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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Natwest Group Plc | LSE:NWG | London | Ordinary Share | GB00BM8PJY71 | ORD 107.69P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-4.00 | -1.25% | 317.00 | 316.70 | 316.90 | 322.10 | 316.70 | 321.80 | 30,674,350 | 16:35:02 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Commercial Banks, Nec | 14.77B | 4.64B | 0.5271 | 6.01 | 27.86B |
TIDMRBS
RNS Number : 5059W
Royal Bank of Scotland Group PLC
17 April 2019
Segmental Reporting Restatement
Document
April 2019
The Royal Bank of Scotland Group plc
Overview of business re-segmentation
This announcement sets out changes to RBS's operating segments and consequent changes in results presentation. The announcement contains re-presented financial results for the year ended 31 December 2018 and, is presented to aid comparison of RBS's quarter ended 31 March 2019 results with prior periods. Re-presented financial information for the quarters ended 31 December 2018 and 31 March 2018 are included.
Segmental reorganisation
RBS continues to deliver on its plan to build a strong, simple and fair bank for both customers and shareholders. To support this, the following previously reported operating segments are now realigned, with comparatives re-presented:
-- Effective from 1 January 2019, Business Banking has been transferred from UK Personal and Business Banking (UK PBB) to Commercial Banking as the nature of the business, including distribution channels, products and customers, are more closely aligned to the Commercial Banking (CB) business. Concurrent with the transfer, UK PBB has been renamed to UK Personal Banking (UK PB) and the previous franchise combining UK PBB (now UK PB) and Ulster Bank RoI has been renamed Personal & Ulster. The Commercial & Private Banking franchise has also been renamed to Commercial & Private.
Quarter ended 31 March 2019 results
RBS's results for the quarter ended 31 March 2019 will be announced on Friday 26 April 2019. These results will be reported on the new structure and reporting basis as described above.
In conjunction with this Segmental Reporting Restatement Document, a financial supplement showing re-presented financial information for the last nine quarters is available at www.rbs.com/results.
Forward-looking statements
This document contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, such as statements that include, without limitation, the words 'expect', 'estimate', 'project', 'anticipate', 'commit', 'believe', 'should', 'intend', 'plan', 'could', 'probability', 'risk', 'Value-at-Risk (VaR)', 'target', 'goal', 'objective', 'may', 'endeavour', 'outlook', 'optimistic', 'prospects' and similar expressions or variations on these expressions. These statements concern or may affect future matters, such as RBSG's future economic results, business plans and current strategies. In particular, this document includes forward-looking statements relating to RBSG in respect of, but not limited to: its regulatory capital position and related requirements, its financial position, profitability and financial performance (including financial, capital and operational targets), its access to adequate sources of liquidity and funding, increasing competition from new incumbents and disruptive technologies, its impairment losses and credit exposures under certain specified scenarios, substantial regulation and oversight, ongoing legal, regulatory and governmental actions and investigations, LIBOR, EURIBOR and other benchmark reform and RBSG's exposure to economic and political risks (including with respect to Brexit and climate change), operational risk, conduct risk, cyber and IT risk and credit rating risk. 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, political, fiscal and regulatory developments, accounting standards, competitive conditions, technological developments, interest and exchange rate fluctuations and general economic conditions. These and other factors, risks and uncertainties that may impact any forward-looking statement or RBSG's actual results are discussed in RBSG's UK 2018 Annual Report and Accounts (ARA) and materials filed with, or furnished to, the US Securities and Exchange Commission, including, but not limited to, RBSG's most recent Annual Report on Form 20-F and Reports on Form 6-K. The forward-looking statements contained in this document speak only as of the date of this document and RBSG does not assume or undertake any obligation or responsibility to update any of the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise, except to the extent legally required.
Document roadmap
Pages 2 to 5 of this document show the income statement, selected balance sheet line items and key metrics for the new reportable segments for the year and quarter ended 31 December 2018 and for the quarter ended 31 March 2018. The Re-segmentation reconciliation Appendix - summarises how Business Banking area is allocated to the reportable operating segment Commercial Banking.
For further information contact:
Alexander Holcroft
Investor Relations
+44 (0) 207 672 1982
Group Media Centre
+44 (0)131 523 4205
Re-presented customer segments
Year ended 31 December 2018 =============================================================================== Personal & Commercial & Ulster Private ================ =================== UK Ulster Central Personal Bank Commercial Private RBS NatWest items Total Banking & other (1) RoI Banking Banking International Markets (2) RBS Income statement GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ============================ ======== ====== ========== ======= ============= ======= ======= ======= Net interest income 4,283 444 2,855 518 466 112 (22) 8,656 Non-interest income 771 166 1,747 257 128 1,238 347 4,654 Own credit adjustments - - - - - 92 - 92 ============================ ======== ====== ========== ======= ============= ======= ======= ======= Total income 5,054 610 4,602 775 594 1,442 325 13,402 ============================ ======== ====== ========== ======= ============= ======= ======= ======= Direct expenses - staff (698) (202) (739) (161) (102) (557) (1,190) (3,649) - other (266) (103) (255) (66) (67) (241) (2,712) (3,710) Indirect expenses (1,464) (185) (1,294) (229) (91) (415) 3,678 - Strategic costs - direct (41) (2) (33) - (3) (195) (730) (1,004) - indirect (185) (20) (122) (21) (6) (43) 397 - Litigation and conduct costs (213) (71) (44) (1) 9 (153) (809) (1,282) ============================ ======== ====== ========== ======= ============= ======= ======= ======= Operating expenses (2,867) (583) (2,487) (478) (260) (1,604) (1,366) (9,645) ============================ ======== ====== ========== ======= ============= ======= ======= ======= Operating profit/(loss) before impairment (losses)/releases 2,187 27 2,115 297 334 (162) (1,041) 3,757 Impairment (losses)/releases (339) (15) (147) 6 2 92 3 (398) ============================ ======== ====== ========== ======= ============= ======= ======= ======= Operating profit/(loss) 1,848 12 1,968 303 336 (70) (1,038) 3,359 ============================ ======== ====== ========== ======= ============= ======= ======= ======= Key metrics ============================ ======== ====== ========== ======= ============= ======= ======= ========= Return on equity (3) 24.7% 0.5% 12.1% 15.4% 24.4% (2.0%) nm 4.8% Net interest margin 2.67% 1.79% 1.96% 2.52% 1.71% 0.40% nm 1.98% Cost:income ratio (4) 56.7% 95.6% 52.8% 61.7% 43.8% 111.2% nm 71.7% Loan impairment rate 0.23% 0.08% 0.14% nm nm nm nm 0.13% ============================ ======== ====== ========== ======= ============= ======= ======= ========= As at 31 December 2018 ================================================================================= Capital and balance sheet GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ============================ ======== ====== ========== ======= ============= ======= ======= ========= Total assets 171.0 25.2 166.4 22.0 28.4 244.5 36.7 694.2 Funded assets (5) 171.0 25.2 166.4 22.0 28.4 111.4 36.5 560.9 Net loans to customers - amortised cost 148.9 18.8 101.4 14.3 13.3 8.4 - 305.1
Impairment provisions (1.1) (0.8) (1.3) - - (0.1) - (3.3) Customer deposits 145.3 18.0 134.4 28.4 27.5 2.6 4.7 360.9 Risk-weighted assets (RWAs) 34.3 14.7 78.4 9.4 6.9 44.9 0.1 188.7 RWA equivalent (RWAes) 35.5 14.7 79.7 9.5 6.9 50.0 0.2 196.5 Employee numbers (FTEs - thousands) (6) 21.7 3.1 10.3 1.9 1.7 4.8 23.6 67.1 ============================ ======== ====== ========== ======= ============= ======= ======= ========= For notes to this table refer to page 5.
Re-presented customer segments
Quarter ended 31 December 2018 ======================================================================================= Personal & Ulster Commercial & Private ===================== ====================== Ulster Central UK Personal Bank Commercial Private RBS NatWest items Total Banking & other (1) RoI Banking Banking International Markets (2) RBS Income statement GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ========================= ============ ======= ============ ======== ============= ======= ======= ======= Net interest income 1,061 110 724 133 123 30 (5) 2,176 Non-interest income 185 37 392 65 32 89 49 849 Own credit adjustments - - - - - 33 - 33 ========================= ============ ======= ============ ======== ============= ======= ======= ======= Total income 1,246 147 1,116 198 155 152 44 3,058 ========================= ============ ======= ============ ======== ============= ======= ======= ======= Direct expenses - staff (166) (53) (185) (39) (25) (128) (263) (859) - other (80) (27) (77) (22) (22) (65) (870) (1,163) Indirect expenses (414) (52) (403) (72) (35) (123) 1,099 - Strategic costs - direct (27) (3) (5) - (1) (89) (230) (355) - indirect (63) (12) (57) (10) (2) (22) 166 - Litigation and conduct costs (7) (17) (37) - (1) (28) (2) (92) ========================= ============ ======= ============ ======== ============= ======= ======= ======= Operating expenses (757) (164) (764) (143) (86) (455) (100) (2,469) ========================= ============ ======= ============ ======== ============= ======= ======= ======= Operating profit/(loss) before impairment (losses)/releases 489 (17) 352 55 69 (303) (56) 589 Impairment (losses)/releases (142) 19 (5) 8 2 100 1 (17) ========================= ============ ======= ============ ======== ============= ======= ======= ======= Operating profit/(loss) 347 2 347 63 71 (203) (55) 572 ========================= ============ ======= ============ ======== ============= ======= ======= ======= Key metrics ========================= ============ ======= ============ ======== ============= ======= ======= ======= Return on equity (3) 17.2% 0.4% 8.3% 12.3% 20.0% (9.2%) nm 3.5% Net interest margin 2.60% 1.73% 1.96% 2.49% 1.81% 0.39% nm 1.95% Cost:income ratio (4) 60.8% 111.6% 67.5% 72.2% 55.5% 299.3% nm 80.5% Loan impairment rate 0.38% (0.39%) 0.02% nm nm nm nm 0.02% ------------------------- ------------ ------- ------------ -------- ------------- ------- ------- ------- For the notes to this table refer to page 5.
Re-presented customer segments
Quarter ended 31 March 2018 ===================================================================================== Personal & Ulster Commercial & Private =================== ====================== Ulster Central UK Personal Bank Commercial Private RBS NatWest items Total Banking & other (1) RoI Banking Banking International Markets (2) RBS GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm =========================== =========== ====== ============ ======== ============= ======= ======= ======= Net interest income 1,068 106 683 123 104 36 26 2,146 Non-interest income 230 40 475 61 33 380 (84) 1,135 Own credit adjustments - - - - - 21 - 21 =========================== =========== ====== ============ ======== ============= ======= ======= ======= Total income 1,298 146 1,158 184 137 437 (58) 3,302 =========================== =========== ====== ============ ======== ============= ======= ======= ======= Direct expenses - staff (178) (49) (188) (43) (24) (165) (317) (964) - other (65) (19) (47) (14) (15) (53) (606) (819) Indirect expenses (374) (47) (311) (55) (20) (102) 909 - Strategic costs - direct (7) (1) (6) (1) - (17) (177) (209) - indirect (61) (3) (42) (8) (1) (6) 121 - Litigation and conduct costs (1) (9) (1) - 1 (6) (3) (19) =========================== =========== ====== ============ ======== ============= ======= ======= ======= Operating expenses (686) (128) (595) (121) (59) (349) (73) (2,011) =========================== =========== ====== ============ ======== ============= ======= ======= ======= Operating profit/(loss) before impairment (losses)/releases 612 18 563 63 78 88 (131) 1,291 Impairment (losses)/releases (68) (8) (12) (1) - 9 2 (78) =========================== =========== ====== ============ ======== ============= ======= ======= ======= Operating profit/(loss) 544 10 551 62 78 97 (129) 1,213 =========================== =========== ====== ============ ======== ============= ======= ======= ======= For the notes to this table refer to page 5.
Re-presented customer segments
Quarter ended 31 March 2018 ==================================================================================== Personal & Ulster Commercial & Private =================== ====================== Ulster Central UK Personal Bank Commercial Private RBS NatWest items Total Banking & other Key metrics (1) RoI Banking Banking International Markets (2) RBS ============================ =========== ====== ============= ======= ============= ======= ======= ====== Return on equity (3) 29.9% 1.6% 13.6% 12.5% 23.2% 2.0% nm 9.3% Net interest margin 2.73% 1.80% 1.91% 2.51% 1.57% 0.54% nm 2.04% Cost:income ratio (4) 52.9% 87.7% 50.0% 65.8% 43.1% 79.9% nm 60.5% Loan impairment rate 0.18% 0.16% 0.05% nm nm nm nm nm ============================ =========== ====== ============= ======= ============= ======= ======= ======
As at 31 March 2018 Capital and balance sheet GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ============================ =========== ====== ============= ======= ============= ======= ======= ====== Total assets 166.3 23.4 165.6 20.4 28.0 283.8 51.0 738.5 Funded assets (5) 166.3 23.3 165.5 20.4 28.0 135.2 50.0 588.7 Net loans to customers - amortised cost (GBPbn) 145.9 19.0 102.9 13.7 13.1 9.4 (0.2) 303.8 Impairment provisions (1.3) (1.2) (1.5) (0.1) - (0.2) 0.1 (4.2) Customer deposits 142.9 16.4 131.1 25.3 26.9 3.8 8.1 354.5 Risk-weighted assets (RWAs) 31.5 16.9 84.3 9.4 7.0 53.1 0.5 202.7 RWA equivalent (RWAes) 32.2 17.4 88.9 9.4 7.0 56.5 0.9 212.3 Employee numbers (FTEs - thousands) (6) 24.5 3.0 10.7 1.9 1.7 5.7 23.4 70.9 ============================ =========== ====== ============= ======= ============= ======= ======= ======
nm = not meaningful
Notes:
(1) Reportable operating segment UK Personal and Business Banking renamed to UK Personal Banking to reflect re-segmentation. (2) Central items include unallocated transactions which principally comprise volatile items under IFRS and RMBS related charges. (3) RBS's CET 1 target is approximately 14% 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 share dividends is divided by average notional equity allocated at different rates of 14% (Ulster Bank RoI), 12% (Commercial Banking), 13.5% (Private Banking), 16% (RBS International) and 15% for all other segments, of the monthly average of segmental risk-weighted assets equivalents (RWAes) incorporating the effect of capital deductions. RBS return on equity is calculated using profit for the period attributable to ordinary shareholders over tangible net asset value. (4) Operating lease depreciation included in income for the year ended 31 December 2018 - GBP121 million; Q4 2018 - GBP32 million; Q1 2018 - GBP31 million. (5) Funded assets exclude derivative assets. (6) On 1 January 2018, 7,600 employees on a FTE basis were transferred from Central items to UK Personal Banking, 200 to Ulster Bank RoI, 3,700 to Commercial Banking and 400 to Private Banking.
Appendix
Re-segmentation reconciliations
UK Personal Banking (operating segment within the Personal & Ulster franchise)
Year ended Quarter ended Quarter ended 31 December 2018 31 December 2018 31 March 2018 ============================= ============================= ============================= Previously Previously Previously reported To Total reported To Total reported To Total UK PBB CB UK PB(1) UK PBB CB UK PB(1) UK PBB CB UK PB(1) Income statement GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ===================== ========== ======= ======== ========== ======= ======== ========== ======= ======== Net interest income 5,098 (815) 4,283 1,267 (206) 1,061 1,259 (191) 1,068 Non-interest income 1,184 (413) 771 290 (105) 185 332 (102) 230 Total income 6,282 (1,228) 5,054 1,557 (311) 1,246 1,591 (293) 1,298 ===================== ========== ======= ======== ========== ======= ======== ========== ======= ======== Direct expenses - staff (890) 192 (698) (208) 42 (166) (229) 51 (178) - other (300) 34 (266) (93) 13 (80) (70) 5 (65) Indirect expenses (1,801) 337 (1,464) (522) 108 (414) (456) 82 (374) Strategic costs - direct (54) 13 (41) (28) 1 (27) (12) 5 (7) - indirect (221) 36 (185) (84) 21 (63) (68) 7 (61) Litigation and conduct costs (216) 3 (213) (6) (1) (7) (1) - (1) Operating expenses (3,482) 615 (2,867) (941) 184 (757) (836) 150 (686) ===================== ========== ======= ======== ========== ======= ======== ========== ======= ======== Operating profit before impairment losses 2,800 (613) 2,187 616 (127) 489 755 (143) 612 Impairment losses (342) 3 (339) (125) (17) (142) (57) (11) (68) ===================== ========== ======= ======== ========== ======= ======== ========== ======= ======== Operating profit 2,458 (610) 1,848 491 (144) 347 698 (154) 544 ===================== ========== ======= ======== ========== ======= ======== ========== ======= ======== Key metrics ===================== ========== ======= ======== ========== ======= ======== ========== ======= ======== Return on equity (2) 24.3% 0.4% 24.7% 18.6% (1.4%) 17.2% 27.9% 2.0% 29.9% Net interest margin 2.78% (0.11%) 2.67% 2.73% (0.13%) 2.60% 2.81% (0.08%) 2.73% Cost:income ratio 55.4% 1.3% 56.7% 60.4% 0.4% 60.8% 52.5% 0.4% 52.9% Loan impairment rate 0.21% 0.02% 0.23% 0.31% 0.07% 0.38% 0.14% 0.04% 0.18% ===================== ========== ======= ======== ========== ======= ======== ========== ======= ======== 31 December 2018 31 March 2018 ============================ ============================ Previously Previously reported To Total reported To Total UK PBB CB UK PB(1) UK PBB CB UK PB(1) Capital and balance sheet GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ======================================== ========== ====== ======== ========== ====== ======== Loans to customers - amortised cost 163.7 (13.7) 150.0 162.1 (14.9) 147.2 Impairment provisions (1.4) 0.3 (1.1) (1.6) 0.3 (1.3) ======================================== ========== ====== ======== ========== ====== ======== Net loans to customers - amortised cost 162.3 (13.4) 148.9 160.5 (14.6) 145.9 Funded assets 194.2 (23.2) 171.0 190.3 (24.0) 166.3 Customer deposits 184.1 (38.8) 145.3 180.3 (37.4) 142.9 Loan:deposit ratio 88% 14% 102% 89% 13% 102% Risk-weighted assets 45.1 (10.8) 34.3 43.4 (11.9) 31.5 ======================================== ========== ====== ======== ========== ====== ======== Notes: (1) Reportable operating segment UK Personal and Business Banking renamed to UK Personal Banking to reflect re-segmentation. (2) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 15% of the monthly average of segmental Risk-weighted assets equivalents (RWAes), incorporating the effect of capital deductions, assuming 28% tax rate. Return on equity is calculated using profit for the period attributable to ordinary shareholders.
Commercial Banking (operating segment within the Commercial & Private franchise)
Year ended Quarter ended Quarter ended 31 December 2018 31 December 2018 31 March 2018 =========================== ========================= ======================== Previously From Total Previously From Total Previously From Total reported reported reported CB UK PB CB CB UK PB CB CB UK PB CB Income statement GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ============================= ========== ====== ======= ========== ====== ===== ========== ===== ===== Net interest income 2,040 815 2,855 518 206 724 492 191 683 Non-interest income 1,334 413 1,747 287 105 392 373 102 475
Total income 3,374 1,228 4,602 805 311 1,116 865 293 1,158 ============================= ========== ====== ======= ========== ====== ===== ========== ===== ===== Direct expenses - staff (547) (192) (739) (143) (42) (185) (137) (51) (188) - other (221) (34) (255) (64) (13) (77) (42) (5) (47) Indirect expenses (957) (337) (1,294) (295) (108) (403) (229) (82) (311) Strategic costs - direct (20) (13) (33) (4) (1) (5) (1) (5) (6) - indirect (86) (36) (122) (36) (21) (57) (35) (7) (42) Litigation and conduct costs (41) (3) (44) (38) 1 (37) (1) - (1) Operating expenses (1,872) (615) (2,487) (580) (184) (764) (445) (150) (595) ============================= ========== ====== ======= ========== ====== ===== ========== ===== ===== Operating profit before impairment (losses)/releases 1,502 613 2,115 225 127 352 420 143 563 Impairment (losses)/releases (144) (3) (147) (22) 17 (5) (23) 11 (12) ============================= ========== ====== ======= ========== ====== ===== ========== ===== ===== Operating profit 1,358 610 1,968 203 144 347 397 154 551 ============================= ========== ====== ======= ========== ====== ===== ========== ===== ===== Key metrics ============================= ========== ====== ======= ========== ====== ===== ========== ===== ===== Return on equity (1) 10.2% 1.9% 12.1% 5.5% 2.8% 8.3% 12.2% 1.4% 13.6% Net interest margin 1.67% 0.29% 1.96% 1.66% 0.30% 1.96% 1.64% 0.27% 1.91% Cost:income ratio 53.8% (1.0%) 52.8% 70.9% (3.4%) 67.5% 49.6% 0.4% 50.0% Loan impairment rate 0.16% 0.02% 0.14% 0.10% 0.08% 0.02% 0.10% 0.05% 0.05% ============================= ========== ====== ======= ========== ====== ===== ========== ===== ===== 31 December 2018 31 March 2018 ======================== ======================== Previously From Total Previously From Total reported reported CB UK PB CB CB UK PB CB Capital and balance sheet GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ======================================== ========== ===== ===== ========== ===== ===== Loans to customers - amortised cost 89.0 13.7 102.7 89.5 14.9 104.4 Impairment provisions (1.0) (0.3) (1.3) (1.2) (0.3) (1.5) ======================================== ========== ===== ===== ========== ===== ===== Net loans to customers - amortised cost 88.0 13.4 101.4 88.3 14.6 102.9 Funded assets 143.2 23.2 166.4 141.5 24.0 165.5 Customer deposits 95.6 38.8 134.4 93.7 37.4 131.1 Loan:deposit ratio 92% (16%) 76% 94% (14%) 80% Risk-weighted assets 67.6 10.8 78.4 72.4 11.9 84.3 ======================================== ========== ===== ===== ========== ===== =====
Note:
(1) Return on equity is based on segmental operating profit after tax adjusted for preference dividends divided by average notional equity based on 11% of the monthly average of segmental Risk-weighted assets equivalents (RWAes), incorporating the effect of capital deductions, assuming 28% tax rate. Return on equity is calculated using profit for the period attributable to ordinary shareholders. Legal Entity Identifier: 2138005O9XJIJN4JPN90
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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