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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Royal Bank Of Scotland Group Plc | LSE:RBS | London | Ordinary Share | GB00B7T77214 | ORD 100P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 120.90 | 121.35 | 121.40 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMRBS
RNS Number : 1397O
Royal Bank of Scotland Group PLC
04 February 2016
The Royal Bank of Scotland Group plc
Restatement
Document
February 2016
Contents
Page =========================================================== ==== Introduction 1 Customer segments 4 Appendix 1 Financial statement reconciliations Financial statement reconciliations 11 Appendix 2 Components of customer segments Operating profit/(loss) by segment 17 UK PBB 18 Ulster Bank RoI 21 Commercial Banking 24 Private Banking 27 RBS International 30 Corporate & Institutional Banking 33 Capital Resolution 36 Williams & Glyn 39 Appendix 3 Allocation of previous segments to new customer segments Introduction 43 UK PBB 44 Ulster Bank 47 Commercial Banking 50 Private Banking 53 Corporate & Institutional Banking 56 RCR 59 Central items & other 62 =========================================================== ====
Forward-looking statements
Certain sections in this document contain 'forward-looking statements' as that term is defined in the United States Private Securities Litigation Reform Act of 1995, such as statements that include the words 'expect', 'estimate', 'project', 'anticipate', 'believes', 'should', 'intend', 'plan', 'could', 'probability', 'risk', 'target', 'goal', 'objective', 'will', 'endeavour', 'outlook', 'optimistic', 'prospects' and similar expressions or variations on such expressions. These statements concern or may affect future matters, such as RBS's future economic results, business plans and current strategies. Forward-looking statements are subject to a number of risks and uncertainties that might cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statements. Factors that could cause or contribute to differences in current expectations include, but are not limited to, legislative, fiscal and regulatory developments, accounting standards, competitive conditions, technological developments, exchange rate fluctuations and general economic conditions. These and other factors, risks and uncertainties that may impact any forward-looking statement or RBS's actual results are discussed in RBS's 2015 Annual Report and Accounts (ARA). The forward-looking statements contained in this document speak only as at the date hereof, and RBS does not assume or undertake any obligation or responsibility to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
The Royal Bank of Scotland Group plc (RBS)
Business reorganisation and reporting changes
This announcement sets out changes to RBS's financial reporting: a change in accounting policy for pensions; revised operating segments; and changes in results presentation. The announcement contains restated financial results for the year ended 31 December 2014 and, to aid comparison of RBS's fourth quarter 2015 results with prior periods, restated financial information for the quarters ended 30 September 2015 and 31 December 2014.
Pension accounting policy
In light of developments during 2015, in particular publication by the International Accounting Standards Board of its exposure draft of amendments to IFRIC 14 'IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction', RBS has revised its accounting policy for determining whether or not it has an unconditional right to a refund of surpluses in its employee pension funds. Previously, where trustees have the power to use a scheme surplus to enhance benefits for members, RBS did not regard such power, in and of itself, as undermining the bank's unconditional legal right to a refund of a surplus existing at that point in time. Under the new policy, where RBS has a right to a refund, this is no longer regarded as unconditional if pension fund trustees can use a scheme surplus to enhance benefits for plan members. As a result of this policy change, a minimum funding requirement to cover an existing shortfall in a scheme may give rise to an additional liability and surpluses may not be recognised in full. The accounting policy change is being applied retrospectively and comparatives restated.
Segmental reorganisation
RBS continues to deliver on its plan to build a stronger, simpler and fairer bank for both customers and shareholders. To support this and reflect the progress made, the previously reported operating segments will now realign as follows:
Personal & Business Banking (PBB) comprises two reportable segments:
-- UK PBB serves individuals and mass affluent customers in the UK together with small businesses (generally up to GBP2 million turnover). UK PBB includes Ulster Bank customers in Northern Ireland.
-- Ulster Bank RoI serves individuals and businesses in the Republic of Ireland (RoI).
Commercial & Private Banking (CPB) comprises three reportable segments:
-- Commercial Banking serves commercial and mid-corporate customers in the UK.
-- Private Banking serves high net worth individuals in the UK.
-- RBS International (RBSI) serves retail, commercial, corporate and financial institution customers in Jersey, Guernsey, Isle of Man and Gibraltar.
Corporate & Institutional Banking (CIB) serves UK and western European customers, both corporates and financial institutions, supported by trading and distribution platforms in the UK, US and Singapore.
Capital Resolution includes CIB Capital Resolution and the remainder of RBS Capital Resolution (RCR).
Williams & Glyn (W&G) comprises RBS England and Wales branch-based businesses, along with certain small and medium enterprises and corporate activities across the UK.
Central items & other includes corporate functions, such as 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 Citizens and the international private banking business are included in Central items in the relevant periods.
The Royal Bank of Scotland Group plc (RBS)
Reporting changes
In line with RBS's strategy to be a simpler bank the following reporting changes have been implemented in relation to the presentation of the results.
One-off and other items
The following items were previously reported separately after operating profit; they are now reported within operating profit:
-- Own credit adjustments; -- Gain/(loss) on redemption of own debt; -- Write-down of goodwill; -- Strategic disposals; and -- RFS Holdings minority interest (RFS MI) (restated for periods up to and including Q4 2014 only; this has been reported within operating profit since Q1 2015).
Own credit adjustments are included within segmental results in CIB, Capital Resolution and Central items (Treasury) in line with where the related liabilities are recorded. The non-statutory results will continue to show these items and restructuring costs and litigation and conduct costs as separate line items within the relevant caption of the income statement where significant.
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. However, previously central balance sheet items have not been allocated. The assets (and risk-weighted assets) held centrally, mainly relating to Treasury, are now allocated to the business using appropriate drivers.
Revised treasury allocations
Treasury allocations which are included within segmental net interest income and segmental net interest margins, have been revised to reflect the following:
-- In preparation for the separation of W&G, the element of treasury allocations previously charged to UK PBB is now retained centrally. -- To reflect the impact of changes to the notional equity allocation detailed below.
Revised segmental return on equity
RBS's CET 1 target is 13% but for the purposes of computing segmental return on equity (ROE), to better reflect the differential drivers of capital usage, segmental operating profit after tax and adjusted for preference dividends is divided by notional equity allocated at different rates of 11% (Commercial Banking and Ulster Bank RoI), 12% (RBS International) and 15% for all other segments, of the monthly average of segmental risk-weighted assets after capital deductions (RWAes). This notional equity was previously 13% for all segments. In addition, due to changes in UK tax rules enacted in the Finance Act 2015, RBS has increased its longer-term effective 31 December tax rate. The notional tax rate used in the segmental ROE has been revised from 25% to 28% (Ulster Bank RoI - 15%; RBS International - 10%). RBS's forward planning tax rate is 26%.
The Royal Bank of Scotland Group plc (RBS)
Annual results 2015
February 04, 2016 11:00 ET (16:00 GMT)
Total income - adjusted (2) 45 - 45 Operating expenses - adjusted (3) (356) - (356) Operating profit - adjusted (2,3) 995 - 995 ========================================== ---------- =========== ========== 31 December 2014 =================================== Allocated to Previously Reporting Capital reported changes (1) Resolution Capital and balance sheet GBPbn GBPbn GBPbn ========================================== ========== =========== ========== Loans and advances to customers (gross) 21.9 - 21.9 Loan impairment provisions (10.9) - (10.9) ========================================== ========== =========== ========== Net loans and advances to customers 11.0 - 11.0 Funded assets 14.9 - 14.9 Risk elements in lending 15.4 - 15.4 Customer deposits (excluding repos) 1.2 - 1.2 Provision coverage (4) 71% - 71% Risk-weighted assets 22.0 - 22.0 ========================================== ========== =========== ==========
Notes:
(1) Refer to page 2 for further details. (2) Excluding own credit adjustments. (3) Excluding restructuring costs. (4) Provision coverage represents loan impairment provisions as a percentage of risk elements in lending.
Central items & other
Impact Income statement of Pension revised Re-presentation Allocated to ================== of one-off Previously accounting treasury and Capital policy other items Centre reported impact allocations (1) (2) Resolution Quarter ended 30 September 2015 GBPm GBPm GBPm GBPm GBPm GBPm ============================ ========== ========== =========== =============== ====== ========== Central items not allocated (285) (16) (10) 20 (317) 26 ============================ ========== ========== =========== =============== ====== ========== Quarter ended 31 December 2014 ============================ ========== ========== =========== =============== ====== ========== Central items not allocated (620) (6) (50) (703) 27 ============================ ========== ========== =========== =============== ====== ========== Year ended 31 December 2014 ============================ ========== ========== =========== =============== ====== ========== Central items not allocated (860) (33) 86 (904) 97 ============================ ========== ========== =========== =============== ====== ========== Balance sheet Impact of Pension revised Allocated to ================== Previously accounting treasury Capital policy Centre reported impact allocations (2) Resolution As at 30 September 2015 GBPbn GBPbn GBPbn GBPbn GBPbn ============================== ========== ========== =========== ====== ========== Central items not allocated - risk-weighted assets 87.7 (8.7) 72.1 6.9 Central items not allocated - funded assets 116.9 0.4 (89.5) 26.7 1.1 ============================== ========== ========== =========== ====== ========== As at 31 December 2014 ============================== ========== ========== =========== ====== ========== Central items not allocated - risk-weighted assets 84.7 (9.8) 68.8 6.1 Central items not allocated - funded assets 169.2 0.3 (83.1) 85.4 1.0 ============================== ========== ========== =========== ====== ==========
Notes:
(1) Refer to page 2 for further details. (2) Centre includes unallocated costs.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
February 04, 2016 11:00 ET (16:00 GMT)
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