | 67 | 93 |
Adjustments in respect of prior periods | 141 | 90 | 116 |
Actual tax charge | (432) | (1,208) | (731) |
UK | |||
Tax reconciliation | |||
Increase/(decrease) in the carrying value of deferred tax assets | 129 | £ 7 | £ (30) |
Ireland | |||
Tax reconciliation | |||
Increase/(decrease) in the carrying value of deferred tax assets | £ (67) |
Tax - Asset and liability (Deta
Tax - Asset and liability (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax | |||
Deferred tax assets | £ (1,011) | £ (1,412) | |
Deferred tax liability | 266 | 454 | |
Net deferred tax asset | £ (745) | £ (958) | £ (1,157) |
Tax - Net deferred tax asset (D
Tax - Net deferred tax asset (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of net deferred tax asset | ||
At 1 January | £ (958) | £ (1,157) |
Implementation of IFRS 9 on 1 January 2018 | 16 | |
Implementation of IFRS 16 on 1 January 2019 | (60) | |
Acquisitions and disposals of subsidiaries | 16 | |
(Credit)/charge to income statement | (119) | 308 |
(Credit)/charge to other comprehensive income | 372 | (84) |
Currency translation and other adjustments | 4 | (41) |
At 31 December | (745) | (958) |
Pension | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (528) | (393) |
Acquisitions and disposals of subsidiaries | (1) | |
(Credit)/charge to income statement | 28 | (40) |
(Credit)/charge to other comprehensive income | 362 | (95) |
At 31 December | (139) | (528) |
Accelerated capital allowances | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 220 | 192 |
Acquisitions and disposals of subsidiaries | (1) | |
(Credit)/charge to income statement | (43) | 22 |
(Credit)/charge to other comprehensive income | 1 | |
Currency translation and other adjustments | (4) | 5 |
At 31 December | 172 | 220 |
Expense provisions | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (159) | (266) |
(Credit)/charge to income statement | 41 | 121 |
Currency translation and other adjustments | (14) | |
At 31 December | (118) | (159) |
Financial instruments | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 349 | 198 |
Implementation of IFRS 9 on 1 January 2018 | 16 | |
Acquisitions and disposals of subsidiaries | 18 | |
(Credit)/charge to income statement | (81) | 154 |
(Credit)/charge to other comprehensive income | 30 | (23) |
Currency translation and other adjustments | (1) | 4 |
At 31 December | 315 | 349 |
Tax losses carried forward | ||
Reconciliation of net deferred tax asset | ||
At 1 January | (936) | (939) |
(Credit)/charge to income statement | (28) | 5 |
Currency translation and other adjustments | 13 | (2) |
At 31 December | (951) | (936) |
Other | ||
Reconciliation of net deferred tax asset | ||
At 1 January | 96 | 51 |
Implementation of IFRS 16 on 1 January 2019 | (60) | |
(Credit)/charge to income statement | (36) | 46 |
(Credit)/charge to other comprehensive income | (20) | 33 |
Currency translation and other adjustments | (4) | (34) |
At 31 December | £ (24) | £ 96 |
Tax - Tax losses (Details)
Tax - Tax losses (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Unused tax losses | ||
Deferred tax assets | £ 1,011 | £ 1,412 |
Tax losses carried forward | ||
Unused tax losses | ||
Deferred tax assets | 951 | 936 |
Tax losses carried forward | UK | ||
Unused tax losses | ||
Deferred tax assets | 770 | 675 |
Tax losses carried forward | UK | NWM Plc | ||
Unused tax losses | ||
Deferred tax assets | 75 | 151 |
Tax losses carried forward | UK | NWB Plc | ||
Unused tax losses | ||
Deferred tax assets | 530 | 505 |
Tax losses carried forward | UK | Ulster Bank | ||
Unused tax losses | ||
Deferred tax assets | 15 | 19 |
Tax losses carried forward | Ireland | Ulster Bank | ||
Unused tax losses | ||
Deferred tax assets | £ 181 | £ 261 |
Tax - Other (Details)
Tax - Other (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred tax: | |||
Deferred tax asset | £ 1,011 | £ 1,412 | |
UK corporation tax | 19.00% | 19.00% | 19.25% |
Loss for the year | £ (3,800) | £ (2,151) | £ (1,508) |
Deferred tax liabilities | 266 | 454 | |
Deferred tax assets that have not been recognised | 4,653 | 5,118 | 6,356 |
Tax losses and other temporary differences carried forward | 23,555 | 25,597 | 30,049 |
Retained earnings | |||
Deferred tax: | |||
Deferred tax liabilities that have not been recognised | 262 | 257 | £ 255 |
within 5 years | |||
Deferred tax: | |||
Tax losses and other temporary differences carried forward | 839 | ||
Over 5 years | |||
Deferred tax: | |||
Tax losses and other temporary differences carried forward | 4,798 | ||
Tax losses carried forward | |||
Deferred tax: | |||
Deferred tax asset | £ 951 | 936 | |
UK | |||
Deferred tax: | |||
Limit of offset of losses carried forward (as a percent) | 25.00% | ||
Banking surcharge rate | 8.00% | ||
Tax losses carried forward | £ 770 | 675 | |
UK | Tax losses carried forward | |||
Deferred tax: | |||
Deferred tax asset | £ 770 | 675 | |
RBS plc | UK | |||
Deferred tax: | |||
Limit of offset of losses carried forward (as a percent) | 25.00% | ||
Transfer of tax losses from related parties | £ 1,161,000 | ||
Deferred tax asset utilised to reduce current tax expense | 56 | ||
Tax losses not recognised | 3,396 | ||
RBS plc | UK | Tax losses carried forward | |||
Deferred tax: | |||
Deferred tax asset | 150 | ||
Deferred tax assets before utilisation | £ 206 | ||
NWM Plc | UK | |||
Deferred tax: | |||
Limit of offset of losses carried forward (as a percent) | 25.00% | ||
Amount of decrease in deferred tax asset | £ 76 | ||
Transfer of tax losses to related parties | 5,438 | ||
Tax losses not recognised | 5,109 | ||
NWM Plc | UK | Forecast | |||
Deferred tax: | |||
Tax losses carried forward | 400 | ||
NWM Plc | UK | Tax losses carried forward | |||
Deferred tax: | |||
Deferred tax asset | 75 | 151 | |
NWB Plc | UK | |||
Deferred tax: | |||
Tax losses carried forward | 3,109 | ||
Transfer of tax losses from related parties | 881 | ||
NWB Plc | UK | Tax losses carried forward | |||
Deferred tax: | |||
Deferred tax asset | 530 | 505 | |
Ulster Bank | UK | Tax losses carried forward | |||
Deferred tax: | |||
Deferred tax asset | 15 | 19 | |
Ulster Bank | Ireland | |||
Deferred tax: | |||
Loss for the year | 1,447 | ||
Tax losses carried forward | 8,334 | ||
Ulster Bank | Ireland | Tax losses carried forward | |||
Deferred tax: | |||
Deferred tax asset | 181 | £ 261 | |
Amount of decrease in deferred tax asset | £ 67 |
Earnings per share (Details)
Earnings per share (Details) - GBP (£) £ in Millions, shares in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share | |||
Profit attributable to ordinary shareholders | £ 3,133 | £ 1,622 | £ 752 |
Weighted average number of shares | |||
Weighted average number of ordinary shares outstanding during the year | 12,067 | 12,009 | 11,867 |
Effect of dilutive share options and convertible securities | 35 | 52 | 69 |
Diluted weighted average number of ordinary shares outstanding during the year | 12,102 | 12,061 | 11,936 |
Trading assets and liabilitie_2
Trading assets and liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Loans | ||
Reverse repos | £ 24,095 | £ 24,759 |
Collateral given | 20,579 | 19,036 |
Other loans | 1,947 | 1,308 |
Total loans | 46,621 | 45,103 |
Securities | ||
Financial institutions and Corporate | 4,867 | 4,995 |
Total securities | 30,124 | 30,016 |
Total | 76,745 | 75,119 |
Deposits | ||
Repos | 27,885 | 25,645 |
Collateral received | 21,509 | 20,187 |
Other deposits | 1,606 | 1,788 |
Total deposits | 51,000 | 47,620 |
Debt securities in issue | 1,762 | 903 |
Short positions | 21,187 | 23,827 |
Total | 73,949 | 72,350 |
UK | ||
Securities | ||
Central and local government securities | 4,897 | 6,834 |
USA | ||
Securities | ||
Central and local government securities | 5,458 | 4,689 |
Other | ||
Securities | ||
Central and local government securities | £ 14,902 | £ 13,498 |
Derivatives - fair value of the
Derivatives - fair value of the hedging derivative (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair value of the hedging derivative | |||
Derivative financial assets | £ 150,029 | £ 133,349 | |
Derivative financial liabilities | 146,879 | 128,897 | |
Derivatives | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 22 | 21 | |
Fair value hedging | |||
Fair value of the hedging derivative | |||
Changes in fair value used for hedge ineffectiveness | 610 | 54 | £ (48) |
IFRS netting | Derivatives | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | (3,464) | (2,922) | |
Derivatives before IFRS netting | |||
Fair value of the hedging derivative | |||
Notional amount | 224,200 | ||
Changes in fair value used for hedge ineffectiveness | (270) | (777) | |
Derivatives before IFRS netting | Derivatives | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 3,486 | 2,943 | |
Interest rate | Fair value hedging | |||
Fair value of the hedging derivative | |||
Notional amount | 65,100 | 60,000 | |
Derivative financial assets | 1,186 | 965 | |
Changes in fair value used for hedge ineffectiveness | (585) | (7) | |
Interest rate | Fair value hedging | Derivatives | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 2,641 | 2,061 | |
Interest rate | Cash flow hedging | |||
Fair value of the hedging derivative | |||
Notional amount | 148,400 | 149,700 | |
Derivative financial assets | 1,450 | 1,148 | |
Changes in fair value used for hedge ineffectiveness | 366 | (770) | |
Interest rate | Cash flow hedging | Derivatives | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 833 | 872 | |
Derivatives | |||
Fair value of the hedging derivative | |||
Derivative financial assets | 202 | 358 | |
Derivatives | IFRS netting | |||
Fair value of the hedging derivative | |||
Derivative financial assets | (2,500) | (1,893) | |
Derivatives | Derivatives before IFRS netting | |||
Fair value of the hedging derivative | |||
Notional amount | 226,200 | ||
Derivative financial assets | 2,702 | 2,251 | |
Exchange rate contracts | |||
Fair value of the hedging derivative | |||
Notional amount | 3,750,000 | 3,426,000 | |
Derivative financial assets | 44,792 | 36,545 | |
Derivative financial liabilities | 47,141 | 38,230 | |
Exchange rate contracts | Cash flow hedging | |||
Fair value of the hedging derivative | |||
Notional amount | 12,500 | ||
Changes in fair value used for hedge ineffectiveness | (59) | ||
Exchange rate contracts | Cash flow hedging | Derivatives | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 8 | ||
Exchange rate contracts | Net investment hedging | |||
Fair value of the hedging derivative | |||
Notional amount | 2,000 | ||
Changes in fair value used for hedge ineffectiveness | 8 | ||
Exchange rate contracts | Net investment hedging | Derivatives | |||
Fair value of the hedging derivative | |||
Derivative financial liabilities | 4 | 10 | |
Exchange rate contracts | Derivatives | Cash flow hedging | |||
Fair value of the hedging derivative | |||
Notional amount | 12,300 | ||
Derivative financial assets | 66 | 106 | |
Exchange rate contracts | Derivatives | Net investment hedging | |||
Fair value of the hedging derivative | |||
Notional amount | 400 | ||
Derivative financial assets | 32 | ||
Interest rate contracts | |||
Fair value of the hedging derivative | |||
Notional amount | 11,293,000 | 10,536,000 | |
Derivative financial assets | 104,957 | 96,410 | |
Derivative financial liabilities | 99,331 | 90,444 | |
Credit derivatives | |||
Fair value of the hedging derivative | |||
Notional amount | 17,000 | 16,000 | |
Derivative financial assets | 280 | 346 | |
Derivative financial liabilities | 359 | 208 | |
Equity and commodity contracts | |||
Fair value of the hedging derivative | |||
Notional amount | 3,000 | 1,000 | |
Derivative financial assets | 48 | ||
Derivative financial liabilities | £ 48 | £ 15 |
Derivatives - Notional of hedgi
Derivatives - Notional of hedging instruments affected by interest rate benchmark reform (Details) - GBP (£) £ in Billions | Dec. 31, 2019 | Dec. 31, 2018 |
Interest rate contracts | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | £ 11,293 | £ 10,536 |
Fair value hedging | LIBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 40.2 | |
Fair value hedging | EURIBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 11.1 | |
Cash flow hedging | LIBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 44.2 | |
Cash flow hedging | EURIBOR | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | 3.4 | |
Cash flow hedging | SONIA | ||
Disclosure of detailed information about hedging instruments [line items] | ||
Notional amount hedging instruments affected by interest rate benchmark reform | £ 0 |
Derivatives - Impact of the acc
Derivatives - Impact of the accumulated amount of fair hedge adjustments (Details) £ in Millions | 12 Months Ended | |||||||
Dec. 31, 2019GBP (£)kr / £ | Dec. 31, 2019GBP (£)kr / £ | Dec. 31, 2019GBP (£)kr / £ | Dec. 31, 2019GBP (£)₨ / £ | Dec. 31, 2019GBP (£)$ / ლ | Dec. 31, 2019GBP (£) | Dec. 31, 2019GBP (£) | Dec. 31, 2018GBP (£)$ / ლ | |
Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | £ 77,600 | £ 77,600 | £ 77,600 | £ 77,600 | £ 77,600 | £ 77,600 | £ 77,600 | £ 67,900 |
Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 0.98% | 0.94% | ||||||
0-3 months | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 1,900 | 1,900 | 1,900 | 1,900 | 1,900 | £ 1,900 | 1,900 | £ 8,600 |
0-3 months | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 0.83% | 0.54% | ||||||
3-12 months | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 22,000 | 22,000 | 22,000 | 22,000 | 22,000 | £ 22,000 | 22,000 | £ 18,900 |
3-12 months | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 1.01% | 0.56% | ||||||
More than 1 year but less than 3 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 45,200 | 45,200 | 45,200 | 45,200 | 45,200 | £ 45,200 | 45,200 | £ 34,100 |
More than 1 year but less than 3 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 0.87% | 1.07% | ||||||
More than 3 years but less than 5 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 5,300 | 5,300 | 5,300 | 5,300 | 5,300 | £ 5,300 | 5,300 | £ 5,100 |
More than 3 years but less than 5 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 1.32% | 1.34% | ||||||
5-10 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 2,400 | 2,400 | 2,400 | 2,400 | 2,400 | £ 2,400 | 2,400 | £ 400 |
5-10 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 1.12% | 3.96% | ||||||
10-20 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 800 | 800 | 800 | 800 | 800 | £ 800 | 800 | £ 800 |
10-20 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 4.31% | 4.31% | ||||||
Fair value hedging | ||||||||
Derivatives | ||||||||
Carrying value of hedged liabilities | 32,209 | 32,209 | 32,209 | 32,209 | 32,209 | £ 32,209 | 32,209 | £ 25,648 |
Impact on hedged items included in carrying value, liabilities | 555 | 555 | 555 | 555 | 555 | 555 | 555 | 3 |
Changes in fair value used for hedge ineffectiveness | (1,029) | 8 | ||||||
Impact on hedged items ceased to be adjusted for hedging gains or losses, liabilities | 54 | 54 | 54 | 54 | 54 | 54 | 54 | |
Fair value hedging | Other financial liabilities | ||||||||
Derivatives | ||||||||
Carrying value of hedged liabilities | 26,811 | 26,811 | 26,811 | 26,811 | 26,811 | 26,811 | 26,811 | 23,289 |
Impact on hedged items included in carrying value, liabilities | 830 | 830 | 830 | 830 | 830 | 830 | 830 | (19) |
Changes in fair value used for hedge ineffectiveness | (807) | (7) | ||||||
Impact on hedged items ceased to be adjusted for hedging gains or losses, liabilities | 30 | 30 | 30 | 30 | 30 | 30 | 30 | |
Fair value hedging | Subordinated liabilities | ||||||||
Derivatives | ||||||||
Carrying value of hedged liabilities | 5,398 | 5,398 | 5,398 | 5,398 | 5,398 | 5,398 | 5,398 | 2,359 |
Impact on hedged items included in carrying value, liabilities | (275) | (275) | (275) | (275) | (275) | (275) | (275) | 22 |
Changes in fair value used for hedge ineffectiveness | (222) | 15 | ||||||
Impact on hedged items ceased to be adjusted for hedging gains or losses, liabilities | 24 | 24 | 24 | 24 | 24 | 24 | 24 | |
Fair value hedging | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 37,000 | 37,000 | 37,000 | 37,000 | 37,000 | 37,000 | 37,000 | 34,000 |
Carrying value of hedged assets | 42,512 | 42,512 | 42,512 | 42,512 | 42,512 | 42,512 | 42,512 | 38,076 |
Impact on hedged items included in carrying value, assets | 2,297 | 2,297 | 2,297 | 2,297 | 2,297 | 2,297 | 2,297 | 1,237 |
Changes in fair value used for hedge ineffectiveness | 1,639 | 46 | ||||||
Impact on hedged items ceased to be adjusted for hedging gains or losses, assets | 86 | 86 | 86 | 86 | 86 | 86 | 86 | 101 |
Fair value hedging | Interest rate contracts | Loans to banks and customers | ||||||||
Derivatives | ||||||||
Carrying value of hedged assets | 6,716 | 6,716 | 6,716 | 6,716 | 6,716 | 6,716 | 6,716 | 6,197 |
Impact on hedged items included in carrying value, assets | 1,023 | 1,023 | 1,023 | 1,023 | 1,023 | 1,023 | 1,023 | 875 |
Changes in fair value used for hedge ineffectiveness | 165 | (62) | ||||||
Impact on hedged items ceased to be adjusted for hedging gains or losses, assets | 86 | 86 | 86 | 86 | 86 | 86 | 86 | 91 |
Fair value hedging | Interest rate contracts | Other financial assets - Securities | ||||||||
Derivatives | ||||||||
Carrying value of hedged liabilities | 31,879 | |||||||
Impact on hedged items included in carrying value, assets | 362 | |||||||
Changes in fair value used for hedge ineffectiveness | 108 | |||||||
Impact on hedged items ceased to be adjusted for hedging gains or losses, assets | 10 | |||||||
Fair value hedging | Interest rate contracts | Other financial assets | ||||||||
Derivatives | ||||||||
Carrying value of hedged assets | 35,796 | 35,796 | 35,796 | 35,796 | 35,796 | 35,796 | 35,796 | |
Impact on hedged items included in carrying value, assets | 1,274 | 1,274 | 1,274 | 1,274 | 1,274 | 1,274 | 1,274 | |
Changes in fair value used for hedge ineffectiveness | 1,474 | |||||||
Fair value hedging | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 28,100 | 28,100 | 28,100 | 28,100 | 28,100 | 28,100 | 28,100 | 26,000 |
Fair value hedging | Exchange rate risk | Other financial assets - Securities | ||||||||
Derivatives | ||||||||
Carrying value of hedged assets | 3 | |||||||
Fair value hedging | 0-3 months | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 600 | 600 | 600 | 600 | 600 | 600 | 600 | 1,000 |
Fair value hedging | 3-12 months | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 1,600 | 1,600 | 1,600 | 1,600 | 1,600 | 1,600 | 1,600 | 1,800 |
Fair value hedging | 3-12 months | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 500 | 500 | 500 | 500 | 500 | 500 | 500 | 2,000 |
Fair value hedging | More than 1 year but less than 3 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 8,100 | 8,100 | 8,100 | 8,100 | 8,100 | 8,100 | 8,100 | 11,000 |
Fair value hedging | More than 1 year but less than 3 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 | 7,500 |
Fair value hedging | More than 3 years but less than 5 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 5,500 | 5,500 | 5,500 | 5,500 | 5,500 | 5,500 | 5,500 | 4,900 |
Fair value hedging | More than 3 years but less than 5 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 12,700 | 12,700 | 12,700 | 12,700 | 12,700 | 12,700 | 12,700 | 10,000 |
Fair value hedging | 5-10 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 12,500 | 12,500 | 12,500 | 12,500 | 12,500 | 12,500 | 12,500 | 7,800 |
Fair value hedging | 5-10 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 6,600 | 6,600 | 6,600 | 6,600 | 6,600 | 6,600 | 6,600 | 4,600 |
Fair value hedging | 10-20 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 4,400 | 4,400 | 4,400 | 4,400 | 4,400 | 4,400 | 4,400 | 3,700 |
Fair value hedging | 10-20 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | 1,900 |
Fair value hedging | 20+ years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 4,300 | 4,300 | 4,300 | £ 4,300 | £ 4,300 | 4,300 | 4,300 | £ 3,800 |
Cash flow hedging | ||||||||
Derivatives | ||||||||
Average foreign exchange rate | 93.11 | 1.35 | 1.37 | |||||
Cash flow hedging | Other financial liabilities | ||||||||
Derivatives | ||||||||
Carrying value of hedged liabilities | 1,009 | 1,009 | 1,009 | £ 1,009 | £ 1,009 | 1,009 | 1,009 | |
Changes in fair value used for hedge ineffectiveness | 14 | |||||||
Cash flow hedging | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 70,800 | 70,800 | 70,800 | 70,800 | 70,800 | 70,800 | 70,800 | £ 81,800 |
Carrying value of hedged assets | 71,529 | 71,529 | 71,529 | 71,529 | 71,529 | 71,529 | 71,529 | |
Changes in fair value used for hedge ineffectiveness | (582) | |||||||
Cash flow hedging | Interest rate contracts | Bank and customer deposits | ||||||||
Derivatives | ||||||||
Carrying value of hedged liabilities | 75,837 | 75,837 | 75,837 | 75,837 | 75,837 | 75,837 | 75,837 | 67,854 |
Changes in fair value used for hedge ineffectiveness | 225 | (28) | ||||||
Cash flow hedging | Interest rate contracts | Loans to banks and customers | ||||||||
Derivatives | ||||||||
Carrying value of hedged assets | 69,254 | 69,254 | 69,254 | 69,254 | 69,254 | 69,254 | 69,254 | 81,880 |
Changes in fair value used for hedge ineffectiveness | (566) | £ 686 | ||||||
Cash flow hedging | Interest rate contracts | Other financial assets - Securities | ||||||||
Derivatives | ||||||||
Carrying value of hedged assets | 2,275 | 2,275 | 2,275 | 2,275 | 2,275 | £ 2,275 | 2,275 | |
Changes in fair value used for hedge ineffectiveness | (16) | |||||||
Cash flow hedging | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 1.11% | 1.33% | ||||||
Cash flow hedging | Exchange rate risk | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 12,300 | 12,300 | 12,300 | 12,300 | 12,300 | £ 12,300 | 12,300 | £ 12,500 |
Carrying value of hedged liabilities | 89,110 | 89,110 | 89,110 | 89,110 | 89,110 | 89,110 | 89,110 | 162,226 |
Changes in fair value used for hedge ineffectiveness | 298 | 658 | ||||||
Cash flow hedging | Exchange rate risk | Other financial liabilities | ||||||||
Derivatives | ||||||||
Carrying value of hedged liabilities | 12,264 | 12,264 | 12,264 | 12,264 | 12,264 | 12,264 | 12,264 | 5,590 |
Changes in fair value used for hedge ineffectiveness | 59 | |||||||
Cash flow hedging | Exchange rate risk | Subordinated liabilities | ||||||||
Derivatives | ||||||||
Carrying value of hedged liabilities | 6,902 | |||||||
Cash flow hedging | 0-3 months | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 4,800 | 4,800 | 4,800 | £ 4,800 | £ 4,800 | £ 4,800 | 4,800 | £ 3,900 |
Cash flow hedging | 0-3 months | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 1.10% | 1.87% | ||||||
Cash flow hedging | 3-12 months | ||||||||
Derivatives | ||||||||
Average foreign exchange rate | 88.64 | 1.56 | ||||||
Cash flow hedging | 3-12 months | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 11,400 | 11,400 | 11,400 | £ 11,400 | £ 11,400 | £ 11,400 | 11,400 | £ 10,900 |
Cash flow hedging | 3-12 months | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 0.97% | 1.44% | ||||||
Cash flow hedging | 3-12 months | Exchange rate risk | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 1,900 | 1,900 | 1,900 | £ 1,900 | £ 1,900 | £ 1,900 | 1,900 | |
Cash flow hedging | More than 1 year but less than 3 years | ||||||||
Derivatives | ||||||||
Average foreign exchange rate | 94.01 | 1.30 | 1.32 | |||||
Cash flow hedging | More than 1 year but less than 3 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 31,700 | 31,700 | 31,700 | £ 31,700 | £ 31,700 | £ 31,700 | 31,700 | £ 47,800 |
Cash flow hedging | More than 1 year but less than 3 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 1.20% | 1.13% | ||||||
Cash flow hedging | More than 1 year but less than 3 years | Exchange rate risk | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 6,200 | 6,200 | 6,200 | 6,200 | £ 6,200 | £ 6,200 | 6,200 | £ 5,800 |
Cash flow hedging | More than 3 years but less than 5 years | ||||||||
Derivatives | ||||||||
Average foreign exchange rate | $ / ლ | 1.30 | 1.37 | ||||||
Cash flow hedging | More than 3 years but less than 5 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 10,700 | 10,700 | 10,700 | 10,700 | £ 10,700 | £ 10,700 | 10,700 | £ 8,700 |
Cash flow hedging | More than 3 years but less than 5 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 1.78% | 2.00% | ||||||
Cash flow hedging | More than 3 years but less than 5 years | Exchange rate risk | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 3,100 | 3,100 | 3,100 | 3,100 | £ 3,100 | £ 3,100 | 3,100 | £ 4,700 |
Cash flow hedging | 5-10 years | ||||||||
Derivatives | ||||||||
Average foreign exchange rate | $ / ლ | 1.44 | 1.50 | ||||||
Cash flow hedging | 5-10 years | Interest rate contracts | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | 12,200 | 12,200 | 12,200 | 12,200 | £ 12,200 | £ 12,200 | 12,200 | £ 10,500 |
Cash flow hedging | 5-10 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 1.44% | 1.43% | ||||||
Cash flow hedging | 5-10 years | Exchange rate risk | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | £ 1,100 | £ 1,100 | £ 1,100 | 1,100 | 1,100 | £ 1,100 | 1,100 | £ 2,000 |
Cash flow hedging | 10-20 years | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Percentage of accumulated amount of fair hedge adjustments | 3.12% | |||||||
Net investment hedging | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Average foreign exchange rate | 12.21 | 12.36 | 8.78 | |||||
Net investment hedging | Exchange rate risk | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | £ 400 | £ 400 | £ 400 | 400 | 400 | £ 400 | 400 | 2,000 |
Net investment hedging | 0-3 months | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Average foreign exchange rate | 12.27 | 12.36 | 8.78 | |||||
Net investment hedging | 0-3 months | Exchange rate risk | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | £ 100 | £ 100 | £ 100 | 100 | 100 | 100 | 100 | 1,200 |
Net investment hedging | 3-12 months | Average fixed interest rate | ||||||||
Derivatives | ||||||||
Average foreign exchange rate | kr / £ | 12.10 | |||||||
Net investment hedging | 3-12 months | Exchange rate risk | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | £ 300 | £ 300 | £ 300 | £ 300 | £ 300 | £ 300 | £ 300 | 600 |
Net investment hedging | More than 1 year but less than 3 years | Exchange rate risk | ||||||||
Derivatives | ||||||||
Accumulated amount of fair hedge adjustments | £ 200 |
Derivatives - Risk exposures th
Derivatives - Risk exposures that will be affected by interest rate benchmark reform (Details) - Interest rate contracts £ in Millions | Dec. 31, 2019GBP (£) |
Fair value hedging | LIBOR | |
Disclosure of detailed information about hedged items [line items] | |
Notional amount | £ 42,000 |
Hedged adjustment | 908 |
Fair value hedging | EURIBOR | |
Disclosure of detailed information about hedged items [line items] | |
Notional amount | 12,700 |
Hedged adjustment | 93 |
Cash flow hedging | LIBOR | |
Disclosure of detailed information about hedged items [line items] | |
Notional amount | 9,600 |
Hedged adjustment | (115) |
Cash flow hedging | EURIBOR | |
Disclosure of detailed information about hedged items [line items] | |
Notional amount | 3,300 |
Hedged adjustment | (46) |
Cash flow hedging | BOE Base rate | |
Disclosure of detailed information about hedged items [line items] | |
Notional amount | 34,700 |
Hedged adjustment | (172) |
Cash flow hedging | ECB REFI rate | |
Disclosure of detailed information about hedged items [line items] | |
Notional amount | 100 |
Hedged adjustment | 0 |
Cash flow hedging | SONIA | |
Disclosure of detailed information about hedged items [line items] | |
Notional amount | 100 |
Hedged adjustment | £ 0 |
Derivatives - Hedge ineffective
Derivatives - Hedge ineffectiveness recognised (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about hedged items | |||
Hedging ineffectiveness | £ 48 | £ (65) | £ 39 |
Fair value hedging | |||
Disclosure of detailed information about hedged items | |||
Gains/(losses) on the hedged items attributable to the hedged risk | 610 | 54 | (48) |
(Losses)/gains on the hedging instruments | (585) | (7) | 78 |
Hedging ineffectiveness | 25 | 47 | 30 |
Cash flow hedging | |||
Disclosure of detailed information about hedged items | |||
Hedging ineffectiveness | 23 | (112) | 9 |
Cash flow hedging | Interest rate contracts | |||
Disclosure of detailed information about hedged items | |||
Hedging ineffectiveness | £ 23 | £ (112) | £ 9 |
Financial Instruments - class_3
Financial Instruments - classification - Assets (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financial instruments | |||
Assets | £ 723,039 | £ 694,235 | £ 738,056 |
Financial Assets | 723,039 | 694,235 | |
Cash and balances at central banks | |||
Financial instruments | |||
Financial Assets | 77,858 | 88,897 | |
Trading assets | |||
Financial instruments | |||
Financial Assets | 76,745 | 75,119 | |
Derivatives | |||
Financial instruments | |||
Financial Assets | 150,029 | 133,349 | |
Net hedging derivative assets | 202 | ||
Settlement balances | |||
Financial instruments | |||
Financial Assets | 4,387 | 2,928 | |
Loans to banks - amortised cost | |||
Financial instruments | |||
Items in course of collection from other banks | 50 | 484 | |
Financial Assets | 10,689 | 12,947 | |
Loans to customers - amortised cost | |||
Financial instruments | |||
Financial Assets | 326,947 | 305,089 | |
Other financial assets | |||
Financial instruments | |||
Financial Assets | 61,452 | 59,485 | |
Intangible assets | |||
Financial instruments | |||
Financial Assets | 6,622 | 6,616 | |
Other assets | |||
Financial instruments | |||
Financial Assets | 8,310 | 9,805 | |
Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Assets | 14,932 | ||
Other financial assets | |||
Financial instruments | |||
Assets | 16,421 | ||
Other financial assets | Intangible assets | |||
Financial instruments | |||
Assets | 6,622 | 6,616 | |
Other financial assets | Other assets | |||
Financial instruments | |||
Assets | 8,310 | 9,805 | |
More than 12 months | Derivatives | |||
Financial instruments | |||
Financial Assets | 109,231 | 104,846 | |
More than 12 months | Other financial assets | |||
Financial instruments | |||
Financial Assets | 51,265 | 47,804 | |
Less than 12 months | Cash and balances at central banks | |||
Financial instruments | |||
Financial Assets | 77,858 | 88,897 | |
Less than 12 months | Derivatives | |||
Financial instruments | |||
Financial Assets | 40,798 | 28,503 | |
Less than 12 months | Settlement balances | |||
Financial instruments | |||
Financial Assets | 4,387 | 2,928 | |
Less than 12 months | Other financial assets | |||
Financial instruments | |||
Financial Assets | 10,187 | 11,681 | |
MFVTPL | Trading assets | |||
Financial instruments | |||
Financial Assets | 76,745 | 75,119 | |
MFVTPL | Derivatives | |||
Financial instruments | |||
Financial Assets | 150,029 | 133,349 | |
MFVTPL | Other financial assets | |||
Financial instruments | |||
Financial Assets | 715 | 1,638 | |
MFVTPL | Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Financial Assets | 227,489 | 210,106 | |
FVOCI | Other financial assets | |||
Financial instruments | |||
Financial Assets | 49,283 | 46,077 | |
FVOCI | Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Financial Assets | 49,283 | 46,077 | |
Amortised cost | Cash and balances at central banks | |||
Financial instruments | |||
Financial Assets | 77,858 | 88,897 | |
Amortised cost | Settlement balances | |||
Financial instruments | |||
Financial Assets | 4,387 | 2,928 | |
Amortised cost | Loans to banks - amortised cost | |||
Financial instruments | |||
Financial Assets | 10,689 | 12,947 | |
Amortised cost | Loans to customers - amortised cost | |||
Financial instruments | |||
Financial Assets | 326,947 | 305,089 | |
Amortised cost | Other financial assets | |||
Financial instruments | |||
Financial Assets | 11,454 | 11,770 | |
Amortised cost | Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Financial Assets | £ 431,335 | £ 421,631 |
Financial Instruments - class_4
Financial Instruments - classification - Liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financial instruments | |||
Liabilities | £ 679,483 | £ 647,745 | £ 688,963 |
Financial Liabilities | 679,483 | 647,745 | |
Increase of carrying amount of other customer accounts designated as at fair value through profit or loss | 0 | 26 | |
Bank deposits | |||
Financial instruments | |||
Financial Liabilities | 20,493 | 23,297 | |
Items in course of transmission to other banks | 2 | 125 | |
Customer deposits | |||
Financial instruments | |||
Financial Liabilities | 369,247 | 360,914 | |
Settlement balances | |||
Financial instruments | |||
Financial Liabilities | 4,069 | 3,066 | |
Trading liabilities | |||
Financial instruments | |||
Financial Liabilities | 73,949 | 72,350 | |
Other financial liabilities | |||
Financial instruments | |||
Financial Liabilities | 45,220 | 39,732 | |
Subordinated liabilities | |||
Financial instruments | |||
Financial Liabilities | 9,979 | 10,535 | |
Other liabilities | |||
Financial instruments | |||
Financial Liabilities | 9,647 | 8,954 | |
Derivatives | |||
Financial instruments | |||
Financial Liabilities | 146,879 | 128,897 | |
Net hedging derivative liabilities | 22 | 22 | |
Derivatives | |||
Financial instruments | |||
Net hedging derivative liabilities | 358 | ||
Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Liabilities | 7,441 | 6,736 | |
Financial Assets and Liabilities, Category | Other liabilities | |||
Financial instruments | |||
Liabilities | 6,736 | ||
Other liabilities | Other liabilities | |||
Financial instruments | |||
Liabilities | 7,441 | ||
Held-for-trading | Trading liabilities | |||
Financial instruments | |||
Financial Liabilities | 73,949 | 72,350 | |
Held-for-trading | Derivatives | |||
Financial instruments | |||
Financial Liabilities | 146,879 | 128,897 | |
Held-for-trading | Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Financial Liabilities | 220,828 | 201,247 | |
DFV | Other financial liabilities | |||
Financial instruments | |||
Financial Liabilities | 2,258 | 2,840 | |
DFV | Subordinated liabilities | |||
Financial instruments | |||
Financial Liabilities | 724 | 867 | |
DFV | Financial Assets and Liabilities, Category | |||
Financial instruments | |||
Financial Liabilities | 2,982 | 3,707 | |
Amortised cost | |||
Financial instruments | |||
Financial Liabilities | 448,232 | 436,055 | |
Amortised cost | Bank deposits | |||
Financial instruments | |||
Financial Liabilities | 20,493 | 23,297 | |
Amortised cost | Customer deposits | |||
Financial instruments | |||
Financial Liabilities | 369,247 | 360,914 | |
Amortised cost | Settlement balances | |||
Financial instruments | |||
Financial Liabilities | 4,069 | 3,066 | |
Amortised cost | Other financial liabilities | |||
Financial instruments | |||
Financial Liabilities | 42,962 | 36,892 | |
Amortised cost | Subordinated liabilities | |||
Financial instruments | |||
Financial Liabilities | 9,255 | 9,668 | |
Amortised cost | Other liabilities | |||
Financial instruments | |||
Financial Liabilities | £ 2,206 | £ 2,218 |
Financial Instruments - class_5
Financial Instruments - classification - Gains and losses (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Financial instruments | ||
Financial Assets | £ 723,039 | £ 694,235 |
Financial Liabilities | 679,483 | 647,745 |
Bank deposits | ||
Financial instruments | ||
Financial Liabilities | 2,597 | 941 |
Customer deposits | ||
Financial instruments | ||
Financial Liabilities | 1,765 | 3,774 |
Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 27,885 | 25,645 |
Trading assets | ||
Financial instruments | ||
Financial Assets | 24,095 | 24,759 |
Loans to banks - amortised cost | ||
Financial instruments | ||
Financial Assets | 165 | 3,539 |
Loans to customers - amortised cost | ||
Financial instruments | ||
Financial Assets | £ 10,649 | £ 9 |
Financial Instruments - class_6
Financial Instruments - classification - Offsetable assets and liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Instruments which can be offset | ||
Gross | £ 136,329 | |
IFRS offset | (5,041) | |
Balance sheet | 131,288 | |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (106,762) | |
Cash collateral | (17,937) | |
Other financial collateral | (4,469) | |
Net amount after the effect of netting arrangements and related collateral | 2,120 | |
Instruments outside netting arrangements | 2,061 | |
Balance sheet total | 133,349 | |
Instruments which can be offset | ||
Gross | 133,965 | |
IFRS offset | (6,776) | |
Balance sheet | 127,189 | |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (106,762) | |
Cash collateral | (15,227) | |
Other financial collateral | (3,466) | |
Net amount after the effect of netting arrangements and related collateral | 1,734 | |
Instruments outside netting arrangements | 1,708 | |
Balance sheet total | 128,897 | |
Instruments which can be offset | ||
IFRS offset | £ 811 | 1,735 |
Derivatives | ||
Instruments which can be offset | ||
Gross | 4,454 | 2,364 |
IFRS offset | 811 | 1,735 |
Balance sheet | 5,265 | 4,099 |
Potential for offset not recognised by IFRS | ||
Cash collateral | (1,389) | (2,710) |
Other financial collateral | (3,016) | (1,003) |
Net amount after the effect of netting arrangements and related collateral | 860 | 386 |
Instruments outside netting arrangements | (2,115) | 353 |
Balance sheet total | 3,150 | 4,452 |
Trading reverse repos/repos | ||
Instruments which can be offset | ||
Gross | (2,124) | (2,716) |
Balance sheet | (2,124) | (2,716) |
Potential for offset not recognised by IFRS | ||
Other financial collateral | 2,546 | 2,726 |
Net amount after the effect of netting arrangements and related collateral | 422 | 10 |
Instruments outside netting arrangements | (1,666) | 1,830 |
Balance sheet total | (3,790) | (886) |
Derivatives | ||
Instruments which can be offset | ||
Gross | 154,396 | |
IFRS offset | (11,724) | |
Balance sheet | 142,672 | |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (122,697) | |
Cash collateral | (17,296) | |
Other financial collateral | (1,276) | |
Net amount after the effect of netting arrangements and related collateral | 1,403 | |
Instruments outside netting arrangements | 4,207 | |
Balance sheet total | 146,879 | |
Trading repos | ||
Instruments which can be offset | ||
Gross | 54,131 | 55,864 |
IFRS offset | (28,720) | (31,376) |
Balance sheet | 25,411 | 24,488 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (562) | (762) |
Other financial collateral | (24,808) | (23,726) |
Net amount after the effect of netting arrangements and related collateral | 41 | |
Instruments outside netting arrangements | 2,474 | 1,157 |
Balance sheet total | 27,885 | 25,645 |
Derivatives | ||
Instruments which can be offset | ||
Gross | 158,850 | |
Balance sheet | 147,937 | |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (122,697) | |
Cash collateral | (18,685) | |
Other financial collateral | (4,292) | |
Net amount after the effect of netting arrangements and related collateral | 2,263 | |
Instruments outside netting arrangements | 2,092 | |
Balance sheet total | 150,029 | |
Instruments which can be offset | ||
IFRS offset | (10,913) | |
Trading reverse repos | ||
Instruments which can be offset | ||
Gross | 52,007 | 53,148 |
IFRS offset | (28,720) | (31,376) |
Balance sheet | 23,287 | 21,772 |
Potential for offset not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (562) | (762) |
Other financial collateral | (22,262) | (21,000) |
Net amount after the effect of netting arrangements and related collateral | 463 | 10 |
Instruments outside netting arrangements | 808 | 2,987 |
Balance sheet total | £ 24,095 | £ 24,759 |
Financial instruments - valua_3
Financial instruments - valuation - hierarchy of assets (Details) - Recurring - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Level 1 | ||
Fair value of assets | ||
Assets | £ 61,909 | £ 62,135 |
Level 1 | Securities | ||
Fair value of assets | ||
Assets | 20,865 | 22,003 |
Level 1 | Securities | ||
Fair value of assets | ||
Assets | 41,044 | 40,132 |
Level 2 | ||
Fair value of assets | ||
Assets | 212,309 | 190,748 |
Level 2 | Loans | ||
Fair value of assets | ||
Assets | 46,172 | 44,983 |
Level 2 | Securities | ||
Fair value of assets | ||
Assets | 8,704 | 7,312 |
Level 2 | Derivatives | ||
Fair value of assets | ||
Assets | 148,800 | 131,513 |
Level 2 | Loans | ||
Fair value of assets | ||
Assets | 307 | 768 |
Level 2 | Securities | ||
Fair value of assets | ||
Assets | 8,326 | 6,172 |
Level 3 | ||
Fair value of assets | ||
Assets | 2,554 | 3,300 |
Level 3 | Loans | ||
Fair value of assets | ||
Assets | 449 | 120 |
Level 3 | Securities | ||
Fair value of assets | ||
Assets | 555 | 701 |
Level 3 | Derivatives | ||
Fair value of assets | ||
Assets | 1,229 | 1,836 |
Level 3 | Loans | ||
Fair value of assets | ||
Assets | 58 | 136 |
Level 3 | Securities | ||
Fair value of assets | ||
Assets | £ 263 | £ 507 |
Financial instruments - valua_4
Financial instruments - valuation - hierarchy of liabilities (Details) - Recurring - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Level 1 | ||
Fair value of liabilities | ||
Liabilities | £ 15,565 | £ 18,941 |
Level 1 | Short positions | ||
Fair value of liabilities | ||
Liabilities | 15,565 | 18,941 |
Level 2 | ||
Fair value of liabilities | ||
Liabilities | 206,928 | 184,056 |
Level 2 | Deposits | ||
Fair value of liabilities | ||
Liabilities | 50,944 | 47,243 |
Level 2 | Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | 1,703 | 791 |
Level 2 | Short positions | ||
Fair value of liabilities | ||
Liabilities | 5,622 | 4,886 |
Level 2 | Derivatives | ||
Fair value of liabilities | ||
Liabilities | 145,818 | 127,709 |
Level 2 | Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | 2,117 | 2,348 |
Level 2 | Other deposits | ||
Fair value of liabilities | ||
Liabilities | 212 | |
Level 2 | Subordinated liabilities | ||
Fair value of liabilities | ||
Liabilities | 724 | 867 |
Level 3 | ||
Fair value of liabilities | ||
Liabilities | 1,317 | 1,957 |
Level 3 | Deposits | ||
Fair value of liabilities | ||
Liabilities | 56 | 377 |
Level 3 | Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | 59 | 112 |
Level 3 | Derivatives | ||
Fair value of liabilities | ||
Liabilities | 1,061 | 1,188 |
Level 3 | Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | £ 141 | £ 280 |
Financial instruments - valua_5
Financial instruments - valuation - Adjustments (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Adjustments | ||
Funding - FVA | £ 244 | £ 250 |
Credit - CVA | 386 | 419 |
Bid - Offer | 165 | 238 |
Product and deal specific | 238 | 327 |
Financial instruments valuation adjustments | 1,033 | 1,234 |
Designated as at fair value through profit or loss | ||
Product and deal specific | ||
Net gains carried forward | 88 | 59 |
Net gains deferred | 183 | 151 |
Net gains recognized in the income statement | £ 154 | £ 148 |
Financial instruments - valua_6
Financial instruments - valuation - Valuation techniques (Details) - Recurring - Level 3 | 12 Months Ended | |||||
Dec. 31, 2019EUR (€)item | Dec. 31, 2019JPY (¥)item | Dec. 31, 2019GBP (£)item | Dec. 31, 2018EUR (€) | Dec. 31, 2018JPY (¥) | Dec. 31, 2018GBP (£) | |
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Increase (decrease) in fair value measurement due to reasonably possible increase in unobservable input, assets | £ 270,000,000 | £ 230,000,000 | ||||
Increase (decrease) in fair value measurement due to reasonably possible decrease in unobservable input, assets | 210,000,000 | 220,000,000 | ||||
Increase (decrease) in fair value measurement due to reasonably possible increase in unobservable input, liabilities | 100,000,000 | 150,000,000 | ||||
Increase (decrease) in fair value measurement due to reasonably possible decrease in unobservable input, liabilities | £ 110,000,000 | £ 140,000,000 | ||||
Loans | Price-based | Price | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of reasonably possible increase in unobservable input, assets | 101.00% | 101.00% | 101.00% | 132.00% | 132.00% | 132.00% |
Loans | Credit Spreads | Credit spreads | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of reasonably possible increase in unobservable input, assets | 1.01% | 1.01% | 1.01% | |||
Percentage of reasonably possible decrease in unobservable input, assets | 0.53% | 0.53% | 0.53% | |||
Secured | Price-based | Price | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of reasonably possible increase in unobservable input, assets | 246.00% | 246.00% | 246.00% | 154.00% | 154.00% | 154.00% |
Equity Shares | Price-based | Price | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of reasonably possible increase in unobservable input, assets | 80.00% | 80.00% | 80.00% | |||
Increase (decrease) in fair value measurement due to reasonably possible increase in unobservable input, assets | £ 25,914 | £ 24,181 | ||||
Equity Shares | Valuation | Discount factor | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of reasonably possible increase in unobservable input, assets | 9.00% | 9.00% | 9.00% | 11.00% | 11.00% | 11.00% |
Percentage of reasonably possible decrease in unobservable input, assets | 6.00% | 6.00% | 6.00% | 8.00% | 8.00% | 8.00% |
Equity Shares | Valuation | Fund NAV | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of reasonably possible increase in unobservable input, assets | 120.00% | 120.00% | 120.00% | 120.00% | 120.00% | 120.00% |
Percentage of reasonably possible decrease in unobservable input, assets | 80.00% | 80.00% | 80.00% | 80.00% | 80.00% | 80.00% |
Deposits | Price-based | Price | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of reasonably possible increase in unobservable input, assets | 98.00% | 98.00% | 98.00% | |||
Deposits | Yield analysis | Day count | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Increase (decrease) in the fair value measurement increase of liabilities, Number | item | 95 | 95 | 95 | |||
Increase (decrease) in the fair value measurement decrease of liabilities, Number | item | 65 | 65 | 65 | |||
Deposits | DCF based on recoveries | Correlation | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of reasonably possible increase in unobservable input, liabilities | 99.00% | 99.00% | 99.00% | |||
Percentage of reasonably possible decrease in unobservable input, liabilities | (45.00%) | (45.00%) | (45.00%) | |||
Deposits | DCF based on recoveries | Interest rate | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of reasonably possible increase in unobservable input, liabilities | 1.74% | 1.74% | 1.74% | |||
Percentage of reasonably possible decrease in unobservable input, liabilities | (0.36%) | (0.36%) | (0.36%) | |||
Debt securities in issue | Price-based | Price | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Increase (decrease) in fair value measurement due to reasonably possible increase in unobservable input, liabilities | € | € 146 | € 136 | ||||
Increase (decrease) in fair value measurement due to reasonably possible decrease in unobservable input, liabilities | ¥ | ¥ 44 | ¥ 21 | ||||
Debt securities in issue | Valuation | Fund NAV | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Increase (decrease) in fair value measurement due to reasonably possible increase in unobservable input, liabilities | £ 622 | |||||
Credit derivative | Price-based | Price | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 110.00% | 110.00% | 110.00% | |||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 90.00% | 90.00% | 90.00% | |||
Credit derivative | DCF based on recoveries | Credit spreads | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% |
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 0.06% | 0.06% | 0.06% | 0.18% | 0.18% | 0.18% |
Credit derivative | Option pricing model | Correlation | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 80.00% | 80.00% | 80.00% | 80.00% | 80.00% | 80.00% |
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | (50.00%) | (50.00%) | (50.00%) | (50.00%) | (50.00%) | (50.00%) |
Credit derivative | Option pricing model | Volatility | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 80.00% | 80.00% | 80.00% | 80.00% | 80.00% | 80.00% |
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 27.00% | 27.00% | 27.00% | 47.00% | 47.00% | 47.00% |
Credit derivative | Option pricing model | Upfront points | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 99.00% | 99.00% | 99.00% | 100.00% | 100.00% | 100.00% |
Credit derivative | Option pricing model | Recovery rate | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 40.00% | 40.00% | 40.00% | 40.00% | 40.00% | 40.00% |
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% |
Interest rate & FX derivatives | Option pricing model | Correlation | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 99.00% | 99.00% | 99.00% | 99.00% | 99.00% | 99.00% |
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | (50.00%) | (50.00%) | (50.00%) | (45.00%) | (45.00%) | (45.00%) |
Interest rate & FX derivatives | Option pricing model | Volatility | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 70.00% | 70.00% | 70.00% | 76.00% | 76.00% | 76.00% |
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 19.00% | 19.00% | 19.00% | 1.00% | 1.00% | 1.00% |
Interest rate & FX derivatives | Option pricing model | Constant Prepayment Rate | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 15.00% | 15.00% | 15.00% | |||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 2.00% | 2.00% | 2.00% | |||
Interest rate & FX derivatives | Option pricing model | Mean Reversal | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 92.00% | 92.00% | 92.00% | |||
Equity derivatives | Option pricing model | Correlation | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 87.00% | 87.00% | 87.00% | 92.00% | 92.00% | 92.00% |
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | (53.00%) | (53.00%) | (53.00%) | (57.00%) | (57.00%) | (57.00%) |
Equity derivatives | Option pricing model | Volatility | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Percentage of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 23.00% | 23.00% | 23.00% | |||
Percentage of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 11.00% | 11.00% | 11.00% | |||
Equity derivatives | Option pricing model | Forward | ||||||
Disclosure of Sensitivity Analysis Of Fair Value Measurement To Changes In Unobservable Inputs, Assets and Liabilities | ||||||
Basis points of Reasonably Possible Increase In Unobservable Input, Assets and Liabilities | 71.06 | 71.06 | 71.06 | |||
Basis Points of Reasonably Possible Decrease In Unobservable Input, Assets and Liabilities | 8.64 | 8.64 | 8.64 |
Financial instruments - valua_7
Financial instruments - valuation - Level 3 Sensitivities of Assets (Details) - Recurring - Level 3 - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair value of assets | ||
Assets | £ 2,554 | £ 3,300 |
Sensitivity favourable | 270 | 230 |
Sensitivity unfavourable | (210) | (220) |
Loans | ||
Fair value of assets | ||
Assets | 449 | 120 |
Sensitivity favourable | 10 | 10 |
Sensitivity unfavourable | (10) | (10) |
Securities | ||
Fair value of assets | ||
Assets | 555 | 701 |
Sensitivity favourable | 20 | |
Sensitivity unfavourable | (10) | |
Interest rate | ||
Fair value of assets | ||
Assets | 1,015 | 1,487 |
Sensitivity favourable | 160 | 120 |
Sensitivity unfavourable | (160) | (120) |
Foreign exchange | ||
Fair value of assets | ||
Assets | 98 | 130 |
Sensitivity favourable | 10 | 10 |
Sensitivity unfavourable | (10) | (10) |
Other | ||
Fair value of assets | ||
Assets | 116 | 219 |
Sensitivity favourable | 10 | 10 |
Sensitivity unfavourable | (10) | (20) |
Loans | ||
Fair value of assets | ||
Assets | 58 | 136 |
Sensitivity favourable | 10 | |
Sensitivity unfavourable | (20) | |
Securities | ||
Fair value of assets | ||
Assets | 263 | 507 |
Sensitivity favourable | 80 | 50 |
Sensitivity unfavourable | £ (20) | £ (30) |
Financial instruments - valua_8
Financial instruments - valuation - Level 3 Sensitivities of Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair value of liabilities | ||
Specified Target Level Of Certainty For Unobservable Inputs | 90.00% | |
Recurring | Level 3 | ||
Fair value of liabilities | ||
Liabilities | £ 1,317 | £ 1,957 |
Sensitivity favourable | 110 | 140 |
Sensitivity unfavourable | (100) | (150) |
Recurring | Level 3 | Deposits | ||
Fair value of liabilities | ||
Liabilities | 56 | 377 |
Sensitivity favourable | 40 | |
Sensitivity unfavourable | (40) | |
Recurring | Level 3 | Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | 59 | 112 |
Sensitivity favourable | 10 | |
Sensitivity unfavourable | (10) | |
Recurring | Level 3 | Interest rate | ||
Fair value of liabilities | ||
Liabilities | 630 | 808 |
Sensitivity favourable | 70 | 70 |
Sensitivity unfavourable | (70) | (70) |
Recurring | Level 3 | Foreign exchange | ||
Fair value of liabilities | ||
Liabilities | 222 | 279 |
Sensitivity favourable | 10 | 10 |
Sensitivity unfavourable | (10) | (10) |
Recurring | Level 3 | Other | ||
Fair value of liabilities | ||
Liabilities | 209 | 101 |
Sensitivity favourable | 20 | |
Sensitivity unfavourable | (10) | (10) |
Recurring | Level 3 | Debt securities in issue | ||
Fair value of liabilities | ||
Liabilities | 141 | 280 |
Sensitivity favourable | 10 | 10 |
Sensitivity unfavourable | £ (10) | £ (10) |
Financial instruments - valua_9
Financial instruments - valuation - Movement in Level 3 portfolios - Assets (Details) - Level 3 - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Held-for-trading | Continuing Operation [Member] | ||
Movement in level 3 assets | ||
Amounts recorded in the income statement | £ (596) | £ (185) |
Other instruments | Continuing Operation [Member] | ||
Movement in level 3 assets | ||
Amounts recorded in the income statement | 190 | |
Other financial assets | Continuing Operation [Member] | ||
Movement in level 3 assets | ||
Amounts recorded in the income statement | 15 | |
Recurring | ||
Movement in level 3 assets | ||
Assets at beginning of period | 3,300 | |
Assets at end of period | 2,554 | 3,300 |
Recurring | IFRS9 | ||
Movement in level 3 assets | ||
Assets at beginning of period | 3,300 | |
Amounts recorded in the income statement | (419) | |
Amounts recorded in the statement of comprehensive income | 86 | |
Level 3 transfers in | 494 | |
Level 3 transfers out | (916) | |
Purchases | 1,136 | |
Settlements | (256) | |
Sales | (867) | |
Foreign exchange and other adjustments | 4 | |
Assets at end of period | 2,554 | 3,300 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | (413) | |
Recurring | IAS39 | ||
Movement in level 3 assets | ||
Assets at beginning of period | 3,300 | 3,222 |
Amounts recorded in the income statement | 31 | |
Amounts recorded in the statement of comprehensive income | 23 | |
Level 3 transfers in | 1,326 | |
Level 3 transfers out | (625) | |
Purchases | 887 | |
Settlements | (515) | |
Sales | (1,055) | |
Foreign exchange and other adjustments | (6) | |
Assets at end of period | 3,300 | |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | 24 | |
Amounts recorded in the income statement in respect of balances held at year end - realised | 4 | |
Recurring | Trading assets | IFRS9 | ||
Movement in level 3 assets | ||
Assets at beginning of period | 2,657 | |
Amounts recorded in the income statement | (418) | |
Level 3 transfers in | 492 | |
Level 3 transfers out | (857) | |
Purchases | 1,121 | |
Settlements | (218) | |
Sales | (541) | |
Foreign exchange and other adjustments | 3 | |
Assets at end of period | 2,233 | 2,657 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | (421) | |
Recurring | Trading assets | IAS39 | ||
Movement in level 3 assets | ||
Assets at beginning of period | 2,657 | 2,692 |
Amounts recorded in the income statement | (147) | |
Level 3 transfers in | 1,307 | |
Level 3 transfers out | (624) | |
Purchases | 871 | |
Settlements | (512) | |
Sales | (930) | |
Assets at end of period | 2,657 | |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | (134) | |
Amounts recorded in the income statement in respect of balances held at year end - realised | (2) | |
Recurring | Other financial assets | IFRS9 | ||
Movement in level 3 assets | ||
Assets at beginning of period | 643 | |
Amounts recorded in the income statement | (1) | |
Amounts recorded in the statement of comprehensive income | 86 | |
Level 3 transfers in | 2 | |
Level 3 transfers out | (59) | |
Purchases | 15 | |
Settlements | (38) | |
Sales | (326) | |
Foreign exchange and other adjustments | 1 | |
Assets at end of period | 321 | 643 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | 8 | |
Recurring | Other financial assets | IAS39 | ||
Movement in level 3 assets | ||
Assets at beginning of period | £ 643 | 530 |
Amounts recorded in the income statement | 178 | |
Amounts recorded in the statement of comprehensive income | 23 | |
Level 3 transfers in | 19 | |
Level 3 transfers out | (1) | |
Purchases | 16 | |
Settlements | (3) | |
Sales | (125) | |
Foreign exchange and other adjustments | (6) | |
Assets at end of period | 643 | |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | 158 | |
Amounts recorded in the income statement in respect of balances held at year end - realised | £ 6 |
Financial instruments - valu_10
Financial instruments - valuation - Movement in Level 3 portfolios - Liabilities (Details) - Recurring - Level 3 - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in level 3 liabilities | ||
Liabilities at beginning of period | £ 1,957 | |
Liabilities at end of period | 1,317 | £ 1,957 |
IFRS9 | ||
Movement in level 3 liabilities | ||
Liabilities at beginning of period | 1,957 | |
Amounts recorded in the income statement | 162 | |
Level 3 transfers in | 104 | |
Level 3 transfers out | (588) | |
Issuances | 46 | |
Purchases | 532 | |
Settlements | (429) | |
Sales | (466) | |
Foreign exchange and other adjustments | (1) | |
Liabilities at end of period | 1,317 | 1,957 |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | 110 | |
IAS39 | ||
Movement in level 3 liabilities | ||
Liabilities at beginning of period | £ 1,957 | 2,187 |
Amounts recorded in the income statement | (344) | |
Level 3 transfers in | 419 | |
Level 3 transfers out | (231) | |
Issuances | 47 | |
Purchases | 401 | |
Settlements | (204) | |
Sales | (316) | |
Foreign exchange and other adjustments | (2) | |
Liabilities at end of period | 1,957 | |
Amounts recorded in the income statement in respect of balances held at year end - unrealised | £ (330) |
Financial instruments - valu_11
Financial instruments - valuation - Assets at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair value of assets | ||
Carrying value, Financial assets | £ 723,039 | £ 694,235 |
Cash and balances at central banks | ||
Fair value of assets | ||
Carrying value, Financial assets | 77,858 | 88,897 |
Loans to banks | ||
Fair value of assets | ||
Carrying value, Financial assets | 10,689 | 12,947 |
Loans to customers | ||
Fair value of assets | ||
Carrying value, Financial assets | 326,947 | 305,089 |
Items where fair values approximates carrying value | Cash and balances at central banks | ||
Fair value of assets | ||
Carrying value, Financial assets | 77,900 | 88,900 |
Items where fair values approximates carrying value | Settlement balances | ||
Fair value of assets | ||
Carrying value, Financial assets | 4,400 | 2,900 |
Items where fair values approximates carrying value | Loans to banks | ||
Fair value of assets | ||
Carrying value, Financial assets | 500 | |
Carrying value | Loans to banks | ||
Fair value of assets | ||
Carrying value, Financial assets | 10,700 | 12,400 |
Carrying value | Loans to customers | ||
Fair value of assets | ||
Carrying value, Financial assets | 326,900 | 305,100 |
Carrying value | Other financial assets | ||
Fair value of assets | ||
Carrying value, Financial assets | 11,500 | 11,800 |
Fair value | Loans to banks | ||
Fair value of assets | ||
Fair value, Financial assets | 10,700 | 12,400 |
Fair value | Loans to banks | Level 2 | ||
Fair value of assets | ||
Fair value, Financial assets | 6,200 | 9,200 |
Fair value | Loans to banks | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 4,500 | 3,200 |
Fair value | Loans to customers | ||
Fair value of assets | ||
Fair value, Financial assets | 324,000 | 301,700 |
Fair value | Loans to customers | Level 2 | ||
Fair value of assets | ||
Fair value, Financial assets | 11,000 | 500 |
Fair value | Loans to customers | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | 313,000 | 301,200 |
Fair value | Other financial assets | ||
Fair value of assets | ||
Fair value, Financial assets | 11,600 | 11,800 |
Fair value | Other financial assets | Level 1 | ||
Fair value of assets | ||
Fair value, Financial assets | 5,900 | 7,300 |
Fair value | Other financial assets | Level 2 | ||
Fair value of assets | ||
Fair value, Financial assets | 2,800 | 3,000 |
Fair value | Other financial assets | Level 3 | ||
Fair value of assets | ||
Fair value, Financial assets | £ 2,900 | £ 1,500 |
Financial instruments - valu_12
Financial instruments - valuation - Liabilities at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair value of liabilities | ||
Carrying value, Financial liabilities | £ 679,483 | £ 647,745 |
Bank deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 20,493 | 23,297 |
Customer deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 369,247 | 360,914 |
Settlement balances | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 4,069 | 3,066 |
Subordinated liabilities | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 9,979 | 10,535 |
Items where fair values approximates carrying value | Bank deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 4,100 | 4,200 |
Items where fair values approximates carrying value | Customer deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 312,400 | 307,100 |
Items where fair values approximates carrying value | Settlement balances | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 4,100 | 3,100 |
Items where fair values approximates carrying value | Other liabilities - notes in circulation | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 2,200 | 2,200 |
Carrying value | Bank deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 16,400 | 19,100 |
Carrying value | Customer deposits | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 56,800 | 53,800 |
Carrying value | Debt securities in issue | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 43,000 | 36,900 |
Carrying value | Subordinated liabilities | ||
Fair value of liabilities | ||
Carrying value, Financial liabilities | 9,300 | 9,700 |
Fair value | Bank deposits | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 16,500 | 18,500 |
Fair value | Bank deposits | Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 12,200 | 13,900 |
Fair value | Bank deposits | Level 3 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 4,300 | 4,600 |
Fair value | Customer deposits | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 56,900 | 54,600 |
Fair value | Customer deposits | Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 7,500 | 10,400 |
Fair value | Customer deposits | Level 3 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 49,400 | 44,200 |
Fair value | Debt securities in issue | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 43,700 | 38,600 |
Fair value | Debt securities in issue | Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 38,500 | 36,900 |
Fair value | Debt securities in issue | Level 3 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 5,200 | 1,700 |
Fair value | Subordinated liabilities | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 10,000 | 10,000 |
Fair value | Subordinated liabilities | Level 2 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | 9,900 | 9,900 |
Fair value | Subordinated liabilities | Level 3 | ||
Fair value of liabilities | ||
Fair value, Financial liabilities | £ 100 | £ 100 |
Financial Instruments - matur_3
Financial Instruments - maturity analysis - Residual Maturity (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Financial instruments | ||
Financial Assets | £ 723,039 | £ 694,235 |
Financial Liabilities | 679,483 | 647,745 |
Bank deposits | ||
Financial instruments | ||
Financial Liabilities | 20,493 | 23,297 |
Customer accounts | ||
Financial instruments | ||
Financial Liabilities | 369,247 | 360,914 |
Settlement balances | ||
Financial instruments | ||
Financial Liabilities | 4,069 | 3,066 |
Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 73,949 | 72,350 |
Derivatives | ||
Financial instruments | ||
Financial Liabilities | 146,879 | 128,897 |
Other financial liabilities | ||
Financial instruments | ||
Financial Liabilities | 45,220 | 39,732 |
Subordinated liabilities | ||
Financial instruments | ||
Financial Liabilities | 9,979 | 10,535 |
Lease liabilities | ||
Financial instruments | ||
Financial Liabilities | 1,823 | |
Less than 12 months | Bank deposits | ||
Financial instruments | ||
Financial Liabilities | 9,286 | 7,438 |
Less than 12 months | Customer accounts | ||
Financial instruments | ||
Financial Liabilities | 367,098 | 359,148 |
Less than 12 months | Settlement balances | ||
Financial instruments | ||
Financial Liabilities | 4,069 | 3,066 |
Less than 12 months | Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 53,047 | 50,668 |
Less than 12 months | Derivatives | ||
Financial instruments | ||
Financial Liabilities | 41,276 | 29,028 |
Less than 12 months | Other financial liabilities | ||
Financial instruments | ||
Financial Liabilities | 11,915 | 8,240 |
Less than 12 months | Subordinated liabilities | ||
Financial instruments | ||
Financial Liabilities | 160 | 299 |
Less than 12 months | Lease liabilities | ||
Financial instruments | ||
Financial Liabilities | 194 | |
More than 12 months | Bank deposits | ||
Financial instruments | ||
Financial Liabilities | 11,207 | 15,859 |
More than 12 months | Customer accounts | ||
Financial instruments | ||
Financial Liabilities | 2,149 | 1,766 |
More than 12 months | Trading liabilities | ||
Financial instruments | ||
Financial Liabilities | 20,902 | 21,682 |
More than 12 months | Derivatives | ||
Financial instruments | ||
Financial Liabilities | 105,603 | 99,869 |
More than 12 months | Other financial liabilities | ||
Financial instruments | ||
Financial Liabilities | 33,305 | 31,492 |
More than 12 months | Subordinated liabilities | ||
Financial instruments | ||
Financial Liabilities | 9,819 | 10,236 |
More than 12 months | Lease liabilities | ||
Financial instruments | ||
Financial Liabilities | 1,629 | |
Cash and balances at central banks | ||
Financial instruments | ||
Financial Assets | 77,858 | 88,897 |
Cash and balances at central banks | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 77,858 | 88,897 |
Equity Shares | ||
Financial instruments | ||
Financial Assets | 76,745 | 75,119 |
Equity Shares | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 51,825 | 49,094 |
Equity Shares | More than 12 months | ||
Financial instruments | ||
Financial Assets | 24,920 | 26,025 |
Derivatives | ||
Financial instruments | ||
Financial Assets | 150,029 | 133,349 |
Derivatives | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 40,798 | 28,503 |
Derivatives | More than 12 months | ||
Financial instruments | ||
Financial Assets | 109,231 | 104,846 |
Settlement balances | ||
Financial instruments | ||
Financial Assets | 4,387 | 2,928 |
Settlement balances | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 4,387 | 2,928 |
Loans to banks | ||
Financial instruments | ||
Financial Assets | 10,689 | 12,947 |
Loans to banks | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 10,676 | 12,833 |
Loans to banks | More than 12 months | ||
Financial instruments | ||
Financial Assets | 13 | 114 |
Loans to customers | ||
Financial instruments | ||
Financial Assets | 326,947 | 305,089 |
Loans to customers | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 77,742 | 67,354 |
Loans to customers | More than 12 months | ||
Financial instruments | ||
Financial Assets | 249,205 | 237,735 |
Other financial assets | ||
Financial instruments | ||
Financial Assets | 61,452 | 59,485 |
Other financial assets | Less than 12 months | ||
Financial instruments | ||
Financial Assets | 10,187 | 11,681 |
Other financial assets | More than 12 months | ||
Financial instruments | ||
Financial Assets | £ 51,265 | £ 47,804 |
Financial Instruments - matur_4
Financial Instruments - maturity analysis - Contractual Maturity (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
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 | |
Financial Assets | £ 723,039 | £ 694,235 |
Financial Liabilities | 679,483 | 647,745 |
0-3 months | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 145,421 | 151,332 |
0-3 months | Total maturing assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 96,523 | 108,196 |
0-3 months | Cash and balances at central banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 77,858 | 88,897 |
0-3 months | Settlement balances | ||
Financial instruments | ||
Undiscounted cash flows, assets | 4,387 | 2,928 |
0-3 months | Loans to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 9,659 | 11,920 |
0-3 months | Other financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 4,619 | 4,451 |
0-3 months | Loans to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 48,793 | 42,953 |
0-3 months | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 72 | 143 |
0-3 months | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 33 | 40 |
0-3 months | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 376,700 | 365,571 |
0-3 months | Total maturing liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 18,278 | 14,502 |
0-3 months | Bank deposits | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 7,269 | 7,417 |
0-3 months | Settlement Balances and other liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 4,069 | 3,066 |
0-3 months | Other financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 4,810 | 1,736 |
0-3 months | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 21 | 131 |
0-3 months | Other liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,109 | 2,152 |
0-3 months | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 358,359 | 351,054 |
0-3 months | Lease liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 54 | |
0-3 months | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 9 | 15 |
0-3 months | Guarantees and Commitments | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 119,985 | 120,795 |
0-3 months | Guarantees | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,757 | 3,952 |
0-3 months | Commitments | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 117,228 | 116,843 |
3-12 months | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 44,080 | 40,507 |
3-12 months | Total maturing assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 7,676 | 8,322 |
3-12 months | Loans to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 1,032 | 925 |
3-12 months | Other financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 6,644 | 7,397 |
3-12 months | Loans to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 36,108 | 31,719 |
3-12 months | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 289 | 368 |
3-12 months | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 7 | 98 |
3-12 months | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 19,095 | 16,028 |
3-12 months | Total maturing liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 10,160 | 7,884 |
3-12 months | Bank deposits | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,017 | 21 |
3-12 months | Other financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 7,602 | 7,226 |
3-12 months | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 541 | 637 |
3-12 months | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 8,773 | 8,114 |
3-12 months | Lease liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 140 | |
3-12 months | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 22 | 30 |
More than 1 year but less than 3 years | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 88,232 | 80,869 |
More than 1 year but less than 3 years | Total maturing assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 16,292 | 14,244 |
More than 1 year but less than 3 years | Loans to banks | ||
Financial instruments | ||
Undiscounted cash flows, assets | 5 | 106 |
More than 1 year but less than 3 years | Other financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 16,287 | 14,138 |
More than 1 year but less than 3 years | Loans to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 70,957 | 65,486 |
More than 1 year but less than 3 years | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 920 | 955 |
More than 1 year but less than 3 years | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 63 | 184 |
More than 1 year but less than 3 years | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 28,909 | 27,806 |
More than 1 year but less than 3 years | Total maturing liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 26,441 | 25,985 |
More than 1 year but less than 3 years | Bank deposits | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 11,297 | 13,785 |
More than 1 year but less than 3 years | Other financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 11,849 | 10,724 |
More than 1 year but less than 3 years | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 3,295 | 1,476 |
More than 1 year but less than 3 years | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,105 | 1,727 |
More than 1 year but less than 3 years | Lease liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 313 | |
More than 1 year but less than 3 years | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 50 | 94 |
More than 3 years but less than 5 years | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 62,273 | 63,213 |
More than 3 years but less than 5 years | Total maturing assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 9,857 | 11,279 |
More than 3 years but less than 5 years | Other financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 9,857 | 11,279 |
More than 3 years but less than 5 years | Loans to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 51,667 | 51,319 |
More than 3 years but less than 5 years | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 646 | 520 |
More than 3 years but less than 5 years | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 103 | 95 |
More than 3 years but less than 5 years | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 19,554 | 21,242 |
More than 3 years but less than 5 years | Total maturing liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 19,243 | 21,193 |
More than 3 years but less than 5 years | Bank deposits | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 38 | 2,003 |
More than 3 years but less than 5 years | Other financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 13,935 | 11,658 |
More than 3 years but less than 5 years | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 5,270 | 7,532 |
More than 3 years but less than 5 years | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 22 | 14 |
More than 3 years but less than 5 years | Lease liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 249 | |
More than 3 years but less than 5 years | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 40 | 35 |
5-10 years | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 83,077 | 78,853 |
5-10 years | Total maturing assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 15,766 | 11,826 |
5-10 years | Other financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 15,766 | 11,826 |
5-10 years | Loans to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 66,453 | 66,149 |
5-10 years | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 802 | 829 |
5-10 years | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 56 | 49 |
5-10 years | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 10,292 | 11,112 |
5-10 years | Total maturing liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 9,753 | 11,053 |
5-10 years | Other financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 9,426 | 9,316 |
5-10 years | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 327 | 1,737 |
5-10 years | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 23 | 6 |
5-10 years | Lease liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 457 | |
5-10 years | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 59 | 53 |
10-20 years | Financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 84,950 | 82,321 |
10-20 years | Total maturing assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 5,081 | 2,744 |
10-20 years | Other financial assets | ||
Financial instruments | ||
Undiscounted cash flows, assets | 5,081 | 2,744 |
10-20 years | Loans to customers | ||
Financial instruments | ||
Undiscounted cash flows, assets | 79,174 | 78,902 |
10-20 years | Finance lease | ||
Financial instruments | ||
Undiscounted cash flows, assets | 653 | 641 |
10-20 years | Derivative held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, assets | 42 | 34 |
10-20 years | Financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, liabilities | 2,662 | 3,581 |
10-20 years | Total maturing liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 2,028 | 3,510 |
10-20 years | Bank deposits | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 59 | |
10-20 years | Other financial liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 328 | 2,029 |
10-20 years | Subordinated Liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 1,700 | 1,422 |
10-20 years | Customer accounts | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 17 | 26 |
10-20 years | Lease liabilities | ||
Financial instruments | ||
Undiscounted cash flows, non-derivative financial liabilities | 571 | |
10-20 years | Derivatives held for hedging | ||
Financial instruments | ||
Undiscounted cash flows, derivative financial liabilities | 46 | 45 |
Held-for-trading | Financial Assets and Liabilities, Category | Financial liabilities | ||
Financial instruments | ||
Financial Liabilities | 220,800 | 201,200 |
FVTPL | Financial Assets and Liabilities, Category | Financial assets | ||
Financial instruments | ||
Financial Assets | £ 227,300 | £ 209,700 |
Loan impairment provisions (Det
Loan impairment provisions (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loan impairment provisions | ||
Financial Assets | £ 723,039 | £ 694,235 |
ECL provisions | £ 3,792 | £ 3,851 |
ECL provision coverage (in percentage) | 1.12% | 1.20% |
ECL charge | £ 696 | £ 398 |
ECL loss rate - annualised (basis points) | 20.47% | 12.43% |
Amounts written off | £ 792 | £ 1,494 |
Contingent liabilities | ||
Loan impairment provisions | ||
ECL charge | 0 | 31 |
Other financial assets | ||
Loan impairment provisions | ||
Financial Assets | 61,452 | 59,485 |
ECL charge | 2 | 3 |
FVOCI | ||
Loan impairment provisions | ||
ECL provisions | 4 | 5 |
FVOCI | Other financial assets | ||
Loan impairment provisions | ||
Financial Assets | 49,283 | 46,077 |
ECL charge | 1 | 1 |
Loans and advances | ||
Loan impairment provisions | ||
Financial Assets | 339,968 | 320,256 |
Cash at central banks | Other financial assets | ||
Loan impairment provisions | ||
Financial Assets | 76,100 | 87,200 |
Secured | Other financial assets | ||
Loan impairment provisions | ||
Financial Assets | 59,400 | 57,000 |
Business loans | ||
Loan impairment provisions | ||
ECL provisions | 3,792 | 3,851 |
Stage 1 | ||
Loan impairment provisions | ||
ECL provisions | £ 322 | £ 297 |
ECL provision coverage (in percentage) | 0.11% | 0.10% |
ECL charge | £ (212) | £ (143) |
Stage 1 | Loans and advances | ||
Loan impairment provisions | ||
Financial Assets | 305,502 | 285,985 |
Stage 2 | ||
Loan impairment provisions | ||
ECL provisions | £ 752 | £ 772 |
ECL provision coverage (in percentage) | 2.70% | 2.96% |
ECL charge | £ 318 | £ 292 |
Stage 2 | Loans and advances | ||
Loan impairment provisions | ||
Financial Assets | 27,868 | 26,097 |
Stage 3 | ||
Loan impairment provisions | ||
ECL provisions | £ 2,718 | £ 2,782 |
ECL provision coverage (in percentage) | 41.19% | 34.03% |
ECL charge | £ 590 | £ 249 |
Stage 3 | Loans and advances | ||
Loan impairment provisions | ||
Financial Assets | 6,598 | 8,174 |
Of which: individual | ||
Loan impairment provisions | ||
ECL provisions | 796 | 850 |
ECL charge | 303 | 94 |
Amounts written off | 372 | 272 |
Of which: individual | Loans and advances | ||
Loan impairment provisions | ||
Financial Assets | 2,051 | 2,860 |
Of which: collective | ||
Loan impairment provisions | ||
ECL provisions | 1,922 | 1,932 |
ECL charge | 287 | 155 |
Amounts written off | 420 | 1,222 |
Of which: collective | Loans and advances | ||
Loan impairment provisions | ||
Financial Assets | £ 4,547 | £ 5,314 |
Other financial assets (Details
Other financial assets (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | £ 30,124 | £ 30,016 |
Other financial assets. | 61,452 | 59,485 |
Alawwal bank merger | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Amount pertaining to transfer of ownership | 595 | |
Equity Shares | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Other financial assets. | 994 | 548 |
Loans | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Other financial assets. | 365 | 904 |
MFVTPL | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 305 | 669 |
Other financial assets. | 715 | 1,638 |
MFVTPL | Other debt | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 305 | 669 |
MFVTPL | Equity Shares | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Other financial assets. | 45 | 65 |
MFVTPL | Loans | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Other financial assets. | 365 | 904 |
FVOCI | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 48,334 | 45,594 |
Other financial assets. | 49,283 | 46,077 |
FVOCI | Central and local government | UK | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 18,437 | 17,192 |
FVOCI | Central and local government | USA | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 13,981 | 11,767 |
FVOCI | Central and local government | Other | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 8,786 | 11,329 |
FVOCI | Other debt | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 7,130 | 5,306 |
FVOCI | Equity Shares | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Other financial assets. | 949 | 483 |
Dividend income | 15 | |
Amortised cost | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 11,454 | 11,770 |
Other financial assets. | 11,454 | 11,770 |
Amortised cost | Central and local government | UK | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 5,411 | 6,928 |
Amortised cost | Central and local government | USA | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 242 | 264 |
Amortised cost | Central and local government | Other | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 120 | 120 |
Amortised cost | Other debt | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 5,681 | 4,458 |
Secured | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 60,093 | 58,033 |
Secured | Central and local government | UK | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 23,848 | 24,120 |
Secured | Central and local government | USA | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 14,223 | 12,031 |
Secured | Central and local government | Other | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | 8,906 | 11,449 |
Secured | Other debt | ||
DisclosureOfDetailedInformationAboutHedgingInstrumentsLineItems | ||
Debt instruments held | £ 13,116 | £ 10,433 |
Intangible assets (Details)
Intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible assets | |||
At 1 January | £ 6,616 | ||
Impairment of goodwill and other intangible assets | 44 | £ 37 | £ 29 |
At 31 December | 6,622 | 6,616 | |
Cost | |||
Intangible assets | |||
At 1 January | 20,188 | 20,298 | |
Currency translation and other adjustments | (178) | 86 | |
Acquisition of subsidiaries | 1 | 50 | |
Additions | 380 | 364 | |
Disposals and write-off of fully amortised assets | (8,118) | (610) | |
At 31 December | 12,273 | 20,188 | 20,298 |
Accumulated amortisation and impairment | |||
Intangible assets | |||
At 1 January | (13,572) | (13,755) | |
Currency translation and other adjustments | 179 | (82) | |
Disposals and write-off of fully amortised assets | (8,077) | (573) | |
Charge for the year | (291) | (271) | |
Impairment of goodwill and other intangible assets | (44) | (37) | |
At 31 December | (5,651) | (13,572) | (13,755) |
Goodwill | |||
Intangible assets | |||
At 1 January | 5,606 | ||
At 31 December | 5,607 | 5,606 | |
Goodwill | Cost | |||
Intangible assets | |||
At 1 January | 18,164 | 18,039 | |
Currency translation and other adjustments | (180) | 77 | |
Acquisition of subsidiaries | 1 | 48 | |
Disposals and write-off of fully amortised assets | (8,005) | ||
At 31 December | 9,980 | 18,164 | 18,039 |
Goodwill | Accumulated amortisation and impairment | |||
Intangible assets | |||
At 1 January | (12,558) | (12,481) | |
Currency translation and other adjustments | 180 | (77) | |
Disposals and write-off of fully amortised assets | (8,005) | ||
At 31 December | (4,373) | (12,558) | (12,481) |
Intangible assets | |||
Intangible assets | |||
Impairment to goodwill | 44 | 37 | |
Intangible assets | Internally generated software | |||
Intangible assets | |||
At 1 January | 1,010 | ||
At 31 December | 1,015 | 1,010 | |
Intangible assets | Internally generated software | Cost | |||
Intangible assets | |||
At 1 January | 2,024 | 2,259 | |
Currency translation and other adjustments | 2 | 9 | |
Acquisition of subsidiaries | 2 | ||
Additions | 380 | 364 | |
Disposals and write-off of fully amortised assets | (113) | (610) | |
At 31 December | 2,293 | 2,024 | 2,259 |
Intangible assets | Internally generated software | Accumulated amortisation and impairment | |||
Intangible assets | |||
At 1 January | (1,014) | (1,274) | |
Currency translation and other adjustments | (1) | (5) | |
Disposals and write-off of fully amortised assets | (72) | (573) | |
Charge for the year | (291) | (271) | |
Impairment of goodwill and other intangible assets | (44) | (37) | |
At 31 December | £ (1,278) | £ (1,014) | £ (1,274) |
Intangible assets - Assumptions
Intangible assets - Assumptions (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of information for cash-generating units | |||
Goodwill | £ 5,607 | £ 5,607 | £ 5,559 |
UK Personal & Business Banking | |||
Disclosure of information for cash-generating units | |||
Goodwill | £ 3,400 | ||
Terminal growth rate | 1.80% | ||
Pre-tax discount rate | 13.10% | ||
Recoverable amount exceeded carrying value | £ 14,400 | ||
Discount rate (in amount) | (2,200) | ||
Terminal growth rate (in amount) | (1,400) | ||
Forecast Income | (4,000) | ||
Forecast cost | £ (1,700) | ||
Breakeven discount rate | 27.70% | ||
Transfer of goodwill for re-segmentation | (0.7) | ||
Commercial Banking | |||
Disclosure of information for cash-generating units | |||
Goodwill | £ 2,606 | £ 2,606 | 2,606 |
Terminal growth rate | 1.60% | ||
Pre-tax discount rate | 13.40% | ||
Recoverable amount exceeded carrying value | £ 4,100 | ||
Discount rate (in amount) | (1,800) | ||
Terminal growth rate (in amount) | (700) | ||
Forecast Income | (2,100) | ||
Forecast cost | £ (1,100) | ||
Breakeven discount rate | 12.70% | ||
Transfer of goodwill for re-segmentation | £ 0.7 | ||
Commercial Banking (including Business Banking) | |||
Disclosure of information for cash-generating units | |||
Increase (decrease) in headroom due to re-segmentation | 4.2 | ||
Commercial and Private Banking | |||
Disclosure of information for cash-generating units | |||
Goodwill | £ 1,900 | ||
Terminal growth rate | 1.80% | ||
Pre-tax discount rate | 13.00% | ||
Recoverable amount exceeded carrying value | £ 4,500 | ||
Discount rate (in amount) | (1,200) | ||
Terminal growth rate (in amount) | (800) | ||
Forecast Income | (2,300) | ||
Forecast cost | £ (1,000) | ||
Breakeven discount rate | 17.60% | ||
RBS International | |||
Disclosure of information for cash-generating units | |||
Goodwill | £ 300 | £ 300 | 300 |
Terminal growth rate | 1.60% | 1.80% | |
Pre-tax discount rate | 12.00% | 12.90% | |
Recoverable amount exceeded carrying value | £ 2,100 | £ 700 | |
Discount rate (in amount) | (500) | (200) | |
Terminal growth rate (in amount) | (300) | (200) | |
Forecast Income | (400) | (400) | |
Forecast cost | £ (1,200) | £ (100) | |
Breakeven discount rate | 16.80% | 18.50% | |
UK Personal Banking | |||
Disclosure of information for cash-generating units | |||
Goodwill | £ 2,692 | £ 2,692 | £ 2,653 |
Terminal growth rate | 1.60% | ||
Pre-tax discount rate | 13.30% | ||
Recoverable amount exceeded carrying value | £ 8,700 | ||
Discount rate (in amount) | (2,200) | ||
Terminal growth rate (in amount) | (1,000) | ||
Forecast Income | (2,100) | ||
Forecast cost | £ (900) | ||
Breakeven discount rate | 16.30% | ||
Increase (decrease) in headroom due to re-segmentation | £ (4.2) |
Other assets (Details)
Other assets (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Other assets | ||
Property, plant and equipment | £ 4,928 | £ 4,351 |
Deferred tax (Note 7) | 1,011 | 1,412 |
Assets of disposal groups (1) | 66 | 1,404 |
Prepayments | 380 | 435 |
Accrued income | 275 | 317 |
Interests in associates (2) | 436 | 404 |
Pension schemes in net surplus (Note 5) | 614 | 520 |
Tax recoverable | 46 | 37 |
Other assets | 554 | 925 |
Total other assets | 8,310 | 9,805 |
Alawwal Bank | ||
Other assets | ||
Interests in associates (2) | 0 | 1,179 |
Business Growth Fund | ||
Other assets | ||
Interests in associates (2) | £ 424 | £ 387 |
Other financial liabilities (De
Other financial liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of financial liabilities | ||
Total | £ 45,220 | £ 39,732 |
Designated as at fair value through profit or loss | Customer accounts | ||
Disclosure of financial liabilities | ||
Total | 212 | |
Designated as at fair value through profit or loss | Debt securities in issue | ||
Disclosure of financial liabilities | ||
Total | 2,258 | 2,628 |
Amortised cost | Debt securities in issue | ||
Disclosure of financial liabilities | ||
Total | £ 42,962 | £ 36,892 |
Subordinated liabilities (Detai
Subordinated liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Subordinated liabilities | ||
Dated loan capital | £ 7,775 | £ 8,262 |
Undated loan capital | 2,058 | 2,127 |
Preference shares | 146 | 146 |
Total subordinated liabilities | £ 9,979 | £ 10,535 |
Subordinated liabilities - Rede
Subordinated liabilities - Redemption (Details) € in Millions, £ in Millions, kr in Millions, $ in Millions | 12 Months Ended | |||||||||
Dec. 31, 2019GBP (£) | Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | Dec. 31, 2019SEK (kr) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019GBP (£) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018GBP (£) | |
Subordinated liabilities | ||||||||||
Redemption of subordinated liabilities | £ 1,108 | £ 2,258 | £ 5,747 | |||||||
Issue of subordinated liabilities | 577 | |||||||||
Royal Bank Of Scotland Group US$750 Million 3.754% Dated Notes 2029 | ||||||||||
Subordinated liabilities | ||||||||||
Notional amount | $ | $ 750 | $ 750 | ||||||||
Interest rate | 3.754% | 3.754% | 3.754% | 3.754% | 3.754% | 3.754% | 3.754% | |||
Redemption of subordinated liabilities | 577 | |||||||||
Royal Bank of Scotland Group plc | ||||||||||
Subordinated liabilities | ||||||||||
Redemption of subordinated liabilities | 855 | 267 | ||||||||
Issue of subordinated liabilities | 577 | |||||||||
Royal Bank of Scotland Group US$350 million 4.70% dated notes 2018 | ||||||||||
Subordinated liabilities | ||||||||||
Notional amount | € | € 350 | € 350 | ||||||||
Interest rate | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | 4.70% | |||
Redemption of subordinated liabilities | 267 | |||||||||
Royal Bank Of Scotland Group 1,000 Million 3.63% Dated Notes 2024 (Callable March 2019) | ||||||||||
Subordinated liabilities | ||||||||||
Notional amount | £ 1,000 | £ 1,000 | ||||||||
Interest rate | 3.63% | 3.63% | 3.63% | 3.63% | 3.63% | 3.63% | 3.63% | |||
Redemption of subordinated liabilities | 855 | |||||||||
Natwest Markets Plc 2,000 million 6.934% dated notes 2018 | ||||||||||
Subordinated liabilities | ||||||||||
Notional amount | $ | $ 2,000 | $ 2,000 | ||||||||
Interest rate | 6.934% | 6.934% | 6.934% | 6.934% | 6.934% | 6.934% | 6.934% | |||
Redemption of subordinated liabilities | 1,743 | |||||||||
Natwest Markets Plc 103 million 9.5% undated subordinated bonds 2018 (callable August 2018) | ||||||||||
Subordinated liabilities | ||||||||||
Interest rate | 9.50% | 9.50% | 9.50% | 9.50% | ||||||
Redemption of subordinated liabilities | 103 | 103 | ||||||||
Natwest Markets Plc 35 million 5.5% undated subordinated notes (callable December 2019) | ||||||||||
Subordinated liabilities | ||||||||||
Interest rate | 5.50% | 5.50% | 5.50% | 5.50% | ||||||
Redemption of subordinated liabilities | 35 | |||||||||
NatWest Plc | ||||||||||
Subordinated liabilities | ||||||||||
Redemption of subordinated liabilities | 8 | |||||||||
NatWest Plc SEK 90mn floating rate notes 2019 | ||||||||||
Subordinated liabilities | ||||||||||
Notional amount | kr | kr 90 | |||||||||
Redemption of subordinated liabilities | 8 | |||||||||
NWM Plc | ||||||||||
Subordinated liabilities | ||||||||||
Redemption of subordinated liabilities | 35 | 1,846 | ||||||||
NWM N.V. and subsidiaries US$500 million 4.65% dated notes 2018 | ||||||||||
Subordinated liabilities | ||||||||||
Notional amount | $ | $ 500 | $ 500 | ||||||||
Interest rate | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | 4.65% | |||
Redemption of subordinated liabilities | 141 | |||||||||
NWM N.V. and subsidiaries US$16 million floating rate notes 2019 | ||||||||||
Subordinated liabilities | ||||||||||
Notional amount | $ | $ 16 | $ 16 | ||||||||
Redemption of subordinated liabilities | 10 | 2 | ||||||||
NWM N.V. and Subsidiaries US$71.8 million floating rate notes 2019 | ||||||||||
Subordinated liabilities | ||||||||||
Notional amount | $ | $ 71.8 | $ 71.8 | ||||||||
Redemption of subordinated liabilities | 56 | |||||||||
NWM 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% | |||
Redemption of subordinated liabilities | 145 | |||||||||
NWM S NV and subsidiaries | ||||||||||
Subordinated liabilities | ||||||||||
Redemption of subordinated liabilities | £ 211 | £ 143 |
Other liabilities (Details)
Other liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Other liabilities | |||
Retirement benefit liabilities (Note 5) | £ 119 | £ 165 | |
Deferred tax (Note 7) | 266 | 454 | |
Notes in circulation | 2,109 | 2,152 | |
Current tax | 132 | 100 | |
Accruals | 1,125 | 1,047 | |
Deferred income | 362 | 451 | |
Lease liabilities (Note 22) | 1,823 | £ 1,876 | |
Other liabilities | 1,034 | 1,581 | |
Provisions for liabilities and charges | 2,677 | 3,004 | |
Total other liabilities | £ 9,647 | £ 8,954 |
Other liabilities - Provision f
Other liabilities - Provision for liabilities and charges (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2019GBP (£) | |
Provisions for liabilities and charges | |
Balance at beginning of the period | £ 3,004 |
Implementation of IFRS 16 on 1 January 2019 | (170) |
ECL impairment charge | 29 |
Transfer (to)/from accruals and other liabilities | 12 |
Currency translation and other movements | (40) |
Charge to income statement | 1,563 |
Releases to income statement | (320) |
Provisions utilised | (1,401) |
Balance at end of the period | 2,677 |
Payment protection insurance | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 695 |
Charge to income statement | 900 |
Provisions utilised | (439) |
Balance at end of the period | 1,156 |
Prior Year Provisions | 97 |
Payment provision protection insurance | 6,200 |
Payment protection insurance provision utilised | 5,000 |
Other customer redress | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 536 |
Transfer (to)/from accruals and other liabilities | (3) |
Currency translation and other movements | (15) |
Transfer | 35 |
Charge to income statement | 141 |
Releases to income statement | (48) |
Provisions utilised | (332) |
Balance at end of the period | 314 |
Litigation and other regulatory | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 783 |
Currency translation and other movements | (6) |
Transfer | (35) |
Charge to income statement | 88 |
Releases to income statement | (111) |
Provisions utilised | (293) |
Balance at end of the period | 426 |
Other(2) | |
Provisions for liabilities and charges | |
Balance at beginning of the period | 990 |
Implementation of IFRS 16 on 1 January 2019 | (170) |
ECL impairment charge | 29 |
Transfer (to)/from accruals and other liabilities | 15 |
Currency translation and other movements | (19) |
Charge to income statement | 434 |
Releases to income statement | (161) |
Provisions utilised | (337) |
Balance at end of the period | £ 781 |
Other liabilities - Sensitivity
Other liabilities - Sensitivity (Details) - Payment protection insurance - GBP (£) | 12 Months Ended | |
Dec. 31, 2019 | Aug. 29, 2019 | |
Disclosure of financial liabilities | ||
Claims received | £ 4,900,000 | |
Average redress | ||
Disclosure of financial liabilities | ||
Claims processed | £ 1,631 | |
Claims still to process | 1,552 | |
Average redress | Minimum | ||
Disclosure of financial liabilities | ||
Change in assumption | (150) | |
Average redress | Estimated change in provision | Minimum | ||
Disclosure of financial liabilities | ||
Consequential change in provisions | £ (73,000,000) | |
No PPI % | ||
Disclosure of financial liabilities | ||
Claims processed (as a percent) | 28.00% | |
Claims still to process (as a percent) | 60.00% | |
No PPI % | Minimum | ||
Disclosure of financial liabilities | ||
Change in assumption (as a percent) | (3.00%) | |
No PPI % | Estimated change in provision | Minimum | ||
Disclosure of financial liabilities | ||
Consequential change in provisions | £ (13,000,000) | |
Uphold rate | ||
Disclosure of financial liabilities | ||
Claims processed (as a percent) | 85.00% | |
Claims still to process (as a percent) | 94.00% | |
Uphold rate | Minimum | ||
Disclosure of financial liabilities | ||
Change in assumption (as a percent) | (2.00%) | |
Uphold rate | Estimated change in provision | Minimum | ||
Disclosure of financial liabilities | ||
Consequential change in provisions | £ (16,000,000) |
Share capital (Details)
Share capital (Details) - GBP (£) £ / shares in Units, shares in Thousands, £ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | |||
Share capital | |||||
Value of shares | £ 46,490 | [1] | £ 43,556 | £ 49,093 | [1] |
Nominal value | 0.3 | ||||
Ordinary shares | |||||
Share capital | |||||
Value of shares | £ 12,049 | £ 12,094 | £ 11,965 | ||
Number of shares | 12,048,605 | 12,093,909 | |||
Par value per share | £ 1 | £ 1 | £ 1 | ||
Non-cumulative preference shares of US$0.01 | |||||
Share capital | |||||
Shares redeemed | 26,000 | ||||
Nominal value | £ 0.2 | ||||
Cumulative preference shares of 1 | |||||
Share capital | |||||
Value of shares | £ 1 | £ 1 | |||
Number of shares | 900 | 900 | |||
Par value per share | £ 1 | £ 1 | |||
[1] | Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. |
Share capital and other equit_2
Share capital and other equity - Movement in shares (Details) - GBP (£) shares in Thousands, £ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | |||
Value of shares | ||||
At 1 January | [1] | £ 46,490 | £ 49,093 | |
At 31 December | 43,556 | 46,490 | [1] | |
Ordinary shares | ||||
Value of shares | ||||
At 1 January | 12,049 | 11,965 | ||
Ordinary shares issued | 45 | 84 | ||
At 31 December | £ 12,094 | £ 12,049 | ||
Number of shares | ||||
At 1 January | 12,048,605 | 11,964,565 | ||
Shares issued | 45,304 | 84,040 | ||
At 31 December | 12,093,909 | 12,048,605 | ||
[1] | Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. |
Share capital and other equit_3
Share capital and other equity - Ordinary shares (Details) - GBP (£) £ / shares in Units, shares in Thousands, £ in Millions | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Share capital | ||||
Gross proceeds | £ 17 | £ 144 | £ 306 | |
Ordinary shares | ||||
Share capital | ||||
Authorized share capital granted | £ 605 | |||
Number of shares issued | 12,093,909 | 12,048,605 | 12,048,605 | |
Equity raised | £ 45 | £ 84 | ||
Percentage of increase in the issued share capital | 1.42% | |||
Shares issued in connection with employee share plans | 45,000 | |||
Par value | £ 1 | £ 1 | £ 1 | £ 1 |
Number of shares | 12,093,909 | 12,048,605 | 12,048,605 | |
Interim dividend paid | £ 241 | £ 241 | ||
Interim dividend per share | £ 2 | £ 2 | ||
Final dividend per share | 3 | 3.5 | ||
Special dividend per share | £ 12 | £ 7.5 | ||
Special dividend paid | £ 1,449 | £ 0 | ||
Dividends paid | 364 | 422 | ||
Special dividend declared | £ 606 | £ 904 | ||
Special dividend declared per share | £ 5 | £ 7.5 | ||
Minimum | Other securities | ||||
Share capital | ||||
Required notice term | 30 days | |||
Maximum | Other securities | ||||
Share capital | ||||
Required notice term | 60 days |
Share capital and other equit_4
Share capital and other equity - Non-cumulative preference shares (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Series U, Non-cumulative preference shares of US$0.01 | ||
Share capital | ||
Par value | $ 0.01 | |
Number of shares | 10,130 | |
Redemption price per share | $ 100,000 | |
Non-cumulative convertible preference shares of US$0.01 | ||
Share capital | ||
Par value | $ 0.01 | $ 0.01 |
Number of shares | 10,000 | 10,000 |
Share capital and other equit_5
Share capital and other equity - Paid-in equity (Details) £ / shares in Units, £ in Millions, $ in Millions, $ in Millions | Dec. 31, 2019USD ($) | Dec. 31, 2019GBP (£)£ / shares | Dec. 31, 2018USD ($) | Dec. 31, 2018GBP (£) | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | Aug. 31, 2017USD ($) | Aug. 31, 2017CAD ($) | Dec. 31, 2016GBP (£) | ||
Borrowings | |||||||||||
Equity | £ | £ 43,556 | £ 46,490 | [1] | £ 49,093 | [1] | ||||||
Paid-in equity | |||||||||||
Borrowings | |||||||||||
Equity | £ | 4,058 | 4,058 | [1] | 4,058 | [1] | £ 4,582 | |||||
Paid-in equity | Additional tier 1 notes callable August, 2020, USD | |||||||||||
Borrowings | |||||||||||
Equity | £ | £ 1,278 | £ 1,278 | £ 1,278 | ||||||||
Notional amount | $ | $ 2,000 | $ 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 notes callable August, 2025, USD | |||||||||||
Borrowings | |||||||||||
Equity | £ | £ 734 | £ 734 | £ 734 | ||||||||
Notional amount | $ | $ 1,150 | $ 1,150 | $ 1,150 | ||||||||
Interest rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |||||
Paid-in equity | Additional tier 1 notes callable August, 2021, USD | |||||||||||
Borrowings | |||||||||||
Equity | £ | £ 2,046 | £ 2,046 | £ 2,046 | ||||||||
Notional amount | $ | $ 2,650 | $ 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 | |||||||||||
Notional amount | $ | $ 564 | ||||||||||
Paid-in equity | EMTN note redeemed October, 2017, CAD | |||||||||||
Borrowings | |||||||||||
Notional amount | $ | $ 321 | ||||||||||
Paid-in equity | Maximum | Additional Tier 1 notes | |||||||||||
Borrowings | |||||||||||
CET1 ratio (as a percent) | 7.00% | 7.00% | |||||||||
[1] | Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. |
Share capital and other equit_6
Share capital and other equity - Reserves (Details) - Share awards and options - Own shares held - £ / shares shares in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Own shares held | 15 | 8 |
Par value | £ 1 | |
Own shares acquired | 24 | |
Delivery of own shares held | 17 |
Leases - Impact on the Group's
Leases - Impact on the Group's balance sheet and retained earnings (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | |||
Retaining earnings | £ 14,100 | ||
Loans to customers - Finance leases | £ 8,997 | ||
Other assets - Net right of use assets | 1,162 | ||
- Recognition of lease liabilities | (1,823) | (1,876) | |
Other liabilities | £ (9,647) | £ (8,954) | |
IFRS 16 | |||
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | |||
Retaining earnings | (200) | ||
Loans to customers - Finance leases | 200 | ||
Other assets - Net right of use assets | 1,300 | ||
- Recognition of lease liabilities | (1,900) | ||
- Provision for onerous leases | 200 | ||
Other liabilities | (1,700) | ||
Previously reported | IFRS 16 | |||
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | |||
Retaining earnings | £ 14,300 |
Leases - Most significant diffe
Leases - Most significant differences between the IAS 17 lease commitments and the lease liabilities recognised on transition to IFRS 16 (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Leases | |||
Weighted average lessee's incremental borrowing rate (as a percent) | 2.30% | ||
Operating lease commitments as disclosed as at 31 December 2018 | £ 2,689 | ||
Adjustments as a result of different treatment of extension and termination options | £ (134) | ||
Discounted using the incremental borrowing rate | (684) | ||
Other | 5 | ||
Lease liabilities | £ 1,823 | £ 1,876 |
Leases - Lessee Leases - Amount
Leases - Lessee Leases - Amounts recognised in consolidated income statement (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Disclosure of quantitative information about right-of-use assets [line items] | |||
Interest payable | £ (44) | ||
Depreciation | (224) | ||
Rental expense on short term leases | (4) | ||
Income from subleasing right-of-use assets | 9 | ||
Rental expense in respect of operating leases in 2018 | £ 233 | ||
Operating lease asset | 1,162 | ||
Additions to right of use assets | 135 | ||
Lease liabilities | (1,823) | £ (1,876) | |
Total cash outflow for leases | 222 | ||
Impairment of right of use assets | 86 | ||
Plant and equipment | |||
Disclosure of quantitative information about right-of-use assets [line items] | |||
Operating lease asset | 23 | ||
Accumulated depreciation | £ 5 |
Leases - Lessee Leases - Proper
Leases - Lessee Leases - Property Leases (Details) £ in Millions | Dec. 31, 2018GBP (£) |
Disclosure of maturity analysis of operating lease payments [line items] | |
Minimum rentals payable under non-cancellable leases | £ 233 |
Property leases | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Minimum rentals payable under non-cancellable leases | 2,689 |
Less than 12 months | Property leases | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Minimum rentals payable under non-cancellable leases | 232 |
After 1 year but within 5 years | Property leases | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Minimum rentals payable under non-cancellable leases | 736 |
Over 5 years | Property leases | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Minimum rentals payable under non-cancellable leases | £ 1,721 |
Leases - Lessor Leases - Amount
Leases - Lessor Leases - Amounts recognised in consolidated income statement (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2019GBP (£) | |
Amounts included in consolidated income statement for finance leases | |
Finance income on the net investment in leases | £ 314 |
Amounts included in consolidated income statement for operating leases | |
Lease income | £ 27 |
Leases - Lessor Leases - Amou_2
Leases - Lessor Leases - Amount receivable under finance leases (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | £ 10,548 | |
Unguaranteed residual values | (215) | £ (205) |
Future drawdowns | (30) | (70) |
Unearned income | (1,196) | |
Present value of lease payments | 9,107 | |
Impairments | (110) | |
Net investment in finance lease | 8,997 | |
Less than 12 months | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 3,388 | |
Unguaranteed residual values | (68) | |
Future drawdowns | (70) | |
1 to 2 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 2,229 | |
Unguaranteed residual values | (32) | |
2 to 3 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 1,733 | |
3 to 4 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 758 | |
4 to 5 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | 682 | |
Over 5 years | ||
Disclosure of maturity analysis of finance lease payments receivable [line items] | ||
Lease payments total | £ 1,758 | |
Unguaranteed residual values | £ (38) |
Leases - Lessor Leases - Minimu
Leases - Lessor Leases - Minimum amounts receivable under non-cancellable leases (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | ||
Gross amounts | £ 9,738 | |
Present value adjustments | (1,288) | |
Other movements | (261) | |
Future drawdowns | £ (30) | (70) |
Present value | 8,119 | |
Impairment allowance | 62 | |
Less than 12 months | ||
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | ||
Gross amounts | 3,237 | |
Present value adjustments | (208) | |
Other movements | (123) | |
Future drawdowns | (70) | |
Present value | 2,836 | |
After 1 year but within 5 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | ||
Gross amounts | 4,566 | |
Present value adjustments | (370) | |
Other movements | (100) | |
Present value | 4,096 | |
Over 5 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | ||
Gross amounts | 1,935 | |
Present value adjustments | (710) | |
Other movements | (38) | |
Present value | £ 1,187 |
Leases - Lessor Leases - Undisc
Leases - Lessor Leases - Undiscounted lease receipts from operating leases (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of maturity analysis of operating lease payments [line items] | ||
Undiscounted operating lease payments to be received | £ 437 | £ 513 |
Less than 12 months | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Undiscounted operating lease payments to be received | 154 | 139 |
1 to 2 years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Undiscounted operating lease payments to be received | 123 | |
2 to 3 years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Undiscounted operating lease payments to be received | 83 | |
3 to 4 years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Undiscounted operating lease payments to be received | 48 | |
4 to 5 years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Undiscounted operating lease payments to be received | 17 | |
After 1 year but within 5 years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Undiscounted operating lease payments to be received | 325 | |
Over 5 years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Undiscounted operating lease payments to be received | £ 12 | £ 49 |
Leases - Lessor Leases - Nature
Leases - Lessor Leases - Nature of operating lease assets on the balance sheet (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | ||
Operating lease asset | £ 1,162 | |
Transportation | ||
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | ||
Operating lease asset | 334 | £ 313 |
Cars and light commercial vehicles | ||
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | ||
Operating lease asset | 24 | 11 |
Other | ||
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | ||
Operating lease asset | 295 | 285 |
Total assets under operating leases | ||
Disclosure Of Finance Lease And Operating Lease By Lessor IAS 17 [Line Items] | ||
Operating lease asset | £ 653 | £ 609 |
Leases - Residual value exposur
Leases - Residual value exposures (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of finance lease contracts | £ 215 | £ 205 |
Unguaranteed residual values of hire purchase agreements | 57 | |
Unguaranteed residual values | 506 | |
Less than 12 months | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of finance lease contracts | 68 | |
Unguaranteed residual values of hire purchase agreements | 55 | |
Unguaranteed residual values | 175 | |
1 to 2 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of finance lease contracts | 32 | |
Unguaranteed residual values of hire purchase agreements | 2 | |
Unguaranteed residual values | 69 | |
After 2 years but within 5 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of finance lease contracts | 67 | |
Unguaranteed residual values | 200 | |
Over 5 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of finance lease contracts | 38 | |
Unguaranteed residual values | 62 | |
Transportation | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 148 | |
Transportation | Less than 12 months | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 25 | |
Transportation | 1 to 2 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 15 | |
Transportation | After 2 years but within 5 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 94 | |
Transportation | Over 5 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 14 | |
Cars and light commercial vehicles | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 4 | |
Cars and light commercial vehicles | Less than 12 months | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 1 | |
Cars and light commercial vehicles | 1 to 2 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 1 | |
Cars and light commercial vehicles | After 2 years but within 5 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 2 | |
Other | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 92 | |
Other | Less than 12 months | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 26 | |
Other | 1 to 2 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 19 | |
Other | After 2 years but within 5 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | 37 | |
Other | Over 5 years | ||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | ||
Unguaranteed residual values of operating leases | £ 10 |
Structured entities - Own asset
Structured entities - Own asset securitisations (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated structured entities | ||
Debt securities in issue | £ 1,762 | £ 903 |
Loans and advances to customers | 326,947 | 305,089 |
Unsecured | ||
Consolidated structured entities | ||
Debt securities in issue | 424 | |
Securitisations | ||
Consolidated structured entities | ||
Assets excluding cash deposits recorded in statements | 2,221 | 2,817 |
Cash deposits | 156 | 221 |
Total assets | 2,377 | 3,038 |
Other credit risk transfer securitisations | ||
Consolidated structured entities | ||
Loans and advances to customers | 9,001 | 8,402 |
Covered debt Programme | ||
Consolidated structured entities | ||
Debt securities in issue | 280 | 478 |
Loans and advances to customers | 9,630 | 9,446 |
Other borrowings | 7,241 | 6,627 |
Lending of own issued securities | ||
Consolidated structured entities | ||
Debt securities in issue | 1,745 | 551 |
Lending of own issued securities | Secured | ||
Consolidated structured entities | ||
Debt securities in issue | 1,704 | 526 |
Lending of own issued securities | Unsecured | ||
Consolidated structured entities | ||
Debt securities in issue | 424 | |
Consolidated structured entities | Securitisations | ||
Consolidated structured entities | ||
Debt securities in issue | 2,385 | 3,017 |
Held by Third party | Securitisations | ||
Consolidated structured entities | ||
Debt securities in issue | 468 | 778 |
Held by Third party | Other credit risk transfer securitisations | ||
Consolidated structured entities | ||
Debt securities in issue | 673 | 596 |
Held by RBS | Securitisations | ||
Consolidated structured entities | ||
Debt securities in issue | £ 1,917 | £ 2,239 |
Structured entities - Unconsoli
Structured entities - Unconsolidated structured entities (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Unconsolidated structured entities | ||
Unconsolidated structured entities | ||
Liquidity facilities/loan commitments | £ 1,916 | £ 2,351 |
Guarantees | 13 | |
Maximum exposure | 10,450 | 10,204 |
Unconsolidated structured entities | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (158) | (205) |
Unconsolidated structured entities | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 874 | 811 |
Unconsolidated structured entities | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 220 | 247 |
Unconsolidated structured entities | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 7,660 | 7,029 |
Unconsolidated structured entities | Other than held-for-trading | Loans to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 2,180 | 2,508 |
Asset backed securitisation vehicles | ||
Unconsolidated structured entities | ||
Liquidity facilities/loan commitments | 1,619 | 2,138 |
Guarantees | 3 | |
Maximum exposure | 9,338 | 9,299 |
Asset backed securitisation vehicles | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (154) | (156) |
Asset backed securitisation vehicles | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 802 | 665 |
Asset backed securitisation vehicles | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 196 | 200 |
Asset backed securitisation vehicles | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 6,917 | 6,493 |
Asset backed securitisation vehicles | Other than held-for-trading | Loans to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 1,544 | 1,972 |
Investment funds and other | ||
Unconsolidated structured entities | ||
Liquidity facilities/loan commitments | 297 | 213 |
Guarantees | 10 | |
Maximum exposure | 1,112 | 905 |
Investment funds and other | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (4) | (49) |
Investment funds and other | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 72 | 146 |
Investment funds and other | Held-for-trading | Derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 24 | 47 |
Investment funds and other | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 743 | 536 |
Investment funds and other | Other than held-for-trading | Loans to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 636 | 536 |
Secured | Unconsolidated structured entities | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 5,480 | 4,521 |
Secured | Asset backed securitisation vehicles | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 5,373 | 4,521 |
Secured | Investment funds and other | Other than held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 107 | |
Equity Shares | Unconsolidated structured entities | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 812 | 769 |
Equity Shares | Asset backed securitisation vehicles | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 760 | 621 |
Equity Shares | Investment funds and other | Held-for-trading | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | £ 52 | £ 148 |
Asset transfers (Details)
Asset transfers (Details) - Securities repurchase agreements or lending transactions - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | £ 27,516 | £ 23,910 |
Fair value of associated liabilities | 27,342 | 23,222 |
Trading assets | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | 23,247 | 14,020 |
Other financial assets | ||
Securities repurchase agreements or lending transactions | ||
Fair value of transferred financial asset not derecognised | £ 4,269 | £ 9,890 |
Asset transfers - Assets pledge
Asset transfers - Assets pledged as collateral (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Asset transfers | ||
Assets pledged against liabilities | £ 50,565 | £ 63,264 |
Trading assets | ||
Asset transfers | ||
Assets pledged against liabilities | 27,918 | 35,571 |
Loans to banks | ||
Asset transfers | ||
Assets pledged against liabilities | 39 | 1,050 |
Loans to customers | ||
Asset transfers | ||
Assets pledged against liabilities | 17,920 | 25,930 |
Other financial assets | ||
Asset transfers | ||
Assets pledged against liabilities | £ 4,688 | £ 713 |
Capital resources (Details)
Capital resources (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Shareholders' equity (excluding non-controlling interests) | ||
Shareholders' equity | £ 43,547 | £ 45,736 |
Qualifying Tier 2 capital | ||
Minimum pillar 1 capital ratio | 8.00% | |
Minimum tier 1 component ratio | 4.50% | |
RBSG plc | ||
Shareholders' equity (excluding non-controlling interests) | ||
Shareholders' equity | 43,547 | £ 45,736 |
Preference shares - equity | (496) | (496) |
Other equity instruments | (4,058) | (4,058) |
Shareholders' equity (excluding non-controlling interests) | 38,993 | 41,182 |
Regulatory adjustments and deductions | ||
Own credit | (118) | (405) |
Defined benefit pension fund adjustment | (474) | (394) |
Cash flow hedging reserve | (35) | 191 |
Deferred tax assets | (757) | (740) |
Prudential valuation adjustments | (431) | (494) |
Goodwill and other intangible assets | (6,622) | (6,616) |
Expected losses less impairments | (167) | (654) |
Foreseeable ordinary and special dividends | (968) | (1,326) |
Foreseeable charges | (365) | |
Other regulatory adjustments | (2) | (105) |
Total regulatory adjustments and deductions | (9,939) | (10,543) |
CET1 capital | 29,054 | 30,639 |
Additional Tier 1 (AT1) capital | ||
Eligible AT1 | 4,051 | 4,051 |
Qualifying instruments and related share premium subject to phase out | 1,366 | 1,393 |
Qualifying instruments issued by subsidiaries and held by third parties subject to phase out | 140 | 140 |
AT1 capital | 5,557 | 5,584 |
Tier 1 capital | 34,611 | 36,223 |
Qualifying Tier 2 capital | ||
Qualifying instruments and related share premium | 4,867 | 6,386 |
Qualifying instruments issued by subsidiaries and held by third parties | 1,345 | 1,565 |
Tier 2 capital | 6,212 | 7,951 |
Total regulatory capital | £ 40,823 | £ 44,174 |
Memorandum items - Contingent l
Memorandum items - Contingent liabilities and commitments (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | £ 119,760 | £ 119,879 | |
Contingent liabilities and commitments | 124,995 | 126,883 | £ 136,050 |
Less than 12 months | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 59,878 | ||
Contingent liabilities and commitments | 62,027 | ||
More than 1 year but less than 3 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 21,054 | ||
Contingent liabilities and commitments | 22,081 | ||
More than 3 years but less than 5 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 31,664 | ||
Contingent liabilities and commitments | 32,043 | ||
Over 5 years | |||
Contingent liabilities and commitments | |||
Standby facilities, credit lines and other commitments | 7,164 | ||
Contingent liabilities and commitments | 8,844 | ||
Guarantees | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 2,757 | 3,952 | |
Guarantees | Less than 12 months | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 1,015 | ||
Guarantees | More than 1 year but less than 3 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 427 | ||
Guarantees | More than 3 years but less than 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 218 | ||
Guarantees | Over 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 1,097 | ||
Other contingent liabilities | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 2,478 | £ 3,052 | |
Other contingent liabilities | Less than 12 months | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 1,134 | ||
Other contingent liabilities | More than 1 year but less than 3 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 600 | ||
Other contingent liabilities | More than 3 years but less than 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | 161 | ||
Other contingent liabilities | Over 5 years | |||
Contingent liabilities and commitments | |||
Estimated net exposure | £ 583 |
Memorandum items - Contractual
Memorandum items - Contractual obligations of future (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | |||
Capital expenditure on property, plant and equipment | £ 20 | £ 17 | [1] |
Contracts to purchase goods or services | 614 | 541 | [1] |
Total capital commitments | 634 | 558 | [1] |
Less than 12 months | |||
Disclosure Of Finance Lease And Operating Lease By Lessee IAS 17 [Line Items] | |||
Contracts to purchase goods or services | £ 285 | £ 253 | |
[1] | Of which due within 1 year: £285 million (2018 - £253 million). |
Memorandum items - Litigation,
Memorandum items - Litigation, investigations and reviews (Details) € in Millions, £ in Millions, SFr in Millions, $ in Millions, $ in Millions, $ in Millions | Dec. 20, 2019USD ($) | May 27, 2019AUD ($) | Jan. 05, 2017USD ($) | Jun. 30, 2019EUR (€) | May 31, 2019EUR (€) | Jun. 30, 2018GBP (£) | Oct. 31, 2017item | Feb. 28, 2017CHF (SFr) | Dec. 31, 2016SGD ($) | Dec. 31, 2015USD ($) | Oct. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2019USD ($)actioncomplaintitemlawsuit | Dec. 31, 2019EUR (€)actioncomplaintitemlawsuit | Dec. 31, 2019GBP (£)actioncomplaintitemlawsuit | Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | Dec. 31, 2016action | Dec. 31, 2015USD ($)company | Dec. 31, 2015GBP (£)company | Dec. 31, 2012GBP (£) | Dec. 31, 2019GBP (£) | Sep. 30, 2019GBP (£) | Jul. 10, 2017item |
Trustee and other fiduciary activities | ||||||||||||||||||||||||
Fee income | £ 250 | £ 257 | £ 244 | |||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Provisions utilised | 1,401 | |||||||||||||||||||||||
Payment protection insurance | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Total aggregate provisions | £ 6,200 | £ 900 | ||||||||||||||||||||||
Provisions utilised | 439 | |||||||||||||||||||||||
Provisions utilised | 5,000 | |||||||||||||||||||||||
Payment provision protection insurance | 6,200 | |||||||||||||||||||||||
FCA review of RBS Group's treatment of SMEs | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Total aggregate provisions | 106 | |||||||||||||||||||||||
Investment advice review | Maximum | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Total aggregate provisions | 10 | |||||||||||||||||||||||
Packaged accounts | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Total aggregate provisions | 23 | |||||||||||||||||||||||
Treatment of tracker mortgage customers | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Total aggregate provisions | € 312 | 266 | ||||||||||||||||||||||
Provisions utilised | 269 | 229 | ||||||||||||||||||||||
Internal review from treatment of tracker mortgage customers | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Total aggregate provisions | 167 | £ 142 | ||||||||||||||||||||||
Provisions utilised | € 111 | £ 94 | ||||||||||||||||||||||
Foreign exchange related investigations | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Settlement amount paid | € | € 275 | € 275 | ||||||||||||||||||||||
Guarantees | ||||||||||||||||||||||||
The Financial Services Compensation Scheme | ||||||||||||||||||||||||
Interest rate basis | 12 month LIBOR | 12 month LIBOR | 12 month LIBOR | |||||||||||||||||||||
Adjustment to interest rate basis | 1.11% | 1.11% | ||||||||||||||||||||||
Interim payment | £ 4,700 | |||||||||||||||||||||||
Accrued estimated FSCS levies | £ 1.8 | |||||||||||||||||||||||
Residential mortgage-backed securities (RMBS) litigation in the US, issued by Nomura Holding America Inc and subsidiaries | ||||||||||||||||||||||||
Litigation, investigations and reviews | ||||||||||||||||||||||||
Final settlement amount | $ | $ 1,000 | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Settlement amount paid | $ | $ 55.3 | |||||||||||||||||||||||
London Interbank Offered Rate (LIBOR) | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Number of non-class action | action | 24 | 24 | 24 | |||||||||||||||||||||
Number of non-class actions pending | action | 7 | |||||||||||||||||||||||
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 | |||||||||||||||||||||
Different Reference Rates [Member] | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Number of class actions | complaint | 5 | 5 | 5 | |||||||||||||||||||||
FX antitrust litigation | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Settlement amount paid | $ | $ 255 | |||||||||||||||||||||||
Maximum Total Transaction Value | $ | $ 0.5 | |||||||||||||||||||||||
Swaps antitrust litigation | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Number of swap execution facilities | item | 3 | 3 | 3 | |||||||||||||||||||||
Madoff | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Number of class actions | action | 2 | 2 | 2 | |||||||||||||||||||||
Damages claimed | $ | $ 21.8 | $ 276.3 | ||||||||||||||||||||||
Property Alliance Group claim | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Damages claimed | £ 446.7 | |||||||||||||||||||||||
Coutts & Co Ltd | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Penalty paid | $ 27.9 | $ 2.4 | $ 78.5 | |||||||||||||||||||||
NPA term | 4 years | |||||||||||||||||||||||
Disgorge Profits | SFr | SFr 6.5 | |||||||||||||||||||||||
Tax dispute | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Damages claimed | £ 71.4 | |||||||||||||||||||||||
Value-added-tax | £ 86 | |||||||||||||||||||||||
Penalty as a percentage of VAT | 100.00% | |||||||||||||||||||||||
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 claimed | item | 18 | |||||||||||||||||||||||
NatWest | DoJ | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Penalty paid | $ | $ 395 | |||||||||||||||||||||||
Number of years probation | 3 years | |||||||||||||||||||||||
NatWest | France local authorities | ||||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||
Number of complaints filed | lawsuit | 3 | 3 | 3 | |||||||||||||||||||||
Number of claims pending | lawsuit | 1 | 1 | 1 | |||||||||||||||||||||
Number of claims dismissed | lawsuit | 1 | 1 | 1 |
Analysis of the net investmen_3
Analysis of the net investment in business interests and intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Analysis of the net investment in business interests and intangible assets | |||
Fair value given for businesses acquired | £ (55) | £ (113) | £ (131) |
Additional investment in associates | (9) | ||
Net outflow of cash in respect of acquisitions | (55) | (122) | (131) |
Net assets/(liabilities) sold | 351 | 177 | |
Non-cash consideration | (15) | ||
Profit on disposals | 155 | ||
Net inflow/(outflow) of cash in respect of disposals | 351 | 317 | |
Dividends received from associates | 5 | (1) | |
Cash expenditure on intangible assets | (380) | (372) | (384) |
Net (outflow)/inflow | £ (84) | £ (489) | £ (199) |
Analysis of changes in financ_3
Analysis of changes in financing during the year (Details) - GBP (£) £ in Millions | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
At 1 January | [1] | £ 46,490 | £ 49,093 | |||
Issue of ordinary shares | 17 | 144 | £ 306 | |||
Net cash flows from financing activities | [2] | (2,547) | 472 | (5,509) | ||
Redemption of debt preference shares | 748 | |||||
At 31 December | 43,556 | 46,490 | [1] | 49,093 | [1] | |
Share capital, share premium, paid-in equity and merger reserve | ||||||
At 1 January | 28,015 | 27,791 | 52,979 | |||
Issue of ordinary shares | 17 | 144 | 306 | |||
Redemption of paid-in equity | (720) | |||||
Net cash flows from financing activities | 17 | 144 | (414) | |||
Transfer to retained earnings | (25,789) | |||||
Redemption of debt preference shares | 748 | |||||
Other adjustments including foreign exchange | 196 | |||||
At 31 December | 28,127 | 28,015 | 27,791 | |||
Employee share schemes | Share capital, share premium, paid-in equity and merger reserve | ||||||
Issue of ordinary shares | £ 95 | £ 80 | £ 71 | |||
[1] | Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. | |||||
[2] | 2018 and 2017 have been re-presented to align the balance sheet classification. MREL was previously presented in Operating activities and is now presented in Financing activities. |
Analysis of changes in financ_4
Analysis of changes in financing during the year, Subordinated liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Analysis of changes in financing during the year | ||||
Issue of subordinated liabilities | £ 577 | |||
Redemption of subordinated liabilities | (1,108) | £ (2,258) | £ (5,747) | |
Interest on subordinated liabilities | (510) | (566) | (717) | |
Issuance of MRELs | 3,640 | 6,996 | 3,612 | |
Maturity/redemption of MRELs | (1,285) | (774) | ||
Interest on MRELs | (428) | (237) | (139) | |
Net cash flows from financing activities | [1] | (2,547) | 472 | (5,509) |
Subordinated Liabilities | ||||
Analysis of changes in financing during the year | ||||
At 1 January | 10,535 | 12,722 | 19,419 | |
Issue of subordinated liabilities | 577 | |||
Redemption of subordinated liabilities | (1,108) | (2,258) | (5,747) | |
Interest on subordinated liabilities | (510) | (566) | (717) | |
Net cash flows from financing activities | (1,041) | (2,824) | (6,464) | |
Other adjustments including foreign exchange | 485 | 637 | (233) | |
At 31 December | 9,979 | 10,535 | 12,722 | |
MREL | ||||
Analysis of changes in financing during the year | ||||
At 1 January | 16,821 | 9,202 | 6,832 | |
Issuance of MRELs | 3,640 | 6,996 | 3,612 | |
Maturity/redemption of MRELs | (1,285) | (774) | ||
Interest on MRELs | (428) | (237) | (139) | |
Net cash flows from financing activities | 1,927 | 6,759 | 2,699 | |
Other adjustments including foreign exchange | 501 | 860 | (329) | |
At 31 December | £ 19,249 | £ 16,821 | £ 9,202 | |
[1] | 2018 and 2017 have been re-presented to align the balance sheet classification. MREL was previously presented in Operating activities and is now presented in Financing activities. |
Analysis of cash and cash equ_3
Analysis of cash and cash equivalents (Details) £ in Millions, € in Billions | 12 Months Ended | |||||||||
Dec. 31, 2019GBP (£) | Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | Dec. 31, 2019EUR (€) | Dec. 31, 2019GBP (£) | Dec. 31, 2018EUR (€) | Dec. 31, 2018GBP (£) | Dec. 31, 2017EUR (€) | Dec. 31, 2017GBP (£) | Dec. 31, 2016GBP (£) | |
Analysis of cash and cash equivalents | ||||||||||
Cash | £ 88,897 | £ 98,337 | £ 88,414 | |||||||
Cash equivalents | 20,039 | 24,268 | 10,156 | |||||||
Cash and cash equivalents at beginning of year | £ 108,936 | £ 122,605 | £ 98,570 | |||||||
Net increase/(decrease) in cash and cash equivalents | (8,348) | (13,669) | 24,035 | |||||||
Cash and cash equivalents at end of year | 100,588 | 108,936 | 122,605 | |||||||
Cash and balances at central banks | £ 77,858 | 88,897 | 98,337 | |||||||
Treasury bills and debt securities | 1,064 | 83 | 427 | |||||||
Net loans to banks | 21,666 | 19,956 | 23,841 | |||||||
Total cash and cash equivalents | £ 100,588 | £ 108,936 | £ 122,605 | 100,588 | 108,936 | 122,605 | £ 98,570 | |||
Cash collateral posted with bank counterparties | 7,570 | 7,302 | 6,683 | |||||||
Bank of England | ||||||||||
Cash | ||||||||||
Mandatory reserve deposits at central banks | £ 1,000 | £ 900 | £ 600 | |||||||
De Nederlandsche Bank | ||||||||||
Cash | ||||||||||
Mandatory reserve deposits at central banks | € | € 0.1 | € 0.1 | € 0.1 |
Directors' and key management r
Directors' and key management remuneration - Directors (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related party transactions | ||
Director emoluments before amounts receivable under long-term incentive plans and share option plans | £ 6,664 | £ 6,658 |
Amounts receivable under long-term incentive plans and share option plans | 741 | |
Total Directors' remuneration | 7,405 | 6,658 |
Non-executive directors | ||
Related party transactions | ||
Director emoluments before amounts receivable under long-term incentive plans and share option plans | 1,881 | 2,001 |
Chairman and executive directors | ||
Related party transactions | ||
Director emoluments before amounts receivable under long-term incentive plans and share option plans | 4,783 | 4,657 |
Director | ||
Related party transactions | ||
Accrued benefits | £ 0 | £ 0 |
Directors' and key management_2
Directors' and key management remuneration - Key management (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Directors' and key management remuneration | ||
Short-term benefits | £ 22,067 | £ 20,316 |
Post-employment benefits | 401 | 82 |
Share-based payments | 2,435 | |
Total remuneration | £ 24,903 | £ 20,398 |
Transactions with directors a_3
Transactions with directors and key management (Details) £ in Thousands | Dec. 31, 2019GBP (£)director | Dec. 31, 2018GBP (£) |
Transactions with directors and key management | ||
Loans to customers | £ 326,947,000 | £ 305,089,000 |
Customer deposits | 369,247,000 | 360,914,000 |
key management personnel | ||
Transactions with directors and key management | ||
Loans to directors | £ 741,550 | |
Number of directors with outstanding loans | director | 7 | |
Loans to customers | £ 1,662 | 1,544 |
Customer deposits | £ 37,727 | £ 31,361 |
Related parties (Details)
Related parties (Details) - GBP (£) £ in Millions, shares in Millions | Dec. 31, 2019 | Jun. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 |
Related party transactions | ||||||
Cash ratio deposits | 0.324% | |||||
Threshold eligible liabilities | £ 600 | £ 600 | ||||
Loans and advances to banks | 10,689 | 10,689 | £ 12,947 | |||
Customer deposits | £ 369,247 | 369,247 | 360,914 | |||
Total income | 14,253 | 13,402 | £ 13,133 | |||
Operating expenses | £ 9,325 | £ 9,645 | £ 10,401 | |||
Associate | ||||||
Related party transactions | ||||||
Investment extended to ownership voting rights (as a percentage) | 20.00% | |||||
RBSG plc | HM Treasury | ||||||
Related party transactions | ||||||
Sale of ordinary shares | 925 | 630 | ||||
Percentage of ownership interest | 62.10% |
Post balance sheet events (Deta
Post balance sheet events (Details) £ in Billions | 12 Months Ended |
Dec. 31, 2020GBP (£) | |
Plan to refocus NatWest Markets business | |
Post balance sheet events | |
Estimated exit restructuring and disposal costs | £ 0.6 |
Consolidating financial infor_3
Consolidating financial information - Income statement (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidating financial information | |||
Net interest income | £ 8,047 | £ 8,656 | £ 8,987 |
Non-interest income | 6,206 | 4,746 | 4,146 |
Total income | 14,253 | 13,402 | 13,133 |
Operating expenses | (9,325) | (9,645) | (10,401) |
Impairment releases/(losses) | (696) | (398) | (493) |
Operating profit before tax | 4,232 | 3,359 | 2,239 |
Tax | (432) | (1,208) | (731) |
Profit/(loss) from continuing operations | 3,800 | 2,151 | 1,508 |
Profit/(loss) for the year | 3,800 | 2,151 | 1,508 |
Attributable to: | |||
Ordinary shareholders | 3,133 | 1,622 | 752 |
Preference shareholders | 39 | 182 | 234 |
Paid-in equity holders | 367 | 355 | 487 |
Non-controlling interests | 261 | (8) | 35 |
Profit for the year | 3,800 | 2,151 | 1,508 |
Consolidation adjustments | |||
Consolidating financial information | |||
Net interest income | 434 | 1,235 | 2,653 |
Non-interest income | (1,262) | (2,790) | 2,521 |
Total income | (828) | (1,555) | 5,174 |
Operating expenses | (133) | (1,443) | (4,732) |
Impairment releases/(losses) | 37 | (59) | (200) |
Operating profit before tax | (924) | (3,057) | 242 |
Tax | 408 | (132) | 48 |
Profit/(loss) from continuing operations | (516) | (3,189) | 290 |
Profit/(loss) from discontinued operations, net of tax | (54) | 510 | |
Profit/(loss) for the year | (516) | (3,243) | 800 |
Attributable to: | |||
Ordinary shareholders | (399) | (3,273) | 766 |
Paid-in equity holders | (375) | 4 | |
Non-controlling interests | 258 | 30 | 30 |
Profit for the year | (516) | (3,243) | 800 |
RBSG plc | |||
Consolidating financial information | |||
Net interest income | (628) | (368) | 203 |
Non-interest income | 3,467 | 2,794 | 1,390 |
Total income | 2,839 | 2,426 | 1,593 |
Operating expenses | (42) | (85) | (122) |
Impairment releases/(losses) | 2 | 1 | |
Operating profit before tax | 2,799 | 2,342 | 1,471 |
Tax | (71) | 149 | (94) |
Profit/(loss) from continuing operations | 2,728 | 2,491 | 1,377 |
Profit/(loss) for the year | 2,728 | 2,491 | 1,377 |
Attributable to: | |||
Ordinary shareholders | 2,322 | 1,954 | 660 |
Preference shareholders | 39 | 182 | 234 |
Paid-in equity holders | 367 | 355 | 483 |
Profit for the year | 2,728 | 2,491 | 1,377 |
RBSG plc | IAS 27 | |||
Consolidating financial information | |||
Increase (decrease) in results of investments using the equity method | (811) | 1,546 | |
Increase (decrease) in net assets | (10,240) | (8,651) | |
NWM Plc | |||
Consolidating financial information | |||
Net interest income | (127) | (239) | (26) |
Non-interest income | 815 | 1,002 | 909 |
Total income | 688 | 763 | 883 |
Operating expenses | (1,101) | (1,262) | (1,601) |
Impairment releases/(losses) | 50 | 89 | 77 |
Operating profit before tax | (363) | (410) | (641) |
Tax | 94 | 51 | 168 |
Profit/(loss) from continuing operations | (269) | (359) | (473) |
Profit/(loss) from discontinued operations, net of tax | 54 | (510) | |
Profit/(loss) for the year | (269) | (305) | (983) |
Attributable to: | |||
Ordinary shareholders | (329) | (305) | (983) |
Paid-in equity holders | 60 | ||
Profit for the year | (269) | (305) | (983) |
NWM Plc | IAS 27 | |||
Consolidating financial information | |||
Increase (decrease) in results of investments using the equity method | 149 | (332) | |
Increase (decrease) in net assets | 276 | 165 | |
Subsidiaries | |||
Consolidating financial information | |||
Net interest income | 8,368 | 8,028 | 6,157 |
Non-interest income | 3,186 | 3,740 | (674) |
Total income | 11,554 | 11,768 | 5,483 |
Operating expenses | (8,049) | (6,855) | (3,946) |
Impairment releases/(losses) | (785) | (429) | (370) |
Operating profit before tax | 2,720 | 4,484 | 1,167 |
Tax | (863) | (1,276) | (853) |
Profit/(loss) from continuing operations | 1,857 | 3,208 | 314 |
Profit/(loss) for the year | 1,857 | 3,208 | 314 |
Attributable to: | |||
Ordinary shareholders | 1,539 | 3,246 | 309 |
Paid-in equity holders | 315 | ||
Non-controlling interests | 3 | (38) | 5 |
Profit for the year | £ 1,857 | £ 3,208 | £ 314 |
Consolidating financial infor_4
Consolidating financial information - Statement of comprehensive income (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Consolidating financial information | ||||
Profit for the year | £ 3,800 | £ 2,151 | £ 1,508 | |
Items that do not qualify for reclassification | ||||
- contributions in preparation for ring-fencing (1) | [1] | (2,053) | ||
- other movements | (142) | 86 | 90 | |
(Loss)/profit on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk | (189) | 200 | (126) | |
Fair value through other comprehensive income (FVOCI) financial assets | (71) | 48 | ||
Tax | 28 | 502 | (10) | |
Total - Items that do not qualify for reclassification | (374) | (1,217) | (46) | |
Items that do qualify for reclassification | ||||
Fair value through other comprehensive income (FVOCI) financial assets | (14) | 7 | 26 | |
Cash flow hedges | 294 | (581) | (1,069) | |
Currency translation | (1,836) | 310 | 100 | |
Tax | (170) | 189 | 256 | |
Total - Items that do qualify for reclassification | (1,726) | (75) | (687) | |
Other comprehensive loss after tax | (2,100) | (1,292) | (733) | |
Total comprehensive income/(loss) for the year | 1,700 | 859 | 775 | |
Total comprehensive income/(loss) attributable to: | ||||
Ordinary shareholders | 1,044 | 305 | 2 | |
Preference shareholders | 39 | 182 | 234 | |
Paid-in equity holders | 367 | 355 | 487 | |
Non-controlling interests | 250 | 17 | 52 | |
Consolidation adjustments | ||||
Consolidating financial information | ||||
Profit for the year | (516) | (3,243) | 800 | |
Items that do not qualify for reclassification | ||||
Fair value through other comprehensive income (FVOCI) financial assets | (2) | |||
Total - Items that do not qualify for reclassification | (2) | |||
Items that do qualify for reclassification | ||||
Fair value through other comprehensive income (FVOCI) financial assets | (9) | (462) | 315 | |
Cash flow hedges | (30) | (332) | (417) | |
Currency translation | (2,546) | 2,630 | (373) | |
Tax | (92) | 128 | 105 | |
Total - Items that do qualify for reclassification | (2,677) | 1,964 | (370) | |
Other comprehensive loss after tax | (2,677) | 1,962 | (370) | |
Total comprehensive income/(loss) for the year | (3,193) | (1,281) | 430 | |
Total comprehensive income/(loss) attributable to: | ||||
Ordinary shareholders | (3,065) | (1,401) | 374 | |
Paid-in equity holders | (375) | 4 | ||
Non-controlling interests | 247 | 120 | 52 | |
RBSG plc | ||||
Consolidating financial information | ||||
Profit for the year | 2,728 | 2,491 | 1,377 | |
Items that do qualify for reclassification | ||||
Cash flow hedges | (21) | 78 | (204) | |
Tax | 5 | (15) | 38 | |
Total - Items that do qualify for reclassification | (16) | 63 | (166) | |
Other comprehensive loss after tax | (16) | 63 | (166) | |
Total comprehensive income/(loss) for the year | 2,712 | 2,554 | 1,211 | |
Total comprehensive income/(loss) attributable to: | ||||
Ordinary shareholders | 2,306 | 2,017 | 494 | |
Preference shareholders | 39 | 182 | 234 | |
Paid-in equity holders | 367 | 355 | 483 | |
NWM Plc | ||||
Consolidating financial information | ||||
Profit for the year | (269) | (305) | (983) | |
Items that do not qualify for reclassification | ||||
- contributions in preparation for ring-fencing (1) | (53) | |||
- other movements | (49) | (9) | 4 | |
(Loss)/profit on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk | (71) | 121 | (68) | |
Fair value through other comprehensive income (FVOCI) financial assets | (164) | 22 | ||
Tax | 32 | (24) | (18) | |
Total - Items that do not qualify for reclassification | (252) | 57 | (82) | |
Items that do qualify for reclassification | ||||
Fair value through other comprehensive income (FVOCI) financial assets | 20 | (339) | 52 | |
Cash flow hedges | 28 | 223 | (424) | |
Currency translation | (32) | 168 | (22) | |
Tax | (4) | 36 | 93 | |
Total - Items that do qualify for reclassification | 12 | 88 | (301) | |
Other comprehensive loss after tax | (240) | 145 | (383) | |
Total comprehensive income/(loss) for the year | (509) | (160) | (1,366) | |
Total comprehensive income/(loss) attributable to: | ||||
Ordinary shareholders | (569) | (160) | (1,366) | |
Paid-in equity holders | 60 | |||
Subsidiaries | ||||
Consolidating financial information | ||||
Profit for the year | 1,857 | 3,208 | 314 | |
Items that do not qualify for reclassification | ||||
- contributions in preparation for ring-fencing (1) | (2,000) | |||
- other movements | (93) | 95 | 86 | |
(Loss)/profit on fair value of credit in financial liabilities designated at fair value through profit or loss due to own credit risk | (118) | 79 | (58) | |
Fair value through other comprehensive income (FVOCI) financial assets | 93 | 28 | ||
Tax | (4) | 526 | 8 | |
Total - Items that do not qualify for reclassification | (122) | (1,272) | 36 | |
Items that do qualify for reclassification | ||||
Fair value through other comprehensive income (FVOCI) financial assets | (25) | 808 | (341) | |
Cash flow hedges | 317 | (550) | (24) | |
Currency translation | 742 | (2,488) | 495 | |
Tax | (79) | 40 | 20 | |
Total - Items that do qualify for reclassification | 955 | (2,190) | 150 | |
Other comprehensive loss after tax | 833 | (3,462) | 186 | |
Total comprehensive income/(loss) for the year | 2,690 | (254) | 500 | |
Total comprehensive income/(loss) attributable to: | ||||
Ordinary shareholders | 2,372 | (151) | £ 500 | |
Paid-in equity holders | 315 | |||
Non-controlling interests | £ (3) | £ (103) | ||
[1] | On 17 April 2018 RBS Group agreed a Memorandum of Understanding (MoU) with the Trustees of the RBS Group Pension Fund in connection with the requirements of ring-fencing. NWM Plc could not continue to be a participant in the Main section and separate arrangements were required for its employees. Under the MoU, NWB Plc made a contribution of £2 billion on 9 October 2018 to strengthen funding of the Main section in recognition of the changes in covenant. Also under the MoU, NWM Plc made a £53 million contribution to the NWM section in Q1 2019 |
Consolidating financial infor_5
Consolidating financial information - Balance sheet (Details) - GBP (£) £ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Assets | |||||
Cash and balances at central banks | £ 77,858 | £ 88,897 | £ 98,337 | ||
Trading assets | 76,745 | 75,119 | |||
Derivatives | 150,029 | 133,349 | |||
Settlement balances | 4,387 | 2,928 | |||
Loans to banks - amortised cost | 10,689 | 12,947 | |||
Loans to customers - amortised cost | 326,947 | 305,089 | |||
Amount due from holding company and fellow subsidiaries | 436 | 404 | |||
Other financial assets. | 61,452 | 59,485 | |||
Intangible assets | 6,622 | 6,616 | |||
Other assets | 8,310 | 9,805 | |||
Total assets | 723,039 | 694,235 | 738,056 | ||
Liabilities | |||||
Bank deposits | 20,493 | 23,297 | |||
Customer deposits | 369,247 | 360,914 | |||
Settlement balances | 4,069 | 3,066 | |||
Trading liabilities | 73,949 | 72,350 | |||
Derivatives | 146,879 | 128,897 | |||
Other financial liabilities. | 45,220 | 39,732 | |||
Subordinated liabilities | 9,979 | 10,535 | |||
Other liabilities | 9,647 | 8,954 | |||
Total liabilities | 679,483 | 647,745 | 688,963 | ||
Owners' equity | 43,547 | 45,736 | |||
Non-controlling interests | 9 | 754 | |||
Total equity | 43,556 | 46,490 | [1] | £ 49,093 | [1] |
Total liabilities and equity | 723,039 | 694,235 | |||
Consolidation adjustments | |||||
Assets | |||||
Trading assets | (3) | (99) | |||
Derivatives | (4,915) | (2,717) | |||
Loans to banks - amortised cost | 14 | (34) | |||
Loans to customers - amortised cost | (13) | (19) | |||
Amount due from holding company and fellow subsidiaries | (42,320) | (51,468) | |||
Other financial assets. | (277) | (232) | |||
Intangible assets | 302 | 302 | |||
Other assets | (60,674) | (60,023) | |||
Total assets | (107,886) | (114,290) | |||
Liabilities | |||||
Bank deposits | (1) | (76) | |||
Customer deposits | 2 | (7) | |||
Amounts due to holding company and fellow subsidiaries | (42,320) | (51,468) | |||
Trading liabilities | (3) | (99) | |||
Derivatives | (4,917) | (2,717) | |||
Other financial liabilities. | (82) | 7 | |||
Subordinated liabilities | (143) | (123) | |||
Other liabilities | (170) | (561) | |||
Total liabilities | (47,634) | (55,044) | |||
Owners' equity | (60,252) | (59,989) | |||
Non-controlling interests | 743 | ||||
Total equity | (60,252) | (59,246) | |||
Total liabilities and equity | (107,886) | (114,290) | |||
RBSG plc | |||||
Assets | |||||
Derivatives | 979 | 543 | |||
Amount due from holding company and fellow subsidiaries | 25,018 | 22,791 | |||
Other financial assets. | 277 | 241 | |||
Other assets | 55,809 | 56,773 | |||
Total assets | 82,083 | 80,348 | |||
Liabilities | |||||
Amounts due to holding company and fellow subsidiaries | 439 | 635 | |||
Derivatives | 711 | 445 | |||
Other financial liabilities. | 19,331 | 16,821 | |||
Subordinated liabilities | 7,647 | 7,941 | |||
Other liabilities | 168 | 119 | |||
Total liabilities | 28,296 | 25,961 | |||
Owners' equity | 53,787 | 54,387 | |||
Total equity | 53,787 | 54,387 | |||
Total liabilities and equity | 82,083 | 80,348 | |||
NWM Plc | |||||
Assets | |||||
Cash and balances at central banks | 9,953 | 11,095 | |||
Trading assets | 57,768 | 61,990 | |||
Derivatives | 147,458 | 134,291 | |||
Settlement balances | 3,353 | 1,421 | |||
Loans to banks - amortised cost | 238 | 454 | |||
Loans to customers - amortised cost | 6,910 | 7,908 | |||
Amount due from holding company and fellow subsidiaries | 7,145 | 11,800 | |||
Other financial assets. | 11,636 | 10,995 | |||
Other assets | 3,592 | 2,087 | |||
Total assets | 248,053 | 242,041 | |||
Liabilities | |||||
Bank deposits | 2,038 | 2,777 | |||
Customer deposits | 2,247 | 2,390 | |||
Amounts due to holding company and fellow subsidiaries | 16,858 | 23,505 | |||
Settlement balances | 2,648 | 1,977 | |||
Trading liabilities | 53,576 | 54,540 | |||
Derivatives | 142,390 | 129,974 | |||
Other financial liabilities. | 16,880 | 15,621 | |||
Subordinated liabilities | 590 | 658 | |||
Other liabilities | 1,195 | 1,677 | |||
Total liabilities | 238,422 | 233,119 | |||
Owners' equity | 9,631 | 8,922 | |||
Total equity | 9,631 | 8,922 | |||
Total liabilities and equity | 248,053 | 242,041 | |||
Subsidiaries | |||||
Assets | |||||
Cash and balances at central banks | 67,905 | 77,802 | |||
Trading assets | 18,980 | 13,228 | |||
Derivatives | 6,507 | 1,232 | |||
Settlement balances | 1,034 | 1,507 | |||
Loans to banks - amortised cost | 10,437 | 12,527 | |||
Loans to customers - amortised cost | 320,050 | 297,200 | |||
Amount due from holding company and fellow subsidiaries | 10,157 | 16,877 | |||
Other financial assets. | 49,816 | 48,481 | |||
Intangible assets | 6,320 | 6,314 | |||
Other assets | 9,583 | 10,968 | |||
Total assets | 500,789 | 486,136 | |||
Liabilities | |||||
Bank deposits | 18,456 | 20,596 | |||
Customer deposits | 366,998 | 358,531 | |||
Amounts due to holding company and fellow subsidiaries | 25,023 | 27,328 | |||
Settlement balances | 1,421 | 1,089 | |||
Trading liabilities | 20,376 | 17,909 | |||
Derivatives | 8,695 | 1,195 | |||
Other financial liabilities. | 9,091 | 7,283 | |||
Subordinated liabilities | 1,885 | 2,059 | |||
Other liabilities | 8,454 | 7,719 | |||
Total liabilities | 460,399 | 443,709 | |||
Owners' equity | 40,381 | 42,416 | |||
Non-controlling interests | 9 | 11 | |||
Total equity | 40,390 | 42,427 | |||
Total liabilities and equity | £ 500,789 | £ 486,136 | |||
[1] | Restated for IAS12 ‘income taxes’ refer to accounting policy 1, Other amendments to IFRS, for further details. |
Consolidating financial infor_6
Consolidating financial information - Cash flow statement (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Consolidating financial information | ||||
Net cash flows from operating activities | [1] | £ (3,102) | £ (6,823) | £ 35,712 |
Net cash flows from investing activities | (716) | (7,994) | (6,152) | |
Net cash flows from financing activities | [2] | (2,547) | 472 | (5,509) |
Effects of exchange rate changes on cash and cash equivalents | (1,983) | 676 | (16) | |
Net increase/(decrease) in cash and cash equivalents | (8,348) | (13,669) | 24,035 | |
Cash and cash equivalents at beginning of year | 108,936 | 122,605 | 98,570 | |
Cash and cash equivalents at end of year | 100,588 | 108,936 | 122,605 | |
Consolidation adjustments | ||||
Consolidating financial information | ||||
Net cash flows from operating activities | 2,545 | 65,131 | 2,724 | |
Net cash flows from investing activities | (1,746) | 15,684 | (4,238) | |
Net cash flows from financing activities | 3,379 | (964) | 4,718 | |
Effects of exchange rate changes on cash and cash equivalents | 60 | (222) | 1,013 | |
Net increase/(decrease) in cash and cash equivalents | 4,238 | 79,629 | 4,217 | |
Cash and cash equivalents at beginning of year | (7,283) | (86,912) | (91,129) | |
Cash and cash equivalents at end of year | (3,045) | (7,283) | (86,912) | |
RBSG plc | ||||
Consolidating financial information | ||||
Net cash flows from operating activities | 4,376 | 16,620 | 2,030 | |
Net cash flows from investing activities | 21 | (9,481) | (2,078) | |
Net cash flows from financing activities | (4,164) | (7,078) | (888) | |
Effects of exchange rate changes on cash and cash equivalents | (1) | 1 | (14) | |
Net increase/(decrease) in cash and cash equivalents | 232 | 62 | (950) | |
Cash and cash equivalents at beginning of year | 307 | 245 | 1,195 | |
Cash and cash equivalents at end of year | 539 | 307 | 245 | |
NWM Plc | ||||
Consolidating financial information | ||||
Net cash flows from operating activities | (1,068) | (6,480) | (74,357) | |
Net cash flows from investing activities | 892 | 18,335 | (2,077) | |
Net cash flows from financing activities | (606) | (670) | (9,668) | |
Effects of exchange rate changes on cash and cash equivalents | (835) | 332 | 87 | |
Net increase/(decrease) in cash and cash equivalents | (1,617) | 11,517 | (86,015) | |
Cash and cash equivalents at beginning of year | 24,575 | 13,058 | 99,073 | |
Cash and cash equivalents at end of year | 22,958 | 24,575 | 13,058 | |
Subsidiaries | ||||
Consolidating financial information | ||||
Net cash flows from operating activities | (8,955) | (82,094) | 105,315 | |
Net cash flows from investing activities | 117 | (32,532) | 2,241 | |
Net cash flows from financing activities | (1,156) | 9,184 | 329 | |
Effects of exchange rate changes on cash and cash equivalents | (1,207) | 565 | (1,102) | |
Net increase/(decrease) in cash and cash equivalents | (11,201) | (104,877) | 106,783 | |
Cash and cash equivalents at beginning of year | 91,337 | 196,214 | 89,431 | |
Cash and cash equivalents at end of year | £ 80,136 | £ 91,337 | £ 196,214 | |
[1] | Includes interest received of £11,245 million (2018 - £10,927 million, 2017 - £10,946 million) and interest paid of £3,318 million (2018 - £2,511 million, 2017 - £2,300 million). | |||
[2] | 2018 and 2017 have been re-presented to align the balance sheet classification. MREL was previously presented in Operating activities and is now presented in Financing activities. |