5th Aug 2011 07:01
Appendix 2
Businesses outlined for disposal
Appendix 2 Businesses outlined for disposal
To comply with EC State Aid requirements the Group agreed to make a series of divestments by the end of 2013: the disposal of RBS Insurance, Global Merchant Services and its interest in RBS Sempra Commodities JV. The Group also agreed to dispose of its RBS England and Wales and NatWest Scotland branch-based businesses, along with certain SME and corporate activities across the UK ('UK branch-based businesses'). The disposals of Global Merchant Services and RBS Sempra Commodities JV businesses have now effectively been completed.
The sale of the Group's UK branch-based businesses to Santander UK plc continues to make good progress. Due to the complex nature of the process required to separate the divesting branches and associated assets, and the desire to minimise customer disruption, the transaction is now expected to complete in the second half of 2012, subject to regulatory approvals and other conditions.
Preparations for the disposal of RBS Insurance, by way of public flotation or a trade sale, targeted for the second half of 2012 continue. External advisors were appointed during Q4 2010 and the process of separation is proceeding on plan. In the meantime, the business continues to be managed and reported as a separate core division.
The table below shows Total income and Operating profit of RBS Insurance, and the UK branch-based businesses.
Total income | Operating profit/(loss) before impairments | Operating profit/(loss) | ||||||
H1 2011 | FY 2010 | H1 2011 | FY 2010 | H1 2011 | FY 2010 | |||
£m | £m | £m | £m | £m | £m | |||
RBS Insurance (1) | 2,116 | 4,369 | 206 | (295) | 206 | (295) | ||
UK branch-based businesses (2) | 472 | 902 | 248 | 439 | 185 | 160 | ||
Total | 2,588 | 5,271 | 454 | 144 | 391 | (135) | ||
The table below shows the estimated risk-weighted assets, total assets and capital of the businesses identified for disposal.
RWAs | Total assets | Capital | ||||||
30 June 2011 | 31 December 2010 | 30 June 2011 | 31 December 2010 | 30 June 2011 | 31 December 2010 | |||
£bn | £bn | £bn | £bn | £bn | £bn | |||
RBS Insurance (1) | n/m | n/m | 12.7 | 12.4 | 4.2 | 4.0 | ||
UK branch-based businesses (2) | 11.5 | 13.2 | 19.6 | 19.9 | 1.0 | 1.2 | ||
Total | 11.5 | 13.2 | 32.3 | 32.3 | 5.2 | 5.2 | ||
Notes:
(1) | As reported in the Interim Results for the half year ended 30 June 2011 and Annual Results for the year ended 31 December 2010 and excluding non-core business. Estimated capital includes approximately £1.0 billion of goodwill. |
(2) | Estimated notional equity based on 9% of RWAs. |
Appendix 2 Businesses outlined for disposal (continued)
Further information on the UK branch-based businesses by division is shown in the tables below:
Division | Total | ||||
UK Retail | UK Corporate | H1 2011 | FY 2010 | ||
£m | £m | £m | £m | ||
Income statement | |||||
Net interest income | 146 | 200 | 346 | 656 | |
Non-interest income | 50 | 76 | 126 | 246 | |
Total income | 196 | 276 | 472 | 902 | |
Direct expenses | |||||
- staff | (39) | (43) | (82) | (176) | |
- other | (47) | (35) | (82) | (144) | |
Indirect expenses | (37) | (23) | (60) | (143) | |
(123) | (101) | (224) | (463) | ||
Operating profit before impairment losses | 73 | 175 | 248 | 439 | |
Impairment losses (1) | (39) | (24) | (63) | (279) | |
Operating profit | 34 | 151 | 185 | 160 | |
Analysis of income by product | |||||
Loans and advances | 69 | 174 | 243 | 445 | |
Deposits | 53 | 77 | 130 | 261 | |
Mortgages | 65 | - | 65 | 120 | |
Other | 9 | 25 | 34 | 76 | |
Total income | 196 | 276 | 472 | 902 | |
Net interest margin | 4.61% | 3.07% | 3.57% | 3.24% | |
Employee numbers (full time equivalents rounded to the nearest hundred) | 3,000 | 1,600 | 4,600 | 4,400 | |
Note:
(1) | Q1 2011 impairment losses benefitted from £54 million of latent and other provision releases. |
Division | Total | |||||
UK Retail | UK Corporate | Global Banking & Markets | 30 June 2011 | 31 December 2010 | ||
£bn | £bn | £bn | £bn | £bn | ||
Capital and balance sheet | ||||||
Total third party assets | 6.6 | 13.0 | - | 19.6 | 19.9 | |
Loans and advances to customers (gross) | 6.9 | 13.4 | - | 20.3 | 20.7 | |
Customer deposits | 8.8 | 14.9 | - | 23.7 | 24.0 | |
Derivative assets | - | - | 0.4 | 0.4 | n/a | |
Derivative liabilities | - | - | 0.1 | 0.1 | n/a | |
Risk elements in lending | 0.5 | 1.1 | - | 1.6 | 1.7 | |
Loan:deposit ratio | 79% | 90% | - | 86% | 86% | |
Risk-weighted assets | 3.3 | 8.2 | - | 11.5 | 13.2 | |
Related Shares:
RBS.L