Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Entity Registrant Name | NATIONAL WESTMINSTER BANK PLC /ENG/ |
Entity Central Index Key | 702,162 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | Yes |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
Ordinary shares of 1 | |
Entity Common Stock, Shares Outstanding | 1,678,177,493 |
Series C Preference Shares | |
Entity Common Stock, Shares Outstanding | 9,829,195 |
Series A Preference Shares | |
Entity Common Stock, Shares Outstanding | 140,000,000 |
Consolidated income statement
Consolidated income statement - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated income statement for the year | |||
Interest receivable | £ 6,271 | £ 5,784 | £ 5,792 |
Interest payable | (790) | (1,012) | (1,253) |
Net interest income | 5,481 | 4,772 | 4,539 |
Fees and commissions receivable | 2,054 | 1,890 | 1,900 |
Fees and commissions payable | (499) | (444) | (473) |
Income from trading activities | 25 | (425) | (73) |
Other operating income | 1,086 | 246 | (267) |
Non-interest income | 2,666 | 1,267 | 1,087 |
Total income | 8,147 | 6,039 | 5,626 |
Staff costs | (844) | (713) | (1,000) |
Premises and equipment | (273) | (233) | (442) |
Other administrative expenses | (2,921) | (3,326) | (3,306) |
Depreciation and amortisation | (282) | (127) | (136) |
Write down of goodwill and other intangible assets. | (16) | (85) | |
Operating expenses | (4,320) | (4,415) | (4,969) |
Profit before impairment (losses)/releases | 3,827 | 1,624 | 657 |
Impairment (losses)/releases | (311) | (125) | 54 |
Operating profit before tax | 3,516 | 1,499 | 711 |
Tax charge | (812) | (683) | (373) |
Profit from continuing operations | 2,704 | 816 | 338 |
Loss from discontinued operations net of tax | (635) | (1,683) | (1,544) |
Profit/(loss) for the year | 2,069 | (867) | (1,206) |
Attributable to: | |||
Non-controlling interests | 4 | (1) | |
Ordinary shareholders | 2,065 | (867) | (1,205) |
Profit/(loss) for the year | £ 2,069 | £ (867) | £ (1,206) |
Consolidated statement of compr
Consolidated statement of comprehensive income - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated statement of comprehensive income | |||
Profit/(loss) for the year | £ 2,069 | £ (867) | £ (1,206) |
Items that do not qualify for reclassification | |||
Loss on remeasurement of retirement benefit schemes | (22) | (1,030) | (167) |
Tax | 8 | 320 | 328 |
Total - Items that do not qualify for reclassification | (14) | (710) | 161 |
Items that do qualify for reclassification | |||
Available-for-sale financial assets | (312) | 284 | (11) |
Cash flow hedges | 2 | 2 | |
Currency translation | (805) | 862 | (326) |
Tax | 5 | 20 | 3 |
Total - Items that do qualify for reclassification | (1,112) | 1,168 | (332) |
Other comprehensive (loss)/income after tax | (1,126) | 458 | (171) |
Total comprehensive income/(loss) for the year | 943 | (409) | (1,377) |
Attributable to: | |||
Non-controlling interests | 4 | 73 | (24) |
Ordinary shareholders | 939 | (482) | (1,353) |
Total comprehensive income/(loss) for the year | £ 943 | £ (409) | £ (1,377) |
Consolidated statement of comp4
Consolidated statement of comprehensive income (Parenthetical) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated statement of comprehensive income | |||
Loss from discontinued operations | £ 635 | £ 1,683 | £ 1,544 |
Balance sheet
Balance sheet - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and balances at central banks | £ 35,799 | £ 2,567 |
Amounts due from intermediate holding company and subsidiaries | 77,926 | 94,686 |
Other loans and advances to banks | 1,919 | 2,466 |
Loans and advances to banks | 79,845 | 97,152 |
Amounts due from subsidiaries | 3,223 | |
Other loans and advances to customers | 191,889 | 173,842 |
Loans and advances to customers | 191,889 | 177,065 |
Debt securities subject to repurchase agreements | 2,900 | |
Other debt securities | 1,612 | 1,563 |
Debt securities | 1,612 | 4,463 |
Equity shares | 43 | 87 |
Settlement balances | 3 | 1,693 |
Amounts due from intermediate holding company and subsidiaries | 1,709 | 2,929 |
Other derivatives | 606 | 975 |
Derivatives | 2,315 | 3,904 |
Intangible assets | 522 | 484 |
Property, plant and equipment | 2,580 | 2,160 |
Deferred tax | 1,079 | 1,391 |
Prepayments, accrued income and other assets | 630 | 534 |
Assets of disposal groups | 24,526 | 24,976 |
Total assets | 340,843 | 316,476 |
Liabilities | ||
Amounts due to intermediate company and subsidiaries | 33,303 | 14,845 |
Other deposits by banks | 20,544 | 5,200 |
Deposits by banks | 53,847 | 20,045 |
Amounts due to subsidiaries | 6,774 | 4,859 |
Other customer accounts | 226,598 | 229,080 |
Customer accounts | 233,372 | 233,939 |
Debt securities in issue | 396 | 301 |
Settlement balances | 4 | 1,753 |
Short positions | 4,591 | |
Amounts due to intermediate holding company and subsidiaries | 2,966 | 4,294 |
Other derivatives | 212 | 360 |
Derivatives | 3,178 | 4,654 |
Provisions for liabilities and charges | 1,398 | 6,659 |
Accruals and other liabilities | 2,646 | 1,897 |
Retirement benefit liabilities | 31 | 29 |
Amounts due to holding company | 4,515 | 5,806 |
Other subordinated liabilities | 1,240 | 1,489 |
Subordinated liabilities | 5,755 | 7,295 |
Liabilities of disposal groups | 23,849 | 19,313 |
Total liabilities | 324,476 | 300,476 |
Non-controlling interests | 81 | 420 |
Owners' equity | 16,286 | 15,580 |
Total equity | 16,367 | 16,000 |
Total liabilities and equity | 340,843 | 316,476 |
Bank | ||
Assets | ||
Cash and balances at central banks | 34,763 | 1,198 |
Amounts due from intermediate holding company and subsidiaries | 54,153 | 63,427 |
Other loans and advances to banks | 1,635 | 1,176 |
Loans and advances to banks | 55,788 | 64,603 |
Amounts due from subsidiaries | 58 | 65 |
Other loans and advances to customers | 160,621 | 150,082 |
Loans and advances to customers | 160,679 | 150,147 |
Other debt securities | 1,059 | |
Debt securities | 1,059 | |
Equity shares | 7 | 11 |
Investments in Group undertakings | 2,546 | 6,931 |
Settlement balances | 119 | |
Amounts due from intermediate holding company and subsidiaries | 1,697 | 2,167 |
Other derivatives | 580 | 915 |
Derivatives | 2,277 | 3,082 |
Intangible assets | 490 | 477 |
Property, plant and equipment | 692 | 787 |
Deferred tax | 1,060 | 1,365 |
Prepayments, accrued income and other assets | 315 | 201 |
Assets of disposal groups | 41 | |
Total assets | 259,717 | 228,921 |
Liabilities | ||
Amounts due to intermediate company and subsidiaries | 11,937 | 5,773 |
Other deposits by banks | 20,528 | 3,435 |
Deposits by banks | 32,465 | 9,208 |
Amounts due to subsidiaries | 6,956 | 4,829 |
Other customer accounts | 194,194 | 187,661 |
Customer accounts | 201,150 | 192,490 |
Settlement balances | 86 | |
Amounts due to intermediate holding company and subsidiaries | 2,908 | 3,604 |
Other derivatives | 209 | 334 |
Derivatives | 3,117 | 3,938 |
Provisions for liabilities and charges | 1,192 | 1,533 |
Accruals and other liabilities | 783 | 467 |
Retirement benefit liabilities | 15 | 12 |
Amounts due to holding company | 4,409 | 4,409 |
Other subordinated liabilities | 1,231 | 1,481 |
Subordinated liabilities | 5,640 | 5,890 |
Total liabilities | 244,362 | 213,624 |
Owners' equity | 15,355 | 15,297 |
Total equity | 15,355 | 15,297 |
Total liabilities and equity | £ 259,717 | £ 228,921 |
Balance sheet (Parenthetical)
Balance sheet (Parenthetical) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of information about consolidated structured entities [line items] | ||
Profit attributable to owners of equity | £ 2,065 | £ (867) |
Bank | ||
Disclosure of information about consolidated structured entities [line items] | ||
Profit attributable to owners of equity | £ 26 | £ 3,466 |
Statement of changes in equity
Statement of changes in equity - GBP (£) £ in Millions | BankCalled-up share capital | BankShare premium | BankAvailable-for-sale reserve | BankCash flow hedging reserve | BankForeign exchange reserve | BankCapital redemption reserve | BankRetained earnings | BankShareholders' equity | Bank | Called-up share capital | Share premium | Available-for-sale reserve | Cash flow hedging reserve | Foreign exchange reserve | Capital redemption reserve | Retained earnings | Shareholders' equity | Non-controlling interests | Total |
Balance at beginning of the year at Dec. 31, 2014 | £ (3) | £ (10) | £ 647 | £ 7,384 | £ 29 | £ (3) | £ 1,121 | £ 647 | £ 9,677 | £ 394 | |||||||||
Unrealized gains/(losses) | (5) | ||||||||||||||||||
Realised gains | (6) | ||||||||||||||||||
Amount transferred from equity to earnings | 2 | 2 | |||||||||||||||||
Retranslation of net assets | (283) | ||||||||||||||||||
Foreign currency losses on hedges of net assets | (20) | ||||||||||||||||||
Tax | 3 | ||||||||||||||||||
Profit/(Loss) attributable to ordinary shareholders and other equity owners - continuing operations | (1,422) | 339 | |||||||||||||||||
Profit/(Loss) attributable to ordinary shareholders and other equity owners - discontinued operations | (1,544) | ||||||||||||||||||
Capital contribution | 800 | 800 | £ 800 | ||||||||||||||||
Loss on remeasurement of the retirement benefit schemes, gross | (348) | (167) | 57 | ||||||||||||||||
Tax amount on loss on remeasurement of the retirement benefit schemes, gross | 329 | 328 | |||||||||||||||||
Currency translation adjustments and other movements | (23) | ||||||||||||||||||
Profit/(loss) attributable to non-controlling interests-continuing operations | (1) | ||||||||||||||||||
Equity withdrawn and disposals | (24) | ||||||||||||||||||
Balance at end of the year at Dec. 31, 2015 | £ 1,678 | £ 2,225 | (1) | (10) | 647 | 6,743 | £ 11,282 | £ 11,282 | £ 1,678 | £ 2,225 | 18 | (1) | 821 | 647 | 9,433 | £ 14,821 | 346 | 15,167 | |
Unrealized gains/(losses) | £ 1 | 303 | |||||||||||||||||
Realised gains | (19) | ||||||||||||||||||
Tax | 5 | ||||||||||||||||||
Amount transferred from equity to earnings | 2 | 2 | |||||||||||||||||
Tax | (1) | £ (1) | |||||||||||||||||
Retranslation of net assets | 994 | ||||||||||||||||||
Foreign currency losses on hedges of net assets | (54) | ||||||||||||||||||
Tax | 16 | ||||||||||||||||||
Recycled to profit or loss on disposal of businesses | (151) | ||||||||||||||||||
Profit/(Loss) attributable to ordinary shareholders and other equity owners - continuing operations | 3,466 | 816 | |||||||||||||||||
Profit/(Loss) attributable to ordinary shareholders and other equity owners - discontinued operations | (1,683) | ||||||||||||||||||
Capital contribution | 1,300 | 1,300 | 1,300 | ||||||||||||||||
Loss on remeasurement of the retirement benefit schemes, gross | (1,058) | (1,030) | |||||||||||||||||
Tax amount on loss on remeasurement of the retirement benefit schemes, gross | 305 | 320 | |||||||||||||||||
Loss on transfer of fellow subsidiary | (59) | ||||||||||||||||||
Currency translation adjustments and other movements | 73 | ||||||||||||||||||
Equity withdrawn and disposals | 1 | ||||||||||||||||||
Balance at end of the year at Dec. 31, 2016 | 1,678 | 2,225 | 1 | (10) | 647 | 10,756 | 15,297 | 15,297 | 1,678 | 2,225 | 307 | 1,626 | 647 | 9,097 | 15,580 | 420 | 16,000 | ||
Unrealized gains/(losses) | 128 | ||||||||||||||||||
Realised gains | (440) | ||||||||||||||||||
Amount recognized in equity | (55) | ||||||||||||||||||
Amount transferred from equity to earnings | £ 55 | ||||||||||||||||||
Retranslation of net assets | (35) | ||||||||||||||||||
Foreign currency losses on hedges of net assets | (77) | ||||||||||||||||||
Tax | 5 | ||||||||||||||||||
Recycled to profit or loss on disposal of businesses | (693) | ||||||||||||||||||
Redemption of debt preference shares | 149 | 149 | |||||||||||||||||
Profit/(Loss) attributable to ordinary shareholders and other equity owners - continuing operations | 26 | 2,700 | |||||||||||||||||
Profit/(Loss) attributable to ordinary shareholders and other equity owners - discontinued operations | (635) | ||||||||||||||||||
Capital contribution | 51 | 51 | 51 | ||||||||||||||||
Redemption of debt preference shares | (157) | (157) | |||||||||||||||||
Loss on remeasurement of the retirement benefit schemes, gross | (19) | (22) | |||||||||||||||||
Tax amount on loss on remeasurement of the retirement benefit schemes, gross | 8 | 8 | |||||||||||||||||
Loss on transfer of fellow subsidiary | (276) | ||||||||||||||||||
Profit/(loss) attributable to non-controlling interests-continuing operations | 4 | ||||||||||||||||||
Dividends paid | (5) | ||||||||||||||||||
Acquisition of business | 8 | ||||||||||||||||||
Equity withdrawn and disposals | (346) | ||||||||||||||||||
Balance at end of the year at Dec. 31, 2017 | £ 1,678 | £ 2,225 | £ 1 | £ (10) | £ 796 | £ 10,665 | £ 15,355 | £ 15,355 | £ 1,678 | £ 2,225 | £ (5) | £ 826 | £ 796 | £ 10,766 | £ 16,286 | £ 81 | £ 16,367 |
Cash flow statement
Cash flow statement - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Operating profit/(loss) before tax from continuing operations | £ 3,516 | £ 1,499 | £ 711 |
Loss before tax from discontinued operations | (642) | (1,663) | (1,625) |
Adjustments for non-cash items and other adjustments included within income statement | (3,855) | (3,548) | (4,993) |
Cash contribution to defined benefit pension schemes | (157) | (4,473) | (807) |
Changes in operating assets and liabilities | 16,791 | (1,227) | 8,772 |
Income taxes (paid)/received | (190) | (77) | 169 |
Net cash flows from operating activities | 15,463 | (9,489) | 2,227 |
Cash flows from investing activities | |||
Sale and maturity of securities | 469 | 1,179 | 2,226 |
Purchase of securities | (1,567) | (1,246) | (1,417) |
Sale of property, plant and equipment | 319 | 64 | 413 |
Purchase of property, plant and equipment | (283) | (88) | (207) |
Net investment in business interests and intangible assets | 5,543 | (1,247) | (2,716) |
Net cash flows from investing activities | 4,481 | (1,338) | (1,701) |
Cash flows from financing activities | |||
Issue of subordinated liabilities | 507 | ||
Capital contribution | 51 | 1,300 | 800 |
Redemption of non-controlling interests | (346) | ||
Redemption of subordinated liabilities | (936) | (387) | |
Redemption of preference shares | (178) | ||
Dividends paid | (5) | ||
Interest on subordinated liabilities | (222) | (245) | (262) |
Net cash flows from financing activities | (1,129) | 1,055 | 151 |
Effects of exchange rate changes on cash and cash equivalents | (639) | 2,993 | 115 |
Net increase/(decrease) in cash and cash equivalents | 18,176 | (6,779) | 792 |
Cash and cash equivalents at beginning of the year | 79,764 | 86,543 | 85,751 |
Cash and cash equivalents at end of the year | 97,940 | 79,764 | 86,543 |
Bank | |||
Cash flows from operating activities | |||
Operating profit/(loss) before tax from continuing operations | 665 | 4,060 | (1,105) |
Adjustments for non-cash items and other adjustments included within income statement | 7,766 | (697) | 2,304 |
Cash contribution to defined benefit pension schemes | (127) | (4,349) | (724) |
Changes in operating assets and liabilities | 18,013 | (5,704) | (548) |
Income taxes (paid)/received | (35) | (131) | 62 |
Net cash flows from operating activities | 26,282 | (6,821) | (11) |
Cash flows from investing activities | |||
Sale and maturity of securities | 3 | 782 | |
Purchase of securities | (1,064) | ||
Sale of property, plant and equipment | 81 | 17 | 15 |
Purchase of property, plant and equipment | (65) | (61) | (165) |
Net investment in business interests and intangible assets | (3,622) | (307) | (715) |
Net cash flows from investing activities | (4,667) | (351) | (83) |
Cash flows from financing activities | |||
Capital contribution | 51 | 1,300 | 800 |
Redemption of subordinated liabilities | (387) | ||
Redemption of preference shares | (178) | ||
Interest on subordinated liabilities | (57) | (237) | (255) |
Net cash flows from financing activities | (184) | 1,063 | 158 |
Effects of exchange rate changes on cash and cash equivalents | (138) | 1,073 | (55) |
Net increase/(decrease) in cash and cash equivalents | 21,293 | (5,036) | 9 |
Cash and cash equivalents at beginning of the year | 61,151 | 66,187 | 66,178 |
Cash and cash equivalents at end of the year | £ 82,444 | £ 61,151 | £ 66,187 |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting policies | |
Accounting policies | Accounting policies 1. Presentation of accounts The accounts, set out on pages 83 to 177 including these accounting policies on pages 92 to 103 and the audited sections of the Financial review: Capital and risk management on pages 16 to 74, are prepared on a going concern basis (see the Report of the directors, page 78) and in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFRS Interpretations Committee of the IASB as adopted by the European Union (EU) (together IFRS). The EU has not adopted the complete text of IAS 39 ‘Financial Instruments: Recognition and Measurement’; it has relaxed some of the standard’s hedging requirements. The Group has not taken advantage of this relaxation: its financial statements are prepared in accordance with IFRS as issued by the IASB. The company is incorporated in the UK and registered in England and Wales. Its accounts are presented in accordance with the Companies Act 2006. With the exception of investment property and certain financial instruments as described in Accounting policies 9, 14, 16 and 18, the accounts are presented on a historical cost basis. NatWest Group Holdings Corp was classified as a disposal group at 31 December 2017. It was measured at fair value less costs to sell. Note 9 contains further information. The Group adopted two revisions to IFRSs effective 1 January 2017: In January 2016, the IASB amended IAS 7 ‘Cash Flow Statements’ to require disclosure of the movements in financing liabilities. This is shown in Note 34. In January 2016, the IASB amended IAS 12 ‘Income taxes’ to clarify the recognition of deferred tax assets in respect of unrealised losses. Neither of these amendments has had a material effect on the Group’s financial statements. 2. Basis of consolidation The consolidated accounts incorporate the financial statements of the company and entities (including certain structured entities) that are controlled by the Group. The Group controls another entity (a subsidiary) when it is exposed, or has rights, to variable returns from its involvement with that entity and has the ability to affect those returns through its power over the other entity; power generally arises from holding a majority of voting rights. On acquisition of a subsidiary, its identifiable assets, liabilities and contingent liabilities are included in the consolidated accounts at their fair value. A subsidiary is included in the consolidated financial statements from the date it is controlled by the Group until the date the Group ceases to control it through a sale or a significant change in circumstances. Changes in the Group’s interest in a subsidiary that do not result in the Group ceasing to control that subsidiary are accounted for as equity transactions. All intergroup balances, transactions, income and expenses are eliminated on consolidation. The consolidated accounts are prepared under uniform accounting policies. 3. Revenue recognition Interest income on financial assets that are classified as loans and receivables, available-for-sale or held-to-maturity and interest expense on financial liabilities other than those measured at fair value are determined using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability (or group of financial assets or liabilities) and of allocating the interest income or interest expense over the expected life of the asset or liability. The effective interest rate is the rate that exactly discounts estimated future cash flows to the instrument’s initial carrying amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument’s yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows. Negative effective interest accruing to financial assets is presented in interest payable Financial assets and financial liabilities held for trading or designated as at fair value through profit or loss are recorded at fair value. Changes in fair value are recognised in profit or loss. Fees in respect of services are recognised as the right to consideration accrues through the provision of the service to the customer. The arrangements are generally contractual and the cost of providing the service is incurred as the service is rendered. The price is usually fixed and always determinable. The application of this policy to significant fee types is outlined below. Payment services - this comprises income received for payment services including cheques cashed, direct debits, Clearing House Automated Payments (the UK electronic settlement system) and BACS payments (the automated clearing house that processes direct debits and direct credits). These are generally charged on a per transaction basis. The income is earned when the payment or transaction occurs. Charges for payment services are usually debited to the customer’s account monthly or quarterly in arrears. Income is accrued at period end for services provided but not yet charged. Credit and debit card fees - fees from card business include: · Interchange received: as issuer, the Group receives a fee (interchange) each time a cardholder purchases goods and services. The Group also receives interchange fees from other card issuers for providing cash advances through its branch and automated teller machine networks. These fees are accrued once the transaction has taken place. · Periodic fees payable by a credit card or debit card holder are deferred and taken to profit or loss over the period of the service. Lending (credit facilities) - commitment and utilisation fees are determined as a percentage of the outstanding facility. If it is unlikely that a specific lending arrangement will be entered into, such fees are taken to profit or loss over the life of the facility, otherwise they are deferred and included in the effective interest rate on the loan. Brokerage fees - in respect of securities, foreign exchange, futures or options transactions entered into on behalf of a customer are recognised as income on execution of a significant act. Trade finance - income from the provision of trade finance is recognised over the term of the finance unless specifically related to a significant act, in which case income is recognised when the act is executed. Investment management - fees charged for managing investments are recognised as revenue as the services are provided. Incremental costs that are directly attributable to securing an investment management contract are deferred and charged as expense as the related revenue is recognised. 4. Assets held for sale and discontinued operations A non-current asset (or disposal group) is classified as held for sale if the Group will recover its carrying amount principally through a sale transaction rather than through continuing use. A non-current asset (or disposal group) classified as held for sale is measured at the lower of its carrying amount and fair value less costs to sell. If the asset (or disposal group) is acquired as part of a business combination it is initially measured at fair value less costs to sell. Asset and liabilities of disposal groups classified as held for sale and non-current assets classified as held for sale are shown separately on the face of the balance sheet. The results of discontinued operations - comprising the post-tax profit or loss of discontinued operations and the post-tax gain or loss recognised either on measurement to fair value less costs to sell or on disposal of the discontinued operation - are shown as a single amount on the face of the income statement; an analysis of this amount is presented in Note 19 on the accounts. A discontinued operation is a cash generating unit or a group of cash generating units that either has been disposed of, or is classified as held for sale, and (a) represents a separate major line of business or geographical area of operations, (b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or (c) is a subsidiary acquired exclusively with a view to resale. 5. Employee benefits Short-term employee benefits, such as salaries, paid absences, and other benefits are accounted for on an accruals basis over the period in which the employees provide the related services. Employees may receive variable compensation satisfied by cash, by debt instruments issued by the Group or by RBSG shares. Variable compensation that is settled in cash or debt instruments is charged to profit or loss over the period from the start of the year to which the variable compensation relates to the expected settlement date taking account of forfeiture and claw back criteria. For defined benefit schemes, the defined benefit obligation is measured on an actuarial basis using the projected unit credit method and discounted at a rate determined by reference to market yields at the end of the reporting period on high quality corporate bonds of equivalent term and currency to the scheme liabilities. Scheme assets are measured at their fair value. The difference between scheme assets and scheme liabilities, the net defined benefit asset or liability, is recognised in the balance sheet. A defined benefit asset is limited to the present value of any economic benefits available to the Group in the form of refunds from the plan or reduced contributions to it. The charge to profit or loss for pension costs (recorded in operating expenses) comprises: · the current service cost · interest, computed at the rate used to discount scheme liabilities, on the net defined benefit liability or asset · past service cost resulting from a scheme amendment or curtailment · gains or losses on settlement. A curtailment occurs when the Group significantly reduces the number of employees covered by a plan. A plan amendment occurs when the Group introduces, or withdraws, a defined benefit plan or changes the benefits payable under an existing defined benefit plan. Past service cost may be either positive (when benefits are introduced or changed so that the present value of the defined benefit obligation increases) or negative (when benefits are withdrawn or changed so that the present value of the defined benefit obligation decreases). A settlement is a transaction that eliminates all further obligation for part or all of the benefits. Actuarial gains and losses (i.e. gains or and losses on re-measuring the net defined benefit asset or liability) are recognised in other comprehensive income in full in the period in which they arise. 6. Intangible assets and goodwill Intangible assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to profit or loss over the assets’ estimated economic lives using methods that best reflect the pattern of economic benefits and is included in Depreciation and amortisation. These estimated useful economic lives are: Computer software 3 to 12 years Other acquired intangibles 5 to 10 years Expenditure on internally generated goodwill and brands is written-off as incurred. Direct costs relating to the development of internal-use computer software are capitalised once technical feasibility and economic viability have been established. These costs include payroll, the costs of materials and services, and directly attributable overheads. Capitalisation of costs ceases when the software is capable of operating as intended. During and after development, accumulated costs are reviewed for impairment against the benefits that the software is expected to generate. Costs incurred prior to the establishment of technical feasibility and economic viability are expensed as incurred as are all training costs and general overheads. The costs of licences to use computer software that are expected to generate economic benefits beyond one year are also capitalised. Intangible assets include goodwill arising on the acquisition of subsidiaries and joint ventures. Goodwill on the acquisition of a subsidiary is the excess of the fair value of the consideration transferred, the fair value of any existing interest in the subsidiary and the amount of any non-controlling interest measured either at fair value or at its share of the subsidiary’s net assets over the Group’s interest in the net fair value of the subsidiary’s identifiable assets, liabilities and contingent liabilities. Goodwill arises on the acquisition of a joint venture when the cost of investment exceeds the Group’s share of the net fair value of the joint venture’s identifiable assets and liabilities. Goodwill is measured at initial cost less any subsequent impairment losses. Goodwill arising on the acquisition of associates is included within their carrying amounts. The gain or loss on the disposal of a subsidiary, associate or joint venture includes the carrying value of any related goodwill. 7. Property, plant and equipment Items of property, plant and equipment (except investment property - see Accounting policy 9) are stated at cost less accumulated depreciation and impairment losses. Where an item of property, plant and equipment comprises major components having different useful lives, these are accounted for separately. Depreciation is charged to profit or loss on a straight-line basis so as to write-off the depreciable amount of property, plant and equipment (including assets owned and let on operating leases) over their estimated useful lives. The depreciable amount is the cost of an asset less its residual value. Freehold land is not depreciated. The estimated useful lives of the Group’s property, plant and equipment are: Freehold buildings 50 years Long leasehold property (leases with more than 50 years to run) 50 years Short leaseholds unexpired period of lease Property adaptation costs 10 to 15 years Computer equipment up to 5 years Other equipment 4 to 15 years The residual value and useful life of property, plant and equipment are reviewed at each balance sheet date and updated for any changes to previous estimates. 8. Impairment of intangible assets and property, plant and equipment At each balance sheet date, the Group assesses whether there is any indication that its intangible assets, or property, plant and equipment are impaired. If any such indication exists, the Group estimates the recoverable amount of the asset and the impairment loss if any. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. If an asset does not generate cash flows that are independent from those of other assets or groups of assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to each of the Group’s cash-generating units or groups of cash-generating units expected to benefit from the combination. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less cost to sell and its value in use. Value in use is the present value of future cash flows from the asset or cash-generating unit discounted at a rate that reflects market interest rates adjusted for risks specific to the asset or cash-generating unit that have not been taken into account in estimating future cash flows. If the recoverable amount of an intangible or tangible asset is less than its carrying value, an impairment loss is recognised immediately in profit or loss and the carrying value of the asset reduced by the amount of the loss. A reversal of an impairment loss on intangible assets (excluding goodwill) or property, plant and equipment can be recognised when an increase in service potential arises provided the increased carrying value is not greater than it would have been had no impairment loss been recognised. Impairment losses on goodwill are not reversed. 9. Investment property Investment property comprises freehold and leasehold properties that are held to earn rentals or for capital appreciation or both. Investment property is not depreciated but is stated at fair value. Fair value is based on current prices for similar properties in the same location and condition. Any gain or loss arising from a change in fair value is recognised in profit or loss. Rental income from investment property is recognised on a straight-line basis over the term of the lease in Other operating income. Lease incentives granted are recognised as an integral part of the total rental income. 10. Foreign currencies The Group’s consolidated financial statements are presented in sterling which is the functional currency of the company. Group entities record transactions in foreign currencies in their functional currency, the currency of the primary economic environment in which they operate, at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the relevant functional currency at the foreign exchange rates ruling at the balance sheet date. Foreign exchange differences arising on the settlement of foreign currency transactions and from the translation of monetary assets and liabilities are reported in income from trading activities except for differences arising on cash flow hedges and hedges of net investments in foreign operations (see Accounting policy 23). Non-monetary items denominated in foreign currencies that are stated at fair value are translated into the relevant functional currency at the foreign exchange rates ruling at the dates the values are determined. Translation differences arising on non-monetary items measured at fair value are recognised in profit or loss except for differences arising on available-for-sale non-monetary financial assets, for example equity shares, which are recognised in other comprehensive income unless the asset is the hedged item in a fair value hedge. Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into sterling at foreign exchange rates ruling at the balance sheet date. Income and expenses of foreign operations are translated into sterling at average exchange rates unless these do not approximate to the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on the translation of a foreign operation are recognised in other comprehensive income. The amount accumulated in equity is reclassified from equity to profit or loss on disposal of a foreign operation. 11. Leases As lessor Contracts with customers to lease assets are classified as finance leases if they transfer substantially all the risks and rewards of ownership of the asset to the customer; all other contracts with customers to lease assets are classified as operating leases. Finance lease receivables are included in the balance sheet, within Loans and advances to customers, at the amount of the net investment in the lease being the minimum lease payments and any unguaranteed residual value discounted at the interest rate implicit in the lease. Finance lease income is allocated to accounting periods so as to give a constant periodic rate of return before tax on the net investment and included in Interest receivable. Unguaranteed residual values are subject to regular review; if there is a reduction in their value, income allocation is revised and any reduction in respect of amounts accrued is recognised immediately. Rental income from operating leases is recognised in income on a straight-line basis over the lease term unless another systematic basis better represents the time pattern of the asset’s use. Operating lease assets are included within Property, plant and equipment and depreciated over their useful lives (see Accounting policy 7). Operating lease rentals receivable are included in Other operating income. As lessee The Group’s contracts to lease assets are principally operating leases. Operating lease rental expense is included in Premises and equipment costs and recognised as an expense on a straight-line basis over the lease term unless another systematic basis better represents the benefit to the Group. 12. Provisions The Group recognises a provision for a present obligation resulting from a past event when it is more likely than not that it will be required to transfer economic benefits to settle the obligation and the amount of the obligation can be estimated reliably. Provision is made for restructuring costs, including the costs of redundancy, when the Group has a constructive obligation to restructure. An obligation exists when the Group has a detailed formal plan for the restructuring and has raised a valid expectation in those affected by starting to implement the plan or by announcing its main features. If the Group has a contract that is onerous, it recognises the present obligation under the contract as a provision. An onerous contract is one where the unavoidable costs of meeting the Group’s contractual obligations exceed the expected economic benefits. When the Group vacates a leasehold property, a provision is recognised for the costs under the lease less any expected economic benefits (such as rental income). Contingent liabilities are possible obligations arising from past events, whose existence will be confirmed only by uncertain future events, or present obligations arising from past events that are not recognised because either an outflow of economic benefits is not probable or the amount of the obligation cannot be reliably measured. Contingent liabilities are not recognised but information about them is disclosed unless the possibility of any outflow of economic benefits in settlement is remote. 13. Tax Income tax expense or income, comprising current tax and deferred tax, is recorded in the income statement except income tax on items recognised outside profit or loss which is credited or charged to other comprehensive income or to equity as appropriate. Current tax is income tax payable or recoverable in respect of the taxable profit or loss for the year arising in profit or loss, other comprehensive income or equity. Provision is made for current tax at rates enacted or substantively enacted at the balance sheet date. Deferred tax is the tax expected to be payable or recoverable in respect of temporary differences between the carrying amount of an asset or liability for accounting purposes and its carrying amount for tax purposes. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered. Deferred tax is not recognised on temporary differences that arise from initial recognition of an asset or a liability in a transaction (other than a business combination) that at the time of the transaction affects neither accounting, nor taxable profit or loss. Deferred tax is calculated using tax rates expected to apply in the periods when the assets will be realised or the liabilities settled, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date. Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to offset and where they relate to income taxes levied by the same taxation authority either on an individual Group company or on Group companies in the same tax group that intend, in future periods, to settle current tax liabilities and assets on a net basis or on a gross basis simultaneously. 14. Financial assets On initial recognition, financial assets are classified into held-to-maturity investments; held-for-trading; designated as at fair value through profit or loss; loans and receivables; or available-for-sale financial assets. Normal purchases of financial assets classified as loans and receivables are recognised on the settlement date; all other normal transactions in financial assets are recognised on the trade date. Held-to-maturity investments - a financial asset may be classified as a held-to-maturity investment only if it has fixed or determinable payments, a fixed maturity and the Group has the positive intention and ability to hold to maturity. Held-to-maturity investments are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method (see Accounting policy 3) less any impairment losses. Held-for-trading - a financial asset is classified as held-for-trading if it is acquired principally for sale in the near term, or forms part of a portfolio of financial instruments that are managed together and for which there is evidence of short-term profit taking, or it is a derivative (not in a qualifying hedge relationship). Held-for-trading financial assets are recognised at fair value with transaction costs being recognised in profit or loss. Subsequently they are measured at fair value. Income from trading activities includes gains and losses on held-for-trading financial assets as they arise. Designated as at fair value through profit or loss - financial assets may be designated as at fair value through profit or loss only if such designation (a) eliminates or significantly reduces a measurement or recognition inconsistency; or (b) applies to a group of financial assets, financial liabilities or both, that the Group manages and evaluates on a fair value basis; or (c) relates to an instrument that contains an embedded derivative which is not evidently closely related to the host contract. Financial assets that the Group designates on initial recognition as being at fair value through profit or loss are recognised at fair value, with transaction costs being recognised in profit or loss, and are subsequently measured at fair value. Gains and losses are recognised in profit or loss as they arise. Loans and receivables - non-derivative financial assets with fixed or determinable repayments that are not quoted in an active market are classified as loans and receivables, except those that are classified as available-for-sale or as held-for-trading, or designated as at fair value through profit or loss. Loans and receivables are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method (see Accounting policy 3) less any impairment losses. Available-for-sale financial assets - financial assets that are not classified as held-to-maturity; held-for-trading; designated as at fair value through profit or loss; or loans and receivables are classified as available-for-sale. Financial assets can be designated as available-for-sale on initial recognition. Available-for-sale financial assets are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at fair value. Unquoted equity investments whose fair value cannot be measured reliably are carried at cost and classified as available-for-sale financial assets. Impairment losses and exchange differences resulting from retranslating the amortised cost of foreign currency monetary available-for-sale financial assets are recognised in profit or loss together with interest calculated using the effective interest method (see Accounting policy 3) as are gains and losses attributable to the hedged risk on available-for-sale financial assets that are hedged items in fair value hedges (see Accounting policy 23). Other changes in the fair value of available-for-sale financial assets and any related tax are reported in other comprehensive income until disposal, when the cumulative gain or loss is reclassified from equity to profit or loss. Reclassifications - held-for-trading and available-for-sale financial assets that meet the definition of loans and receivables (non-derivative financial assets with fixed or determinable payments that are not quoted in an active market) may be reclassified to loans and receivables if the Group has the intention and ability to hold the financial asset for the foreseeable future or until maturity. The Group typically regards the foreseeable future for this purpose as twelve months from the date of reclassification. Additionally, held-for-trading financial assets that do not meet the definition of loans and receivables may, in rare circumstances, be transferred to available-for-sale financial assets or to held-to-maturity investments. Reclassifications are made at fair value. This fair value becomes the asset’s new cost or amortised cost as appropriate. Gains and losses recognised up to the date of reclassification are not reversed. Fair value - the Group’s approach to determining the fair value of financial instruments measured at fair value is set out in the section of Critical accounting policies and key sources of estimation uncertainty entitled Fair value - financial instruments. Further details are given in Note 9 on the accounts. 15. Impairment of financial assets The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets classified as held-to-maturity, as available-for-sale or as loans and receivables is impaired. A financial asset or group of financial assets is impaired and an impairment loss incurred if there is objective evidence that an event or events since initial recognition of the asset have adversely affected the amount or timing of future cash flows from the asset. Financial assets carried at amortised cost - if there is objective evidence that an impairment loss on a financial asset or group of financial assets classified as loans and receivables or as held-to-maturity investments has been incurred, the Group measures the amount of the loss as the difference between the carrying amount of the asset or group of assets and the present value of estimated future cash flows from the asset or group of assets discounted at the effective interest rate of the instrument at initial recognition. For collateralised loans and receivables, estimated future cash flows include cash flows that may result from foreclosure less the costs of obtaining and selling the collateral, whether or not foreclosure is probable. Where, in the course of the orderly realisation of a loan, it is exchanged for equity shares or property, the exchange is accounted for as the sale of the loan and the acquisition of equity securities or investment property. Where the Group’s interest in equity shares following the exchange is such that the Group controls an entity, that entity is consolidated. Impairment losses are assessed individually for financial assets that are individually significant and individually or collectively for assets that are not individually significant. In making collective impairment assessments, financial assets are grouped into portfolios on the basis of similar risk characteristics. Future cash flows from these portfolios are estimated on the basis of the contractual cash flows and historical loss experience for assets with similar credit risk characteristics. Historical loss experience is adjusted, on the basis of observable data, to reflect current conditions not affecting the period of historical experience. Impairment losses are recognised in profit or loss and the carrying amount of the financial asset or group of financial assets reduced by establishing an allowance for impairment losses. If, in a subsequent period, the amount of the impairment loss reduces and the reduction can be ascribed to an event after the impairment was recognised, the previously recognised loss is reversed by adjusting the allowance. Once an impairment loss has been recognised on a financial asset or group of financial assets, interest income is recognised on the carrying amount using the rate of interest at which estimated future cash flows were discounted in measuring impairment. Impaired loans and receivables are written off, i.e. the impairment provision is applied in writing down the loan’s carrying value partially or in full, when the Group concludes that there is no l |
Net interest income
Net interest income | 12 Months Ended |
Dec. 31, 2017 | |
Net interest income | |
Net interest income | 1 Net interest income £m £m £m Loans and advances to customers Loans and advances to banks Debt securities Interest receivable (1) Customer accounts: demand deposits Customer accounts: savings deposits Customer accounts: other time deposits Balances with banks Debt securities in issue — — Subordinated liabilities Internal funding of trading businesses Interest payable (1) Net interest income Notes: (1) Negative interest on loans and advances is classed as interest payable and on customer deposits is classed as interest receivable. |
Non-interest income
Non-interest income | 12 Months Ended |
Dec. 31, 2017 | |
Non-interest income | |
Non-interest income | 2 Non-interest income £m £m £m Fees and commissions receivable Payment services Credit and debit card fees Lending (credit facilities) Brokerage Investment management Trade finance Other Fees and commissions payable Income from trading activities Foreign exchange Interest rate Credit Equities and other — Other operating income Operating lease and other rental income Changes in the fair value of financial assets and liabilities designated at fair value through profit or loss and related derivatives Changes in the fair value of investment properties Profit on sale of securities (2) Profit on sale of property, plant and equipment Profit/(loss) on sale of subsidiaries and associates Profit/(loss) on disposal or settlement of loans and receivables Dividend income Share of profits of associated entities — — Other income (3) Notes: (2) Includes £444 million gain realised in relation to NatWest’s equity holding in RBSI. (3) Includes income from activities other than banking. |
Operating expenses
Operating expenses | 12 Months Ended |
Dec. 31, 2017 | |
Operating expenses | |
Operating expenses | 3 Operating expenses Group £m £m £m Wages, salaries and other staff costs Social security costs Pension costs - defined benefit schemes (see Note 4) - gains on curtailments or settlements (see Note 4) — — - defined contribution schemes Staff costs Premises and equipment Other administrative expenses (1) Property, plant and equipment, depreciation and write down (see Note 17) Intangible assets amortisation (see Note 16) Depreciation and amortisation Write down of goodwill and other intangible assets (see Note 16) — Restructuring costs relating to continuing operations included in operating expenses comprise: £m £m £m Staff costs Premises and depreciation Other (2) Notes: (1) Includes litigation and conduct costs. Further details are provided in Note 21. (2) Includes other administration expenses and write down of intangible assets. The average number of persons employed in continuing operations, rounded to the nearest hundred, in the Group during the year, excluding temporary staff, was 14,700 (2016 - 20,200, 2015 - 25,600); on the same basis, there were 2,100 people employed in discontinued operations (2016 – 3,600, 2015 – 4,200). The number of people employed by the Group in continued operations at 31 December, excluding temporary staff was as follows: 2016* 2015* UK Personal & Business Banking Commercial Banking Private Banking Commercial & Private Banking Central & Other Total UK Europe Rest of the World — — Total * Restated - refer to page 165 for further details. Re-presented to reflect the segmental reorganisation. There were 800 people employed in discontinued operations at 31 December 2017 (2016 – 3,400; 2015 – 3,800). |
Pensions
Pensions | 12 Months Ended |
Dec. 31, 2017 | |
Pensions | |
Pensions | 4 Pensions Defined contribution schemes The Group sponsors a number of defined contribution pension schemes in different territories, which new employees are offered the opportunity to join. Defined benefit schemes The Group sponsors a number of pension schemes in the UK and overseas, including the Main section of The Royal Bank of Scotland Group Pension Fund (the “Main scheme”) which operates under UK trust law and is managed and administered on behalf of its members in accordance with the terms of the trust deed, the scheme rules and UK legislation. Pension fund trustees are appointed to operate each fund and ensure benefits are paid in accordance with the scheme rules and national law. The trustees are the legal owner of a scheme’s assets, and have a duty to act in the best interests of all scheme members. The schemes generally provide a pension of one-sixtieth of final pensionable salary for each year of service prior to retirement up to a maximum of 40 years and are contributory for current members. These have been closed to new entrants some ten years ago, although current members continue to build up additional pension benefits currently subject to 2% maximum annual salary inflation while they remain employed by the Group. The Main scheme corporate trustee is RBS Pension Trustee Limited (the Trustee), a wholly owned subsidiary of National Westminster Bank Plc, Principal Employer of the Main scheme. The Board of the Trustee comprises four member trustee directors selected from eligible active staff, deferred and pensioner members who apply and six appointed by the Group. Under UK legislation a defined benefit pension scheme is required to meet the statutory funding objective of having sufficient and appropriate assets to cover its liabilities (the pensions that have been promised to members). Similar governance principles apply to the Group’s other pension schemes. Investment strategy The assets of the Main scheme, which represent 97% of plan assets at 31 December 2017 (2016 - 97%), are invested in a diversified portfolio of quoted and private equity, government and corporate fixed-interest and index-linked bonds, and other assets including real estate and infrastructure. The Main scheme employs derivative instruments to achieve a desired asset class exposure and to reduce the scheme’s interest rate, inflation and currency risk. This means that the net funding position is considerably less sensitive to changes in market conditions than the value of the assets or liabilities in isolation. Main scheme Major classes of plan assets as a percentage of total plan assets % % Quoted assets Quoted equities - Consumer industry - Manufacturing industry - Energy and utilities - Financial institutions - Technology and telecommunications - Other Private equity Index-linked bonds Government fixed interest bonds Corporate fixed interest bonds Unquoted assets Corporate and other bonds Hedge funds — Real estate Derivatives Cash and other assets Equity exposure of equity futures Cash exposure of equity futures The Main scheme’s holdings of derivative instruments are summarised in the table below: 2017 2016 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps Interest rate swaps Currency forwards Equity and bond call options — Equity and bond put options — Other The investment strategy of other schemes is similar to that of the Main scheme, adjusted to take account of the nature of liabilities, risk appetite of the trustees, size of the scheme and any local regulatory constraints. Swaps are used to manage interest rate and inflation risk of the liabilities, as well as being used to manage other risks within the Main scheme. They have been executed at prevailing market rates and within standard market bid/offer spreads with a number of counterparty banks, including The Royal Bank of Scotland plc. At 31 December 2017, the gross notional value of the swaps was £57 billion (2016 - £56 billion) and had a net positive fair value of £3,045 million (2016 - £3,629 million). Collateral is required on all swap transactions. The counterparty banks had delivered a net amount of £3,436 million of collateral at 31 December 2017 (2016 - £3,991 million). The schemes do not invest directly in the Group but can have exposure to the Group within their investment programmes through indirect exposure to ordinary shares of the Group through index tracking investments, swaps contracts (before allowing for collateral posted against the mark value of the swaps) and cash deposits placed with National Westminster Bank Plc. The trustees of the respective schemes are responsible for ensuring that indirect investments in the Group do not exceed the 5% regulatory limit. Amounts in the Financial statements The Group recognises the net pension scheme surplus or deficit as a net asset or liability. In doing so, the funded status is adjusted to reflect any schemes with a surplus that the Group may not be able to access, as well as any minimum funding requirement to pay in additional contributions. This is most relevant to the Main scheme, where the current surplus is not recognised. All schemes Amounts recognised on the balance sheet £m £m Fund assets at fair value Present value of fund liabilities Funded status Asset ceiling/minimum funding Retirement benefit liability Group Bank Net pension (liability)/asset comprises £m £m £m £m Net assets surplus of schemes in surplus (included in Prepayments, accrued income and other assets, Note 18) Net liabilities of schemes in deficit The income statement charge comprises: £m £m £m Continuing operations Discontinued operations — Group Bank Present Asset Net Present Asset Net Fair value of defined ceiling/ pension Fair value of defined ceiling/ pension of plan benefit minimum liability/ of plan benefit minimum liability/ assets obligation funding (1) (asset) assets obligation funding (1) (asset) Changes in value of net pension liability/(asset) £m £m £m £m £m £m £m £m At 1 January 2016 Currency translation and other adjustments Income statement Net interest expense Current service cost Less direct contributions from other scheme members Past service cost Statement of comprehensive income Return on plan assets above recognised interest income Experience gains and losses Effect of changes in actuarial financial assumptions Effect of changes in actuarial demographic assumptions Asset ceiling/minimum funding adjustments Contributions by employer — — Contributions by plan participants and other scheme members — — Liabilities extinguished upon settlement — — — — Benefits paid — — Transfers to/from fellow subsidiaries — — — — — Transfer to disposal groups At 1 January 2017 Currency translation and other adjustments — — — — Income statement Net interest expense — — Current service cost Less direct contributions from other scheme members Past service cost Statement of comprehensive income Return on plan assets above recognised interest income Experience gains and losses Effect of changes in actuarial financial assumptions Effect of changes in actuarial demographic assumptions Asset ceiling/minimum funding adjustments Contributions by employer — — Contributions by plan participants and other scheme members — — Benefits paid — — Transfer to/from fellow subsidiaries — — — At 31 December 2017 Note: (1) In recognising the net surplus or deficit of a pension scheme, the funded status of each scheme is adjusted to reflect any minimum funding requirement imposed on the sponsor and any ceiling on the amount that the sponsor has an unconditional right to recover from a scheme. (2) The Group expects to make contributions to the Main scheme of £190 million in 2018. Funding and contributions by the Group In the UK, the Trustees of defined benefit pension schemes are required to perform funding valuations every three years. The Trustees and the Company, with the support of the scheme Actuary, agree the assumptions used to value the liabilities and a Schedule of Contributions required to eliminate any funding deficit. The funding assumptions incorporate a margin for prudence over and above the expected cost of providing the benefits promised to members, taking into account the sponsor’s covenant and the investment strategy of the scheme. Similar arrangements apply in the other territories where the Group sponsors defined benefit pension schemes. The last funding valuation of the Main scheme was at 31 December 2015 and next funding valuation is due at 31 December 2018, to be agreed by 31 March 2020. The triennial funding valuation of the Main scheme as at 31 December 2015 determined the funding level to be 84%, pension liabilities to be £37 billion and the deficit to be £5.8 billion, subsequently reduced by a £4.2 billion cash payment in March 2016. Investment returns over the next 10 year period were forecast to absorb the £1.6 billion balance of the deficit. The average cost of the future service of current members is 35% of basic salary before contributions from those members; it includes the expenses of running the scheme. Assumptions Placing a value on the Group’s defined benefit pension schemes’ liabilities requires the Group’s management to make a number of assumptions, with the support of independent actuaries who provide advice and guidance to the Group. The ultimate cost of the defined benefit obligations to the Group will depend upon actual future events and the assumptions made are unlikely to be exactly borne out in practice, meaning the final cost may be higher or lower than expected. The most significant assumptions used for the Main scheme are shown below: Principal IAS 19 Principal assumptions of 2015 triennial valuation % % Discount rate Fixed interest swap yield curve plus 1.5% per annum at all durations Inflation assumption (RPI) Retail price index RPI swap yield curve Rate of increase in salaries Rate of increase in deferred pensions Rate of increase in pensions in payment (RPI floor 0%, cap 5%): Limited price indexation (LPI) (0,5) swap yield curve Proportion of pension converted to a cash lump sum at retirement Longevity at age 60 for current pensioners (years) Males Females Longevity at age 60 for future pensioners currently aged 40 (years) Males Females Discount rate The Group discounts its defined benefit pension obligations at discount rates determined by reference to the yield on ‘high quality’ corporate bonds. The sterling yield curve (applied to 99% of the Group’s defined benefit obligations) is constructed by reference to yields on ‘AA’ corporate bonds from which a single discount rate is derived based on a cash flow profile similar in structure and duration to the pension obligations. The weighted average duration of the Main scheme’s defined benefit obligation at 31 December 2017 is 21 years (2016 - 20.9 years). Significant judgement is required when setting the criteria for bonds to be included in the population from which the yield curve is derived. The criteria include issue size, quality of pricing and the exclusion of outliers. Judgement is also required in determining the shape of the yield curve at long durations: a constant credit spread relative to gilts is assumed The table below shows how the present value of the defined benefit obligation would change if the key assumptions used were changed. The sensitivity analysis presented below may not be representative of the actual change in the defined benefit obligation as it is unlikely that the changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Main scheme (decrease)/increase in obligation at 31 December £m £m 0.25% increase in the discount rate 0.25% increase in inflation 0.25% additional rate of increase in pensions in payment Longevity increase of one year The defined benefit obligation is attributable to the different classes of scheme members in the following proportions (Main scheme): Membership category % % Active members Deferred members Pensioners and dependants The experience history of Group schemes is shown below: Group Bank History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets Present value of plan obligations Net surplus/(deficit) Experience (losses)/gains on plan liabilities Experience gains/(losses) on plan assets Actual return on plan assets Actual return on plan assets - % |
Auditor's remuneration
Auditor's remuneration | 12 Months Ended |
Dec. 31, 2017 | |
Auditor's remuneration | |
Auditor's remuneration | 5 Auditor’s remuneration Ernst & Young LLP (EY) are the Group’s auditors for the audit of the 2017 annual accounts. Amounts paid to EY for statutory audit and other services are set out below: EY £m £m Fees payable for the audit of the Group’s annual accounts Fees payable to the auditor and its associates for other services to the Group - the audit of the Bank’s subsidiaries pursuant to legislation Total audit and audit-related assurance service fees Fees payable to the auditor for non-audit services are disclosed in the consolidated financial statements of The Royal Bank of Scotland Group plc. |
Tax
Tax | 12 Months Ended |
Dec. 31, 2017 | |
Tax | |
Tax | 6 Tax 2017 2016 2015 Current tax Charge for the year Over/(under) provision in respect of prior years Deferred tax (Charge)/credit for the year Reduction in the carrying value of deferred tax assets — — (Under)/over provision in respect of prior years Tax charge for the year The actual tax charge differs from the expected tax charge computed by applying the standard rate of UK corporation tax of 19.25% (2016 - 20.00%; 2015 – 20.25%) as follows: £m £m £m Expected tax charge Losses and temporary differences in year where no deferred tax asset recognised Foreign profits taxed at other rates UK tax rate change impact (1) — Non-deductible goodwill impairment — — Items not allowed for tax - losses on disposal and write-downs - UK bank levy — — - regulatory and legal actions - other disallowable items Non-taxable items Taxable foreign exchange movements Losses brought forward and utilised Reduction in carrying value of deferred tax asset in respect of - UK losses — — Banking surcharge — Adjustments in respect of prior years (2) Actual tax charge Notes: (1) In recent years, the UK government has steadily reduced the rate of UK corporation tax, with the latest enacted rates standing at 20% with effect from 1 April 2015, 19% from 1 April 2017 and 17% from 1 April 2020. The Finance (No 2) Act 2015 restricts the rate at which tax losses are given credit in future periods to the main rate of UK corporation tax, excluding the Banking Surcharge 8% rate introduced by this Act. Deferred tax assets and liabilities at 31 December 2017 take into account the reduced rates in respect of tax losses and non-banking temporary differences and where appropriate, the banking surcharge inclusive rate in respect of other banking temporary differences. (2) Prior year tax adjustments incorporate refinements to tax computations made on submission and agreement with the tax authorities. Current taxation balances include provisions in respect of uncertain tax positions, in particular in relation to restructuring and other costs where the taxation treatment remains subject to agreement with the relevant tax authorities. |
Profit_(loss) dealt with in the
Profit/(loss) dealt with in the accounts of the Bank | 12 Months Ended |
Dec. 31, 2017 | |
Bank | |
Acquisitions and disposals | |
Profit/(loss) dealt with in the accounts of the Bank | 7 Profit/(loss) dealt with in the accounts of the Bank As permitted by section 408(3) of the Companies Act 2006, no income statement for the Bank has been presented as a primary financial statement. |
Financial instruments - classif
Financial instruments - classification | 12 Months Ended |
Dec. 31, 2017 | |
Financial instruments | |
Financial instruments - classification | 8 Financial instruments - classification The following tables analyse the Group’s financial assets and liabilities in accordance with the categories of financial instruments in IAS 39. Assets and liabilities outside the scope of IAS 39 are shown within other assets and other liabilities. Group Designated as at fair value Held-for- through profit Available- Loans and Other Assets trading or loss for-sale receivables assets Total £m £m £m £m £m £m Cash and balances at central banks — — — Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries — - reverse repos — — — — — - other (1) — — — Loans and advances to customers - amounts due from fellow subsidiaries — — — — — - reverse repos — — — — — - other — — Debt securities (2) — — Equity shares — — Settlement balances — — Derivatives - amounts due from intermediate holding company and fellow subsidiaries - other Assets of disposal groups Other assets — — — — 31 December 2017 Cash and balances at central banks — — — Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries — - reverse repos — — — - other (1) — — — Loans and advances to customers - amounts due from fellow subsidiaries — — - reverse repos — — — - other — — Debt securities (2) — — Equity shares — Settlement balances — — Derivatives - amounts due from intermediate holding company - other Assets of disposal groups Other assets — — — — 31 December 2016 Group Designated as at fair value Held-for- through profit Amortised Other Liabilities trading or loss cost liabilities Total £m £m £m £m £m Deposits by banks - amounts due to intermediate holding company and fellow subsidiaries — - repos — — — — - other (3) — — Customer accounts - amounts due to fellow subsidiaries — — - repos — — — — - other (4) Debt securities in issue (5) — — Settlement balances — — Short positions — — — — Derivatives - amounts due to intermediate holding company and fellow subsidiaries - other — Subordinated liabilities - amounts due to intermediate holding company and fellow subsidiaries — — - other — — Liabilities of disposal groups Other liabilities 31 December 2017 Deposits by banks - amounts due to intermediate holding company and fellow subsidiaries — - repos — — - other (3) — Customer accounts - amounts due to fellow subsidiaries — - repos — — - other (4) Debt securities in issue (5) — — Settlement balances — — Short positions — — Derivatives - amounts due to intermediate holding company - other Subordinated liabilities - amounts due to intermediate holding company and fellow subsidiaries — — - other — — Liabilities of disposal groups Other liabilities 31 December 2016 The above includes amounts due from/to: Group 2017 2016 Intermediate Intermediate holding Fellow holding Fellow company (6) subsidiaries company (6) subsidiaries £m £m £m £m Assets Loans and advances to banks Loans and advances to customers — — — Derivatives — Liabilities Deposits by banks Customer accounts — — Derivatives — Notes: (1) Includes items in the course of collection from other banks of £593 million (2016 - £559 million). (2) Debt securities balances with Group companies are shown on pages 61 and 62. (3) Includes items in the course of transmission to other banks of £198 million (2016 - £211 million). (4) The carrying amount of other customer accounts designated as at fair value through profit or loss is £26 million (2016 - £54 million) higher than the principal amount. No amounts have been recognised in the profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. Measured as the change in fair value from movements in the period in the credit risk premium payable. (5) Comprises bonds and medium term notes of £396 million (2016 - £301 million) and certificates of deposit and other commercial paper of nil (2016 - nil). (6) Refer to note 40 for holding company details. Amounts relating to continuing operations included in operating profit before tax: Group £m £m £m Gains/(losses) on financial assets/liabilities designated as at fair value through profit or loss Gains/(losses) on disposal or settlement of loans and receivables Amounts included in loss from discontinued operations, net of tax were nil (2016 - nil, 2015 - £43 million gain) in relation to financial assets/liabilities as at fair value through profit or loss and nil (2016 - £5 million gain, 2015 - £61 million loss) in relation to disposal or settlement of loans and receivables. Bank Designated as at fair value Held-for- through profit Available- Loans and Other Assets trading or loss for-sale receivables assets Total £m £m £m £m £m £m Cash and balances at central banks — — — Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries — - other (1) — — — Loans and advances to customers - amounts due from fellow subsidiaries — — — - other — — Equity shares — — — — Debt securities — — — Investment in group undertakings — — — — Settlement balances — — — — Derivatives - amounts due from intermediate holding company - other Other assets — — — — 31 December 2017 Cash and balances at central banks — — — — Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries — - other (1) — — — Loans and advances to customers - amounts due from fellow subsidiaries — — — - other — — Equity shares — — — Investment in group undertakings — — — — Settlement balances — — — Derivatives - amounts due from intermediate holding company - other Other assets — — — — 31 December 2016 Bank Designated as at fair value Held-for- through profit Amortised Other Liabilities trading or loss cost liabilities Total £m £m £m £m £m Deposits by banks - amounts due to intermediate holding company and fellow subsidiaries — — - other (3) — — Customer accounts - amounts due to fellow subsidiaries — — - other (4) Settlement balances — — — — Derivatives - amounts due to intermediate holding company - other — Subordinated liabilities - amounts due to holding company — — - other — — Other liabilities — 31 December 2017 Deposits by banks - amounts due to intermediate holding company and fellow subsidiaries — - other (3) — Customer accounts - amounts due to fellow subsidiaries — — - other (4) Settlement balances — — Derivatives - amounts due to intermediate holding company - other — — Subordinated liabilities - amounts due to intermediate holding company — — - other — — Other liabilities — 31 December 2016 The above includes amounts due from/to: Bank 2017 2016 Intermediate Intermediate holding Fellow holding Fellow company (5) subsidiaries Subsidiaries company (5) subsidiaries Subsidiaries £m £m £m £m £m £m Assets Loans and advances to banks Loans and advances to customers — — Derivatives — — — — Liabilities Deposits by banks Customer Accounts — — Derivatives — — — — Notes: (1) Includes items in the course of collection from other banks of £562 million (2016 - £531 million). (2) Debt securities balances with Group companies are shown on pages 61 and 62. (3) Includes items in the course of transmission to other banks of £192 million (2016 - £204 million). (4) The carrying amount of other customer accounts designated as at fair value through the profit or loss is £27 million (2016 - £57 million) higher than the principal amount. No amounts have been recognised in the profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. Measured as the change in fair value from movements in the period in the credit risk premium payable. (5) Refer to note 40 for holding company details. The tables below present information on financial assets and liabilities that are offset on the balance sheet under IFRS or subject to enforceable master netting agreements, together with financial collateral received or given. Offsetable instruments Offsetable potential not recognised by IFRS Net amount after Effect of the effect of Instruments master netting Other netting outside Balance IFRS and similar Cash financial arrangements and netting sheet Balance Gross offset sheet agreements collateral collateral related collateral arrangements total 2017 £m £m £m £m £m £m £m £m £m Assets Derivatives — Loans and advances to banks — — — Settlement balances — — — — — — — Liabilities Derivatives — — — Deposits by banks — — — Settlement balances — — — — — — — — — 2016 Assets Derivatives — Reverse repurchase agreements — — Settlement balances — — — — — Liabilities Derivatives — — Repurchase agreements — — — Settlement balances — — — Note: (1) The effect of master netting agreements on derivatives within the Bank was £1,804 million (2016 - £2,120 million). |
Financial instruments - valuati
Financial instruments - valuation | 12 Months Ended |
Dec. 31, 2017 | |
Financial instruments | |
Financial instruments - valuation | 9 Financial instruments - valuation Valuation of financial instruments carried at fair value Control environment Common valuation policies, procedures, frameworks and models apply across the RBS Group. Therefore, for the most part, discussions on these aspects below reflect those in the RBS Group as relevant for businesses in the Group. The Group’s control environment for the determination of the fair value of financial instruments includes formalised protocols for the review and validation of fair values independent of the businesses entering into the transactions. There are specific controls to ensure consistent pricing policies and procedures, incorporating disciplined price verification. The Group ensures that appropriate attention is given to bespoke transactions, structured products, illiquid products and other instruments which are difficult to price. Independent price verification (IPV) IPV is a key element of the control environment. Valuations are first performed by the business which entered into the transaction. Such valuations may be directly from available prices, or may be derived using a model and variable model inputs. These valuations are reviewed, and if necessary amended, by a team independent of those trading the financial instruments, in the light of available pricing evidence. IPV differences are classified according to the quality of independent market observables into IPV quality bands linked to the fair value hierarchy principles, as laid out in IFRS 13 ‘Fair Value Measurement’. These differences are classified into fair value levels 1, 2 and 3 (with the valuation uncertainty risk increasing as the levels rise from 1 to 3) and then further classified into high, medium, low and indicative depending on the quality of the independent data available to validate the prices. Valuations are revised if they are outside agreed thresholds. Governance framework IPV takes place at least each month end date, for all fair value positions. The IPV control includes formalised reporting and escalation of any valuation differences in breach of established thresholds. The Pricing Unit determines IPV policy, monitors adherence to that policy and performs additional independent reviews of highly subjective valuation issues. The Modelled Product Review Committee sets the policy for model documentation, testing and review, and prioritises models with significant exposure being reviewed by the RBS Group Pricing Model Risk team. The Valuation Committee is made up of valuation specialists and senior business representatives from various functions and oversee pricing, reserving and valuations issues as relevant to businesses within the RBS Group. This committee meets monthly to review and ratify any methodology changes. The Executive Valuation Committee meets quarterly to address key material and subjective valuation issues, to review items escalated by the Valuation Committees and to discuss other relevant matters including prudential valuation. Valuation hierarchy Initial classification of a financial instrument is carried out by the Product Control team following the principles in IFRS 13. They base their judgment on information gathered during the IPV process for instruments which include the sourcing of independent prices and model inputs. The quality and completeness of the information gathered in the IPV process gives an indication as to the liquidity and valuation uncertainty of an instrument. These initial classifications are reviewed and challenged by the Pricing Unit and are also subject to senior management review. Particular attention is paid to instruments crossing from one level to another, new instrument classes or products, instruments that are generating significant profit and loss and instruments where valuation uncertainty is high. Valuation techniques The Group derives fair value of its instruments differently depending on whether the instrument is a non-modelled or a modelled product. Non-modelled products Non-modelled products are valued directly from a price input typically on a position by position basis and include cash, equities and most debt securities. Modelled products Modelled products valued using a pricing model range in complexity from comparatively vanilla products such as interest rate swaps and options (e.g. interest rate caps and floors) through to more complex derivatives. The valuation of modelled products requires an appropriate model and inputs into this model. Sometimes models are also used to derive inputs (e.g. to construct volatility surfaces). The Group uses a number of modelling methodologies. Inputs to valuation models Values between and beyond available data points are obtained by interpolation and extrapolation. When utilising valuation techniques, the fair value can be significantly affected by the choice of valuation model and by underlying assumptions concerning factors such as the amounts and timing of cash flows, discount rates and credit risk. The principal inputs to these valuation techniques are as follows: · Bond prices - quoted prices are generally available for government bonds, certain corporate securities and some mortgage-related products. · Credit spreads - where available, these are derived from prices of credit default swaps or other credit based instruments, such as debt securities. For others, credit spreads are obtained from pricing services. For counterparty credit spreads, adjustments are made to market prices (or parameters) when the creditworthiness of the counterparty differs from that of the assumed counterparty in the market price (or parameters). Inputs to valuation models · 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 centers. · 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, the Group considers the value of the prepayment option. · Recovery rates/loss given default - these are used as an input to valuation models and reserves for asset-backed securities and other credit products as an indicator of severity of losses on default. Recovery rates are primarily sourced from market data providers or inferred from observable credit spreads. Consensus pricing The Group uses consensus prices for the IPV of some instruments. The consensus service encompasses the equity, interest rate, currency, commodity, credit, property, fund and bond markets, providing comprehensive matrices of vanilla prices and a wide selection of exotic products. NatWest Markets contribute 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 the Group 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 the Group’s assessment of factors that market participants would consider in setting a price. Furthermore, on an ongoing basis, the Group assesses the appropriateness of any model used. To the extent that the price determined by internal models does not represent the fair value of the instrument, for instance in highly stressed market conditions, the Group makes adjustments to the model valuation to calibrate to other available pricing sources. Where unobservable inputs are used, the Group 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, the Group considers adjustments to the modelled price which market participants would make when pricing that instrument. Such adjustments include the credit quality of the counterparty and adjustments to compensate for model limitations. Valuation reserves When valuing financial instruments in the trading book, adjustments are made to mid-market valuations to cover bid-offer spread, liquidity and credit risk. 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 reserve at 31 December 2017 was £11 million (2016 - £26 million). The CVA is calculated on a portfolio basis reflecting an estimate of the amount a third party would charge to assume the credit risk. Where a positive exposure exists to a counterparty that is considered to be close to default, the CVA is calculated by applying expected losses to the current level of exposure. Otherwise, expected losses are applied to estimated potential future positive exposures which are modelled to reflect the volatility of the market factors which drive the exposures and the correlation between those factors. Expected losses are determined from market implied probabilities of default and internally assessed recovery levels. The probability of default is calculated with reference to observable credit spreads and observable recovery levels. For counterparties where observable data do not exist, the probability of default is determined from the credit spreads and recovery levels of similarly rated entities. Collateral held under a credit support agreement is factored into the CVA calculation. In such cases where the Group holds collateral against counterparty exposures, CVA is held to the extent that residual risk remains. Valuation hierarchy The following tables show financial instruments carried at fair value on the balance sheet by valuation hierarchy for continuing operations - level 1, level 2 and level 3. 2017 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total £bn £bn £bn £bn £bn £bn £bn £bn Assets Loans and advances — — — Debt securities — — - of which AFS — — Equity shares — — — — — — Derivatives — — — — — Proportion — Liabilities Deposits — — — — Short positions — — — — — — Derivatives — — — — — — — Proportion — — — Level 3 balances within continuing operations at 31 December 2017 were nil (2016 – level 3 comprised loans and advances of £0.4 billion with sensitivity of +£40 million / -£30 million, valued using a traded price with a range of 85% to 95%). Level 3 balances within disposal groups were immaterial at 31 December 2017. Notes: (1) Level 1: valued using unadjusted quoted prices in active markets, for identical financial instruments. Examples include G10 government securities, listed equity shares, certain US agency securities.| Level 2: valued using techniques based significantly on observable market data. Instruments in this category are valued using: (a) quoted prices for similar instruments or identical instruments in markets which are not considered to be active; or (b) valuation techniques where all the inputs that have a significant effect on the valuations are directly or indirectly based on observable market data. Level 2 instruments included non-G10 government securities, most government agency securities, certain mortgage products, most bank loans, repos and reverse repos, less liquid listed equities, and most OTC derivatives. Level 3: instruments in this category have been valued using a valuation technique where at least one input which could have a significant effect on the instrument’s valuation, is not based on observable market data. Level 3 instruments primarily include cash instruments which trade infrequently such as certain mortgage loans. (2) Transfers between levels are deemed to have occurred at the beginning of the quarter in which the instruments were transferred. There were no significant transfers between level 1 and level 2. (3) For an analysis of debt securities (by issuer and measurement classification) and derivatives (by type of contract) refer to Capital and risk management – Credit risk. (4) The determination of an instrument’s level cannot be made at a global product level as a single product type can be in more than one level. For example, a single name corporate credit default swap could be in Level 2 or Level 3 depending on whether the reference counterparty’s obligations are liquid or illiquid. The following table shows the carrying value and fair value of financial instruments carried at amortised cost on the balance sheet. Group Bank Items where Items where fair value fair value approximates Carrying Fair Fair value hierarchy level approximates Carrying Fair Fair value hierarchy level carrying value value value Level 2 Level 3 carrying value value value Level 2 Level 3 2017 £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 35.8 34.8 Loans and advances to banks 0.6 79.1 79.5 1.0 78.5 0.6 55.0 55.5 1.1 54.4 Loans and advances to customers 191.9 191.3 0.2 191.1 160.7 160.1 — 160.1 Debt securities 1.1 1.1 — 1.1 1.1 1.1 — 1.1 Settlement balances — — Financial liabilities Deposits by banks 18.8 34.4 35.6 17.0 18.6 4.5 27.4 28.5 17.0 11.5 Customer accounts 206.3 26.9 26.9 4.9 22.0 187.2 13.8 13.8 4.9 8.9 Debt securities in issue 0.4 0.4 — 0.4 — — — — Settlement balances — — Notes in circulation (1) 0.8 — Subordinated liabilities 5.8 6.0 5.9 0.1 5.6 5.9 5.9 — 2016 Financial assets Cash and balances at central banks 2.6 1.2 Loans and advances to banks 0.6 87.6 88.1 3.6 84.5 0.5 63.8 64.2 3.3 60.9 Loans and advances to customers 166.0 166.0 0.9 165.1 150.0 150.0 — 150.0 Debt securities — — — — — — — — Settlement balances 1.7 0.1 Financial liabilities Deposits by banks 5.1 11.1 12.1 0.9 11.2 4.5 4.2 5.2 — 5.2 Customer accounts 197.3 24.9 24.9 5.7 19.2 180.1 12.1 12.1 5.7 6.4 Debt securities in issue 0.3 0.3 — 0.3 — — — — Settlement balances 1.8 0.1 Notes in circulation (1) 0.8 — Subordinated liabilities 7.3 7.0 1.6 5.4 5.9 5.7 1.3 4.4 Note: (1) Included in Accruals and other liabilities. The 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. Quoted market values are used where available; otherwise, fair values have been estimated based on discounted expected future cash flows and other valuation techniques. These techniques involve uncertainties and require assumptions and judgments covering prepayments, credit risk and discount rates. Furthermore there is a wide range of potential valuation techniques. Changes in these assumptions would significantly affect estimated fair values. The fair values reported would not necessarily be realised in an immediate sale or settlement. The assumptions and methodologies underlying the calculation of fair values of financial instruments at the balance sheet date are as follows: Short-term financial instruments For certain short-term financial instruments: cash and balances at central banks, items in the course of collection from other banks, settlement balances, items in the course of transmission to other banks, customer demand deposits and notes in circulation, carrying value is a reasonable approximation of fair value. Loans and advances to banks and customers In estimating the fair value of loans and advances to banks and customers measured at amortised cost, the Group’s loans are segregated into appropriate portfolios reflecting the characteristics of the constituent loans. Two principal methods are used to estimate fair value: (a) Contractual cash flows are discounted using a market discount rate that incorporates the current spread for the borrower or where this is not observable, the spread for borrowers of a similar credit standing. This method is used for portfolios where counterparties have external ratings: institutional and corporate lending in NatWest Markets. (b) Expected cash flows (unadjusted for credit losses) are discounted at the current offer rate for the same or similar products. This approach is adopted for lending portfolios in UK PBB, Commercial Banking (SME loans) and Private Banking in order to reflect the homogeneous nature of these portfolios. For certain portfolios where there are very few or no recent transactions a bespoke approach is used based on available market data. Debt securities The majority of debt securities are valued using quoted prices in active markets, or using quoted prices for similar assets in active markets. Fair values of the rest are determined using discounted cash flow valuation techniques. Deposits by banks and customer accounts Fair values of deposits are estimated using discounted cash flow valuation techniques. Debt securities in issue and subordinated liabilities Fair values are determined using quoted prices for similar liabilities where available or by reference to valuation techniques, adjusting for own credit spreads where appropriate. |
Financial instruments - maturit
Financial instruments - maturity analysis | 12 Months Ended |
Dec. 31, 2017 | |
Financial instruments | |
Financial instruments - maturity analysis | 10 Financial instruments - maturity analysis Remaining maturity The following table shows the residual maturity of financial instruments, based on contractual date of maturity. Group 2017 2016 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks 35,799 — 35,799 2,567 — 2,567 Loans and advances to banks 65,132 14,713 79,845 86,817 10,335 97,152 Loans and advances to customers 41,947 149,942 191,889 43,619 133,446 177,065 Debt securities 433 1,179 1,612 703 3,760 4,463 Equity shares — 43 43 — 87 87 Settlement balances 3 — 3 1,693 — 1,693 Derivatives 217 2,098 2,315 597 3,307 3,904 Liabilities Deposits by banks 31,634 22,213 53,847 15,792 4,253 20,045 Customer accounts 225,457 7,915 233,372 229,135 4,804 233,939 Debt securities in issue — 396 396 — 301 301 Settlement balances and short positions 4 — 4 2,284 4,060 6,344 Derivatives 228 2,950 3,178 506 4,148 4,654 Subordinated liabilities 21 5,734 5,755 369 6,926 7,295 Bank 2017 2016 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks 34,763 — 34,763 1,198 — 1,198 Loans and advances to banks 48,452 7,336 55,788 60,767 3,836 64,603 Loans and advances to customers 26,648 134,031 160,679 26,718 123,429 150,147 Debt securities — 1,059 1,059 — — — Equity shares — 7 7 — 11 11 Settlement balances — — — 119 — 119 Derivatives 209 2,068 2,277 436 2,646 3,082 Liabilities Deposits by banks 13,882 18,583 32,465 7,620 1,588 9,208 Customer accounts 193,274 7,876 201,150 187,750 4,740 192,490 Settlement balances and short positions — — — 86 — 86 Derivatives 217 2,900 3,117 429 3,509 3,938 Subordinated liabilities 21 5,619 5,640 25 5,865 5,890 On balance sheet liabilities The following table shows, by contractual maturity, the undiscounted cash flows payable up to a period of 20 years from the balance sheet date, including future payments of interest. Group 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2017 £m £m £m £m £m £m Deposits by banks 31,921 788 4,960 15,240 619 88 Customer accounts 225,745 1,414 1,145 1,004 2,242 3,142 Debt securities in issue 8 33 87 87 617 — Subordinated liabilities 46 174 1,400 624 2,604 1,207 Settlement balances and other liabilities 813 — — — — — 258,533 2,409 7,592 16,955 6,082 4,437 Guarantees and commitments notional amount Guarantees (1) 674 — — — — — Commitments (2) 53,132 — — — — — 53,806 — — — — — 2016 Deposits by banks 10,707 1,205 2,200 1,298 692 93 Customer accounts 218,100 1,196 733 487 1,084 1,498 Debt securities in issue — — — — — 301 Subordinated liabilities 50 529 1,902 821 2,991 1,343 Settlement balances and other liabilities 2,510 — — — — — 231,367 2,930 4,835 2,606 4,767 3,235 Guarantees and commitments notional amount Guarantees (1) 869 — — — — — Commitments (2) 55,127 — — — — — 55,996 — — — — — Notes: (1) The Group is only called upon to satisfy a guarantee when the guaranteed party fails to meet its obligations. The Group expects most guarantees it provides to expire unused. (2) The Group 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. The Group does not expect all facilities to be drawn, and some may lapse before drawdown. Bank 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2017 £m £m £m £m £m £m Deposits by banks — Customer accounts Subordinated liabilities Settlement balances — — — — — Guarantees and commitments notional amount Guarantees — — — — — Commitments — — — — — — — — — — 2016 Deposits by banks - Customer accounts Subordinated liabilities Settlement balances — — — — — Guarantees and commitments notional amount Guarantees — — — — — Commitments — — — — — — — — — — The tables above show the timing of cash outflows to settle financial liabilities, prepared on the following basis: 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 repayment is triggered by, or is subject to, specific criteria such as market price hurdles being reached, the liability is included at the earliest possible date that the conditions could be fulfilled without considering the probability of the conditions being met. For example, if a structured note automatically prepays 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 issued by certain securitisation vehicles consolidated by the Group 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. The principal amounts of financial liabilities that are repayable after 20 years or where the counterparty has no right to repayment of the principal are excluded from the table along with interest payments after 20 years. Held-for-trading liabilities amounting to £3.8 billion (2016 - £24.5 billion) for the Group and £3.7 billion (2016 - £4.4 billion) for the Bank have been excluded from the tables. |
Financial assets - impairments
Financial assets - impairments | 12 Months Ended |
Dec. 31, 2017 | |
Financial assets - impairments | |
Financial assets - impairments | 11 Financial assets - impairments The following table shows the movement in the provision for impairment losses on loans and advances. Group Individually Collectively assessed assessed Latent £m £m £m £m £m At 1 January Transfers to disposal groups — — — — Transfers from fellow subsidiaries — Currency translation and other adjustments — — Amounts written-off — Recoveries of amounts previously written-off — Charge/(release) to income statement - from continuing operations - from discontinued operations — — — — Unwind of discount (recognised in interest income) - from continuing operations — - from discontinued operations — — — — At 31 December Bank Individually Collectively assessed assessed Latent £m £m £m £m £m At 1 January Currency translation and other adjustments — Amounts written-off — Recoveries of amounts previously written-off — Charge/(release) to income statement Unwind of discount (recognised in interest income) — At 31 December Group Impairment charge/(release) to the income statement £m £m £m Loans and advances to customers Charge/(release) to the income statement for continuing operations There was no release to the income statement in relation to discontinued operations (2016 - £106 million: 2015 - £675 million) Group £m £m £m Gross income not recognised but which would have been recognised under the original terms of the impaired loans Domestic Foreign Total The gross income not recognised but which would have been recognised under the original terms of the impaired loans within discontinued operations nil (2016 - £68 million: 2015 - £59 million). Group £m £m £m Interest on impaired loans included in net interest income Domestic Total Interest on impaired loans included in net interest income for discontinued operations nil (2016 - £37 million: 2015 - £46 million) The following tables analyse impaired financial assets. Group 2017 2016 Carrying Carrying Cost Provision value Cost Provision value £m £m £m £m £m £m Loans and receivables Loans and advances to customers (1) Group Carrying Carrying value value £m £m Available-for-sale securities Equity shares Bank 2017 2016 Carrying Carrying Cost Provision value Cost Provision value £m £m £m £m £m £m Loans and receivables Loans and advances to customers (2) Notes: (1) Impairment provisions individually assessed on balances of £951 million (2016 - £535 million). (2) Impairment provisions individually assessed on balances of £647 million (2016 - £425 million). Financial and non-financial assets recognised on the balance sheet, obtained during the year by taking possession of collateral or calling on other credit enhancements, were £20 million (2016 - £21 million) for the Group and £20 million (2016 - £21 million) for the Bank. In general, the Group seeks to dispose of property and other assets not readily convertible into cash, obtained by taking possession of collateral, as rapidly as the market for the individual asset permits. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2017 | |
Derivatives | |
Derivatives | 12 Derivatives Companies in the Group transact derivatives as principal either as a trading activity or to manage balance sheet foreign exchange, interest rate and credit risk. The following table shows the notional amount and fair value of the Group’s derivatives. Group 2017 2016 Notional Notional amount Assets Liabilities amount Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts Spot, forwards and futures Currency swaps Options purchased — — Options written — — Interest rate contracts Interest rate swaps Options purchased — — Options written — — Futures and forwards — — — — — Equity and commodity contracts — — — — Amounts above include: Due from/to intermediate holding company Due from/to fellow subsidiaries — — Bank 2017 2016 Notional Notional amount Assets Liabilities amount Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts Spot, forwards and futures Currency swaps Options purchased — — Options written — — Interest rate contracts Interest rate swaps Options purchased — — Options written — — Amounts above include: Due from/to intermediate holding company |
Debt securities
Debt securities | 12 Months Ended |
Dec. 31, 2017 | |
Debt securities | |
Debt securities | 13 Debt securities Group Central and local Other Government financial Of which UK US Other Banks institutions Corporate Total ABS (1) 2017 £m £m £m £m £m £m £m Available-for-sale — — Loans and receivables — — — — — — — 2016 Held-for-trading — — Available-for-sale — — — — — Note: (1) Includes covered bonds. The following table analyses the Group’s available-for-sale debt securities and the related yield (based on weighted averages) by remaining maturity and issuer. Within 1 year After 1 but within 5 years Total Amount Yield Amount Yield Amount Yield 2017 £m % £m % £m % Central and local governments - UK — — - Other — — Banks Other financial institutions — — — — 2016 Central and local governments - Other — Banks — Note: (1) There are no balances with a maturity of after 5 but within 10 years and after 10 years. Gross gains of £5 million (2016 - nil) and gross losses of nil (2016 – nil) were realised on the sale of available for sale securities in continuing operations. There were no gains or losses in discontinued operations. |
Equity shares
Equity shares | 12 Months Ended |
Dec. 31, 2017 | |
Equity shares | |
Equity shares | 14 Equity shares Group 2017 2016 Listed Unlisted Total Listed Unlisted Total £m £m £m £m £m £m Held-for-trading — — — — Designated as at fair value through profit or loss Available-for-sale — Available-for-sale Gross unrealised gains — Bank 2017 2016 Listed Unlisted Total Listed Unlisted Total £m £m £m £m £m £m Held-for-trading — — — — Available-for-sale — — — — Available-for-sale Gross unrealised gains — — — — Gross gains of £435 million (2016 - £26 million) and gross losses of nil (2016 - £1 million) were realised on the sale of available-for-sale equity shares in continuing operations. Gross gains of nil (2016 - nil) and gross losses of nil (2016 - £6 million) were realised on the sale of available-for-sale equity shares in discontinued operations. Dividend income from available-for-sale equity shares in continuing operations was nil (2016 - £1 million) and in discontinued operations was £4 million (2016 - £7 million). |
Investments in Group undertakin
Investments in Group undertakings | 12 Months Ended |
Dec. 31, 2017 | |
Investments in Group undertakings | |
Investments in Group undertakings | 15 Investments in Group undertakings Investments in Group undertakings are carried at cost less impairment. Movements during the year were as follows: Bank £m £m At 1 January Currency translation and other adjustments Additional investments in Group undertakings — Acquisitions Disposals — (Impairment)/write back of investments At 31 December The impairment in 2017 mainly relates to a dividend receipt of £3.9 billion from Ulster Bank Limited and a capital contribution of £2.5 billion in RBS Securities Inc that was impaired after it funded an RMBS settlement (Note 21). The principal subsidiary undertakings of the Bank are shown below. Their capital consists of ordinary and preference shares which are unlisted. All of the subsidiary undertakings are owned by the Bank, or directly or indirectly through intermediate holding companies. All of these subsidiaries are included in the Group’s consolidated financial statements and have an accounting reference date of 31 December. Nature of business Country of incorporation and principal area of operations Coutts & Company (1) Private banking Great Britain RBS Securities Inc. (2) Broker dealer US Ulster Bank Limited Banking Northern Ireland Notes: (1) Coutts & Company is incorporated with unlimited liability. Its registered office is 440 Strand, London WC2R OQS. (2) RBS Securities Inc is classed as a disposal group at 31 December 2017. Shares are not directly held by the Bank. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets | |
Intangible assets | 16 Intangible assets Group 2017 2016 Goodwill Other (1) Total Goodwill Other(1) Total £m £m £m £m £m £m Cost At 1 January Transfers to disposal groups — Transfers from/to fellow subsidiaries — Currency translation and other adjustments Additions — — Disposals and write-off of fully amortised assets — — At 31 December Accumulated amortisation and impairment At 1 January Transfers to disposal groups — Transfers from/to fellow subsidiaries — Currency translation and other adjustments Disposals and write-off of fully amortised assets — — Charge for the year - continuing operations — — Write down of goodwill and intangible assets - continuing operations — — — — At 31 December Net book value at 31 December — Note: (1) Principally internally generated software. Bank £m £m Cost At 1 January Additions — Transfers from/to fellow subsidiaries Disposals and write-off of fully amortised assets — At 31 December Accumulated amortisation At 1 January Transfers from/to fellow subsidiaries Disposals and write-off of fully amortised assets — Charge for the year At 31 December Net book value at 31 December |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, plant and equipment | |
Property, plant and equipment | 17 Property, plant and equipment Group Long Short Computers Operating Investment Freehold leasehold leasehold and other lease properties premises premises premises equipment assets Total 2017 £m £m £m £m £m £m £m Cost or valuation At 1 January — Transfers to disposal groups — — Currency translation and other adjustments — — — Transfers from/to fellow subsidiaries — Additions Change in fair value of investment properties - continuing operations — — — — — Disposals and write-off of fully depreciated assets — At 31 December Accumulated impairment, depreciation and amortisation At 1 January — — Transfers to disposal groups — — Currency translation and other adjustments — — — — Transfers from/to fellow subsidiaries — — Disposals and write-off of fully depreciated assets — Charge for the year - from continuing operations — - from discontinued operations — — — — Write back of property, plant and equipment - from discontinued operations — — — — — At 31 December — Net book value at 31 December 2016 Cost or valuation At 1 January — Transfers to disposal groups — — Currency translation and other adjustments — Purchases of Nordisk properties from intermediate holding company — — — — — Transfers from/to fellow subsidiaries — — — Additions — Change in fair value of investment properties - continuing operations — — — — — Disposals and write-off of fully depreciated assets — At 31 December — Accumulated impairment, depreciation and amortisation At 1 January — — Transfers to disposal groups — — Currency translation and other adjustments — — Transfers from/to fellow subsidiaries — — — Disposals and write-off of fully depreciated assets — — Charge for the year - from continuing operations — — - from discontinued operations — — — Write down of property, plant and equipment - discontinuing operations — — — — — At 31 December — — Net book value at 31 December — Investment property valuations principally employ present value techniques that discount expected cash flows. Expected cash flows reflect rental income, occupancy and residual market values; valuations are sensitive to changes in these factors. The investment property fair value measurements are categorised as level 3. A 5% change in the most sensitive assumption, residual values, is £40 million. Valuations were carried out by qualified surveyors who are members of the Royal Institution of Chartered Surveyors, or an equivalent overseas body; property with a fair value of £183 million (2016 - £196 million) was valued by independent valuers. Rental income from investment properties was £81 million (2016 - £18 million). Direct operating expenses of investment properties were £9 million (2016 - £3 million). Bank Long Short Computers Freehold leasehold leasehold and other premises premises premises equipment Total 2017 £m £m £m £m £m Cost or valuation At 1 January Transfers to disposal groups Transfers from/to fellow subsidiaries Additions Disposals and write-off of fully depreciated assets At 31 December Accumulated impairment, depreciation and amortisation At 1 January Transfers to disposal groups — Transfers from/to fellow subsidiaries — Disposals and write-off of fully depreciated assets — Charge for the year At 31 December Net book value at 31 December 2016 Cost or valuation At 1 January Additions Disposals and write-off of fully depreciated assets At 31 December Accumulated impairment, depreciation and amortisation At 1 January Disposals and write-off of fully depreciated assets — Charge for the year At 31 December Net book value at 31 December |
Prepayments, accrued income and
Prepayments, accrued income and other assets | 12 Months Ended |
Dec. 31, 2017 | |
Prepayments, accrued income and other assets | |
Prepayments, accrued income and other assets | 18 Prepayments, accrued income and other assets Group Bank 2016 £m £m £m £m Prepayments Accrued income Tax recoverable — — Pension schemes in net surplus (see Note 4) Interests in associates — Other assets |
Discontinued operations and ass
Discontinued operations and assets and liabilities of disposal groups | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued operations and assets and liabilities of disposal groups | |
Discontinued operations and assets and liabilities of disposal groups | 19 Discontinued operations and assets and liabilities of disposal groups As part of implementing the legislation following the recommendations of the Independent Commission on Banking, NatWest Group Holdings Corp (NWGH), which is a direct subsidiary of NatWest and which wholly owns RBS Securities Inc (RBSSI), is due to be transferred to RBSG by 1 January 2019 in preparation for ring-fencing. Accordingly, NWGH is classified as a disposal group at 31 December 2017 and presented as a discontinued operation, with comparative income statement and related notes re-presented. On 1 January 2017 Ulster Bank (Ireland) Holdings Unlimited Company (UBIH) was sold to NatWest Holdings. NatWest Holdings is a subsidiary of RBS plc, the immediate parent company of the Group. Accordingly, UBIH was classified as a disposal group at 31 December 2016 and presented as a discontinued operation. (a) Profit from discontinued operations, net of tax £m £m £m NWGH Interest income — — 1 Interest expense Net interest income Other income Total income Operating expenses Loss before impairment losses Impairment losses — Operating loss before tax Tax credit/(charge) Loss from NWGH discontinued operations, net of tax UBIH Interest income — Interest expense — Net interest income — Other income — Total income — Operating expenses — (Loss)/profit before impairment losses — Impairment losses — Operating profit before tax — Tax credit/(charge) — Profit from UBIH discontinued operations, net of tax — Note: (1) Other comprehensive loss from discontinued operations for the year ended 31 December 2017 was £67 million. (b) Operating cash flows attributable to discontinued operations £m £m £m Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Net increase in cash and cash equivalents (c) Assets and liabilities of disposal groups £m £m Assets of disposal groups Cash and balances at central banks — Loans and advances to banks Loans and advances to customers Debt securities and equity shares Derivatives Property, plant and equipment Settlement balances — Other assets Liabilities of disposal groups Deposits by banks Customer accounts Derivatives Debt securities in issue — Subordinated liabilities Settlement balances — Short positions — Provisions for liabilities and charges Other liabilities At 31 December 2017, disposal groups comprise the third party net assets of NWHG due to be distributed to RBSG before 1 January 2019; costs to distribute are expected to be immaterial. At 31 December 2016, disposal groups comprise the third party net assets of UBIH and the Group’s interest in RBS International. Debt securities and equity shares are carried at fair value and are primarily classed as Level 1in the fair value hierarchy. |
Short positions
Short positions | 12 Months Ended |
Dec. 31, 2017 | |
Short positions | |
Short positions | 20 Short positions Group £m £m Debt securities - Government — - other issuers — — Note: (1) All short positions are classified as held-for-trading. |
Provision for liabilities and c
Provision for liabilities and charges | 12 Months Ended |
Dec. 31, 2017 | |
Provisions for liabilities and charges | |
Provisions for liabilities and charges | 21 Provisions for liabilities and charges Group Payment Other Residential Litigation and protection customer mortgage backed other Property Provisions for liabilities and charges insurance (1) redress securities (2) regulatory (3) and other (4) Total £m £m £m £m £m £m At 1 January 2017 Transfer to disposal groups — — Acquisition of business — — Currency translation and other movements — — Charge to income statement - from continuing operations — - from discontinued operations — — — Releases to income statement - from continuing operations — - from discontinued operations — — — — Provisions utilised At 31 December 2017 — Bank Payment Other Litigation protection customer and other Property Provisions for liabilities and charges insurance (1) redress regulatory (3) and other (4) Total £m £m £m £m £m At 1 January 2017 — Acquisition of business — — — Currency translation and other movements — — Charge to income statement Releases to income statement — Provisions utilised At 31 December 2017 Notes: (1) To reflect the increased volume of complaints following the FCA’s introduction of an August 2019 timebar as outlined in FCA announcement CP17/3 and the introduction of new Plevin (unfair commission) complaint handling rules, the Group increased its provision for PPI by £107 million in 2017 (2016 - £362 million, 2015 - £359 million, 2014 - £440 million) bringing the cumulative charge to £3.0 billion, of which £2.1 billion (70%) in redress and £0.3 billion in administrative expenses had been paid by 31 December 2017. Of the £3.0 billion cumulative charge, £2.7 billion relates to redress and £0.3 billion to administrative expenses. The principal assumptions underlying the Group’s provision in respect of PPI sales are: assessment of the total number of complaints that the Group will receive before 29 August 2019; the proportion of these that will result in redress; and the average cost of such redress. The number of complaints has been estimated from an analysis of the Group’s portfolio of PPI policies sold by vintage and by product. Estimates of the percentage of policyholders that will lodge complaints (the take up rate) and of the number of these that will be upheld (the uphold rate) have been established based on recent experience, guidance in FCA policy statements and the expected rate of responses from proactive customer contact. The average redress assumption is based on recent experience and FCA calculation rules. The table below shows the sensitivity of the provision to changes in the principal assumptions (all other assumptions remaining the same). Sensitivity Assumptions Actual to date Future expected Change in assumption % Consequential change in provision £m Customer initiated complaints (1) 1,423k 256k +/-5 +/-18 Uphold rate (2) +/-1 +/-4 Average redress (3) £1,681 £1,476 +/-5 +/-18 Processing costs per claim (4) £160 £142 +/- £10 +/- 1 Notes: (1) Claims received directly by the Group to date, including those received via CMCs and Plevin (commission) only. Excluding those for proactive mailings and where no PPI policy exists. (2) Average uphold rate per customer initiated claims received directly by the Group to end of timebar for both PPI (mis-sale) and Plevin (commission), excluding those for which no PPI policy exists. (3) Average redress for PPI (mis-sale) and Plevin (commission) pay-outs. (4) Processing costs per claim on a valid complaints basis, includes direct staff costs and associated overhead - excluding FOS fees. Interest that will be payable on successful complaints has been included in the provision as has the estimated cost to the Group of administering the redress process. There are uncertainties as to the eventual cost of redress which will depend on actual complaint volumes, take up and uphold rates and average redress costs. Assumptions related to these are inherently uncertain and the ultimate financial impact may be different from the amount provided. We continue to monitor the position closely and refresh the underlying assumptions. Background information in relation to PPI claims is given in Note 30. (2) In the US, the Group is subject to civil litigation and various investigations relating to its issuance and underwriting of US mortgage-backed securities (RMBS). Additional charges of US$92 million (£71 million) and US$333 million (£258 million) were taken in Q2 2017 and Q4 2017 respectively, in connection with these matters, resulting in a year to date charge of US$774 million (£600 million). Detailed descriptions of the Group’s legal proceedings and discussion of the associated uncertainties are given in Note 30. In July 2017, the RBS Group reached a settlement with the Federal Housing Finance Agency (FHFA) as conservator of Fannie Mae and Freddie Mac, to resolve claims by FHFA in relation to the RBS Group’s issuance and underwriting of approximately US$32 billion (£25 billion) of RMBS in the US. As part of the settlement, FHFA’s outstanding litigation against the RBS Group relating to those securities was withdrawn. Under the settlement, the RBS Group paid FHFA US$5.5 billion (£4.2 billion), of which US$754 million (£581 million) was reimbursed to the RBS Group under indemnification agreements with third parties. The cost to the RBS Group (net of the indemnity mentioned above) of US$4.75 billion (£3.65 billion) was largely covered by then-existing provisions but an incremental charge of US$196 million (£151 million) was recorded in Q2 2017 in relation to the settlement. (3) The Group is party to certain legal proceedings and regulatory investigations and continues to co-operate with a number of regulators. All such matters are periodically reassessed with the assistance of external professional advisers, where appropriate, to determine the likelihood of the Group incurring a liability and to evaluate the extent to which a reliable estimate of any liability can be made. Details of these investigations and a discussion of the nature of the associated uncertainties are given in Note 30. (4) The majority of property provisions relate to vacant leasehold property and comprise the present value of the shortfall between rentals payable and rentals receivable from sub-letting. Other provisions include restructuring provisions of £110 million principally in relation to termination benefits. |
Accruals and other liabilities
Accruals and other liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accruals and other liabilities | |
Accruals and other liabilities | 22 Accruals and other liabilities Group Bank £m £m £m £m Notes in circulation — — Current tax Accruals Deferred income Deferred tax (see Note 23) — — Other liabilities |
Deferred tax
Deferred tax | 12 Months Ended |
Dec. 31, 2017 | |
Deferred tax | |
Deferred tax | 23 Deferred tax Group Bank £m £m £m £m Deferred tax liability — — Deferred tax asset Net deferred tax asset Net deferred tax asset comprised: Group Available- Tax Accelerated for-sale Cash losses capital Deferred financial flow carried Pension allowances Provisions gains assets hedging forward Other Total £m £m £m £m £m £m £m £m £m At 1 January 2016 Acquisitions and disposals of subsidiaries — — — — (Credit)/charge to income statement - from continuing operations - from discontinued operations — — — — — — — Charge/(credit) to other comprehensive income — — — — Currency translation and other adjustments — — — At 1 January 2017 — Acquisitions and disposals of subsidiaries — — — — — — — Charge/(credit) to income statement — — — Charge/(credit) to other comprehensive income — — — — — — Currency translation and other adjustments — — — — At 31 December 2017 — Bank Available Tax Accelerated for sale Cash losses capital Deferred financial flow carried Pension allowances Provisions gains assets hedging forward Other Total £m £m £m £m £m £m £m £m £m At 1 January 2016 — — (Credit)/charge to income statement — Charge/(credit) to other comprehensive income — — — — — At 1 January 2017 — — — Charge/(credit) to income statement — — — Charge/(credit) to other comprehensive income — — — — — — Currency translation and other adjustments — — — — — — — At 31 December 2017 — — — Deferred tax assets in respect of unused tax losses are recognised if the losses can be used to offset probable future taxable profits after taking into account the expected reversal of other temporary differences. Recognised deferred tax assets in respect of tax losses are analysed further below. £m £m UK tax losses carried forward - National Westminster Bank Plc - Ulster Bank Limited UK tax losses Under UK tax rules, tax losses can be carried forward indefinitely. In periods from 1 April 2015, the Finance Act 2015 limits the offset of losses carried forward by UK banks to 50% of profits. In periods from 1 April 2016, the Finance Act 2016 further limits the offset of losses carried forward by UK banks to 25% of profits. The main rate of UK Corporation Tax reduced from 20% to 19% from 1 April 2017 and will reduce to 17% from 1 April 2020. Under the Finance (No 2) Act 2015, tax losses arising prior to 1 January 2016 are given credit in future periods at the main rate of UK corporation tax, excluding the Banking Surcharge rate (8%) introduced by the Act. Deferred tax assets and liabilities at 31 December 2017 take into account the reduced rates in respect of tax losses and non-banking temporary differences and where appropriate, the banking surcharge inclusive rate in respect of other banking temporary differences. National Westminster Bank Plc – A deferred tax asset of £541 million has been recognised in respect of total losses of £3,092 million. The losses arose principally as a result of significant impairment and conduct charges between 2009 and 2012 during challenging economic conditions in the UK banking sector. National Westminster Bank plc returned to tax profitability during 2015 and expects the deferred tax asset to be substantially consumed by future taxable profits by the end of 2024. A reduction in annual profits by £120 million would extend the recovery of the deferred tax asset by one year. Unrecognised deferred tax Deferred tax assets of £1,886 million (2016 - £2,665 million) have not been recognised in respect of tax losses and other temporary differences carried forward of £6,673 million (2016 - £8,000 million) in jurisdictions where doubt exists over the availability of future taxable profits. Of these losses and other temporary differences, £6,578 million expire after five years. The balance of tax losses and other temporary differences carried forward has no expiry date. Deferred tax liabilities of £104 million (2016 - £108 million) have not been recognised in respect of retained earnings of overseas subsidiaries and held-over gains on the incorporation of overseas branches. Retained earnings of overseas subsidiaries are expected to be reinvested indefinitely or remitted to the UK free from further taxation. No taxation is expected to arise in the foreseeable future in respect of held-over gains. Dividends received from overseas are largely exempt from UK tax. |
Subordinated liabilities
Subordinated liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Subordinated liabilities | |
Subordinated liabilities | 24 Subordinated liabilities Group Bank £m £m £m £m Dated loan capital Undated loan capital Preference shares The following tables analyse the remaining contractual maturity of subordinated liabilities by the final redemption date and by the next call date. Group 2020-2022 2023-2027 Thereafter Perpetual Total 2017 - final redemption £m £m £m £m £m £m £m Sterling — US dollar — — — — Euro — — — — Other — — — — — — Group Currently 2020-2022 2023-2027 Thereafter Perpetual Total 2017 - call date £m £m £m £m £m £m £m £m Sterling — — — US dollar — — — — — — Euro — — — — Other — — — — — — — — Group 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - final redemption £m £m £m £m £m £m £m Sterling — — US dollar — — — Euro — — Other — — — — — — Group Currently 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - call date £m £m £m £m £m £m £m £m Sterling — US dollar — — — — — — Euro — — Other — — — — — — — Bank 2020-2022 2023-2027 Thereafter Perpetual Total 2017 - final redemption £m £m £m £m £m £m £m Sterling — US dollar — — — — Euro — — — — — Bank Currently 2020-2022 2023-2027 Thereafter Perpetual Total 2017 - call date £m £m £m £m £m £m £m £m Sterling — — — US dollar — — — — — — Euro — — — — — — — — — Bank 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - final redemption £m £m £m £m £m £m £m Sterling — — US dollar — — — — Euro — — — — — — Bank Currently 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - call date £m £m £m £m £m £m £m £m Sterling — US dollar — — — — — — Euro — — — — — — — Capital Transfers from fellow subsidiaries treatment £m £m National Westminster Bank Plc SEK 3 million dated notes (1) Tier 1 — Note: (1) Nordisk Issuance - transferred from RBS to NatWest in 2016 in preparation for ring-fencing. Capital Redemptions in the period (values as at date of transaction) treatment £m £m National Westminster Bank Plc US$ 300 million 8.6250% non-cumulative preference shares (callable) Tier 1 — Coutts & Company € 20 million floating rate subordinated loan capital 2023 Tier 2 — £30 million floating rate subordinated loan capital - 2023 Tier 2 — £13.3 million 0.7294% undated subordinated notes Tier 2 — US$ 15 million 0.4691% undated subordinated notes Tier 2 — Ulster Bank Limited £100 million floating rate subordinated loan capital 2019 Tier 2 — € 120 million perpetual floating rate notes 2020 Tier 2 — € 60 million perpetual floating rate notes 2020 Tier 2 — € 280 million subordinated loan capital December 2022 Tier 2 — € 400 million subordinated loan December 2017 Tier 2 — — Capital Dated loan capital treatment £m £m National Westminster Bank Plc £300 million 6.50% notes 2021 (not callable) Tier 2 £2,000 million floating rate notes 2023 (callable January 2018) Tier 2 £1,000 million floating rate notes 2019 (callable quarterly) Tier 2 Notes: (1) In the event of certain changes in tax laws, dated loan capital issues may be redeemed in whole, but not in part, at the option of the issuer, at the principal amount thereof plus accrued interest, subject to prior regulatory approval. (2) Except as stated above, claims in respect of the Group’s dated loan capital are subordinated to the claims of other creditors. None of the Group’s dated loan capital is secured. (3) Interest on all floating rate subordinated notes is calculated by reference to market rates. Capital Undated loan capital treatment £m £m National Westminster Bank Plc US$193 million floating rate notes (callable semi-annually) Tier 2 US$229 million floating rate notes (callable semi-annually) Tier 2 US$285 million floating rate notes (callable semi-annually) Tier 2 € 178 million floating rate notes (callable quarterly) Tier 2 € 100 million floating rate notes (callable quarterly) Tier 2 £53 million 7.125% notes (callable every five years from October 2022) Tier 2 £35 million 11.50% notes (callable December 2022) (1) Tier 2 £700 million floating rate notes (callable every five years from January 2018) Tier 2 £700 million floating rate notes (callable quarterly from September 2016) Tier 2 Notes: (1) Exchangeable at the option of the issuer into 8.392% (gross) non-cumulative preference shares of £1 each of National Westminster Bank Plc at any time. (2) The company can satisfy interest payment obligations by issuing sufficient ordinary shares to appointed Trustees to enable them, on selling these shares, to settle the interest payment. (3) Except as stated above, claims in respect of the Group’s undated loan capital are subordinated to the claims of other creditors. None of the Group’s undated loan capital is secured. (4) In the event of certain changes in tax laws, undated loan capital issues may be redeemed in whole, but not in part, at the option of the Group, at the principal amount thereof plus accrued interest, subject to prior regulatory approval. (5) Interest on all floating rate subordinated notes is calculated by reference to market rates. Capital Preference shares (1) treatment £m £m National Westminster Bank Plc £140 million 9.00% Series A non-cumulative preference shares of £1 (not callable) Tier 1 US$300 million 8.625% Series C non-cumulative preference shares of US$25 (callable quarterly) Tier 1 — Note: (1) Further details of the contractual terms of the preference shares are given in Note 25. The Group has now resumed payments on all discretionary non-equity capital instruments following the end of the European Commission ban in 2012. Future coupons and dividends on hybrid capital instruments will only be paid subject to, and in accordance with, the terms of the relevant instruments. The preference shares issued by the company are classified as liabilities; these securities remain subject to the capital maintenance rules of the Companies Act 2006. |
Share capital and reserves
Share capital and reserves | 12 Months Ended |
Dec. 31, 2017 | |
Share capital and reserves | |
Share capital and reserves | 25 Share capital and reserves Number of shares - millions Allotted, called up and fully paid £m £m Ordinary shares of £1 Non-cumulative preference shares of £1 Non-cumulative preference shares of US$25 — — Ordinary shares The bank did not pay an ordinary dividend in 2017 (2016 - nil million; 2015 - nil) Preference shares The 9% non-cumulative preference shares Series A of £1 each are non-redeemable. In December 2017 the non-cumulative preference shares Series C of US$25 were redeemed in whole. The holders of sterling preference shares are entitled, on the winding-up of the Bank, to priority over the ordinary shareholders as regards payment of capital. Otherwise the holders of preference shares are not entitled to any further participation in the profits or assets of the Bank and accordingly these shares are classified as non-equity shares. The holders of sterling preference shares are not entitled to receive notice of, attend, or vote at any general meeting unless the business of the meeting includes the consideration of a resolution for the winding-up of the Bank or the sale of the whole of the business of the Bank or any resolution directly affecting any of the special rights or privileges attached to any of the classes of preference shares. Under IFRS, the Group’s preference shares are classified as debt and are included in subordinated liabilities on the balance sheet (see Note 24). Reserves 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. UK law prescribes that only reserves of the Bank are taken into account for the purpose of making distributions and the permissible applications of the share premium account and capital redemption reserve of £608 million (2016 and 2015 - £459 million) included within other reserves. The Group received capital contributions of £51 million (2016 - £1,300 million; 2015 - £800 million) from the holding company for which no additional share capital was issued. As such, these were recorded as capital contributions in retained earnings. The Group 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 parent or the redemption of shares or subordinated capital by regulated entities may be subject to maintaining the capital resources required by the relevant regulator. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases | |
Leases | 26 Leases Minimum amounts receivable under non-cancellable leases Operating lease Finance lease contracts and hire purchase agreements assets: Gross Present value Other Future Present future minimum amounts adjustments movements Drawdowns value lease rentals Year in which receipt will occur £m £m £m £m £m £m 2017 Within 1 year After 1 year but within 5 years — After 5 years — Total 2016 Within 1 year — — After 1 year but within 5 years — — After 5 years — — Total — — £m £m £m Nature of operating lease assets on the balance sheet Transportation — — Cars and light commercial vehicles — — Other — — — — Amounts recognised as income and expense Finance leases - contingent rental income — Operating leases - minimum rentals payable Finance lease contracts and hire purchase agreements Accumulated allowance for uncollectable minimum receivables — — There were no amounts recognised as income and expense in discontinued operations (2016 - £11 million; 2015 - £11 million) in relation to operating leases – minimum rentals payable. 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 (refer to page 131 and 132). 2017 2016 Year in which residual value will be recovered Year in which residual value will be recovered After 1 year After 2 years After 1 year After 2 years Within 1 but within but within After 5 Within 1 but within but within After 5 year 2 years 5 years years Total year 2 years 5 years years Total £m £m £m £m £m £m £m £m £m £m Operating leases - transportation — — — — — - cars and light commercial vehicles — — — — — — - other — — — — — Finance lease contracts Hire purchase agreements — — — — — — Acting as a lessor the 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. |
Structured entities
Structured entities | 12 Months Ended |
Dec. 31, 2017 | |
Structured entities | |
Structured entities | 27 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 to segregate custodial duties from the fund management advice. Consolidated structured entities Securitisations In a securitisation, assets, or interests in a pool of assets, are transferred generally to a SE which then issues liabilities to third party investors. The majority of securitisations are supported through liquidity facilities or other credit enhancements. The Group arranges securitisations to facilitate client transactions and undertakes own asset securitisations to sell or to fund portfolios of financial assets. The Group also acts as an underwriter and depositor in securitisation transactions in both client and proprietary transactions. The Group’s 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 the RBS Group, 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 the Group’s balance sheet. Group 2017 2016 Debt securities in issue Debt securities in issue Held by third Held by the Held by third Held by the Asset type Assets parties Group (1) Total Assets parties Group (1) Total £m £m £m £m £m £m £m £m Mortgages - UK (2) — — — — — — — - Irish — — — — - US — — — — — — — — — Cash deposit — Total — Notes: (1) Debt securities retained by the Group may be pledged with central banks. (2) These assets have been transferred to SEs that are consolidated by RBS plc. Covered bond programme Certain loans and advances to customers have been assigned to bankruptcy remote limited liability partnerships to provide security for issues of debt securities by the RBS Group. The Group retains all of the risks and rewards of these loans. The partnerships are consolidated by the RBS Group, the loans retained on the RBS Group’s balance sheet and the related covered bonds included within debt securities in issue of the RBS Group. At 31 December 2017, £8,915 million of mortgages have been assigned to bankruptcy remote limited liability partnerships to provide security for issues of debt securities by the RBS Group (2016 - £7,624 million). Unconsolidated structured entities The Group’s interests in unconsolidated structured entities are analysed below. Asset backed Securitisation Investment vehicles funds and other Total 2017 £m £m £m Loans and advances to customers — Debt securities — Total Liquidity facilities/loan commitments — Total exposure 2016 Loans and advances to customers — Derivative assets — Derivatives liabilities Total Guarantees — Total exposure Notes: (1) Income from interests in unconsolidated structured entities includes interest receivable, changes in fair value and other income less impairments. (2) A sponsored entity is a structured entity established by the Group where the Group provides liquidity and/or credit enhancements or provides ongoing services to the entity. The Group can act as sponsor for its own or for customers’ transactions. (3) In 2017 no assets were transferred into sponsored structured entities (2016 - nil) which are not consolidated by the Group and for which the Group held no interest at 31 December 2017. The income arising from sponsored entitles where the Group holds no interest at year end was nil (2016 - nil). |
Asset transfers
Asset transfers | 12 Months Ended |
Dec. 31, 2017 | |
Asset transfers | |
Asset transfers | 28 Asset transfers Under IAS 39 a financial asset is transferred if the Group either (a) transfers the contractual rights to receive the asset’s cash flows; or (b) retains the right to the asset’s cash flows but assumes a contractual obligation to pay those cash flows to a third party. Following a transfer the financial asset will be derecognised; not derecognised and retained in full on the Group’s balance sheet; or continue to be recognised on the balance sheet to the extent of the Group’s continuing involvement. Transfers that do not qualify for derecognition Securities repurchase agreements and lending transactions The Group enters into securities repurchase agreements and securities lending transactions under which it transfers securities in accordance with normal market practice. Generally, the agreements require additional collateral to be provided if the value of the securities falls below a predetermined level. Under standard terms for repurchase transactions in the UK and US markets, the recipient of collateral has an unrestricted right to sell or repledge it, subject to returning equivalent securities on settlement of the transaction. Securities sold under repurchase transactions are not derecognised if the Group retains substantially all the risks and rewards of ownership. The fair value (and carrying value) of securities transferred under such repurchase transactions included on the balance sheet, are set out below. All of these securities could be sold or repledged by the holder. Group Assets subject to securities repurchase agreements or security lending transactions £m £m Debt securities (1) — Note: (1) Associated liabilities were nil (2016 - £2,891 million). The following table analyses assets that have been transferred but have failed the derecognition rules under IAS 39 and therefore continue to be recognised on the Bank’s balance sheet. 2017(1) Asset type £m £m Mortgages UK mortgages - securitisations (2) — UK mortgages - covered bond programme Notes: (1) The associated liabilities are £8,904 million (2016 - £8,866 million). (2) Creditors have recourse is to these assets only, the fair value of transferred assets and fair value of associated liabilities was not materially different. |
Capital resources
Capital resources | 12 Months Ended |
Dec. 31, 2017 | |
Capital resources | |
Capital resources | 29 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 relevant transitional basis for the significant legal entities within the Group are set out below. NatWest NatWest £m £m Shareholders’ equity (excluding non-controlling interests) Regulatory adjustments and deductions Defined benefit pension fund adjustment Deferred tax assets Prudential valuation adjustments Qualifying deductions exceeding AT1 capital Goodwill and other intangible assets Expected losses less impairments Instruments of financial sector entities where the institution has a significant investment Significant investments in excess of secondary capital — Other regulatory adjustments CET1 capital Additional Tier 1 (AT1) capital Qualifying instruments and related share premium subject to phase out Tier 1 capital Instruments of financial sector entities where the institution has a significant investment Qualifying deductions exceeding AT1 capital Tier 1 capital Qualifying Tier 2 capital Qualifying instruments and related share premium Instruments of financial sector entities where the institution has a significant investment Tier 2 capital Total regulatory capital In the management of capital resources, the Group is governed by the RBS Group’s 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, the 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, excluding capital buffers should be not less than 8% with a Common equity Tier 1 component of not less than 4%. The Group has complied with the PRA’s capital requirements throughout the year. A number of subsidiaries and sub-groups within the 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 the RBS Group to lend money to other members of the RBS Group may be subject to restrictions such as local regulatory or legal requirements, the availability of reserves and financial and operating performance. |
Memorandum items
Memorandum items | 12 Months Ended |
Dec. 31, 2017 | |
Memorandum items | |
Memorandum items | 30 Memorandum items Contingent liabilities and commitments The amounts shown in the table below are intended only to provide an indication of the volume of business outstanding at 31 December 2017. Although the Group is exposed to credit risk in the event of non-performance of the obligations undertaken by customers, the amounts shown do not, and are not intended to, provide any indication of the Group’s expectation of future losses. Group Bank £m £m £m £m Contingent liabilities and commitments Guarantees and assets pledged as collateral security Other contingent liabilities Standby facilities, credit lines and other commitments Note: (1) In the normal course of business, the Bank guarantees specified third party liabilities of certain subsidiaries; it also gives undertakings that individual subsidiaries will fulfil their obligations to third parties under contractual or other arrangements. 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. The 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 the Group’s normal credit approval processes. Guarantees - the Group gives guarantees on behalf of customers. A financial guarantee represents an irrevocable undertaking that the Group will meet a customer’s specified obligations to a third party if the customer fails to do so. The maximum amount that the Group could be required to pay under a guarantee is its principal amount as disclosed in the table above. The 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 the 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 the 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. Capital Support Deed The Bank, together with other members of the RBS Group, is party to a Capital Support Deed (CSD). Under the terms of the CSD, the Bank may be required, if compatible with its legal obligations, to make distributions on, or repurchase or redeem, its ordinary shares. The amount of this obligation is limited to the Bank’s capital resources in excess of the capital and financial resources needed to meet its regulatory requirements. The Bank may also be obliged to make onward distribution to its ordinary shareholders of dividends or other capital distributions received from subsidiaries that are party to the CSD. The CSD also provides that, in certain circumstances, funding received by the Bank from other parties to the CSD becomes immediately repayable, such repayment being limited to the Bank’s available resources. Trustee and other fiduciary activities In its capacity as trustee or other fiduciary role, the Group may hold or place assets on behalf of individuals, trusts, companies, pension schemes and others. The assets and their income are not included in the Group’s financial statements. The Group earned fee income of £213 million (2016 - £168 million; 2015 - £230 million) from these activities. The Financial Services Compensation Scheme The Financial Services Compensation Scheme (FSCS), the UK’s statutory fund of last resort for customers of authorised financial services firms, pays compensation if a firm is unable to meet its obligations. The FSCS funds compensation for customers by raising management expenses levies and compensation levies on the industry. In relation to protected deposits, each deposit-taking institution contributes towards these levies in proportion to their share of total protected deposits on 31 December of the year preceding the scheme year (which runs from 1 April to 31 March), subject to annual maxima set by the Prudential Regulation Authority. In addition, the FSCS has the power to raise levies on a firm that has ceased to participate in the scheme and is in the process of ceasing to be authorised for the costs that it would have been liable to pay had the FSCS made a levy in the financial year it ceased to be a participant in the scheme. The FSCS has borrowed from HM Treasury (HMT) to fund compensation costs associated with the failure of Bradford & Bingley, Heritable Bank, Kaupthing Singer & Friedlander, Landsbanki ‘Icesave’ and London Scottish Bank plc. The industry repaid the remaining balance on the non-Bradford and Bingley loans during the period. The Bradford and Bingley loan is interest bearing with the reference rate being the higher of 12 month LIBOR plus 111 basis points or the relevant gilt rate for the equivalent cost of borrowing from HMT. The FSCS and HM Treasury have agreed that the period of these loans will reflect the expected timetable for recoveries from the estate of Bradford & Bingley. The total interest element levied on the industry in the 2017/18 scheme year was £202 million (£337 million in the 2016/17 scheme year). The Group has accrued £8.5 million for its share of estimated FSCS levies. 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. Group Bank £m £m £m £m Operating leases Minimum rentals payable under non-cancellable leases (1) - within 1 year - after 1 year but within 5 years - after 5 years Contracts to purchase goods or services (2) — — Notes: (1) Predominantly property leases. (2) Of which due within 1 year: £25 million (2016 - £31 million). Litigation, investigations and reviews NatWest Group and certain members of the 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. The 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. While the outcome of these Matters is inherently uncertain, the directors believe that, based on the information available to them, appropriate provisions have been made in respect of the Matters as at 31 December 2017 (refer to Note 21). 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 the 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. The 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. In respect of certain matters described below, we have established a provision and in certain of those matters, we have indicated that we have established a provision. The RBS Group generally does not disclose information about the establishment or existence of a provision for a particular matter where disclosure of the information can be expected to prejudice seriously the RBS Group’s position in the matter. There are situations where the 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 the 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 Group may not be directly involved in all of the following litigation, investigations and reviews but due to the potential implications to the RBS Group of such litigation, investigations and reviews, if a final outcome is adverse to the RBS Group it may also have an adverse effect on the Group. 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 the RBS Group has recognised. Where (and as far as) liability cannot be reasonably estimated, no provision has been recognised. Other than those discussed below, no member of the Group is or has been involved in governmental, legal or regulatory proceedings (including those which are pending or threatened) that are expected to be material, individually or in aggregate. The 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 the Group’s litigation, investigations and reviews, see the Risk Factor relating to legal, regulatory and governmental actions and investigations set out on page 198. Litigation UK 2008 rights issue shareholder litigation Between March and July 2013, claims were issued in the High Court of Justice of England and Wales by sets of current and former shareholders, against RBSG (and in one of those claims, also against certain former individual officers and directors) alleging that untrue and misleading statements and/or improper omissions, in breach of the Financial Services and Markets Act 2000, were made in connection with the rights issue announced by the RBS Group on 22 April 2008. These and other similar threatened claims were consolidated by the Court via a Group Litigation Order. Since then, further High Court claims have been issued against RBS under the Group Litigation Order. Prior to the settlement described below, the aggregate value of the shares subscribed for at 200 pence per share by all of the then claimant shareholders was approximately £4 billion. In December 2016 the RBS Group concluded full and final settlements with four of the five shareholder groups representing 78 per cent of the claims by value. Further full and final settlements, without any admission of liability were reached and the RBS Group has now concluded the action with over 98 per cent of the claimants. The aggregate settlement figure available to claimants is £900 million, for which a previously established provision is in place, and is subject to validation of claims. Litigation, investigations and reviews continued The Court directed that any claimant choosing not to enter the settlement should, by 28 July 2017, issue an application to restore the proceedings. No such application was made. Residential mortgage-backed securities (RMBS) litigation in the US RBS Group companies have been named as defendants in their various roles as issuer, depositor and/or underwriter in a number of claims in the US that relate to the securitisation and securities underwriting businesses. These cases include actions by individual purchasers of securities and a purported class action suit. In general, plaintiffs in these actions claim that certain disclosures made in connection with the relevant offerings of RMBS contained materially false or misleading statements and/or omissions regarding the underwriting standards pursuant to which the mortgage loans underlying the securities were issued. RBS Securities Inc. remains a defendant in a lawsuit relating to RMBS issued by Nomura Holding America Inc. (Nomura) and subsidiaries, filed by the US Federal Housing Finance Agency (FHFA) as conservator for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). In May 2015, following a trial, the United States District Court for the Southern District of New York issued a written decision in favour of FHFA, finding, as relevant to the RBS Group, that the offering documents for four Nomura-issued RMBS for which RBS Securities Inc. served as an underwriter contained materially misleading statements about the mortgage loans that backed the securitisations. Nomura and the RBS Group appealed. On 28 September 2017, the court’s judgment against Nomura and RBS Securities Inc. was affirmed by the United States Court of Appeals for the Second Circuit. RBS Securities Inc. estimates that its net exposure under the court’s judgment is approximately US$318 million, which consists of the difference between the amount of the judgment against RBS Securities Inc. (US$636 million) and the estimated market value of the four RMBS that FHFA would return to RBS Securities Inc. pursuant to the judgment, plus the costs and attorney’s fees that will be due to FHFA if the judgment is upheld. The estimated net exposure in this matter is covered by an existing provision. The judgment is stayed pending defendants’ request for review by the United States Supreme Court, though post-judgment interest on the judgment amount will accrue while that request and any further review is pending. RBS Securities Inc. intends to pursue a contractual claim for indemnification against Nomura with respect to any losses it suffers as a result of this matter. RBS Group companies are also defendants in a purported RMBS class action entitled New Jersey Carpenters Health Fund v. Novastar Mortgage Inc. et al., which remains pending in the United States District Court for the Southern District of New York. The RBS Group has settled this matter for US$55.3 million, which has been paid into escrow pending court approval of the settlement. In addition to the above, the remaining RMBS lawsuits against RBS Group companies consist of cases filed by the Federal Home Loan Banks of Boston and Seattle and the Federal Deposit Insurance Corporation that together involve the issuance of less than US$1 billion of RMBS issued primarily from 2005 to 2007. As at 31 December 2017, the Group’s total aggregate of provisions in relation to certain of the RMBS litigation matters (described immediately above) and RMBS and other securitised products investigations (set out under “Investigations and reviews” on page 154) was £1.7 billion (US$2.3 billion) which has been transferred to disposal groups. The duration and outcome of these investigations and litigation matters remain uncertain, including in respect of whether settlements for all or any of such matters may be reached. The RBS Group continues to caution that, in connection with RMBS litigation matters and RMBS investigations taken as a whole, further substantial provisions and costs may be recognised and, depending on the final outcomes, other adverse consequences may occur. London Interbank Offered Rate (LIBOR) and other rates litigation Certain members of the Group have been named as defendants in a number of class actions and individual claims filed in the US with respect to the setting of LIBOR and certain other benchmark interest rates. The complaints are substantially similar and allege that certain members of the Group and other panel banks individually and collectively violated various federal laws, including the US commodities and antitrust laws, and state statutory and common law, as well as contracts, by manipulating LIBOR and prices of LIBOR-based derivatives in various markets through various means. Most of the USD LIBOR-related actions in which RBS Group companies are defendants, including all purported class actions relating to USD LIBOR, were transferred to a coordinated proceeding in the United States District Court for the Southern District of New York. In the coordinated proceeding, consolidated class action complaints were filed on behalf of (1) exchange-based purchaser plaintiffs, (2) over-the-counter purchaser plaintiffs, and (3) corporate debt purchaser plaintiffs. Over 35 other USD LIBOR-related actions naming the RBS Group as a defendant, including purported class actions on behalf of lenders and mortgage borrowers, were also made part of the coordinated proceeding. Litigation, investigations and reviews continued In a series of orders issued in 2013 and 2014, the district court overseeing the coordinated USD proceeding dismissed class plaintiffs’ antitrust claims and claims under RICO (Racketeer Influenced and Corrupt Organizations Act), but declined to dismiss (a) certain Commodity Exchange Act claims on behalf of persons who transacted in Eurodollar futures contracts and options on futures contracts on the Chicago Mercantile Exchange (on the theory that defendants’ alleged persistent suppression of USD LIBOR caused loss to plaintiffs), and (b) certain contract and unjust enrichment claims on behalf of over-the-counter purchaser plaintiffs who transacted directly with a defendant. On 23 May 2016, the district court’s dismissal of plaintiffs’ antitrust claims was vacated by the United States Court of Appeals for the Second Circuit, which held that plaintiffs have adequately pled antitrust injury and an antitrust conspiracy, but remanded to the lower court for further consideration on the question of whether plaintiffs possess the requisite antitrust standing to proceed with antitrust claims. In a decision issued in December 2016, the district court held that it lacks personal jurisdiction over the RBS Group with respect to certain claims asserted in the coordinated proceeding. Following that decision, the RBS Group has been dismissed from each of the USD LIBOR-related class actions in the coordinated proceeding, subject to appeal, although certain non-class cases, on behalf of particular plaintiffs, remain pending. On 10 July 2017, the US Federal Deposit Insurance Corporation (FDIC), on behalf of 39 failed US banks, served a claim in the High Court of Justice of England and Wales against the RBS Group, other LIBOR panel banks and the British Bankers’ Association, alleging collusion with respect to the setting of USD LIBOR. The action alleges that the defendants breached English and European competition law as well as asserting common law claims of fraud under US law. The FDIC previously asserted many of the same US law USD LIBOR-related claims against the RBS Group and others in a lawsuit pending in the United States District Court for the Southern District of New York, though most of the claims in that case have been dismissed, as a result of a series of rulings by that court. The RBS Group’s defence to the High Court claim was filed on 24 November 2017. Certain members of the Group have also been named as defendants in two class actions relating to JPY LIBOR and Euroyen TIBOR, both pending before the same judge in the United States District Court for the Southern District of New York. In the first case, relating to Euroyen TIBOR futures contracts, the court dismissed plaintiffs’ antitrust claims in March 2014, but declined to dismiss their claims under the Commodity Exchange Act for price manipulation, which are proceeding in the discovery phase. In the second case, relating to other derivatives allegedly tied to JPY LIBOR and Euroyen TIBOR, the court dismissed the case on 10 March 2017 on the ground that the plaintiffs lack standing. Plaintiffs have commenced an appeal of that decision. Certain members of the Group have also been named as defendants in class actions relating to (i) Euribor, (ii) Swiss Franc LIBOR (iii) Pound sterling LIBOR, (iv) the Singapore Interbank Offered Rate and Singapore Swap Offer Rate, and (v) the Australian Bank Bill Swap Reference Rate, all of which are pending before other judges in the United States District Court for the Southern District of New York. On 21 February 2017, the court in the action relating to Euribor dismissed all claims alleged against the RBS Group for lack of personal jurisdiction. On 18 August 2017, the court in the action relating to the Singapore Interbank Offered Rate and Singapore Swap Offer Rate dismissed all claims against the RBS Group for lack of personal jurisdiction; however, the court allowed the plaintiffs to replead their complaint, and defendants’ renewed motion to dismiss the amended complaint is pending. On 25 September 2017, the court in the action relating to Swiss Franc LIBOR dismissed all claims against all defendants on various grounds; however, the court held that it has personal jurisdiction over RBS and allowed the plaintiffs to replead their complaint, and defendants’ renewed motion to dismiss the amended complaint is pending. The other matters described in this paragraph (relating to Pound Sterling LIBOR and the Australian Bank Bill Swap Reference Rate) are subject to motions to dismiss that are currently pending. Details of UK litigation claims in relation to the sale of interest rate hedging products (IRHPs) involving LIBOR-related allegations are set out under “Interest rate hedging products litigation” on 162. Details of LIBOR investigations involving the RBS Group are set out under ‘‘Investigations and reviews’’ on page 155. ISDAFIX antitrust litigation Beginning in September 2014, The Royal Bank of Scotland plc (RBS plc) and a number of other financial institutions were named as defendants in several purported class action complaints (subsequently consolidated into one complaint) in the United States District Court for the Southern District of New York alleging manipulation of USD ISDAFIX rates. In 2015, RBS plc reached an agreement to settle this matter for US$50 million, and that settlement received preliminary approval from the Court in May 2016. The settlement amount has been paid into escrow pending the final court approval of the settlement. FX antitrust litigation In 2015, Group companies settled a consolidated antitrust class action (the “consolidated action”), pending in the United States District Court for the Southern District of New York, asserting claims on behalf of persons who entered into (a) over-the-counter foreign exchange (FX) spot transactions, forwards, swaps, futures, options or other FX transactions the trading or settlement of which is related in any way to FX rates, or (b) exchange-traded FX instruments. Following the Court’s preliminary approval of the settlement in December 2015, the RBS Group paid the total settlement amount (US$255 million) into escrow pending final court approval of the settlement. On 24 March 2017, the court dismissed a second FX-related antitrust class action, holding that the alleged class of “consumers and end-user businesses” lacked standing to pursue antitrust claims. The plaintiffs in that case have since filed an amended complaint. The defendants made a renewed motion to dismiss the complaint but the court denied that motion on 3 August 2017. As a result, the discovery phase has commenced. The RBS Group and the other defendants are seeking reconsideration of the court’s decision regarding standing or, in the alternative, permission to take an immediate appeal to the United States Court of Appeals for the Second Circuit. A third FX-related class action, asserting Employee Retirement Income Security Act claims on behalf of employee benefit plans that engaged in FX transactions, including claims based on alleged non-collusive FX-related conduct, was dismissed in September 2016 on the ground that the plaintiffs failed to plead that the defendants had ERISA-based fiduciary duties to the plaintiffs. The plaintiffs’ appeal of this dismissal remains pending. Beginning in September 2016, several additional class action complaints were filed in the United States District Court for the Southern District of New York asserting claims on behalf of “indirect purchasers” of FX instruments. The plaintiffs define “indirect purchasers” as persons who were indirectly affected by FX instruments that others entered into directly with defendant banks or on exchanges. The consolidated amended complaint for these matters alleges that certain RBS Group companies and other defendant banks caused damages to the “indirect purchasers” by conspiring to restrain trade in the FX spot market. The plaintiffs have asserted claims under federal and state antitrust laws. The RBS Group and the other defendants have filed a motion to dismiss, which remains pending. On 12 July 2017, Alpari (US) LLC (Alpari) filed a class action complaint against RBS Group companies in the United States District Court for the Southern District of New York. The complaint alleges that the RBS Group breached contracts with Alpari and other counterparties by rejecting FX orders placed over electronic trading platforms through the application of a function referred to as “Last Look”, and that the rejected orders were later filled at prices less favourable to putative class members. The complaint contains claims for breach of contract and unjust enrichment. The RBS Group has filed a motion to compel arbitration of Alpari’s claims or, in the alternative, to dismiss those claims for improper venue. In September 2015, certain members of the Group, as well as a number of other financial institutions, were named as defendants in two class actions filed in Ontario and Quebec on behalf of persons in Canada who entered into foreign exchange transactions or who invested in funds that entered into foreign exchange transactions, alleging that the defendants violated the Canadian Competition Act by conspiring to manipulate the prices of currency trades. The RBS Group settled the matters for approximately CAD 13 million. The settlement amount has been paid and the settlement has received final court approval. Certain other foreign exchange transaction related claims have been or may be threatened against the RBS Group in other jurisdictions. The RBS Group cannot predict whether any of these claims will be pursued, but expects that several may. US Treasury securities antitrust litigation Beginning in July 2015, numerous class action antitrust complaints were filed in US federal courts against a number of primary dealers of US Treasury securities, including RBS Securities Inc.. The consolidated amended complaint for these matters, pending in the United States District Court for the Southern District of New York, alleges that RBS Securities Inc. and the other defendants rigged the US Treasury securities auction bidding process to deflate prices at which they bought such securities and colluded to increase the prices at which they sold such securities to plaintiffs. The complaint asserts claims under the US antitrust laws on behalf of persons who transacted in US Treasury securities or derivatives based on such instruments, including futures and options. The defendants anticipate filing a motion to dismiss the operative complaint in this matter. Swaps antitrust litigation Beginning in November 2015, RBS plc and other members of the Group, as well as a number of other interest rate swap dealers, were named as defendants in a number of class action antitrust complaints filed in the United States District Court for the Southern District of New York and the United States District Court for the Northern District of Illinois. The complaints, filed on behalf of persons who entered into interest rate swaps with the defendants, allege that the defendants violated the US antitrust laws by restraining competition in the market for interest rate swaps through various means and thereby caused inflated bid-ask spreads for interest rate swaps, to the alleged detriment of the plaintiff class. In addition, two complaints containing similar allegations of collusion were filed in United States District Court for the Southern District of New York on behalf of TeraExchange and Javelin, who allege that they would have successfully established exchange-like trading of interest rate swaps if the defendant dealers had not unlawfully conspired to prevent that from happening through boycotts and other means, in violation of the U.S. antitrust laws. In June 2016, all of these matters were transferred to the United States District Court for the Southern District of New York for coordinated or consolidated pretrial proceedings. In July 2017, the Court overseeing the above matters dismissed all claims against RBS Group companies relating to the 2008 - 2012 time period, but declined to dismiss certain antitrust and unjust enrichment claims covering the 2013 - 2016 time period. Discovery is ongoing. On 8 June 2017, TeraExchange filed another complaint against the RBS Group and others in the United States District Court for the Southern District of New York, this time relating to credit default swaps instead of interest rate swaps. TeraExchange alleges it would have established exchange-like trading of credit default swap if the defendant dealers had not engaged in an unlawful antitrust conspiracy. The RBS Group has filed a motion to dismiss the complaint in this matter Thornburg adversary proceeding RBS Securities Inc. and certain other RBS Group companies, as well as several other financial institutions, are defendants in an adversary proceeding filed in the US bankruptcy court in Maryland by the trustee for TMST, Inc. (formerly known as Thornburg Mortgage, Inc.). The trustee seeks recovery of transfers made under certain restructuring agreements as, among other things, avoidable fraudulent and preferential conveyances and transfers. In September 2014, the Court largely denied the defendants’ motion to dismiss this matter and, as a result, discovery is ongoing. Interest rate hedging products litigation The RBS Group is dealing with a large number of active litigation claims in relation to the sale of interest rate hedging products (IRHPs). In general claimants allege that the relevant interest rate hedging products were mis-sold to them, with some also alleging the RBS Group made misrepresentations in relation to LIBOR. Claims have been brought by customers who were considered under the UK Financial Conduct Authority (FCA) redress programme, as well as customers who were outside of the scope of that programme, which was closed to new entrants on 31 March 2015. The RBS Group encouraged those customers that were eligible to seek redress under the FCA redress programme to participate in that programme. The 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. Property Alliance Group (PAG) v The Royal Bank of Scotland plc was the leading case before the English High Court involving both IRHP mis-selling and LIBOR misconduct allegations. The amount claimed was £34.8 million and the trial ended in October 2016. In December 2016 the Court dismissed all of PAG’s claims. PAG appealed that decision, and the appeal hearing closed on 8 February 2018. The judgment is awaited. The decision (subject to the appeal by PAG) may have significance to other similar LIBOR-related cases currently pending in the English courts, some of which involve substantial amounts. The case of London Bridge Holdings Ltd and others v RBS plc remains stayed pending the outcome of the PAG appeal. The sum claimed i |
Net cash flow from operating ac
Net cash flow from operating activities | 12 Months Ended |
Dec. 31, 2017 | |
Net cash flow from operating activities | |
Net cash flow from operating activities | 31 Net cash flow from operating activities Group Bank £m £m £m £m £m £m Operating profit/(loss) before tax - continuing operations Loss before tax - discontinued operations — — — Decrease/(increase) in prepayments and accrued income Interest on subordinated liabilities (Decrease)/increase in accruals and deferred income Impairment losses/(releases) Loans and advances written-off net of recoveries Unwind of discount on impairment losses (Profit)/loss on sale of property, plant and equipment Loss/(profit) on sale of subsidiaries and associates — (Profit)/loss on sale of securities — — — Charge for defined benefit pension schemes Pension scheme curtailments or settlements gain — — — — — Cash contribution to defined benefit pension schemes Other provisions charged net of releases Other provisions utilised Depreciation and amortisation Write down of goodwill and other intangible assets — — — — Write back/(write down) of investment in subsidiaries — — — Elimination of foreign exchange differences Other non-cash items Net cash (outflow)/inflow from trading activities (Increase)/decrease in loans and advances to banks and customers Decrease/(increase) in securities (Increase)/decrease in other assets Decrease/(increase) in derivative assets Changes in operating assets Increase/(decrease) in deposits by banks and customers Increase/(decrease) in debt securities in issue — — — Increase/(decrease) in other liabilities (Decrease)/increase in derivative liabilities (Decrease)/increase in settlement balances and short positions Changes in operating liabilities Income taxes (paid)/received Net cash inflow/(outflow) from operating activities |
Analysis of the net investment
Analysis of the net investment in business interests and intangible assets | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of the net investment in business interests and intangible assets | |
Analysis of the net investment in business interests and intangible assets | 32 Analysis of the net investment in business interests and intangible assets Group Bank Acquisitions and disposals £m £m £m £m £m £m Value recognised for business transferred from fellow subsidiary — — — Additional investments in Group undertakings — — — Fair value given for business acquired — — — — — Net outflow of cash in respect of purchases — Disposal of investment in group undertakings — — — — — Other assets sold — — Non-cash consideration — — — (Loss)/profit on disposal — Net inflow/(outflow) of cash in respect of disposals — Dividends received from associates — — — — — Net cash expenditure on intangible assets — — — — Net inflow/(outflow) |
Interest received and paid
Interest received and paid | 12 Months Ended |
Dec. 31, 2017 | |
Interest received and paid | |
Interest received and paid | 33 Interest received and paid Group Bank £m £m £m £m £m £m Interest received Interest paid |
Analysis of changes in financin
Analysis of changes in financing during the year | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of changes in financing during year | |
Analysis of changes in financing during the year | 34 Analysis of changes in financing during the year Group Bank Share capital Subordinated Share capital Subordinated and share premium liabilities and share premium liabilities £m £m £m £m £m £m £m £m £m £m £m £m At 1 January Issue of subordinated liabilities — — — — — Repayment of subordinated liabilities — — — — Redemption of preference shares — — — Net cash outflow from financing — — — — — — — — Currency translation and other adjustments — — — — — — At 31 December |
Analysis of cash and cash equiv
Analysis of cash and cash equivalents | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of cash and cash equivalents | |
Analysis of cash and cash equivalents | 35 Analysis of cash and cash equivalents Group Bank £m £m £m £m £m £m At 1 January - cash - cash equivalents Net cash inflow/(outflow) At 31 December Comprising: Cash and balances at central banks Treasury bills and debt securities — — — — — Loans and advances to banks Cash and cash equivalents Note: (1) Includes no cash collateral posted with bank counterparties in respect of derivative liabilities (2016 - nil; 2015 – nil) The Bank and certain subsidiary undertakings are required to maintain balances with central banks which, at 31 December 2017, amounted to £231 million (2016 - £231 million; 2015 - £198 million). |
Segmental analysis
Segmental analysis | 12 Months Ended |
Dec. 31, 2017 | |
Segmental analysis | |
Segmental analysis | 36 Segmental analysis (a) Reportable segments Segmental reorganisation and business transfers The Group continues to deliver on its plan to build a strong, simple and fair bank for both customers and shareholders. To support this, and in preparation for the UK ring-fencing regime the previously reported operating segments were realigned in Q4 2017 and a number of business transfers completed. Segmental reorganisation The previously reported operating segments are now realigned and comparatives have been re-presented as follows: · The former Capital Resolution reported operating segment has been integrated into the NatWest Markets reportable segment, with the exception of the costs in relation to the retail mortgage backed securities (RMBS) claims, which have been transferred to the Central items & other reportable segment. · NatWest Markets (including the former Capital Resolution business), which is predominately RBS Securities Inc (RBSSI), and is wholly owned by NatWest Group Holdings Corp (NWGH), is due to be transferred to RBS plc by 1 January 2019. It is therefore no longer a reportable segment and presented as a discontinued operation. Business transfers On 1 October 2017 the following changes were made to the Group’s businesses, which impacts its financial reporting but where comparatives have not been re-presented: · Certain UK PBB and Commercial Banking businesses, which are prohibited from being within the ring-fence but are designed to serve UK PBB and Commercial Banking customers, have move out of those segments to Central items & other; · Shipping & Other activities has been transferred from NatWest Markets to Commercial Banking; and · The UK PBB Collective Investment Funds business has been transferred to Private Banking. Disposal groups and discontinued operations NatWest Group Holdings Corp NatWest Group Holdings Corp (NWGH) which wholly owns RBS Securities Inc (RBSSI) is due to be transferred to RBSG by 1 January 2019 in preparation for ring-fencing. NWGH is a direct subsidiary of NatWest. NWGH is classified as a disposal group at 31 December 2017 and its assets and liabilities presented in aggregate in accordance with IFRS 5. NWGH, which was mainly reported in the former NatWest Markets and Capital Resolution operating segments, are no longer a reportable operating segments but presented as a discontinued operation and comparatives have been re-presented accordingly. Ulster Bank (Ireland) Holdings Unlimited Company Ulster Bank (Ireland) Holdings Unlimited Company (UBIH) was sold to NatWest Holdings Limited (NatWest Holdings) on 1 January 2017 in preparation for ring-fencing. NatWest Holdings was a direct subsidiary of RBS plc and was classified as a disposal group at 31 December 2016 and its assets and liabilities presented in aggregate in accordance with IFRS 5. UBIH is presented as a discontinued operation in relevant periods. Reportable operating segments Following the changes detailed the reportable operating segments are as follows: Personal & Business Banking (PBB) comprises one reportable segment: UK Personal & Business Banking (UK PBB). UK PBB serves individuals and mass affluent customers in the UK together with small businesses (generally up to £2 million turnover). UK PBB includes Ulster Bank customers in Northern Ireland. Commercial & Private Banking (CPB) comprises two reportable segments: Commercial Banking and Private Banking. Commercial Banking serves commercial and corporate customers in the UK and Western Europe. Private Banking serves UK connected high net worth individuals. 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, the NWHG, UBIH and international private banking business are included in Central items in the relevant periods. Net Non- Depreciation Impairment interest interest Total Operating and (losses)/ Operating income income income expenses amortisation releases profit/(loss) 2017 £m £m £m £m £m £m £m UK Personal & Business Banking — Commercial Banking Private Banking — Commercial & Private Banking Central items & other Total 2016* UK Personal & Business Banking — Commercial Banking — Private Banking — Commercial & Private Banking — Central items & other Total 2015* UK Personal & Business Banking — Commercial Banking — Private Banking — Commercial & Private Banking — Central items & other Total 2017 2016* 2015* Inter Inter Inter Total revenue External segment Total External segment Total External segment Total £m £m £m £m £m £m £m £m £m UK Personal & Business Banking — Commercial Banking Private Banking Commercial & Private Banking Central items & other Total — — — * Re-presented to reflect the segmental reorganisation. 2017 2016* 2015* Inter Inter Inter Total income External segment Total External segment Total External segment Total £m £m £m £m £m £m £m £m £m UK Personal & Business Banking Commercial Banking Private Banking Commercial & Private Banking Central items & other Total — — — 2017 2016* 2015* Cost to acquire Cost to acquire Cost to acquire fixed assets fixed assets fixed assets and intangible and intangible and intangible Assets Liabilities assets Assets Liabilities assets Assets Liabilities assets £m £m £m £m £m £m £m £m £m UK Personal & Business Banking — — — Commercial Banking — Private Banking — — — Commercial & Private Banking — Central items & other Total * Re-presented to reflect the segmental reorganisation. (b) Geographical segments The geographical analysis in the tables below has been compiled on the basis of location of office where the transactions are recorded. UK USA Europe RoW Total 2017 £m £m £m £m £m Total revenue — — Net interest income — — Net fees and commissions — — Income from trading activities — — Other operating income — — Total income — — Operating profit/(loss) before tax — Total assets of which total assets held for sale — — — Total liabilities of which total liabilities held for sale — — — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments — — Cost to acquire property, plant and equipment and intangible assets — — 2016 Total revenue Net interest income — Net fees and commissions — Income from trading activities — Other operating income Total income Operating profit/ (loss) before tax Total assets of which total assets held for sale — — — Total liabilities of which total liabilities held for sale — — — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments — — Cost to acquire property, plant and equipment and intangible assets 2015 Total revenue Net interest income Net fees and commissions — Income from trading activities — Other operating income Total income Operating profit/(loss) before tax Total assets Total liabilities Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments Cost to acquire property, plant and equipment and intangible assets |
Directors and key management re
Directors and key management remuneration | 12 Months Ended |
Dec. 31, 2017 | |
Directors' and key management remuneration | |
Directors' and key management remuneration | 37 Directors’ and key management remuneration The directors of the Bank are also directors of the ultimate holding company and are remunerated for their services to the RBS Group as a whole. The remuneration of the directors is disclosed in the 2017 Annual Report and Accounts of the RBS Group. Directors’ remuneration £000 £000 Non-executive directors emoluments Chairman and executive directors emoluments Amounts receivable under long-term incentive plans and share option plans No directors accrued benefits under defined benefit schemes or money purchase schemes during 2017 and 2016. The executive directors may participate in the company’s long-term incentive plans, executive share option and sharesave schemes and details of their interests in the company’s shares arising from their participation are given in the Directors’ remuneration report in the 2017 Annual Report and Accounts of the RBS Group. Details of the remuneration received by each director is also given in the Directors’ remuneration report in the 2017 Annual Report and Accounts of the RBS Group. Compensation of key management The aggregate remuneration of directors and other members of key management during the year, borne by the RBS Group, was as follows: £000 £000 Short-term benefits Post-employment benefits Share-based payments Key management comprises members of the RBS Group Executive Committee. |
Transactions with directors and
Transactions with directors and key management | 12 Months Ended |
Dec. 31, 2017 | |
Transactions with directors and key management | |
Transactions with directors and key management | 38 Transactions with directors and key management (a) At 31 December 2017, the amounts outstanding in relation to transactions, arrangements and agreements entered into by authorised institutions, as defined in UK legislation, in the Group, were £6,265 in respect of loans to four persons who were directors of the Bank at any time during the financial period. (b) For the purposes of IAS 24 ‘Related Party Disclosures’, key management comprise directors of the Bank and members of the RBS Group Executive Committee. The captions in the primary financial statements include the following amounts attributable, in aggregate, to key management: £000 £000 Loans and advances to customers Customer accounts Key management have banking relationships with Group entities which are entered into in the normal course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with other persons of a similar standing or, where applicable, with other employees. These transactions did not involve more than the normal risk of repayment or present other unfavourable features. Key management had no reportable transactions or balances with the ultimate holding company. |
Related parties
Related parties | 12 Months Ended |
Dec. 31, 2017 | |
Related parties | |
Related parties | 39 Related parties UK Government On 1 December 2008, the UK Government through HM Treasury became the ultimate controlling party of The Royal Bank of Scotland Group plc. The UK Government’s shareholding is managed by UK Financial Investments Limited, a company wholly owned by the UK Government. As a result, the UK Government and UK Government controlled bodies became related parties of the Group. During 2015, all of the B shares held by the UK Government were converted into ordinary shares of £1 each. The Group enters into transactions with many of these bodies on an arm’s length basis. Transactions include the payment of: taxes principally UK corporation tax (see Note 6) and value added tax; national insurance contributions; local authority rates; and regulatory fees and levies; together with banking transactions such as loans and deposits undertaken in the normal course of banker-customer relationships. Bank of England facilities The Group may participate in a number of schemes operated by the Bank of England in the normal course of business. Members of the Group that are UK authorised institutions are required to maintain non-interest bearing (cash ratio) deposits with the Bank of England amounting to 0.18% of their average eligible liabilities in excess of £600 million. They also have access to Bank of England reserve accounts: sterling current accounts that earn interest at the Bank of England Rate. Other related parties (a) In their roles as providers of finance, Group companies provide development and other types of capital support to businesses. These investments are made in the normal course of business and on arm’s length terms. In some instances, the investment may extend to ownership or control over 20% or more of the voting rights of the investee company. However, these investments are not considered to give rise to transactions of a materiality requiring disclosure under IAS 24. (b) The Group recharges The Royal Bank of Scotland Group Pension Fund with the cost of administration services incurred by it. The amounts involved are not material to the Group. (c) In accordance with IAS 24, transactions or balances between Group 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. The table below discloses items included in income and operating expenses on transactions between the Group and subsidiaries of the RBS Group. £m £m £m Income Interest receivable Interest payable Fees and commissions receivable Fees and commissions payable Other administrative expenses Discontinued operations Net expenses Other administrative expenses — |
Ultimate holding company
Ultimate holding company | 12 Months Ended |
Dec. 31, 2017 | |
Ultimate holding company | |
Ultimate holding company | 40 Ultimate holding company The Group’s ultimate holding company is The Royal Bank of Scotland Group plc (RBSG) and its immediate parent company NatWest Holdings Limited (NatWest Holdings or ‘the holding company’). NatWest Holdings Limited was introduced as a direct subsidiary of The Royal Bank of Scotland plc (RBS Plc or ‘intermediate holding company’) during 2016. NatWest Plc was transferred from being a direct subsidiary of RBS plc to become a direct subsidiary of NatWest Holdings on 1 January 2017, in preparation for ring-fencing. All companies are incorporated in Great Britain and registered in Scotland. As at 31 December 2017, The Royal Bank of Scotland Group plc heads the largest group in which the Group is consolidated and RBS Plc heads the smallest group in which the Group is consolidated. Copies of the consolidated accounts of both companies may be obtained from The Secretary, The Royal Bank of Scotland Group plc, Gogarburn, PO Box 1000, Edinburgh EH12 1HQ. Following placing and open offers by The Royal Bank of Scotland Group plc in December 2008 and April 2009, the UK Government, through HM Treasury, currently holds 70.5% of the issued ordinary share capital of the ultimate holding company and is therefore the Group’s ultimate controlling party. |
Post balance sheet events
Post balance sheet events | 12 Months Ended |
Dec. 31, 2017 | |
Post balance sheet events | |
Post balance sheet events | 41 Post balance sheet events On 2 March 2018 NatWest Group Holdings Corporation and its subsidiaries, which include The Royal Bank of Scotland Securities Inc., were transferred at their book values from NatWest, a future ring-fenced entity, to RBS plc (to be re-named NatWest Markets Plc), which will be outside the future ring-fenced sub-group. There have been no other significant events between 31 December 2017 and the date of approval of these accounts which would require a change to or additional disclosure in the accounts. |
Related undertakings
Related undertakings | 12 Months Ended |
Dec. 31, 2017 | |
Related undertakings | |
Related undertakings | 42 Related undertakings Group legal entities and activities at 31 December 2017 In accordance with the Companies Act 2006, the Bank’s related undertakings and the accounting treatment for each are listed below. All undertakings are wholly-owned by the Bank or subsidiaries of the Bank and are consolidated by reason of contractual control (Section 1162(2) CA 2006), unless otherwise indicated. Group interest refers to ordinary shares of equal values and voting rights unless further analysis is provided in the notes. Activities are classified in accordance with Annex I to the Capital Requirements Directive (“CRD IV”) and the definitions in Article 4 of the Capital Requirements Regulation. All other requirements of the Capital Requirements (country-by-country) Reporting Regulations 2013 will be published on the RBS Group’s website. The following table details active related undertakings incorporated in the UK which are 100% owned by the Group and fully consolidated for accounting purposes. Entity name Activity (2) Reg Acc (3) Address Caledonian Sleepers Rail Leasing Ltd BF FC 1 Princes Street, London, EC2R 8PB, England Coutts & Company CI FC 440 Strand, London, WC2R 0QS, England Coutts Finance Company BF FC 440 Strand, London, WC2R 0QS, England Digi Ventures Ltd OTH FC 250 Bishopsgate, London, EC2M 4AA, England Esme Loans Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England Euro Sales Finance Plc BF FC 250 Bishopsgate, London, EC2M 4AA, England G L Trains Ltd BF FC 1 Princes Street, London, EC2R 8PB, England Gatehouse Way Developments Ltd INV PC 1 Princes Street, London, EC2R 8PB, England KUC Properties Ltd BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland Lombard & Ulster Ltd BF FC 11-16 Donegall Square East, Belfast, BT1 5HD, Northern Ireland Lombard Business Finance Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Business Leasing Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Charterhire Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Discount Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Finance Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Initial Leasing Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Leasing Contracts Ltd BF FC 1 Princes Street, London, EC2R 8PB, England Lombard Lessors Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Maritime Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard North Central Leasing Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard North Central PLC BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Property Facilities Ltd BF FC 1 Princes Street, London, EC2R 8PB, England Lombard Technology Services Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England National Westminster Properties No. 1 Ltd SC FC 250 Bishopsgate, London, EC2M 4AA, England NatWest Capital Finance Ltd BF FC 1 Princes Street, London, EC2R 8PB, England NatWest Corporate Investments BF DE 250 Bishopsgate, London, EC2M 4AA, England NatWest Machinery Leasing Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England NatWest Property Investments Ltd INV FC 250 Bishopsgate, London, EC2M 4AA, England NatWest Ventures Investments Ltd BF DE 250 Bishopsgate, London, EC2M 4AA, England Premier Audit Company Ltd BF DE 250 Bishopsgate, London, EC2M 4AA, England RBS Asset Management (ACD) Ltd BF FC 440 Strand, London, WC2R 0QS, England RBS Asset Management Holdings BF FC 440 Strand, London, WC2R 0QS, England RBS Collective Investment Funds Ltd BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland RBS Invoice Finance (Holdings) Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England RBS Invoice Finance Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England RBSG Collective Investments Holdings Ltd BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland Riossi Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Royal Bank Invoice Finance Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England RoyScot Trust plc BF FC 280 Bishopsgate, London, EC2M 4RB, England Safetosign Ltd SC FC 250 Bishopsgate, London, EC2M 4RB, England Springwell Street Developments (No 1) Ltd INV FC 280 Bishopsgate, London, EC2M 4RB, England The Royal Bank of Scotland Group Independent Financial Services Ltd BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland The Royal Bank of Scotland Invoice Discounting Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England Ulster Bank Commercial Services (NI) Ltd BF FC 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland Ulster Bank Ltd CI FC 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland Ulster Bank Pension Trustees Ltd TR FC 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland Voyager Leasing Ltd BF FC The Quadrangle, The Promenade, Cheltenham, GL50 1PX, England Walton Lake Developments Ltd INV DE 1 Princes Street, London, EC2R 8PB, England The following table details active related undertakings incorporated outside the UK which are 100% owned by the Group and fully consolidated for accounting purposes. Country (1) Entity name Activity (2) Reg Acc (3) Address Denmark Airside Properties ASP Denmark AS BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Denmark Airside Properties Denmark AS BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Denmark Kastrup Commuter K/S BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Denmark Kastrup Hangar 5 K/S BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Denmark Kastrup V & L Building K/S BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Finland Artul Kiinteistöt Oy BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Fab Ekenäs Formanshagen 4 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Forssa Liikekiinteistöt Oy BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Kiinteistö Oy Pennalan Johtotie 2 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Espoon Entresse II BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Espoon Niittysillantie 5 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Helsingin Mechelininkatu 1 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Helsingin Osmontie 34 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Helsingin Panuntie 11 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Helsingin Panuntie 6 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Iisalmen Kihlavirta BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Jämsän Keskushovi BF FC Södra esplanaden, 12 c/o Nordisk Renting Oy, FI-00130, Helsinki Finland Koy Kokkolan Kaarlenportti Fab BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Kouvolan Oikeus ja Poliisitalo BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Lohjan Huonekalutalo BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Millennium BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Nummelan Portti BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Nuolialan päiväkoti BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Päiväläisentie 1-6 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Peltolantie 27 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Raision Kihlakulma BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Ravattulan Kauppakeskus BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Tapiolan Louhi BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Vapaalan Service-Center BF DE c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Nordisk Renting OY BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Germany RBS Deutschland Holdings GmbH BF FC Junghofstrasse 22, Frankfurt am Main, D-60311 Isle of Man Lombard Manx Leasing Ltd BF FC Royal Bank House, 2 Victoria Street, Douglas, IM1 2LN Isle of Man Lombard Manx Ltd BF FC Royal Bank House, 2 Victoria Street, Douglas, IM1 2LN Jersey Lombard Finance (CI) Ltd BF FC Royal Bank House, 71 Bath Street, St Helier, JE4 8PJ Netherlands National Westminster International Holdings B.V. BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland Netherlands RBS Netherlands Holdings B.V. BF FC Gustav Mahlerlaan 350, Amsterdam, 1082 ME Norway BD Lagerhus AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Norway Eiendomsselskapet Apteno Larvik AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Norway Hatros 1 AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Norway Nordisk Renting AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Norway Ringdalveien 20 AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Poland RBS Polish Financial Advisory Services sp. z o.o. BF FC Wisniowy Business Park, ul 1-go Sierpnia 8a, Warsaw 02-134 RoI Lombard Ireland Group Holdings Unlimited Company BF FC Ulster Bank Group Centre, George’s Quay, Dublin 2 RoI Lombard Ireland Ltd BF FC Ulster Bank Group Centre, George’s Quay, Dublin 2 RoI RBS Asset Management (Dublin) Ltd BF FC Guild House, Guild Street, IFSC, D01 K2C5, Dublin 1 Sweden Airside Properties AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Arkivborgen KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Backsmedjan KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Bil Fastigheter i Sverige AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Bilfastighet I Täby AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Country (1) Entity name Activity (2) Reg Acc (3) Address Sweden Braheberget KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Brödmagasinet KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Eurohill 4 KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighet Kallebäck 2:4 i Göteborg AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Flöjten i Norrköping BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Hammarbyvagnen BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Kabisten 1 BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Stockmakaren BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Xalam BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets Aktiebolaget Sambiblioteket BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighetsbolaget Holma i Höör AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Förvaltningsbolaget Dalkyrkan KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Förvaltningsbolaget Predio 3 KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Forskningshöjden KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Gredelinen KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Grinnhagen KB BF PC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Horrsta 4:38 KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden IR Fastighets AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden IR IndustriRenting AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Kallebäck Institutfastigheter AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden KB Eurohill BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden KB IR Gamlestaden BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden KB Lagermannen BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden KB Likriktaren BF DE c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Läkten 1 KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden LerumsKrysset KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Limstagården KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Mjälgen KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Mons AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Mons Investment AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordisk Renting AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordisk Renting Kapital AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordisk Specialinvest AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordiska Strategifastigheter Holding AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Pyrrhula 6,7 AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden SFK Kommunfastigheter AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Sjöklockan KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Skinnarängen KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Solbänken KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Strand European Holdings AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Svenskt Fastighetskapital AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Svenskt Fastighetskapital Holding AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Svenskt Energikapital AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Tingsbrogården KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Tygverkstaden 1 KB BF DE c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Switzerland RBS Services (Switzerland) Ltd SC FC Lerchenstrasse 18, Zurich, CH 8022 Switzerland Coutts & Co Ltd CI FC Lerchenstrasse 18, Zurich, CH 8022 Switzerland Coutts & Co Trustees (Suisse) S.A. BF FC c/o Regus Rue du Rhône Sàrl, Geneva, CH-1204 USA Candlelight Acquisition LLC BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA Financial Asset Securities Corp. BF PC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 Country (1) Entity name Activity (2) Reg Acc (3) Address USA Greenwich Capital Derivatives, Inc. BF PC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA NatWest Group Holdings Corporation BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA Random Properties Acquisition Corp. III INV PC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA Random Properties Acquisition Corp. IV INV DE 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Holdings USA Inc. BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Americas Property Corp. SC FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Acceptance Inc. CI FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Commercial Funding Inc. BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Equity Corporation BF FC 340 Madison Avenue, New York, 10173 USA RBS Financial Products Inc. BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Securities Inc. BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 The following table details an active related undertaking incorporated in the UK where the Group ownership is less than 100%. Entity name Activity (2) Accounting Treatment (4) Reg Acc (3) Group interest % Address Notes RBS Covered Bonds LLP BF FC DE 1 Princes Street, London, EC2R 8BP, England Jaguar Cars Finance Ltd BF FC FC 280 Bishopsgate, London, EC2M 4RB, England GWNW City Developments Ltd BF EAJV FC Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, England JCB Finance Ltd BF FC FC The Mill, High Street, Rocester, ST14 5JW, England JCB Finance (Leasing) Ltd BF FC FC The Mill, High Street, Rocester, ST14 5JW, England Landpower Leasing Ltd BF FC FC The Mill, High Street, Rocester, ST14 5JW, England The following table details active related undertakings incorporated outside the UK where the Group ownership is less than 100%. Country (1) Entity name Activity (2) Accounting Treatment (4) Reg Acc (3) Group Interest % Address Notes Cyprus Pharos Estates Ltd OTH EAA DE 24 Demostheni Severi, 1st Floor, Nicosia, 1080 Jersey Nightingale Securities 2017-1 Ltd BF FC DE 44 Esplanade, St Helier, JE4 9WG Poland Wiśniowy Management sp. z o.o. SC EAA FC Ilzecka 26 Street, Warsaw, 02-135 Sweden Optimus KB BF FC PC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Stora Kvarnen KB BF FC FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Förvaltningsbolaget Klöverbacken Skola KB BF FC FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm The following table details an active related undertaking which is 100% owned by the Group but is not consolidated for accounting purposes(4). Country (1) Entity Name Activity (2) Reg Acc (3) Address Notes USA West Granite Homes Inc. INV FC Bellevue Parkway, Suite 210, Wilmington, Delaware, DE 19809 (7) The following tables detail related undertakings that are not active. Actively being dissolved Country (1) Entity name Accounting treatment (4) Reg Acc (3) Group Interest % Address Notes Cayman Islands Equator Investments (Cayman) Ltd FC FC Maples Corporate Services Limited, P.O. Box 309, 121 South Church Street, George Town, Grand Cayman, KY1-1104 Germany West Register Prime Holding GmbH i. L. FC FC Emil-Riedl-Weg 6, Pullach i.Isartal, D-82049 Isle of Man Coutts & Co (Manx) Ltd FC FC 23/25 Broad Street, St Helier, JE4 8ND RoI The Royal Bank of Scotland Finance (Ireland) FC FC 24/26 City Quay, Dublin 2 UK CNW Group Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK Greenwich NatWest Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK NatWest (HMHP) Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK NatWest Finance Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK NatWest Nominees Ltd FC DE 1 Princes Street, London, EC2R 8PB, England UK Cala Campus Ltd EAJV DE Ledingham Chalmers, Johnstone House, 52-54 Rose Street, Aberdeen, AB10 1HA, Scotland UK Dixon Motors Developments Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Farming and Agricultural Finance Ltd FC FC 280 Bishopsgate, London, EC2M 4RB, England UK Lombard Corporate Finance (3) Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Lombard Venture Finance Ltd FC FC 280 Bishopsgate, London, EC2M 4RB, England UK Property Ventures (B&M) Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK WR (NI) Property Investments Ltd FC DE 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland UK WR (NI) Property Realisations Ltd FC DE 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland UK West Register (Northern Ireland) Property Ltd FC DE 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland UK RoyScot Ltd FC FC 280 Bishopsgate, London, EC2M 4RB, England UK Northants Developments Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Thrapston Triangle Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Emperor Holdings Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Latam Directors Ltd NC FC Quartermile Two, 2 Lister Square, Edinburgh, Midlothian, EH3 9GL, Scotland Dormant Country (1) Entity name Accounting treatment (4) Reg Acc Group Interest Address Denmark Nordisk Renting A/S FC FC c/o Adv Jan-Erik Svensson, HC Andersens Boulevard 12, Kopenhaum V, 1553 Sweden Nordisk Renting Facilities Management AB FC FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordisk Renting HB FC FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm UK NatWest Aerospace Trust Company Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK NatWest FIS Nominees Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK NatWest PEP Nominees Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK NatWest Security Trustee Company Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK Lombard Bank FC FC Lee House, Baird Road, Enfield, Middlesex, EN1 1SJ, England UK Dunfly Trustee Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK National Westminster Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK RBS Secretarial Services Ltd FC FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland UK Syndicate Nominees Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK RBS Pension Trustee Ltd NC FC 1 Princes Street, London, EC2R 8PB, England UK HPUT A Ltd FC FC 250 Bishopsgate, London, EC2M 4RB, England UK HPUT B Ltd FC FC 250 Bishopsgate, London, EC2M 4RB, England UK Nextlinks Ltd FC FC 250 Bishopsgate, London, EC2M 4RB, England UK Dixon Vehicle Sales Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK NatWest Invoice Finance Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK Strand Nominees Ltd FC FC 440 Strand, London, WC2R 0QS, England UK RBSG Collective Investments Nominees Ltd FC FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland UK RBS Investment Executive Ltd NC DE 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland UK JCB Finance Pension Ltd FC FC 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland UK RoyScot Leasing Ltd FC FC 280 Bishopsgate, London, EC2M 4RB, England Notes: (1) Country: UK – United Kingdom USA – United States of America RoI – Republic of Ireland (2) Activity: BF - Banking and Financial institution CI - Credit institution INV - Investment (shares or property) holding company SC - Service company TR - Trustee OTH – Other (3) Regulatory Accounting treatment: DE - Deconsolidated (for non financial or insurance undertakings) FC - Full consolidation PC - Pro-rata consolidation (based on percentage equity held by RBSG) (4) Accounting treatment: EAA - Equity accounting - Associate EAJV - Equity accounting - Joint Venture FC - Fully consolidated IA - Investment Accounting NC - Not consolidated (5) Related undertaking consolidated because the Group controls the company by virtue of contractual agreements (6) Related undertaking not consolidated as it is not controlled by the Group. (7) Related undertaking owned for the benefit of Group pension schemes. Group overseas branches The company’s related undertakings have branches in the following countries. Subsidiary Geographic location of branches Coutts & Co Ltd Hong Kong National Westminster Bank Plc Finland, France, Germany, Italy, Jersey, Netherlands, Norway, Spain, Sweden |
Accounting policies (Policies)
Accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting policies | |
Presentation of accounts | 1. Presentation of accounts The accounts, set out on pages 83 to 177 including these accounting policies on pages 92 to 103 and the audited sections of the Financial review: Capital and risk management on pages 16 to 74, are prepared on a going concern basis (see the Report of the directors, page 78) and in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFRS Interpretations Committee of the IASB as adopted by the European Union (EU) (together IFRS). The EU has not adopted the complete text of IAS 39 ‘Financial Instruments: Recognition and Measurement’; it has relaxed some of the standard’s hedging requirements. The Group has not taken advantage of this relaxation: its financial statements are prepared in accordance with IFRS as issued by the IASB. The company is incorporated in the UK and registered in England and Wales. Its accounts are presented in accordance with the Companies Act 2006. With the exception of investment property and certain financial instruments as described in Accounting policies 9, 14, 16 and 18, the accounts are presented on a historical cost basis. NatWest Group Holdings Corp was classified as a disposal group at 31 December 2017. It was measured at fair value less costs to sell. Note 9 contains further information. The Group adopted two revisions to IFRSs effective 1 January 2017: In January 2016, the IASB amended IAS 7 ‘Cash Flow Statements’ to require disclosure of the movements in financing liabilities. This is shown in Note 34. In January 2016, the IASB amended IAS 12 ‘Income taxes’ to clarify the recognition of deferred tax assets in respect of unrealised losses. Neither of these amendments has had a material effect on the Group’s financial statements. |
Basis of consolidation | 2. Basis of consolidation The consolidated accounts incorporate the financial statements of the company and entities (including certain structured entities) that are controlled by the Group. The Group controls another entity (a subsidiary) when it is exposed, or has rights, to variable returns from its involvement with that entity and has the ability to affect those returns through its power over the other entity; power generally arises from holding a majority of voting rights. On acquisition of a subsidiary, its identifiable assets, liabilities and contingent liabilities are included in the consolidated accounts at their fair value. A subsidiary is included in the consolidated financial statements from the date it is controlled by the Group until the date the Group ceases to control it through a sale or a significant change in circumstances. Changes in the Group’s interest in a subsidiary that do not result in the Group ceasing to control that subsidiary are accounted for as equity transactions. All intergroup balances, transactions, income and expenses are eliminated on consolidation. The consolidated accounts are prepared under uniform accounting policies. |
Revenue recognition | 3. Revenue recognition Interest income on financial assets that are classified as loans and receivables, available-for-sale or held-to-maturity and interest expense on financial liabilities other than those measured at fair value are determined using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability (or group of financial assets or liabilities) and of allocating the interest income or interest expense over the expected life of the asset or liability. The effective interest rate is the rate that exactly discounts estimated future cash flows to the instrument’s initial carrying amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument’s yield, premiums or discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows. Negative effective interest accruing to financial assets is presented in interest payable Financial assets and financial liabilities held for trading or designated as at fair value through profit or loss are recorded at fair value. Changes in fair value are recognised in profit or loss. Fees in respect of services are recognised as the right to consideration accrues through the provision of the service to the customer. The arrangements are generally contractual and the cost of providing the service is incurred as the service is rendered. The price is usually fixed and always determinable. The application of this policy to significant fee types is outlined below. Payment services - this comprises income received for payment services including cheques cashed, direct debits, Clearing House Automated Payments (the UK electronic settlement system) and BACS payments (the automated clearing house that processes direct debits and direct credits). These are generally charged on a per transaction basis. The income is earned when the payment or transaction occurs. Charges for payment services are usually debited to the customer’s account monthly or quarterly in arrears. Income is accrued at period end for services provided but not yet charged. Credit and debit card fees - fees from card business include: · Interchange received: as issuer, the Group receives a fee (interchange) each time a cardholder purchases goods and services. The Group also receives interchange fees from other card issuers for providing cash advances through its branch and automated teller machine networks. These fees are accrued once the transaction has taken place. · Periodic fees payable by a credit card or debit card holder are deferred and taken to profit or loss over the period of the service. Lending (credit facilities) - commitment and utilisation fees are determined as a percentage of the outstanding facility. If it is unlikely that a specific lending arrangement will be entered into, such fees are taken to profit or loss over the life of the facility, otherwise they are deferred and included in the effective interest rate on the loan. Brokerage fees - in respect of securities, foreign exchange, futures or options transactions entered into on behalf of a customer are recognised as income on execution of a significant act. Trade finance - income from the provision of trade finance is recognised over the term of the finance unless specifically related to a significant act, in which case income is recognised when the act is executed. Investment management - fees charged for managing investments are recognised as revenue as the services are provided. Incremental costs that are directly attributable to securing an investment management contract are deferred and charged as expense as the related revenue is recognised. |
Assets held for sale and discontinued operations | 4. Assets held for sale and discontinued operations A non-current asset (or disposal group) is classified as held for sale if the Group will recover its carrying amount principally through a sale transaction rather than through continuing use. A non-current asset (or disposal group) classified as held for sale is measured at the lower of its carrying amount and fair value less costs to sell. If the asset (or disposal group) is acquired as part of a business combination it is initially measured at fair value less costs to sell. Asset and liabilities of disposal groups classified as held for sale and non-current assets classified as held for sale are shown separately on the face of the balance sheet. The results of discontinued operations - comprising the post-tax profit or loss of discontinued operations and the post-tax gain or loss recognised either on measurement to fair value less costs to sell or on disposal of the discontinued operation - are shown as a single amount on the face of the income statement; an analysis of this amount is presented in Note 19 on the accounts. A discontinued operation is a cash generating unit or a group of cash generating units that either has been disposed of, or is classified as held for sale, and (a) represents a separate major line of business or geographical area of operations, (b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or (c) is a subsidiary acquired exclusively with a view to resale. |
Employee benefits | 5. Employee benefits Short-term employee benefits, such as salaries, paid absences, and other benefits are accounted for on an accruals basis over the period in which the employees provide the related services. Employees may receive variable compensation satisfied by cash, by debt instruments issued by the Group or by RBSG shares. Variable compensation that is settled in cash or debt instruments is charged to profit or loss over the period from the start of the year to which the variable compensation relates to the expected settlement date taking account of forfeiture and claw back criteria. For defined benefit schemes, the defined benefit obligation is measured on an actuarial basis using the projected unit credit method and discounted at a rate determined by reference to market yields at the end of the reporting period on high quality corporate bonds of equivalent term and currency to the scheme liabilities. Scheme assets are measured at their fair value. The difference between scheme assets and scheme liabilities, the net defined benefit asset or liability, is recognised in the balance sheet. A defined benefit asset is limited to the present value of any economic benefits available to the Group in the form of refunds from the plan or reduced contributions to it. The charge to profit or loss for pension costs (recorded in operating expenses) comprises: · the current service cost · interest, computed at the rate used to discount scheme liabilities, on the net defined benefit liability or asset · past service cost resulting from a scheme amendment or curtailment · gains or losses on settlement. A curtailment occurs when the Group significantly reduces the number of employees covered by a plan. A plan amendment occurs when the Group introduces, or withdraws, a defined benefit plan or changes the benefits payable under an existing defined benefit plan. Past service cost may be either positive (when benefits are introduced or changed so that the present value of the defined benefit obligation increases) or negative (when benefits are withdrawn or changed so that the present value of the defined benefit obligation decreases). A settlement is a transaction that eliminates all further obligation for part or all of the benefits. Actuarial gains and losses (i.e. gains or and losses on re-measuring the net defined benefit asset or liability) are recognised in other comprehensive income in full in the period in which they arise. |
Intangible assets and goodwill | 6. Intangible assets and goodwill Intangible assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to profit or loss over the assets’ estimated economic lives using methods that best reflect the pattern of economic benefits and is included in Depreciation and amortisation. These estimated useful economic lives are: Computer software 3 to 12 years Other acquired intangibles 5 to 10 years Expenditure on internally generated goodwill and brands is written-off as incurred. Direct costs relating to the development of internal-use computer software are capitalised once technical feasibility and economic viability have been established. These costs include payroll, the costs of materials and services, and directly attributable overheads. Capitalisation of costs ceases when the software is capable of operating as intended. During and after development, accumulated costs are reviewed for impairment against the benefits that the software is expected to generate. Costs incurred prior to the establishment of technical feasibility and economic viability are expensed as incurred as are all training costs and general overheads. The costs of licences to use computer software that are expected to generate economic benefits beyond one year are also capitalised. Intangible assets include goodwill arising on the acquisition of subsidiaries and joint ventures. Goodwill on the acquisition of a subsidiary is the excess of the fair value of the consideration transferred, the fair value of any existing interest in the subsidiary and the amount of any non-controlling interest measured either at fair value or at its share of the subsidiary’s net assets over the Group’s interest in the net fair value of the subsidiary’s identifiable assets, liabilities and contingent liabilities. Goodwill arises on the acquisition of a joint venture when the cost of investment exceeds the Group’s share of the net fair value of the joint venture’s identifiable assets and liabilities. Goodwill is measured at initial cost less any subsequent impairment losses. Goodwill arising on the acquisition of associates is included within their carrying amounts. The gain or loss on the disposal of a subsidiary, associate or joint venture includes the carrying value of any related goodwill. |
Property, plant and equipment | 7. Property, plant and equipment Items of property, plant and equipment (except investment property - see Accounting policy 9) are stated at cost less accumulated depreciation and impairment losses. Where an item of property, plant and equipment comprises major components having different useful lives, these are accounted for separately. Depreciation is charged to profit or loss on a straight-line basis so as to write-off the depreciable amount of property, plant and equipment (including assets owned and let on operating leases) over their estimated useful lives. The depreciable amount is the cost of an asset less its residual value. Freehold land is not depreciated. The estimated useful lives of the Group’s property, plant and equipment are: Freehold buildings 50 years Long leasehold property (leases with more than 50 years to run) 50 years Short leaseholds unexpired period of lease Property adaptation costs 10 to 15 years Computer equipment up to 5 years Other equipment 4 to 15 years The residual value and useful life of property, plant and equipment are reviewed at each balance sheet date and updated for any changes to previous estimates. |
Impairment of intangible assets and property, plant and equipment | 8. Impairment of intangible assets and property, plant and equipment At each balance sheet date, the Group assesses whether there is any indication that its intangible assets, or property, plant and equipment are impaired. If any such indication exists, the Group estimates the recoverable amount of the asset and the impairment loss if any. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. If an asset does not generate cash flows that are independent from those of other assets or groups of assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to each of the Group’s cash-generating units or groups of cash-generating units expected to benefit from the combination. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less cost to sell and its value in use. Value in use is the present value of future cash flows from the asset or cash-generating unit discounted at a rate that reflects market interest rates adjusted for risks specific to the asset or cash-generating unit that have not been taken into account in estimating future cash flows. If the recoverable amount of an intangible or tangible asset is less than its carrying value, an impairment loss is recognised immediately in profit or loss and the carrying value of the asset reduced by the amount of the loss. A reversal of an impairment loss on intangible assets (excluding goodwill) or property, plant and equipment can be recognised when an increase in service potential arises provided the increased carrying value is not greater than it would have been had no impairment loss been recognised. Impairment losses on goodwill are not reversed. |
Investment property | 9. Investment property Investment property comprises freehold and leasehold properties that are held to earn rentals or for capital appreciation or both. Investment property is not depreciated but is stated at fair value. Fair value is based on current prices for similar properties in the same location and condition. Any gain or loss arising from a change in fair value is recognised in profit or loss. Rental income from investment property is recognised on a straight-line basis over the term of the lease in Other operating income. Lease incentives granted are recognised as an integral part of the total rental income. |
Foreign currencies | 10. Foreign currencies The Group’s consolidated financial statements are presented in sterling which is the functional currency of the company. Group entities record transactions in foreign currencies in their functional currency, the currency of the primary economic environment in which they operate, at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the relevant functional currency at the foreign exchange rates ruling at the balance sheet date. Foreign exchange differences arising on the settlement of foreign currency transactions and from the translation of monetary assets and liabilities are reported in income from trading activities except for differences arising on cash flow hedges and hedges of net investments in foreign operations (see Accounting policy 23). Non-monetary items denominated in foreign currencies that are stated at fair value are translated into the relevant functional currency at the foreign exchange rates ruling at the dates the values are determined. Translation differences arising on non-monetary items measured at fair value are recognised in profit or loss except for differences arising on available-for-sale non-monetary financial assets, for example equity shares, which are recognised in other comprehensive income unless the asset is the hedged item in a fair value hedge. Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into sterling at foreign exchange rates ruling at the balance sheet date. Income and expenses of foreign operations are translated into sterling at average exchange rates unless these do not approximate to the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on the translation of a foreign operation are recognised in other comprehensive income. The amount accumulated in equity is reclassified from equity to profit or loss on disposal of a foreign operation. |
Leases | 11. Leases As lessor Contracts with customers to lease assets are classified as finance leases if they transfer substantially all the risks and rewards of ownership of the asset to the customer; all other contracts with customers to lease assets are classified as operating leases. Finance lease receivables are included in the balance sheet, within Loans and advances to customers, at the amount of the net investment in the lease being the minimum lease payments and any unguaranteed residual value discounted at the interest rate implicit in the lease. Finance lease income is allocated to accounting periods so as to give a constant periodic rate of return before tax on the net investment and included in Interest receivable. Unguaranteed residual values are subject to regular review; if there is a reduction in their value, income allocation is revised and any reduction in respect of amounts accrued is recognised immediately. Rental income from operating leases is recognised in income on a straight-line basis over the lease term unless another systematic basis better represents the time pattern of the asset’s use. Operating lease assets are included within Property, plant and equipment and depreciated over their useful lives (see Accounting policy 7). Operating lease rentals receivable are included in Other operating income. As lessee The Group’s contracts to lease assets are principally operating leases. Operating lease rental expense is included in Premises and equipment costs and recognised as an expense on a straight-line basis over the lease term unless another systematic basis better represents the benefit to the Group. |
Provisions | 12. Provisions The Group recognises a provision for a present obligation resulting from a past event when it is more likely than not that it will be required to transfer economic benefits to settle the obligation and the amount of the obligation can be estimated reliably. Provision is made for restructuring costs, including the costs of redundancy, when the Group has a constructive obligation to restructure. An obligation exists when the Group has a detailed formal plan for the restructuring and has raised a valid expectation in those affected by starting to implement the plan or by announcing its main features. If the Group has a contract that is onerous, it recognises the present obligation under the contract as a provision. An onerous contract is one where the unavoidable costs of meeting the Group’s contractual obligations exceed the expected economic benefits. When the Group vacates a leasehold property, a provision is recognised for the costs under the lease less any expected economic benefits (such as rental income). Contingent liabilities are possible obligations arising from past events, whose existence will be confirmed only by uncertain future events, or present obligations arising from past events that are not recognised because either an outflow of economic benefits is not probable or the amount of the obligation cannot be reliably measured. Contingent liabilities are not recognised but information about them is disclosed unless the possibility of any outflow of economic benefits in settlement is remote. |
Tax | 13. Tax Income tax expense or income, comprising current tax and deferred tax, is recorded in the income statement except income tax on items recognised outside profit or loss which is credited or charged to other comprehensive income or to equity as appropriate. Current tax is income tax payable or recoverable in respect of the taxable profit or loss for the year arising in profit or loss, other comprehensive income or equity. Provision is made for current tax at rates enacted or substantively enacted at the balance sheet date. Deferred tax is the tax expected to be payable or recoverable in respect of temporary differences between the carrying amount of an asset or liability for accounting purposes and its carrying amount for tax purposes. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered. Deferred tax is not recognised on temporary differences that arise from initial recognition of an asset or a liability in a transaction (other than a business combination) that at the time of the transaction affects neither accounting, nor taxable profit or loss. Deferred tax is calculated using tax rates expected to apply in the periods when the assets will be realised or the liabilities settled, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date. Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to offset and where they relate to income taxes levied by the same taxation authority either on an individual Group company or on Group companies in the same tax group that intend, in future periods, to settle current tax liabilities and assets on a net basis or on a gross basis simultaneously. |
Financial assets | 14. Financial assets On initial recognition, financial assets are classified into held-to-maturity investments; held-for-trading; designated as at fair value through profit or loss; loans and receivables; or available-for-sale financial assets. Normal purchases of financial assets classified as loans and receivables are recognised on the settlement date; all other normal transactions in financial assets are recognised on the trade date. Held-to-maturity investments - a financial asset may be classified as a held-to-maturity investment only if it has fixed or determinable payments, a fixed maturity and the Group has the positive intention and ability to hold to maturity. Held-to-maturity investments are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method (see Accounting policy 3) less any impairment losses. Held-for-trading - a financial asset is classified as held-for-trading if it is acquired principally for sale in the near term, or forms part of a portfolio of financial instruments that are managed together and for which there is evidence of short-term profit taking, or it is a derivative (not in a qualifying hedge relationship). Held-for-trading financial assets are recognised at fair value with transaction costs being recognised in profit or loss. Subsequently they are measured at fair value. Income from trading activities includes gains and losses on held-for-trading financial assets as they arise. Designated as at fair value through profit or loss - financial assets may be designated as at fair value through profit or loss only if such designation (a) eliminates or significantly reduces a measurement or recognition inconsistency; or (b) applies to a group of financial assets, financial liabilities or both, that the Group manages and evaluates on a fair value basis; or (c) relates to an instrument that contains an embedded derivative which is not evidently closely related to the host contract. Financial assets that the Group designates on initial recognition as being at fair value through profit or loss are recognised at fair value, with transaction costs being recognised in profit or loss, and are subsequently measured at fair value. Gains and losses are recognised in profit or loss as they arise. Loans and receivables - non-derivative financial assets with fixed or determinable repayments that are not quoted in an active market are classified as loans and receivables, except those that are classified as available-for-sale or as held-for-trading, or designated as at fair value through profit or loss. Loans and receivables are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method (see Accounting policy 3) less any impairment losses. Available-for-sale financial assets - financial assets that are not classified as held-to-maturity; held-for-trading; designated as at fair value through profit or loss; or loans and receivables are classified as available-for-sale. Financial assets can be designated as available-for-sale on initial recognition. Available-for-sale financial assets are initially recognised at fair value plus directly related transaction costs. They are subsequently measured at fair value. Unquoted equity investments whose fair value cannot be measured reliably are carried at cost and classified as available-for-sale financial assets. Impairment losses and exchange differences resulting from retranslating the amortised cost of foreign currency monetary available-for-sale financial assets are recognised in profit or loss together with interest calculated using the effective interest method (see Accounting policy 3) as are gains and losses attributable to the hedged risk on available-for-sale financial assets that are hedged items in fair value hedges (see Accounting policy 23). Other changes in the fair value of available-for-sale financial assets and any related tax are reported in other comprehensive income until disposal, when the cumulative gain or loss is reclassified from equity to profit or loss. Reclassifications - held-for-trading and available-for-sale financial assets that meet the definition of loans and receivables (non-derivative financial assets with fixed or determinable payments that are not quoted in an active market) may be reclassified to loans and receivables if the Group has the intention and ability to hold the financial asset for the foreseeable future or until maturity. The Group typically regards the foreseeable future for this purpose as twelve months from the date of reclassification. Additionally, held-for-trading financial assets that do not meet the definition of loans and receivables may, in rare circumstances, be transferred to available-for-sale financial assets or to held-to-maturity investments. Reclassifications are made at fair value. This fair value becomes the asset’s new cost or amortised cost as appropriate. Gains and losses recognised up to the date of reclassification are not reversed. Fair value - the Group’s approach to determining the fair value of financial instruments measured at fair value is set out in the section of Critical accounting policies and key sources of estimation uncertainty entitled Fair value - financial instruments. Further details are given in Note 9 on the accounts. |
Impairment of financial assets | 15. Impairment of financial assets The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets classified as held-to-maturity, as available-for-sale or as loans and receivables is impaired. A financial asset or group of financial assets is impaired and an impairment loss incurred if there is objective evidence that an event or events since initial recognition of the asset have adversely affected the amount or timing of future cash flows from the asset. Financial assets carried at amortised cost - if there is objective evidence that an impairment loss on a financial asset or group of financial assets classified as loans and receivables or as held-to-maturity investments has been incurred, the Group measures the amount of the loss as the difference between the carrying amount of the asset or group of assets and the present value of estimated future cash flows from the asset or group of assets discounted at the effective interest rate of the instrument at initial recognition. For collateralised loans and receivables, estimated future cash flows include cash flows that may result from foreclosure less the costs of obtaining and selling the collateral, whether or not foreclosure is probable. Where, in the course of the orderly realisation of a loan, it is exchanged for equity shares or property, the exchange is accounted for as the sale of the loan and the acquisition of equity securities or investment property. Where the Group’s interest in equity shares following the exchange is such that the Group controls an entity, that entity is consolidated. Impairment losses are assessed individually for financial assets that are individually significant and individually or collectively for assets that are not individually significant. In making collective impairment assessments, financial assets are grouped into portfolios on the basis of similar risk characteristics. Future cash flows from these portfolios are estimated on the basis of the contractual cash flows and historical loss experience for assets with similar credit risk characteristics. Historical loss experience is adjusted, on the basis of observable data, to reflect current conditions not affecting the period of historical experience. Impairment losses are recognised in profit or loss and the carrying amount of the financial asset or group of financial assets reduced by establishing an allowance for impairment losses. If, in a subsequent period, the amount of the impairment loss reduces and the reduction can be ascribed to an event after the impairment was recognised, the previously recognised loss is reversed by adjusting the allowance. Once an impairment loss has been recognised on a financial asset or group of financial assets, interest income is recognised on the carrying amount using the rate of interest at which estimated future cash flows were discounted in measuring impairment. Impaired loans and receivables are written off, i.e. the impairment provision is applied in writing down the loan’s carrying value partially or in full, when the Group concludes that there is no longer any realistic prospect of recovery of part or all of the loan. For loans that are individually assessed for impairment, the timing of write off is determined on a case-by-case basis. Such loans are reviewed regularly and write off will be prompted by bankruptcy, insolvency, renegotiation and similar events. The typical time frames from initial impairment to write off for the Group’s collectively-assessed portfolios are: · Retail mortgages: write off usually occurs within five years, or when an account is closed if earlier. · Credit cards: the irrecoverable amount is written off after 12 months; three years later any remaining amounts outstanding are written off. · Overdrafts and other unsecured loans: write off occurs within six years. · Business and commercial loans: write offs of commercial loans are determined in the light of individual circumstances; the period does not exceed five years. Business loans are generally written off within five years. Amounts recovered after a loan has been written off are credited to the loan impairment charge for the period in which they are received. Financial assets carried at fair value - when a decline in the fair value of a financial asset classified as available-for-sale has been recognised directly in other comprehensive income and there is objective evidence that it is impaired, the cumulative loss is reclassified from equity to profit or loss. The loss is measured as the difference between the amortised cost (including any hedge accounting adjustments) of the financial asset and its current fair value. Impairment losses on available-for-sale equity instruments are not reversed through profit or loss, but those on available-for-sale debt instruments are reversed, if there is an increase in fair value that is objectively related to a subsequent event. |
Financial liabilities | 16. Financial liabilities Financial liabilities are recognised initially at fair value and classified into held-for-trading; designated as at fair value through profit or loss; or amortised cost. Issues of financial liabilities measured at amortised cost are recognised on settlement date; all other normal transactions in financial liabilities are recognised on trade date. Held-for-trading - a financial liability is classified as held-for-trading if it is incurred principally for repurchase in the near term, or forms part of a portfolio of financial instruments that are managed together and for which there is evidence of short-term profit taking, or it is a derivative (not in a qualifying hedge relationship). Held-for-trading financial liabilities are recognised at fair value with transaction costs being recognised in profit or loss. Subsequently they are measured at fair value. Gains and losses are recognised in profit or loss as they arise. Designated as at fair value through profit or loss - financial liabilities may be designated as at fair value through profit or loss only if such designation (a) eliminates or significantly reduces a measurement or recognition inconsistency; or (b) applies to a group of financial assets, financial liabilities or both that the Group manages and evaluates on a fair value basis; or (c) relates to an instrument that contains an embedded derivative which is not evidently closely related to the host contract. Financial liabilities that the Group designates on initial recognition as being at fair value through profit or loss are recognised at fair value, with transaction costs being recognised in profit or loss, and are subsequently measured at fair value. Income from trading activities includes gains and losses on held-for-trading financial liabilities as they arise. Financial liabilities designated as at fair value through profit or loss principally comprise structured liabilities issued by the Group: designation significantly reduces the measurement inconsistency between these liabilities and the related derivatives carried at fair value. Amortised cost - all other financial liabilities are measured at amortised cost using the effective interest method (see Accounting policy 3). Fair value - the Group’s approach to determining the fair value of financial instruments measured at fair value is set out in the section of Critical accounting policies and key sources of estimation uncertainty entitled Fair value - financial instruments; further details are given in Note 9 on the accounts. |
Financial guarantee contracts | 17. Financial guarantee contracts Under a financial guarantee contract, the Group, in return for a fee, undertakes to meet a customer’s obligations under the terms of a debt instrument if the customer fails to do so. A financial guarantee is recognised as a liability; initially at fair value and, if not designated as at fair value through profit or loss, subsequently at the higher of its initial value less cumulative amortisation and any provision under the contract measured in accordance with Accounting policy 12. Amortisation is calculated so as to recognise fees receivable in profit or loss over the period of the guarantee. |
Loan commitments | 18. Loan commitments Provision is made for loan commitments, other than those classified as held-for-trading, if it is probable that the facility will be drawn and the resulting loan will be recognised at an amount less than the cash advanced. Syndicated loan commitments in excess of the level of lending under the commitment approved for retention by the Group are classified as held-for-trading and measured at fair value. |
Derecognition | 19. Derecognition A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired or when it has been transferred and the transfer qualifies for derecognition. A transfer requires that the Group either (a) transfers the contractual rights to receive the asset’s cash flows; or (b) retains the right to the asset’s cash flows but assumes a contractual obligation to pay those cash flows to a third party. After a transfer, the Group assesses the extent to which it has retained the risks and rewards of ownership of the transferred asset. The asset remains on the balance sheet if substantially all the risks and rewards have been retained. It is derecognised if substantially all the risks and rewards have been transferred. If substantially all the risks and rewards have been neither retained nor transferred, the Group assesses whether or not it has retained control of the asset. If the Group has retained control of the asset, it continues to recognise the asset to the extent of its continuing involvement; if the Group has not retained control of the asset, it is derecognised. A financial liability is removed from the balance sheet when the obligation is discharged, or is cancelled, or expires. On the redemption or settlement of debt securities (including subordinated liabilities) issued by the Group, the Group derecognises the debt instrument and records a gain or loss being the difference between the debt’s carrying amount and the cost of redemption or settlement. The same treatment applies where the debt is exchanged for a new debt issue that has terms substantially different from those of the existing debt. The assessment of whether the terms of the new debt instrument are substantially different takes into account qualitative and quantitative characteristics including a comparison of the present value of the cash flows under the new terms with the present value of the remaining cash flows of the original debt issue discounted at the effective interest rate of the original debt issue. |
Sale and repurchase transactions | 20. Sale and repurchase transactions Securities subject to a sale and repurchase agreement under which substantially all the risks and rewards of ownership are retained by the Group continue to be shown on the balance sheet and the sale proceeds recorded as a financial liability. Securities acquired in a reverse sale and repurchase transaction under which the Group is not exposed to substantially all the risks and rewards of ownership are not recognised on the balance sheet and the consideration paid is recorded as a financial asset. Securities borrowing and lending transactions are usually secured by cash or securities advanced by the borrower. Borrowed securities are not recognised on the balance sheet or lent securities derecognised. Cash collateral given or received is treated as a loan or deposit; collateral in the form of securities is not recognised. However, where securities borrowed are transferred to third parties, a liability for the obligation to return the securities to the stock lending counterparty is recorded. |
Netting | 21. Netting Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group currently has a legally enforceable right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group is party to a number of arrangements, including master netting agreements, that give it the right to offset financial assets and financial liabilities, but where it does not intend to settle the amounts net or simultaneously, the assets and liabilities concerned are presented gross. |
Capital instruments | 22. Capital instruments The Group classifies a financial instrument that it issues as a liability if it is a contractual obligation to deliver cash or another financial asset, or to exchange financial assets or financial liabilities on potentially unfavourable terms and as equity if it evidences a residual interest in the assets of the Group after the deduction of liabilities. The components of a compound financial instrument issued by the Group are classified and accounted for separately as financial assets, financial liabilities or equity as appropriate. Incremental costs and related tax that are directly attributable to an equity transaction are deducted from equity. The consideration for any ordinary shares of the company purchased by the Group (treasury shares) is deducted from equity. On the cancellation of treasury shares their nominal value is removed from equity and any excess of consideration over nominal value is treated in accordance with the capital maintenance provisions of the Companies Act. On the sale or reissue of treasury shares the consideration received and related tax are credited to equity, net of any directly attributable incremental costs. |
Derivatives and hedging | 23. Derivatives and hedging Derivative financial instruments are initially recognised, and subsequently measured, at fair value. The Group’s approach to determining the fair value of financial instruments is set out in the section of Critical accounting policies and key sources of estimation uncertainty entitled Fair value - financial instruments; further details are given in Note 9 on the accounts. A derivative embedded in a contract is accounted for as a stand-alone derivative if its economic characteristics are not closely related to the economic characteristics of the host contract; unless the entire contract is measured at fair value with changes in fair value recognised in profit or loss. Gains and losses arising from changes in the fair value of derivatives that are not the hedging instrument in a qualifying hedge are recognised as they arise in profit or loss. Gains and losses are recorded in Income from trading activities except for gains and losses on those derivatives that are managed together with financial instruments designated at fair value; these gains and losses are included in Other operating income. The Group enters into three types of hedge relationship: hedges of changes in the fair value of a recognised asset or liability or unrecognised firm commitment (fair value hedges); hedges of the variability in cash flows from a recognised asset or liability or a highly probable forecast transaction (cash flow hedges); and hedges of the net investment in a foreign operation. Hedge relationships are formally designated and documented at inception. The documentation identifies the hedged item and the hedging instrument and details the risk that is being hedged and the way in which effectiveness will be assessed at inception and during the period of the hedge. If the hedge is not highly effective in offsetting changes in fair values or cash flows attributable to the hedged risk, consistent with the documented risk management strategy, hedge accounting is discontinued. Hedge accounting is also discontinued if the Group revokes the designation of a hedge relationship. Fair value hedge - in a fair value hedge, the gain or loss on the hedging instrument is recognised in profit or loss. The gain or loss on the hedged item attributable to the hedged risk is recognised in profit or loss and, where the hedged item is measured at amortised cost, adjusts the carrying amount of the hedged item. Hedge accounting is discontinued if the hedge no longer meets the criteria for hedge accounting; or if the hedging instrument expires or is sold, terminated or exercised; or if hedge designation is revoked. If the hedged item is one for which the effective interest rate method is used, any cumulative adjustment is amortised to profit or loss over the life of the hedged item using a recalculated effective interest rate. Cash flow hedge - in a cash flow hedge, the effective portion of the gain or loss on the hedging instrument is recognised in other comprehensive income and the ineffective portion in profit or loss. When the forecast transaction results in the recognition of a financial asset or financial liability, the cumulative gain or loss is reclassified from equity to profit or loss in the same periods in which the hedged forecast cash flows affect profit or loss. Otherwise the cumulative gain or loss is removed from equity and recognised in profit or loss at the same time as the hedged transaction. Hedge accounting is discontinued if the hedge no longer meets the criteria for hedge accounting; if the hedging instrument expires or is sold, terminated or exercised; if the forecast transaction is no longer expected to occur; or if hedge designation is revoked. The discontinuance of hedge accounting (except where a forecast transaction is no longer expected to occur), the cumulative unrealised gain or loss is reclassified from equity to profit or loss when the hedged cash flows occur or, if the forecast transaction results in the recognition of a financial asset or financial liability, when the hedged forecast cash flows affect profit or loss. Where a forecast transaction is no longer expected to occur, the cumulative unrealised gain or loss is reclassified from equity to profit or loss immediately. Hedge of net investment in a foreign operation - in the hedge of a net investment in a foreign operation, the portion of foreign exchange differences arising on the hedging instrument determined to be an effective hedge is recognised in other comprehensive income. Any ineffective portion is recognised in profit or loss. Non-derivative financial liabilities as well as derivatives may be the hedging instrument in a net investment hedge. On disposal or partial disposal of a foreign operation, the amount accumulated in equity is reclassified from equity to profit or loss. |
Cash and cash equivalents | 24. 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 | 25. Shares in Group entities The Bank’s investments in its subsidiaries are stated at cost less any impairment. Critical accounting policies and key sources of estimation uncertainty The reported results of the Group are sensitive to the accounting policies, assumptions and estimates that underlie the preparation of its financial statements. UK company law and IFRS require the directors, in preparing the Group’s financial statements, to select suitable accounting policies, apply them consistently and make judgements and estimates that are reasonable and prudent. In the absence of an applicable standard or interpretation, IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’, requires management to develop and apply an accounting policy that results in relevant and reliable information in the light of the requirements and guidance in IFRS dealing with similar and related issues and the IASB’s ‘Conceptual Framework for Financial Reporting’. The judgements and assumptions involved in the Group’s accounting policies that are considered by the Board to be the most important to the portrayal of its financial condition are discussed below. The use of estimates, assumptions or models that differ from those adopted by the Group would affect its reported results. |
Provisions for liabilities | (i) Provisions for liabilities As set out in Note 21 on the accounts, at 31 December 2017 the Group recognised provisions for liabilities in respect of Payment Protection Insurance, £632 million (2016 - £753 million), other customer redress, £386 million (2016 - £562 million), residential mortgage backed securities, nil (2016 - £4,966 million), litigation and other regulatory proceedings, £65 million (2016 - £86 million) and property and other £315 million, (2016 - £292 million. Provisions are liabilities of uncertain timing or amount, and are recognised when there is a present obligation as a result of a past event, the outflow of economic benefit is probable and the outflow can be estimated reliably. Judgement is involved in determining whether an obligation exists, and in estimating the probability, timing and amount of any outflows. Where the Group can look to another party such as an insurer to pay some or all of the expenditure required to settle a provision, any reimbursement is recognised when, and only when, it is virtually certain that it will be received. Payment Protection Insurance - the Group has established a provision for redress payable in respect of the mis-selling of Payment Protection Insurance policies. The provision is management’s best estimate of the anticipated costs of redress and related administration expenses. The determination of appropriate assumptions to underpin the provision requires significant judgement by management. The principal assumptions underlying the provision together with sensitivities to changes in those assumptions are given in Note 21 on the accounts. Provisions for litigation - the Group and members of the Group are party to legal proceedings in the United Kingdom, the United States and other jurisdictions, arising out of their normal business operations. The measurement and recognition of liabilities in respect of litigation involves a high degree of management judgement. Before the existence of a present obligation as the result of a past event can be confirmed, numerous facts may need to be established, involving extensive and time-consuming discovery, and novel or unsettled legal questions addressed. Once it is determined there is an obligation, assessing the probability of economic outflows and estimating the amount of any liability can be very difficult. In many proceedings, it is not possible to determine whether any loss is probable or to estimate the amount of any loss. Furthermore, for an individual matter, there can be a wide range of possible outcomes and often it is not practicable to quantify a range of such outcomes. The Group’s outstanding litigation is periodically assessed in consultation with external professional advisers, where appropriate, to determine the likelihood of the Group incurring a liability. A detailed description of the Group’s material legal proceedings and a discussion of the nature of the associated uncertainties are given in Note 30 on the accounts. Tax contingencies - determining the Group’s income tax charge and its provisions for income taxes necessarily involves a significant degree of estimation and judgement. The tax treatment of some transactions is uncertain and tax computations are yet to be agreed with the tax authorities in a number of jurisdictions. The Group recognises anticipated tax liabilities based on all available evidence and, where appropriate, in the light of external advice. Any difference between the final outcome and the amounts provided will affect current and deferred income tax assets and liabilities in the period when the matter is resolved. |
Deferred tax | (ii) Deferred tax The Group makes provision for deferred tax on temporary differences where tax recognition occurs at a different time from accounting recognition. Deferred tax assets of £1,079 million were recognised as at 31 December 2017 (2016 - £1,391 million). The Group has recognised deferred tax assets in respect of losses, principally in the UK, and temporary differences. Deferred tax assets are recognised in respect of unused tax losses and other temporary differences to the extent that it is probable that there will be future UK taxable profits against which the losses and other temporary differences can be utilised. The Group has considered the carrying value of the deferred tax asset as at 31 December 2017 that, based on management’s estimates, sufficient taxable profits will be generated in future years to recover recognised deferred tax assets. These estimates are based on forecast performance and take into account Brexit, the Group’s plans to implement the UK ring-fencing regime and the resultant transfers between members of the Group. Deferred tax assets of £1,886 million (2016 - £2,665 million) have not been recognised in respect of tax losses and other temporary differences where the availability of future taxable profits is uncertain. Further details about the Group’s deferred tax assets are given in Note 23 on the accounts. |
Loan impairment provisions | (iii) Loan impairment provisions The Group’s loan impairment provisions are established to recognise incurred impairment losses in its portfolio of loans classified as loans and receivables and carried at amortised cost in accordance with Accounting policy 15. A loan is impaired when there is objective evidence that events since the loan was granted have affected expected cash flows from the loan. Such objective evidence, indicative that a borrower’s financial condition has deteriorated, can include for loans that are individually assessed: the non-payment of interest or principal; debt renegotiation; probable bankruptcy or liquidation; significant reduction in the value of any security; breach of limits or covenants; and deteriorating trading performance and, for collectively assessed portfolios: the borrowers’ payment status and observable data about relevant macroeconomic measures. The impairment loss is the difference between the carrying value of the loan and the present value of estimated future cash flows at the loan’s original effective interest rate. There are two components to the Group’s loan impairment provisions: individual and collective. Individual component - all impaired loans that exceed specific thresholds are individually assessed for impairment. Individually assessed loans principally comprise the Group’s portfolio of commercial loans to medium and large businesses. Impairment losses are recognised as the difference between the carrying value of the loan and the discounted value of management’s best estimate of future cash repayments and proceeds from any security held. These estimates take into account the customer’s debt capacity and financial flexibility; the level and quality of its earnings; the amount and sources of cash flows; the industry in which the counterparty operates; and the realisable value of any security held. Estimating the quantum and timing of future recoveries involves significant judgement. The size of receipts will depend on the future performance of the borrower and the value of security, both of which will be affected by future economic conditions; additionally, collateral may not be readily marketable. The actual amount of future cash flows and the date they are received may differ from these estimates and consequently actual losses incurred may differ from those recognised in these financial statements. Collective component - this is made up of two elements: loan impairment provisions for impaired loans that are below individual assessment thresholds (collectively assessed provisions) and for loan losses that have been incurred but have not been separately identified at the balance sheet date (latent loss provisions). Collectively assessed provisions are established on a portfolio basis using a present value methodology taking into account the level of arrears, security, past loss experience, credit scores and defaults based on portfolio trends. The most significant factors in establishing these provisions are the expected loss rates and the related average life. These portfolios include mortgages, credit card receivables and other personal lending. The future credit quality of these portfolios is subject to uncertainties that could cause actual credit losses to differ materially from reported loan impairment provisions. These uncertainties include the economic environment, notably interest rates and their effect on customer spending, the unemployment level, payment behaviour and bankruptcy trends. Latent loss provisions are held against estimated impairment losses in the performing portfolio that have yet to be identified as at the balance sheet date. To assess the latent loss within its portfolios, the Group has developed methodologies to estimate the time that an asset can remain impaired within a performing portfolio before it is identified and reported as such. |
Accounting developments | Accounting developments International Financial Reporting Standards A number of IFRSs and amendments to IFRS were in issue at 31 December 2017 that would affect RBS Group from 1 January 2018 or later. Effective 1 January 2018 - IFRS 9 In July 2014, the IASB published IFRS 9 ‘Financial Instruments’ with an effective date of 1 January 2018. IFRS 9 replaces the current financial instruments standard IAS 39, setting out new accounting requirements in a number of areas. The principle features of IFRS 9 are as follows: Recognition and derecognition The material in IAS 39 setting out the criteria for the recognition and derecognition of financial instruments have been included unamended in IFRS 9. Classification and measurement Financial assets - There are three classifications for financial assets in IFRS 9. · Amortised cost - Financial assets with terms that give rise to interest and principal cash flows only and which are held in a business model whose objective is to hold financial assets to collect their cash flow are measured at amortised cost. · Fair value through other comprehensive income - Financial assets with terms that give rise to interest and principal cash flows only and which are held in a business model whose objective is achieved by holding financial assets to collect their cash flow and selling them are measured at fair value through other comprehensive income. · Fair value through profit and loss - Other financial assets are measured at fair value through profit and loss. At initial recognition, any financial asset may be irrevocably designated as measured at fair value through profit or loss if such designation eliminates a measurement or recognition inconsistency. The measurement basis of the majority of the Group’s financial assets will be unchanged on application of IFRS 9. Financial liabilities – Since early adopting in 2016 the IFRS 9 accounting for fair value attributable to own credit risk there are no further material changes on accounting for financial liabilities on adoption of IFRS 9. Hedge accounting IFRS 9’s hedge accounting requirements are designed to align accounting more closely to the risk management framework; permit a greater variety of hedging instruments; and remove or simplify some of the rule-based requirements in IAS 39. The elements of hedge accounting: fair value, cash flow and net investment hedges are retained. The Group accounting policy choice is to continue with the IAS 39 hedge accounting framework. Credit impairment IFRS 9’s credit impairment requirements apply to financial assets measured at amortised cost, to those measured at fair value through other comprehensive income, to lease receivables and to certain loan commitments and financial guarantee contracts. On initial recognition a loss allowance is established at an amount equal to 12-month expected credit losses (ECL) that is the portion of life-time expected losses resulting from default events that are possible within the next 12 months. Where a significant increase in credit risk since initial recognition is identified, the loss allowance increases so as to recognise all expected default events over the expected life of the asset. The Group expects that financial assets where there is objective evidence of impairment under IAS 39 will be credit impaired under IFRS 9, and carry loss allowances based on all expected default events. The assessment of credit risk and the estimation of ECL are required to be unbiased and probability-weighted: determined by evaluating at the balance sheet date for each customer or loan portfolio a range of possible outcomes using reasonable and supportable information about past events, current conditions, forecasts of future events and economic conditions. The estimation of ECL also takes into account the discount of future cash flows. Recognition and measurement of credit impairments under IFRS 9 are more forward-looking than under IAS 39. An RBS Group-wide programme has implemented the necessary changes in the modelling of credit loss parameters, and the underlying credit management and financial processes. The result is an increase in overall credit impairment provisions when compared with the current basis of measurement under IAS 39. Transition The classification and measurement and impairment requirements will be applied retrospectively by adjusting the opening balance sheet at the date of initial application, with no requirement to restate comparative period. In summary, on 1 January 2018, the estimate impact on the Group is a £271 million post tax reduction in equity, comprising: · Reclassification of financial instruments - £7 million pre tax decrease. · Change in impairment methodology - £364 million pre tax reduction. · Net tax impact - £100 million increase. The estimate impact on the bank is a £270 million post tax reduction in equity, comprising: · Reclassification of financial instruments - £46 million pre tax decrease. · Change in impairment methodology - £314 million pre tax reduction. · Net tax impact - £90 million increase. There will be no restatement of accounts prior to 2018. The Group has opted to early adopt the IFRS 9 amendment on negative compensation with effect from 1 January 2018; this is expected to be endorsed for use in the EU in early 2018. Effective 1 January 2018 – other standards IFRS 15 ‘Revenue from Contracts with Customers’ was issued in May 2014. It will replace IAS 11 ‘Construction Contracts’, IAS 18 ‘Revenue’ and several Interpretations. Contracts are bundled or unbundled into distinct performance obligations with revenue recognised as the obligations are met. A restatement is not expected on initial application of this standard. IFRS 2 ‘Share-based payment’ was amended in June 2016 to clarify the accounting for net settlement of tax in respect of share-based payments and the calculation of the cost of modified awards and those with vesting conditions that are not market conditions. IFRIC Interpretation 22 ‘Foreign Currency Transaction and Advance Consideration’ was issued in December 2016 clarifying the date of a foreign exchange transaction to be used on initial recognition of a related asset or other item. IAS 40 ‘Investment Property’ was amended in December 2016 to clarify that transfers into or out of the investment property classification may only occur on a change of use or the property ceasing to meet the definition of an investment property. The effective date is 1 January 2018. On adoption, none of these standards are expected to have a material effect on the group’s results. Effective after 2018 IFRS 16 ‘Leases’ was issued in January 2016 to replace IAS 17 ‘Leases’. There are no substantial changes to the accounting for leases by lessors nor for finance leases; operating leases will be brought on balance sheet through the recognition of assets representing the contractual rights of use, and liabilities will be recognised for the contractual payments that exist. The effective date is 1 January 2019. RBS Group is currently working on the implementation of the new requirements and currently anticipates that the property lease portfolio will have the most significant implementation impact as property represents 87% of the operating lease commitments of RBS Group. A preliminary estimate (excluding the impacts of tax) of the opening balance sheet adjustment as a result of the RBS Group’s property portfolio using a modified retrospective approach to transition would be to create a Right of Use asset of c£1.4bn, also impacting RWAs and an estimated decrease (excluding the impacts of tax) in retaining earnings of some c£0.3bn. As permitted by the standard RBS Group intends to apply IFRS 16 on a retrospective basis but to take advantage of the option not to restate. RBS Group will continue to work on the implementation throughout 2018 and therefore this estimate of the impact is subject to change. Changes could arise from the addition of non property leases, further development of calibration of models and processes, methodology and approach refinement, and sensitivity analysis performed on key assumptions such as discount factors and lease term. IFRS 17 ‘Insurance contracts’ was issued in May 2017 to replace IFRS 4 and to establish a comprehensive standard for inceptors of insurance policies. The effective date is 1 January 2021. IFRIC Interpretation 23 ‘Uncertainty over income tax treatments’ was issued in June 2017 to clarify how to apply judgement in assessing the tax position of the reporting entity. The effective date is 1 January 2019. In October 2017, the IASB amended IAS 28 ‘Investments in associates and joint ventures’ to require long term, non-equity interests in these investments to be tested for impairment first in accordance with IFRS 9 and then in accordance with IAS 28. The effective date of the amendment is 1 January 2019. In February 2018 the IASB amended IAS ‘Employee Benefits’ to clarify the need to update assumptions whenever there is a plan amendment, curtailment or settlement during the reporting period. The effective date is 1 January 2019. The Group is assessing the effect of adopting these standards on its financial statements. |
Accounting policies (Tables)
Accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting policies | |
Schedule of intangible assets and goodwill | Computer software 3 to 12 years Other acquired intangibles 5 to 10 years |
Schedule of property, plant and equipment | Freehold buildings 50 years Long leasehold property (leases with more than 50 years to run) 50 years Short leaseholds unexpired period of lease Property adaptation costs 10 to 15 years Computer equipment up to 5 years Other equipment 4 to 15 years |
Net interest income (Tables)
Net interest income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net interest income | |
Schedule of net interest income | £m £m £m Loans and advances to customers Loans and advances to banks Debt securities Interest receivable (1) Customer accounts: demand deposits Customer accounts: savings deposits Customer accounts: other time deposits Balances with banks Debt securities in issue — — Subordinated liabilities Internal funding of trading businesses Interest payable (1) Net interest income Notes: (1) Negative interest on loans and advances is classed as interest payable and on customer deposits is classed as interest receivable. |
Non-interest income (Tables)
Non-interest income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Non-interest income | |
Schedule of non-interest income | £m £m £m Fees and commissions receivable Payment services Credit and debit card fees Lending (credit facilities) Brokerage Investment management Trade finance Other Fees and commissions payable Income from trading activities Foreign exchange Interest rate Credit Equities and other — Other operating income Operating lease and other rental income Changes in the fair value of financial assets and liabilities designated at fair value through profit or loss and related derivatives Changes in the fair value of investment properties Profit on sale of securities (2) Profit on sale of property, plant and equipment Profit/(loss) on sale of subsidiaries and associates Profit/(loss) on disposal or settlement of loans and receivables Dividend income Share of profits of associated entities — — Other income (3) Notes: (2) Includes £444 million gain realised in relation to NatWest’s equity holding in RBSI. (3) Includes income from activities other than banking. |
Operating expenses (Tables)
Operating expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Operating expenses | |
schedule of operating expenses | Group £m £m £m Wages, salaries and other staff costs Social security costs Pension costs - defined benefit schemes (see Note 4) - gains on curtailments or settlements (see Note 4) — — - defined contribution schemes Staff costs Premises and equipment Other administrative expenses (1) Property, plant and equipment, depreciation and write down (see Note 17) Intangible assets amortisation (see Note 16) Depreciation and amortisation Write down of goodwill and other intangible assets (see Note 16) — Notes: (1) Includes litigation and conduct costs. Further details are provided in Note 21. |
Schedule of restructuring and divestment costs | £m £m £m Staff costs Premises and depreciation Other (2) Notes: (2) Includes other administration expenses and write down of intangible assets. |
Schedule of employees in continuing operations | 2016* 2015* UK Personal & Business Banking Commercial Banking Private Banking Commercial & Private Banking Central & Other Total UK Europe Rest of the World — — Total * Restated - refer to page 165 for further details. Re-presented to reflect the segmental reorganisation. |
Pensions (Tables)
Pensions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Pensions | |
Schedule of major classes of plan assets as a percentage of total plan assets | Main scheme Major classes of plan assets as a percentage of total plan assets % % Quoted assets Quoted equities - Consumer industry - Manufacturing industry - Energy and utilities - Financial institutions - Technology and telecommunications - Other Private equity Index-linked bonds Government fixed interest bonds Corporate fixed interest bonds Unquoted assets Corporate and other bonds Hedge funds — Real estate Derivatives Cash and other assets Equity exposure of equity futures Cash exposure of equity futures |
Schedule of derivative financial instruments | 2017 2016 Notional Fair value Notional Fair value amounts Assets Liabilities amounts Assets Liabilities £bn £m £m £bn £m £m Inflation rate swaps Interest rate swaps Currency forwards Equity and bond call options — Equity and bond put options — Other |
Schedule of the net pension scheme surplus or deficit as a net asset or liability | All schemes Amounts recognised on the balance sheet £m £m Fund assets at fair value Present value of fund liabilities Funded status Asset ceiling/minimum funding Retirement benefit liability Group Bank Net pension (liability)/asset comprises £m £m £m £m Net assets surplus of schemes in surplus (included in Prepayments, accrued income and other assets, Note 18) Net liabilities of schemes in deficit The income statement charge comprises: £m £m £m Continuing operations Discontinued operations — |
Schedule of changes in value of net pension liability | Group Bank Present Asset Net Present Asset Net Fair value of defined ceiling/ pension Fair value of defined ceiling/ pension of plan benefit minimum liability/ of plan benefit minimum liability/ assets obligation funding (1) (asset) assets obligation funding (1) (asset) Changes in value of net pension liability/(asset) £m £m £m £m £m £m £m £m At 1 January 2016 Currency translation and other adjustments Income statement Net interest expense Current service cost Less direct contributions from other scheme members Past service cost Statement of comprehensive income Return on plan assets above recognised interest income Experience gains and losses Effect of changes in actuarial financial assumptions Effect of changes in actuarial demographic assumptions Asset ceiling/minimum funding adjustments Contributions by employer — — Contributions by plan participants and other scheme members — — Liabilities extinguished upon settlement — — — — Benefits paid — — Transfers to/from fellow subsidiaries — — — — — Transfer to disposal groups At 1 January 2017 Currency translation and other adjustments — — — — Income statement Net interest expense — — Current service cost Less direct contributions from other scheme members Past service cost Statement of comprehensive income Return on plan assets above recognised interest income Experience gains and losses Effect of changes in actuarial financial assumptions Effect of changes in actuarial demographic assumptions Asset ceiling/minimum funding adjustments Contributions by employer — — Contributions by plan participants and other scheme members — — Benefits paid — — Transfer to/from fellow subsidiaries — — — At 31 December 2017 Note: (1) In recognising the net surplus or deficit of a pension scheme, the funded status of each scheme is adjusted to reflect any minimum funding requirement imposed on the sponsor and any ceiling on the amount that the sponsor has an unconditional right to recover from a scheme. (2) The Group expects to make contributions to the Main scheme of £190 million in 2018. |
Schedule of principal actuarial assumptions | Principal IAS 19 Principal assumptions of 2015 triennial valuation % % Discount rate Fixed interest swap yield curve plus 1.5% per annum at all durations Inflation assumption (RPI) Retail price index RPI swap yield curve Rate of increase in salaries Rate of increase in deferred pensions Rate of increase in pensions in payment (RPI floor 0%, cap 5%): Limited price indexation (LPI) (0,5) swap yield curve Proportion of pension converted to a cash lump sum at retirement Longevity at age 60 for current pensioners (years) Males Females Longevity at age 60 for future pensioners currently aged 40 (years) Males Females |
Schedule of sensitivities of the present value of defined benefit obligations | Main scheme (decrease)/increase in obligation at 31 December £m £m 0.25% increase in the discount rate 0.25% increase in inflation 0.25% additional rate of increase in pensions in payment Longevity increase of one year |
Schedule of different classes of scheme members proportions | Membership category % % Active members Deferred members Pensioners and dependants |
Schedule of history of defined benefit schemes | Group Bank History of defined benefit schemes £m £m £m £m £m £m £m £m £m £m Fair value of plan assets Present value of plan obligations Net surplus/(deficit) Experience (losses)/gains on plan liabilities Experience gains/(losses) on plan assets Actual return on plan assets Actual return on plan assets - % |
Auditor's remuneration (Tables)
Auditor's remuneration (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Auditor's remuneration | |
Schedule of auditor's remuneration | EY £m £m Fees payable for the audit of the Group’s annual accounts Fees payable to the auditor and its associates for other services to the Group - the audit of the Bank’s subsidiaries pursuant to legislation Total audit and audit-related assurance service fees |
Tax (Tables)
Tax (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tax | |
Schedule of current and deferred tax expense | 2017 2016 2015 Current tax Charge for the year Over/(under) provision in respect of prior years Deferred tax (Charge)/credit for the year Reduction in the carrying value of deferred tax assets — — (Under)/over provision in respect of prior years Tax charge for the year |
Schedule of reconciliation of actual tax charge from the expected tax charge | £m £m £m Expected tax charge Losses and temporary differences in year where no deferred tax asset recognised Foreign profits taxed at other rates UK tax rate change impact (1) — Non-deductible goodwill impairment — — Items not allowed for tax - losses on disposal and write-downs - UK bank levy — — - regulatory and legal actions - other disallowable items Non-taxable items Taxable foreign exchange movements Losses brought forward and utilised Reduction in carrying value of deferred tax asset in respect of - UK losses — — Banking surcharge — Adjustments in respect of prior years (2) Actual tax charge Notes: (1) In recent years, the UK government has steadily reduced the rate of UK corporation tax, with the latest enacted rates standing at 20% with effect from 1 April 2015, 19% from 1 April 2017 and 17% from 1 April 2020. The Finance (No 2) Act 2015 restricts the rate at which tax losses are given credit in future periods to the main rate of UK corporation tax, excluding the Banking Surcharge 8% rate introduced by this Act. Deferred tax assets and liabilities at 31 December 2017 take into account the reduced rates in respect of tax losses and non-banking temporary differences and where appropriate, the banking surcharge inclusive rate in respect of other banking temporary differences. (2) Prior year tax adjustments incorporate refinements to tax computations made on submission and agreement with the tax authorities. Current taxation balances include provisions in respect of uncertain tax positions, in particular in relation to restructuring and other costs where the taxation treatment remains subject to agreement with the relevant tax authorities. |
Financial instruments - class60
Financial instruments - classification (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial instruments | |
Schedule of classification for financial assets | Group Designated as at fair value Held-for- through profit Available- Loans and Other Assets trading or loss for-sale receivables assets Total £m £m £m £m £m £m Cash and balances at central banks — — — Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries — - reverse repos — — — — — - other (1) — — — Loans and advances to customers - amounts due from fellow subsidiaries — — — — — - reverse repos — — — — — - other — — Debt securities (2) — — Equity shares — — Settlement balances — — Derivatives - amounts due from intermediate holding company and fellow subsidiaries - other Assets of disposal groups Other assets — — — — 31 December 2017 Cash and balances at central banks — — — Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries — - reverse repos — — — - other (1) — — — Loans and advances to customers - amounts due from fellow subsidiaries — — - reverse repos — — — - other — — Debt securities (2) — — Equity shares — Settlement balances — — Derivatives - amounts due from intermediate holding company - other Assets of disposal groups Other assets — — — — 31 December 2016 Notes: (1) Includes items in the course of collection from other banks of £593 million (2016 - £559 million). (2) Debt securities balances with Group companies are shown on pages 61 and 62. |
Schedule of classification for financial liabilities | Group Designated as at fair value Held-for- through profit Amortised Other Liabilities trading or loss cost liabilities Total £m £m £m £m £m Deposits by banks - amounts due to intermediate holding company and fellow subsidiaries — - repos — — — — - other (3) — — Customer accounts - amounts due to fellow subsidiaries — — - repos — — — — - other (4) Debt securities in issue (5) — — Settlement balances — — Short positions — — — — Derivatives - amounts due to intermediate holding company and fellow subsidiaries - other — Subordinated liabilities - amounts due to intermediate holding company and fellow subsidiaries — — - other — — Liabilities of disposal groups Other liabilities 31 December 2017 Deposits by banks - amounts due to intermediate holding company and fellow subsidiaries — - repos — — - other (3) — Customer accounts - amounts due to fellow subsidiaries — - repos — — - other (4) Debt securities in issue (5) — — Settlement balances — — Short positions — — Derivatives - amounts due to intermediate holding company - other Subordinated liabilities - amounts due to intermediate holding company and fellow subsidiaries — — - other — — Liabilities of disposal groups Other liabilities 31 December 2016 Notes: (3) Includes items in the course of transmission to other banks of £198 million (2016 - £211 million). (4) The carrying amount of other customer accounts designated as at fair value through profit or loss is £26 million (2016 - £54 million) higher than the principal amount. No amounts have been recognised in the profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. Measured as the change in fair value from movements in the period in the credit risk premium payable. (5) Comprises bonds and medium term notes of £396 million (2016 - £301 million) and certificates of deposit and other commercial paper of nil (2016 - nil). |
Schedule of amounts due from/to, included in the financial instrument assets and liabilities | Group 2017 2016 Intermediate Intermediate holding Fellow holding Fellow company (6) subsidiaries company (6) subsidiaries £m £m £m £m Assets Loans and advances to banks Loans and advances to customers — — — Derivatives — Liabilities Deposits by banks Customer accounts — — Derivatives — Notes: (6) Refer to note 40 for holding company details. |
Schedule of financial instruments amounts relating to continuing operations included in operating profit (loss) before tax | Group £m £m £m Gains/(losses) on financial assets/liabilities designated as at fair value through profit or loss Gains/(losses) on disposal or settlement of loans and receivables |
Schedule of financial assets and liabilities that are offset on the balance sheet | Offsetable instruments Offsetable potential not recognised by IFRS Net amount after Effect of the effect of Instruments master netting Other netting outside Balance IFRS and similar Cash financial arrangements and netting sheet Balance Gross offset sheet agreements collateral collateral related collateral arrangements total 2017 £m £m £m £m £m £m £m £m £m Assets Derivatives — Loans and advances to banks — — — Settlement balances — — — — — — — Liabilities Derivatives — — — Deposits by banks — — — Settlement balances — — — — — — — — — 2016 Assets Derivatives — Reverse repurchase agreements — — Settlement balances — — — — — Liabilities Derivatives — — Repurchase agreements — — — Settlement balances — — — Note: (1) The effect of master netting agreements on derivatives within the Bank was £1,804 million (2016 - £2,120 million). |
Bank | |
Financial instruments | |
Schedule of classification for financial assets | Bank Designated as at fair value Held-for- through profit Available- Loans and Other Assets trading or loss for-sale receivables assets Total £m £m £m £m £m £m Cash and balances at central banks — — — Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries — - other (1) — — — Loans and advances to customers - amounts due from fellow subsidiaries — — — - other — — Equity shares — — — — Debt securities — — — Investment in group undertakings — — — — Settlement balances — — — — Derivatives - amounts due from intermediate holding company - other Other assets — — — — 31 December 2017 Cash and balances at central banks — — — — Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries — - other (1) — — — Loans and advances to customers - amounts due from fellow subsidiaries — — — - other — — Equity shares — — — Investment in group undertakings — — — — Settlement balances — — — Derivatives - amounts due from intermediate holding company - other Other assets — — — — 31 December 2016 Notes: (1) Includes items in the course of collection from other banks of £562 million (2016 - £531 million). |
Schedule of classification for financial liabilities | Bank Designated as at fair value Held-for- through profit Amortised Other Liabilities trading or loss cost liabilities Total £m £m £m £m £m Deposits by banks - amounts due to intermediate holding company and fellow subsidiaries — — - other (3) — — Customer accounts - amounts due to fellow subsidiaries — — - other (4) Settlement balances — — — — Derivatives - amounts due to intermediate holding company - other — Subordinated liabilities - amounts due to holding company — — - other — — Other liabilities — 31 December 2017 Deposits by banks - amounts due to intermediate holding company and fellow subsidiaries — - other (3) — Customer accounts - amounts due to fellow subsidiaries — — - other (4) Settlement balances — — Derivatives - amounts due to intermediate holding company - other — — Subordinated liabilities - amounts due to intermediate holding company — — - other — — Other liabilities — 31 December 2016 Notes: (3) Includes items in the course of transmission to other banks of £192 million (2016 - £204 million). (4) The carrying amount of other customer accounts designated as at fair value through the profit or loss is £27 million (2016 - £57 million) higher than the principal amount. No amounts have been recognised in the profit or loss for changes in credit risk associated with these liabilities as the changes are immaterial both during the period and cumulatively. Measured as the change in fair value from movements in the period in the credit risk premium payable. |
Schedule of amounts due from/to, included in the financial instrument assets and liabilities | Bank 2017 2016 Intermediate Intermediate holding Fellow holding Fellow company (5) subsidiaries Subsidiaries company (5) subsidiaries Subsidiaries £m £m £m £m £m £m Assets Loans and advances to banks Loans and advances to customers — — Derivatives — — — — Liabilities Deposits by banks Customer Accounts — — Derivatives — — — — Notes: (5) Refer to note 40 for holding company details. |
Financial instruments - valua61
Financial instruments - valuation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial instruments | |
Schedule financial assets carried at fair value on the balance sheet by valuation hierarchy | 2017 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total £bn £bn £bn £bn £bn £bn £bn £bn Assets Loans and advances — — — Debt securities — — - of which AFS — — Equity shares — — — — — — Derivatives — — — — — Proportion — |
Schedule financial liabilities carried at fair value on the balance sheet by valuation hierarchy | 2017 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total £bn £bn £bn £bn £bn £bn £bn £bn Liabilities Deposits — — — — Short positions — — — — — — Derivatives — — — — — — — Proportion — — — |
Schedule of carrying value and fair value of financial instruments carried at amortised cost on the balance sheet | Group Bank Items where Items where fair value fair value approximates Carrying Fair Fair value hierarchy level approximates Carrying Fair Fair value hierarchy level carrying value value value Level 2 Level 3 carrying value value value Level 2 Level 3 2017 £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn Financial assets Cash and balances at central banks 35.8 34.8 Loans and advances to banks 0.6 79.1 79.5 1.0 78.5 0.6 55.0 55.5 1.1 54.4 Loans and advances to customers 191.9 191.3 0.2 191.1 160.7 160.1 — 160.1 Debt securities 1.1 1.1 — 1.1 1.1 1.1 — 1.1 Settlement balances — — Financial liabilities Deposits by banks 18.8 34.4 35.6 17.0 18.6 4.5 27.4 28.5 17.0 11.5 Customer accounts 206.3 26.9 26.9 4.9 22.0 187.2 13.8 13.8 4.9 8.9 Debt securities in issue 0.4 0.4 — 0.4 — — — — Settlement balances — — Notes in circulation (1) 0.8 — Subordinated liabilities 5.8 6.0 5.9 0.1 5.6 5.9 5.9 — 2016 Financial assets Cash and balances at central banks 2.6 1.2 Loans and advances to banks 0.6 87.6 88.1 3.6 84.5 0.5 63.8 64.2 3.3 60.9 Loans and advances to customers 166.0 166.0 0.9 165.1 150.0 150.0 — 150.0 Debt securities — — — — — — — — Settlement balances 1.7 0.1 Financial liabilities Deposits by banks 5.1 11.1 12.1 0.9 11.2 4.5 4.2 5.2 — 5.2 Customer accounts 197.3 24.9 24.9 5.7 19.2 180.1 12.1 12.1 5.7 6.4 Debt securities in issue 0.3 0.3 — 0.3 — — — — Settlement balances 1.8 0.1 Notes in circulation (1) 0.8 — Subordinated liabilities 7.3 7.0 1.6 5.4 5.9 5.7 1.3 4.4 Note: (1) Included in Accruals and other liabilities. |
Financial instruments - matur62
Financial instruments - maturity analysis (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial instruments | |
Schedule of residual maturity of financial instruments | Group 2017 2016 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks 35,799 — 35,799 2,567 — 2,567 Loans and advances to banks 65,132 14,713 79,845 86,817 10,335 97,152 Loans and advances to customers 41,947 149,942 191,889 43,619 133,446 177,065 Debt securities 433 1,179 1,612 703 3,760 4,463 Equity shares — 43 43 — 87 87 Settlement balances 3 — 3 1,693 — 1,693 Derivatives 217 2,098 2,315 597 3,307 3,904 Liabilities Deposits by banks 31,634 22,213 53,847 15,792 4,253 20,045 Customer accounts 225,457 7,915 233,372 229,135 4,804 233,939 Debt securities in issue — 396 396 — 301 301 Settlement balances and short positions 4 — 4 2,284 4,060 6,344 Derivatives 228 2,950 3,178 506 4,148 4,654 Subordinated liabilities 21 5,734 5,755 369 6,926 7,295 |
Schedule of undiscounted cash flows payable by contractual maturity | Group 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2017 £m £m £m £m £m £m Deposits by banks 31,921 788 4,960 15,240 619 88 Customer accounts 225,745 1,414 1,145 1,004 2,242 3,142 Debt securities in issue 8 33 87 87 617 — Subordinated liabilities 46 174 1,400 624 2,604 1,207 Settlement balances and other liabilities 813 — — — — — 258,533 2,409 7,592 16,955 6,082 4,437 Guarantees and commitments notional amount Guarantees (1) 674 — — — — — Commitments (2) 53,132 — — — — — 53,806 — — — — — 2016 Deposits by banks 10,707 1,205 2,200 1,298 692 93 Customer accounts 218,100 1,196 733 487 1,084 1,498 Debt securities in issue — — — — — 301 Subordinated liabilities 50 529 1,902 821 2,991 1,343 Settlement balances and other liabilities 2,510 — — — — — 231,367 2,930 4,835 2,606 4,767 3,235 Guarantees and commitments notional amount Guarantees (1) 869 — — — — — Commitments (2) 55,127 — — — — — 55,996 — — — — — Notes: (1) The Group is only called upon to satisfy a guarantee when the guaranteed party fails to meet its obligations. The Group expects most guarantees it provides to expire unused. (2) The Group 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. The Group does not expect all facilities to be drawn, and some may lapse before drawdown. |
Bank | |
Financial instruments | |
Schedule of residual maturity of financial instruments | Bank 2017 2016 Less than More than Less than More than 12 months 12 months Total 12 months 12 months Total £m £m £m £m £m £m Assets Cash and balances at central banks 34,763 — 34,763 1,198 — 1,198 Loans and advances to banks 48,452 7,336 55,788 60,767 3,836 64,603 Loans and advances to customers 26,648 134,031 160,679 26,718 123,429 150,147 Debt securities — 1,059 1,059 — — — Equity shares — 7 7 — 11 11 Settlement balances — — — 119 — 119 Derivatives 209 2,068 2,277 436 2,646 3,082 Liabilities Deposits by banks 13,882 18,583 32,465 7,620 1,588 9,208 Customer accounts 193,274 7,876 201,150 187,750 4,740 192,490 Settlement balances and short positions — — — 86 — 86 Derivatives 217 2,900 3,117 429 3,509 3,938 Subordinated liabilities 21 5,619 5,640 25 5,865 5,890 |
Schedule of undiscounted cash flows payable by contractual maturity | Bank 0-3 months 3-12 months 1-3 years 3-5 years 5-10 years 10-20 years 2017 £m £m £m £m £m £m Deposits by banks — Customer accounts Subordinated liabilities Settlement balances — — — — — Guarantees and commitments notional amount Guarantees — — — — — Commitments — — — — — — — — — — 2016 Deposits by banks - Customer accounts Subordinated liabilities Settlement balances — — — — — Guarantees and commitments notional amount Guarantees — — — — — Commitments — — — — — — — — — — |
Financial assets - impairments
Financial assets - impairments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial assets - impairments | |
Schedule of movement in provision for impairment losses on loan and advances | Group Individually Collectively assessed assessed Latent £m £m £m £m £m At 1 January Transfers to disposal groups — — — — Transfers from fellow subsidiaries — Currency translation and other adjustments — — Amounts written-off — Recoveries of amounts previously written-off — Charge/(release) to income statement - from continuing operations - from discontinued operations — — — — Unwind of discount (recognised in interest income) - from continuing operations — - from discontinued operations — — — — At 31 December Bank Individually Collectively assessed assessed Latent £m £m £m £m £m At 1 January Currency translation and other adjustments — Amounts written-off — Recoveries of amounts previously written-off — Charge/(release) to income statement Unwind of discount (recognised in interest income) — At 31 December |
Summary of impairment charge/(release) to the income statement | Group Impairment charge/(release) to the income statement £m £m £m Loans and advances to customers Charge/(release) to the income statement for continuing operations Group £m £m £m Gross income not recognised but which would have been recognised under the original terms of the impaired loans Domestic Foreign Total Group £m £m £m Interest on impaired loans included in net interest income Domestic Total |
Summary of impaired financial assets | Group 2017 2016 Carrying Carrying Cost Provision value Cost Provision value £m £m £m £m £m £m Loans and receivables Loans and advances to customers (1) Group Carrying Carrying value value £m £m Available-for-sale securities Equity shares Bank 2017 2016 Carrying Carrying Cost Provision value Cost Provision value £m £m £m £m £m £m Loans and receivables Loans and advances to customers (2) Notes: (1) Impairment provisions individually assessed on balances of £951 million (2016 - £535 million). (2) Impairment provisions individually assessed on balances of £647 million (2016 - £425 million). |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivatives | |
Schedule of notional amount and fair value of the derivatives | Group 2017 2016 Notional Notional amount Assets Liabilities amount Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts Spot, forwards and futures Currency swaps Options purchased — — Options written — — Interest rate contracts Interest rate swaps Options purchased — — Options written — — Futures and forwards — — — — — Equity and commodity contracts — — — — Amounts above include: Due from/to intermediate holding company Due from/to fellow subsidiaries — — Bank 2017 2016 Notional Notional amount Assets Liabilities amount Assets Liabilities £bn £m £m £bn £m £m Exchange rate contracts Spot, forwards and futures Currency swaps Options purchased — — Options written — — Interest rate contracts Interest rate swaps Options purchased — — Options written — — Amounts above include: Due from/to intermediate holding company |
Debt securities (Tables)
Debt securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt securities | |
Schedule of debt securities | Group Central and local Other Government financial Of which UK US Other Banks institutions Corporate Total ABS (1) 2017 £m £m £m £m £m £m £m Available-for-sale — — Loans and receivables — — — — — — — 2016 Held-for-trading — — Available-for-sale — — — — — Note: (1) Includes covered bonds. |
Schedule of available-for-sale debt securities | Within 1 year After 1 but within 5 years Total Amount Yield Amount Yield Amount Yield 2017 £m % £m % £m % Central and local governments - UK — — - Other — — Banks Other financial institutions — — — — 2016 Central and local governments - Other — Banks — Note: (1) There are no balances with a maturity of after 5 but within 10 years and after 10 years. |
Equity shares (Tables)
Equity shares (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity shares | |
Schedule of equity shares | Group 2017 2016 Listed Unlisted Total Listed Unlisted Total £m £m £m £m £m £m Held-for-trading — — — — Designated as at fair value through profit or loss Available-for-sale — Available-for-sale Gross unrealised gains — Bank 2017 2016 Listed Unlisted Total Listed Unlisted Total £m £m £m £m £m £m Held-for-trading — — — — Available-for-sale — — — — Available-for-sale Gross unrealised gains — — — — |
Investments in Group undertak67
Investments in Group undertakings (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments in Group undertakings | |
Schedule of investments in Group undertakings | Bank £m £m At 1 January Currency translation and other adjustments Additional investments in Group undertakings — Acquisitions Disposals — (Impairment)/write back of investments At 31 December Nature of business Country of incorporation and principal area of operations Coutts & Company (1) Private banking Great Britain RBS Securities Inc. (2) Broker dealer US Ulster Bank Limited Banking Northern Ireland Notes: (1) Coutts & Company is incorporated with unlimited liability. Its registered office is 440 Strand, London WC2R OQS. (2) RBS Securities Inc is classed as a disposal group at 31 December 2017. Shares are not directly held by the Bank. |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets | |
Schedule of intangible assets | Group 2017 2016 Goodwill Other (1) Total Goodwill Other(1) Total £m £m £m £m £m £m Cost At 1 January Transfers to disposal groups — Transfers from/to fellow subsidiaries — Currency translation and other adjustments Additions — — Disposals and write-off of fully amortised assets — — At 31 December Accumulated amortisation and impairment At 1 January Transfers to disposal groups — Transfers from/to fellow subsidiaries — Currency translation and other adjustments Disposals and write-off of fully amortised assets — — Charge for the year - continuing operations — — Write down of goodwill and intangible assets - continuing operations — — — — At 31 December Net book value at 31 December — Note: (1) Principally internally generated software. Bank £m £m Cost At 1 January Additions — Transfers from/to fellow subsidiaries Disposals and write-off of fully amortised assets — At 31 December Accumulated amortisation At 1 January Transfers from/to fellow subsidiaries Disposals and write-off of fully amortised assets — Charge for the year At 31 December Net book value at 31 December |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, plant and equipment | |
Schedule of property, plant and equipment | Group Long Short Computers Operating Investment Freehold leasehold leasehold and other lease properties premises premises premises equipment assets Total 2017 £m £m £m £m £m £m £m Cost or valuation At 1 January — Transfers to disposal groups — — Currency translation and other adjustments — — — Transfers from/to fellow subsidiaries — Additions Change in fair value of investment properties - continuing operations — — — — — Disposals and write-off of fully depreciated assets — At 31 December Accumulated impairment, depreciation and amortisation At 1 January — — Transfers to disposal groups — — Currency translation and other adjustments — — — — Transfers from/to fellow subsidiaries — — Disposals and write-off of fully depreciated assets — Charge for the year - from continuing operations — - from discontinued operations — — — — Write back of property, plant and equipment - from discontinued operations — — — — — At 31 December — Net book value at 31 December 2016 Cost or valuation At 1 January — Transfers to disposal groups — — Currency translation and other adjustments — Purchases of Nordisk properties from intermediate holding company — — — — — Transfers from/to fellow subsidiaries — — — Additions — Change in fair value of investment properties - continuing operations — — — — — Disposals and write-off of fully depreciated assets — At 31 December — Accumulated impairment, depreciation and amortisation At 1 January — — Transfers to disposal groups — — Currency translation and other adjustments — — Transfers from/to fellow subsidiaries — — — Disposals and write-off of fully depreciated assets — — Charge for the year - from continuing operations — — - from discontinued operations — — — Write down of property, plant and equipment - discontinuing operations — — — — — At 31 December — — Net book value at 31 December — Bank Long Short Computers Freehold leasehold leasehold and other premises premises premises equipment Total 2017 £m £m £m £m £m Cost or valuation At 1 January Transfers to disposal groups Transfers from/to fellow subsidiaries Additions Disposals and write-off of fully depreciated assets At 31 December Accumulated impairment, depreciation and amortisation At 1 January Transfers to disposal groups — Transfers from/to fellow subsidiaries — Disposals and write-off of fully depreciated assets — Charge for the year At 31 December Net book value at 31 December 2016 Cost or valuation At 1 January Additions Disposals and write-off of fully depreciated assets At 31 December Accumulated impairment, depreciation and amortisation At 1 January Disposals and write-off of fully depreciated assets — Charge for the year At 31 December Net book value at 31 December |
Prepayments, accrued income a70
Prepayments, accrued income and other assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepayments, accrued income and other assets | |
Schedule of prepayments, accrued income and other assets | Group Bank 2016 £m £m £m £m Prepayments Accrued income Tax recoverable — — Pension schemes in net surplus (see Note 4) Interests in associates — Other assets |
Discontinued operations and a71
Discontinued operations and assets and liabilities of disposal groups (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued operations and assets and liabilities of disposal groups | |
Schedules relating to discontinued operations | (a) Profit from discontinued operations, net of tax £m £m £m NWGH Interest income — — 1 Interest expense Net interest income Other income Total income Operating expenses Loss before impairment losses Impairment losses — Operating loss before tax Tax credit/(charge) Loss from NWGH discontinued operations, net of tax UBIH Interest income — Interest expense — Net interest income — Other income — Total income — Operating expenses — (Loss)/profit before impairment losses — Impairment losses — Operating profit before tax — Tax credit/(charge) — Profit from UBIH discontinued operations, net of tax — Note: (1) Other comprehensive loss from discontinued operations for the year ended 31 December 2017 was £67 million. (b) Operating cash flows attributable to discontinued operations £m £m £m Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Net increase in cash and cash equivalents (c) Assets and liabilities of disposal groups £m £m Assets of disposal groups Cash and balances at central banks — Loans and advances to banks Loans and advances to customers Debt securities and equity shares Derivatives Property, plant and equipment Settlement balances — Other assets Liabilities of disposal groups Deposits by banks Customer accounts Derivatives Debt securities in issue — Subordinated liabilities Settlement balances — Short positions — Provisions for liabilities and charges Other liabilities |
Short positions (Tables)
Short positions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Short positions | |
Schedule of short positions | Group £m £m Debt securities - Government — - other issuers — — Note: (1) All short positions are classified as held-for-trading. |
Provision for liabilities and73
Provision for liabilities and charges (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Provisions for liabilities and charges | |
Schedule for provisions for liabilities and charges | Group Payment Other Residential Litigation and protection customer mortgage backed other Property Provisions for liabilities and charges insurance (1) redress securities (2) regulatory (3) and other (4) Total £m £m £m £m £m £m At 1 January 2017 Transfer to disposal groups — — Acquisition of business — — Currency translation and other movements — — Charge to income statement - from continuing operations — - from discontinued operations — — — Releases to income statement - from continuing operations — - from discontinued operations — — — — Provisions utilised At 31 December 2017 — Bank Payment Other Litigation protection customer and other Property Provisions for liabilities and charges insurance (1) redress regulatory (3) and other (4) Total £m £m £m £m £m At 1 January 2017 — Acquisition of business — — — Currency translation and other movements — — Charge to income statement Releases to income statement — Provisions utilised At 31 December 2017 For the notes to these tables refer to the following page. Notes: (1) To reflect the increased volume of complaints following the FCA’s introduction of an August 2019 timebar as outlined in FCA announcement CP17/3 and the introduction of new Plevin (unfair commission) complaint handling rules, the Group increased its provision for PPI by £107 million in 2017 (2016 - £362 million, 2015 - £359 million, 2014 - £440 million) bringing the cumulative charge to £3.0 billion, of which £2.1 billion (70%) in redress and £0.3 billion in administrative expenses had been paid by 31 December 2017. Of the £3.0 billion cumulative charge, £2.7 billion relates to redress and £0.3 billion to administrative expenses. The principal assumptions underlying the Group’s provision in respect of PPI sales are: assessment of the total number of complaints that the Group will receive before 29 August 2019; the proportion of these that will result in redress; and the average cost of such redress. The number of complaints has been estimated from an analysis of the Group’s portfolio of PPI policies sold by vintage and by product. Estimates of the percentage of policyholders that will lodge complaints (the take up rate) and of the number of these that will be upheld (the uphold rate) have been established based on recent experience, guidance in FCA policy statements and the expected rate of responses from proactive customer contact. The average redress assumption is based on recent experience and FCA calculation rules. The table below shows the sensitivity of the provision to changes in the principal assumptions (all other assumptions remaining the same). Sensitivity Assumptions Actual to date Future expected Change in assumption % Consequential change in provision £m Customer initiated complaints (1) 1,423k 256k +/-5 +/-18 Uphold rate (2) +/-1 +/-4 Average redress (3) £1,681 £1,476 +/-5 +/-18 Processing costs per claim (4) £160 £142 +/- £10 +/- 1 Notes: (1) Claims received directly by the Group to date, including those received via CMCs and Plevin (commission) only. Excluding those for proactive mailings and where no PPI policy exists. (2) Average uphold rate per customer initiated claims received directly by the Group to end of timebar for both PPI (mis-sale) and Plevin (commission), excluding those for which no PPI policy exists. (3) Average redress for PPI (mis-sale) and Plevin (commission) pay-outs. (4) Processing costs per claim on a valid complaints basis, includes direct staff costs and associated overhead - excluding FOS fees. Interest that will be payable on successful complaints has been included in the provision as has the estimated cost to the Group of administering the redress process. There are uncertainties as to the eventual cost of redress which will depend on actual complaint volumes, take up and uphold rates and average redress costs. Assumptions related to these are inherently uncertain and the ultimate financial impact may be different from the amount provided. We continue to monitor the position closely and refresh the underlying assumptions. Background information in relation to PPI claims is given in Note 30. (2) In the US, the Group is subject to civil litigation and various investigations relating to its issuance and underwriting of US mortgage-backed securities (RMBS). Additional charges of US$92 million (£71 million) and US$333 million (£258 million) were taken in Q2 2017 and Q4 2017 respectively, in connection with these matters, resulting in a year to date charge of US$774 million (£600 million). Detailed descriptions of the Group’s legal proceedings and discussion of the associated uncertainties are given in Note 30. In July 2017, the RBS Group reached a settlement with the Federal Housing Finance Agency (FHFA) as conservator of Fannie Mae and Freddie Mac, to resolve claims by FHFA in relation to the RBS Group’s issuance and underwriting of approximately US$32 billion (£25 billion) of RMBS in the US. As part of the settlement, FHFA’s outstanding litigation against the RBS Group relating to those securities was withdrawn. Under the settlement, the RBS Group paid FHFA US$5.5 billion (£4.2 billion), of which US$754 million (£581 million) was reimbursed to the RBS Group under indemnification agreements with third parties. The cost to the RBS Group (net of the indemnity mentioned above) of US$4.75 billion (£3.65 billion) was largely covered by then-existing provisions but an incremental charge of US$196 million (£151 million) was recorded in Q2 2017 in relation to the settlement. (3) The Group is party to certain legal proceedings and regulatory investigations and continues to co-operate with a number of regulators. All such matters are periodically reassessed with the assistance of external professional advisers, where appropriate, to determine the likelihood of the Group incurring a liability and to evaluate the extent to which a reliable estimate of any liability can be made. Details of these investigations and a discussion of the nature of the associated uncertainties are given in Note 30. (4) The majority of property provisions relate to vacant leasehold property and comprise the present value of the shortfall between rentals payable and rentals receivable from sub-letting. Other provisions include restructuring provisions of £110 million principally in relation to termination benefits. |
Accruals and other liabilities
Accruals and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accruals and other liabilities | |
Schedule of accruals and other liabilities | Group Bank £m £m £m £m Notes in circulation — — Current tax Accruals Deferred income Deferred tax (see Note 23) — — Other liabilities |
Deferred tax (Tables)
Deferred tax (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred tax | |
Schedule of deferred tax asset and liability | Group Bank £m £m £m £m Deferred tax liability — — Deferred tax asset Net deferred tax asset |
Schedule of net deferred tax asset | Group Available- Tax Accelerated for-sale Cash losses capital Deferred financial flow carried Pension allowances Provisions gains assets hedging forward Other Total £m £m £m £m £m £m £m £m £m At 1 January 2016 Acquisitions and disposals of subsidiaries — — — — (Credit)/charge to income statement - from continuing operations - from discontinued operations — — — — — — — Charge/(credit) to other comprehensive income — — — — Currency translation and other adjustments — — — At 1 January 2017 — Acquisitions and disposals of subsidiaries — — — — — — — Charge/(credit) to income statement — — — Charge/(credit) to other comprehensive income — — — — — — Currency translation and other adjustments — — — — At 31 December 2017 — Bank Available Tax Accelerated for sale Cash losses capital Deferred financial flow carried Pension allowances Provisions gains assets hedging forward Other Total £m £m £m £m £m £m £m £m £m At 1 January 2016 — — (Credit)/charge to income statement — Charge/(credit) to other comprehensive income — — — — — At 1 January 2017 — — — Charge/(credit) to income statement — — — Charge/(credit) to other comprehensive income — — — — — — Currency translation and other adjustments — — — — — — — At 31 December 2017 — — — |
Schedule of recognised deferred tax assets in respect of tax losses | £m £m UK tax losses carried forward - National Westminster Bank Plc - Ulster Bank Limited |
Subordinated liabilities (Table
Subordinated liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Subordinated liabilities | |
Schedule of subordinated liabilities | Group Bank £m £m £m £m Dated loan capital Undated loan capital Preference shares |
Schedule of contractual maturity of subordinated liabilities | Group 2020-2022 2023-2027 Thereafter Perpetual Total 2017 - final redemption £m £m £m £m £m £m £m Sterling — US dollar — — — — Euro — — — — Other — — — — — — Group Currently 2020-2022 2023-2027 Thereafter Perpetual Total 2017 - call date £m £m £m £m £m £m £m £m Sterling — — — US dollar — — — — — — Euro — — — — Other — — — — — — — — Group 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - final redemption £m £m £m £m £m £m £m Sterling — — US dollar — — — Euro — — Other — — — — — — Group Currently 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - call date £m £m £m £m £m £m £m £m Sterling — US dollar — — — — — — Euro — — Other — — — — — — — Bank 2020-2022 2023-2027 Thereafter Perpetual Total 2017 - final redemption £m £m £m £m £m £m £m Sterling — US dollar — — — — Euro — — — — — Bank Currently 2020-2022 2023-2027 Thereafter Perpetual Total 2017 - call date £m £m £m £m £m £m £m £m Sterling — — — US dollar — — — — — — Euro — — — — — — — — — Bank 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - final redemption £m £m £m £m £m £m £m Sterling — — US dollar — — — — Euro — — — — — — Bank Currently 2019-2021 2022-2026 Thereafter Perpetual Total 2016 - call date £m £m £m £m £m £m £m £m Sterling — US dollar — — — — — — Euro — — — — — — — |
Schedule of issuances and redemptions | Capital Transfers from fellow subsidiaries treatment £m £m National Westminster Bank Plc SEK 3 million dated notes (1) Tier 1 — Note: (1) Nordisk Issuance - transferred from RBS to NatWest in 2016 in preparation for ring-fencing. Capital Redemptions in the period (values as at date of transaction) treatment £m £m National Westminster Bank Plc US$ 300 million 8.6250% non-cumulative preference shares (callable) Tier 1 — Coutts & Company € 20 million floating rate subordinated loan capital 2023 Tier 2 — £30 million floating rate subordinated loan capital - 2023 Tier 2 — £13.3 million 0.7294% undated subordinated notes Tier 2 — US$ 15 million 0.4691% undated subordinated notes Tier 2 — Ulster Bank Limited £100 million floating rate subordinated loan capital 2019 Tier 2 — € 120 million perpetual floating rate notes 2020 Tier 2 — € 60 million perpetual floating rate notes 2020 Tier 2 — € 280 million subordinated loan capital December 2022 Tier 2 — € 400 million subordinated loan December 2017 Tier 2 — — Capital Dated loan capital treatment £m £m National Westminster Bank Plc £300 million 6.50% notes 2021 (not callable) Tier 2 £2,000 million floating rate notes 2023 (callable January 2018) Tier 2 £1,000 million floating rate notes 2019 (callable quarterly) Tier 2 Notes: (1) In the event of certain changes in tax laws, dated loan capital issues may be redeemed in whole, but not in part, at the option of the issuer, at the principal amount thereof plus accrued interest, subject to prior regulatory approval. (2) Except as stated above, claims in respect of the Group’s dated loan capital are subordinated to the claims of other creditors. None of the Group’s dated loan capital is secured. (3) Interest on all floating rate subordinated notes is calculated by reference to market rates. Capital Undated loan capital treatment £m £m National Westminster Bank Plc US$193 million floating rate notes (callable semi-annually) Tier 2 US$229 million floating rate notes (callable semi-annually) Tier 2 US$285 million floating rate notes (callable semi-annually) Tier 2 € 178 million floating rate notes (callable quarterly) Tier 2 € 100 million floating rate notes (callable quarterly) Tier 2 £53 million 7.125% notes (callable every five years from October 2022) Tier 2 £35 million 11.50% notes (callable December 2022) (1) Tier 2 £700 million floating rate notes (callable every five years from January 2018) Tier 2 £700 million floating rate notes (callable quarterly from September 2016) Tier 2 Notes: (1) Exchangeable at the option of the issuer into 8.392% (gross) non-cumulative preference shares of £1 each of National Westminster Bank Plc at any time. (2) The company can satisfy interest payment obligations by issuing sufficient ordinary shares to appointed Trustees to enable them, on selling these shares, to settle the interest payment. (3) Except as stated above, claims in respect of the Group’s undated loan capital are subordinated to the claims of other creditors. None of the Group’s undated loan capital is secured. (4) In the event of certain changes in tax laws, undated loan capital issues may be redeemed in whole, but not in part, at the option of the Group, at the principal amount thereof plus accrued interest, subject to prior regulatory approval. (5) Interest on all floating rate subordinated notes is calculated by reference to market rates. Capital Preference shares (1) treatment £m £m National Westminster Bank Plc £140 million 9.00% Series A non-cumulative preference shares of £1 (not callable) Tier 1 US$300 million 8.625% Series C non-cumulative preference shares of US$25 (callable quarterly) Tier 1 — Note: (1) Further details of the contractual terms of the preference shares are given in Note 25. |
Share capital and reserves (Tab
Share capital and reserves (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share capital and reserves | |
Schedule of allotted, called up and fully paid shares | Number of shares - millions Allotted, called up and fully paid £m £m Ordinary shares of £1 Non-cumulative preference shares of £1 Non-cumulative preference shares of US$25 — — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases | |
Schedule of minimum amounts receivable under non-cancellable leases | Operating lease Finance lease contracts and hire purchase agreements assets: Gross Present value Other Future Present future minimum amounts adjustments movements Drawdowns value lease rentals Year in which receipt will occur £m £m £m £m £m £m 2017 Within 1 year After 1 year but within 5 years — After 5 years — Total 2016 Within 1 year — — After 1 year but within 5 years — — After 5 years — — Total — — |
Schedule of additional information about leases | £m £m £m Nature of operating lease assets on the balance sheet Transportation — — Cars and light commercial vehicles — — Other — — — — Amounts recognised as income and expense Finance leases - contingent rental income — Operating leases - minimum rentals payable Finance lease contracts and hire purchase agreements Accumulated allowance for uncollectable minimum receivables — — |
Schedule of residual value recoverable | 2017 2016 Year in which residual value will be recovered Year in which residual value will be recovered After 1 year After 2 years After 1 year After 2 years Within 1 but within but within After 5 Within 1 but within but within After 5 year 2 years 5 years years Total year 2 years 5 years years Total £m £m £m £m £m £m £m £m £m £m Operating leases - transportation — — — — — - cars and light commercial vehicles — — — — — — - other — — — — — Finance lease contracts Hire purchase agreements — — — — — — |
Structured entities (Tables)
Structured entities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Structured entities | |
Schedule of analyses the asset categories of own-asset securitisations transferred assets continue to be recorded on Group's balance sheet | Group 2017 2016 Debt securities in issue Debt securities in issue Held by third Held by the Held by third Held by the Asset type Assets parties Group (1) Total Assets parties Group (1) Total £m £m £m £m £m £m £m £m Mortgages - UK (2) — — — — — — — - Irish — — — — - US — — — — — — — — — Cash deposit — Total — Notes: (1) Debt securities retained by the Group may be pledged with central banks. (2) These assets have been transferred to SEs that are consolidated by RBS plc. |
Schedule of Group's interest in unconsolidated structured entities | Asset backed Securitisation Investment vehicles funds and other Total 2017 £m £m £m Loans and advances to customers — Debt securities — Total Liquidity facilities/loan commitments — Total exposure 2016 Loans and advances to customers — Derivative assets — Derivatives liabilities Total Guarantees — Total exposure Notes: (1) Income from interests in unconsolidated structured entities includes interest receivable, changes in fair value and other income less impairments. (2) A sponsored entity is a structured entity established by the Group where the Group provides liquidity and/or credit enhancements or provides ongoing services to the entity. The Group can act as sponsor for its own or for customers’ transactions. (3) In 2017 no assets were transferred into sponsored structured entities (2016 - nil) which are not consolidated by the Group and for which the Group held no interest at 31 December 2017. The income arising from sponsored entitles where the Group holds no interest at year end was nil (2016 - nil). |
Asset transfers (Tables)
Asset transfers (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Asset transfers | |
Schedule of assets subject to securities repurchase agreements or security lending transactions | Group Assets subject to securities repurchase agreements or security lending transactions £m £m Debt securities (1) — Note: (1) Associated liabilities were nil (2016 - £2,891 million). |
Schedule of assets recognized on Bank's balance sheet | 2017(1) Asset type £m £m Mortgages UK mortgages - securitisations (2) — UK mortgages - covered bond programme Notes: (1) The associated liabilities are £8,904 million (2016 - £8,866 million). (2) Creditors have recourse is to these assets only, the fair value of transferred assets and fair value of associated liabilities was not materially different. |
Capital resources (Tables)
Capital resources (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Capital resources | |
Schedule of regulatory capital | NatWest NatWest £m £m Shareholders’ equity (excluding non-controlling interests) Regulatory adjustments and deductions Defined benefit pension fund adjustment Deferred tax assets Prudential valuation adjustments Qualifying deductions exceeding AT1 capital Goodwill and other intangible assets Expected losses less impairments Instruments of financial sector entities where the institution has a significant investment Significant investments in excess of secondary capital — Other regulatory adjustments CET1 capital Additional Tier 1 (AT1) capital Qualifying instruments and related share premium subject to phase out Tier 1 capital Instruments of financial sector entities where the institution has a significant investment Qualifying deductions exceeding AT1 capital Tier 1 capital Qualifying Tier 2 capital Qualifying instruments and related share premium Instruments of financial sector entities where the institution has a significant investment Tier 2 capital Total regulatory capital |
Memorandum items (Tables)
Memorandum items (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Memorandum items | |
Schedule of contingent liabilities and commitments | Group Bank £m £m £m £m Contingent liabilities and commitments Guarantees and assets pledged as collateral security Other contingent liabilities Standby facilities, credit lines and other commitments Note: (1) In the normal course of business, the Bank guarantees specified third party liabilities of certain subsidiaries; it also gives undertakings that individual subsidiaries will fulfil their obligations to third parties under contractual or other arrangements. |
Schedule of contractual obligations for future expenditure not provided for in the accounts | Group Bank £m £m £m £m Operating leases Minimum rentals payable under non-cancellable leases (1) - within 1 year - after 1 year but within 5 years - after 5 years Contracts to purchase goods or services (2) — — Notes: (1) Predominantly property leases. (2) Of which due within 1 year: £25 million (2016 - £31 million). |
Net cash flow from operating 83
Net cash flow from operating activities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net cash flow from operating activities | |
Schedule of net cash flow from operating activities | Group Bank £m £m £m £m £m £m Operating profit/(loss) before tax - continuing operations Loss before tax - discontinued operations — — — Decrease/(increase) in prepayments and accrued income Interest on subordinated liabilities (Decrease)/increase in accruals and deferred income Impairment losses/(releases) Loans and advances written-off net of recoveries Unwind of discount on impairment losses (Profit)/loss on sale of property, plant and equipment Loss/(profit) on sale of subsidiaries and associates — (Profit)/loss on sale of securities — — — Charge for defined benefit pension schemes Pension scheme curtailments or settlements gain — — — — — Cash contribution to defined benefit pension schemes Other provisions charged net of releases Other provisions utilised Depreciation and amortisation Write down of goodwill and other intangible assets — — — — Write back/(write down) of investment in subsidiaries — — — Elimination of foreign exchange differences Other non-cash items Net cash (outflow)/inflow from trading activities (Increase)/decrease in loans and advances to banks and customers Decrease/(increase) in securities (Increase)/decrease in other assets Decrease/(increase) in derivative assets Changes in operating assets Increase/(decrease) in deposits by banks and customers Increase/(decrease) in debt securities in issue — — — Increase/(decrease) in other liabilities (Decrease)/increase in derivative liabilities (Decrease)/increase in settlement balances and short positions Changes in operating liabilities Income taxes (paid)/received Net cash inflow/(outflow) from operating activities |
Analysis of the net investmen84
Analysis of the net investment in business interests and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of the net investment in business interests and intangible assets | |
Schedule of the analysis of the net investment in business interests and intangible assets | Group Bank Acquisitions and disposals £m £m £m £m £m £m Value recognised for business transferred from fellow subsidiary — — — Additional investments in Group undertakings — — — Fair value given for business acquired — — — — — Net outflow of cash in respect of purchases — Disposal of investment in group undertakings — — — — — Other assets sold — — Non-cash consideration — — — (Loss)/profit on disposal — Net inflow/(outflow) of cash in respect of disposals — Dividends received from associates — — — — — Net cash expenditure on intangible assets — — — — Net inflow/(outflow) |
Interest received and paid (Tab
Interest received and paid (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Interest received and paid | |
Schedule of interest received and paid | Group Bank £m £m £m £m £m £m Interest received Interest paid |
Analysis of changes in financ86
Analysis of changes in financing during the year (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of changes in financing during year | |
Schedule of the analysis of changes in financing during the year | Group Bank Share capital Subordinated Share capital Subordinated and share premium liabilities and share premium liabilities £m £m £m £m £m £m £m £m £m £m £m £m At 1 January Issue of subordinated liabilities — — — — — Repayment of subordinated liabilities — — — — Redemption of preference shares — — — Net cash outflow from financing — — — — — — — — Currency translation and other adjustments — — — — — — At 31 December |
Analysis of cash and cash equ87
Analysis of cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of cash and cash equivalents | |
Schedule of the analysis of cash and cash equivalents | Group Bank £m £m £m £m £m £m At 1 January - cash - cash equivalents Net cash inflow/(outflow) At 31 December Comprising: Cash and balances at central banks Treasury bills and debt securities — — — — — Loans and advances to banks Cash and cash equivalents Note: (1) Includes no cash collateral posted with bank counterparties in respect of derivative liabilities (2016 - nil; 2015 – nil) |
Segmental analysis (Tables)
Segmental analysis (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segmental analysis | |
Schedule of operating segments | Net Non- Depreciation Impairment interest interest Total Operating and (losses)/ Operating income income income expenses amortisation releases profit/(loss) 2017 £m £m £m £m £m £m £m UK Personal & Business Banking — Commercial Banking Private Banking — Commercial & Private Banking Central items & other Total 2016* UK Personal & Business Banking — Commercial Banking — Private Banking — Commercial & Private Banking — Central items & other Total 2015* UK Personal & Business Banking — Commercial Banking — Private Banking — Commercial & Private Banking — Central items & other Total 2017 2016* 2015* Inter Inter Inter Total revenue External segment Total External segment Total External segment Total £m £m £m £m £m £m £m £m £m UK Personal & Business Banking — Commercial Banking Private Banking Commercial & Private Banking Central items & other Total — — — * Re-presented to reflect the segmental reorganisation. 2017 2016* 2015* Inter Inter Inter Total income External segment Total External segment Total External segment Total £m £m £m £m £m £m £m £m £m UK Personal & Business Banking Commercial Banking Private Banking Commercial & Private Banking Central items & other Total — — — 2017 2016* 2015* Cost to acquire Cost to acquire Cost to acquire fixed assets fixed assets fixed assets and intangible and intangible and intangible Assets Liabilities assets Assets Liabilities assets Assets Liabilities assets £m £m £m £m £m £m £m £m £m UK Personal & Business Banking — — — Commercial Banking — Private Banking — — — Commercial & Private Banking — Central items & other Total * Re-presented to reflect the segmental reorganisation. |
Schedule of geographical segments | UK USA Europe RoW Total 2017 £m £m £m £m £m Total revenue — — Net interest income — — Net fees and commissions — — Income from trading activities — — Other operating income — — Total income — — Operating profit/(loss) before tax — Total assets of which total assets held for sale — — — Total liabilities of which total liabilities held for sale — — — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments — — Cost to acquire property, plant and equipment and intangible assets — — 2016 Total revenue Net interest income — Net fees and commissions — Income from trading activities — Other operating income Total income Operating profit/ (loss) before tax Total assets of which total assets held for sale — — — Total liabilities of which total liabilities held for sale — — — Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments — — Cost to acquire property, plant and equipment and intangible assets 2015 Total revenue Net interest income Net fees and commissions — Income from trading activities — Other operating income Total income Operating profit/(loss) before tax Total assets Total liabilities Net assets attributable to equity owners and non-controlling interests Contingent liabilities and commitments Cost to acquire property, plant and equipment and intangible assets |
Directors and key management 89
Directors and key management remuneration (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Directors' and key management remuneration | |
Schedule of directors' remuneration | Directors’ remuneration £000 £000 Non-executive directors emoluments Chairman and executive directors emoluments Amounts receivable under long-term incentive plans and share option plans |
Schedule of compensation of key management | £000 £000 Short-term benefits Post-employment benefits Share-based payments |
Transactions with directors a90
Transactions with directors and key management (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Transactions with directors and key management | |
Schedule of transactions with directors and key management | £000 £000 Loans and advances to customers Customer accounts |
Related parties (Tables)
Related parties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related parties | |
Schedule of income and operating expenses on transactions between related parties | £m £m £m Income Interest receivable Interest payable Fees and commissions receivable Fees and commissions payable Other administrative expenses Discontinued operations Net expenses Other administrative expenses — |
Related undertakings (Tables)
Related undertakings (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related undertakings | |
Schedule of related undertakings and Overseas branches | Entity name Activity (2) Reg Acc (3) Address Caledonian Sleepers Rail Leasing Ltd BF FC 1 Princes Street, London, EC2R 8PB, England Coutts & Company CI FC 440 Strand, London, WC2R 0QS, England Coutts Finance Company BF FC 440 Strand, London, WC2R 0QS, England Digi Ventures Ltd OTH FC 250 Bishopsgate, London, EC2M 4AA, England Esme Loans Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England Euro Sales Finance Plc BF FC 250 Bishopsgate, London, EC2M 4AA, England G L Trains Ltd BF FC 1 Princes Street, London, EC2R 8PB, England Gatehouse Way Developments Ltd INV PC 1 Princes Street, London, EC2R 8PB, England KUC Properties Ltd BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland Lombard & Ulster Ltd BF FC 11-16 Donegall Square East, Belfast, BT1 5HD, Northern Ireland Lombard Business Finance Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Business Leasing Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Charterhire Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Discount Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Finance Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Initial Leasing Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Leasing Contracts Ltd BF FC 1 Princes Street, London, EC2R 8PB, England Lombard Lessors Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Maritime Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard North Central Leasing Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard North Central PLC BF FC 280 Bishopsgate, London, EC2M 4RB, England Lombard Property Facilities Ltd BF FC 1 Princes Street, London, EC2R 8PB, England Lombard Technology Services Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England National Westminster Properties No. 1 Ltd SC FC 250 Bishopsgate, London, EC2M 4AA, England NatWest Capital Finance Ltd BF FC 1 Princes Street, London, EC2R 8PB, England NatWest Corporate Investments BF DE 250 Bishopsgate, London, EC2M 4AA, England NatWest Machinery Leasing Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England NatWest Property Investments Ltd INV FC 250 Bishopsgate, London, EC2M 4AA, England NatWest Ventures Investments Ltd BF DE 250 Bishopsgate, London, EC2M 4AA, England Premier Audit Company Ltd BF DE 250 Bishopsgate, London, EC2M 4AA, England RBS Asset Management (ACD) Ltd BF FC 440 Strand, London, WC2R 0QS, England RBS Asset Management Holdings BF FC 440 Strand, London, WC2R 0QS, England RBS Collective Investment Funds Ltd BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland RBS Invoice Finance (Holdings) Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England RBS Invoice Finance Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England RBSG Collective Investments Holdings Ltd BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland Riossi Ltd BF FC 280 Bishopsgate, London, EC2M 4RB, England Royal Bank Invoice Finance Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England RoyScot Trust plc BF FC 280 Bishopsgate, London, EC2M 4RB, England Safetosign Ltd SC FC 250 Bishopsgate, London, EC2M 4RB, England Springwell Street Developments (No 1) Ltd INV FC 280 Bishopsgate, London, EC2M 4RB, England The Royal Bank of Scotland Group Independent Financial Services Ltd BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland The Royal Bank of Scotland Invoice Discounting Ltd BF FC 250 Bishopsgate, London, EC2M 4AA, England Ulster Bank Commercial Services (NI) Ltd BF FC 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland Ulster Bank Ltd CI FC 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland Ulster Bank Pension Trustees Ltd TR FC 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland Voyager Leasing Ltd BF FC The Quadrangle, The Promenade, Cheltenham, GL50 1PX, England Walton Lake Developments Ltd INV DE 1 Princes Street, London, EC2R 8PB, England The following table details active related undertakings incorporated outside the UK which are 100% owned by the Group and fully consolidated for accounting purposes. Country (1) Entity name Activity (2) Reg Acc (3) Address Denmark Airside Properties ASP Denmark AS BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Denmark Airside Properties Denmark AS BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Denmark Kastrup Commuter K/S BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Denmark Kastrup Hangar 5 K/S BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Denmark Kastrup V & L Building K/S BF FC c/o Visma Services, Lyskaer 3 CD, Herlev, 104 40 Finland Artul Kiinteistöt Oy BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Fab Ekenäs Formanshagen 4 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Forssa Liikekiinteistöt Oy BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Kiinteistö Oy Pennalan Johtotie 2 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Espoon Entresse II BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Espoon Niittysillantie 5 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Helsingin Mechelininkatu 1 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Helsingin Osmontie 34 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Helsingin Panuntie 11 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Helsingin Panuntie 6 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Iisalmen Kihlavirta BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Jämsän Keskushovi BF FC Södra esplanaden, 12 c/o Nordisk Renting Oy, FI-00130, Helsinki Finland Koy Kokkolan Kaarlenportti Fab BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Kouvolan Oikeus ja Poliisitalo BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Lohjan Huonekalutalo BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Millennium BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Nummelan Portti BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Nuolialan päiväkoti BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Päiväläisentie 1-6 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Peltolantie 27 BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Raision Kihlakulma BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Ravattulan Kauppakeskus BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Tapiolan Louhi BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Koy Vapaalan Service-Center BF DE c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Finland Nordisk Renting OY BF FC c/o Nordisk Renting OY, Eteläesplanadi 12, Box 14044, FI-00130, Helsinki Germany RBS Deutschland Holdings GmbH BF FC Junghofstrasse 22, Frankfurt am Main, D-60311 Isle of Man Lombard Manx Leasing Ltd BF FC Royal Bank House, 2 Victoria Street, Douglas, IM1 2LN Isle of Man Lombard Manx Ltd BF FC Royal Bank House, 2 Victoria Street, Douglas, IM1 2LN Jersey Lombard Finance (CI) Ltd BF FC Royal Bank House, 71 Bath Street, St Helier, JE4 8PJ Netherlands National Westminster International Holdings B.V. BF FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland Netherlands RBS Netherlands Holdings B.V. BF FC Gustav Mahlerlaan 350, Amsterdam, 1082 ME Norway BD Lagerhus AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Norway Eiendomsselskapet Apteno Larvik AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Norway Hatros 1 AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Norway Nordisk Renting AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Norway Ringdalveien 20 AS BF FC c/o Nordisk Renting AS, 9 Estaje, Klingenberggata 7, NO-0161, Oslo Poland RBS Polish Financial Advisory Services sp. z o.o. BF FC Wisniowy Business Park, ul 1-go Sierpnia 8a, Warsaw 02-134 RoI Lombard Ireland Group Holdings Unlimited Company BF FC Ulster Bank Group Centre, George’s Quay, Dublin 2 RoI Lombard Ireland Ltd BF FC Ulster Bank Group Centre, George’s Quay, Dublin 2 RoI RBS Asset Management (Dublin) Ltd BF FC Guild House, Guild Street, IFSC, D01 K2C5, Dublin 1 Sweden Airside Properties AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Arkivborgen KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Backsmedjan KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Bil Fastigheter i Sverige AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Bilfastighet I Täby AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Country (1) Entity name Activity (2) Reg Acc (3) Address Sweden Braheberget KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Brödmagasinet KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Eurohill 4 KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighet Kallebäck 2:4 i Göteborg AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Flöjten i Norrköping BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Hammarbyvagnen BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Kabisten 1 BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Stockmakaren BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets AB Xalam BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighets Aktiebolaget Sambiblioteket BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Fastighetsbolaget Holma i Höör AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Förvaltningsbolaget Dalkyrkan KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Förvaltningsbolaget Predio 3 KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Forskningshöjden KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Gredelinen KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Grinnhagen KB BF PC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Horrsta 4:38 KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden IR Fastighets AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden IR IndustriRenting AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Kallebäck Institutfastigheter AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden KB Eurohill BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden KB IR Gamlestaden BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden KB Lagermannen BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden KB Likriktaren BF DE c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Läkten 1 KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden LerumsKrysset KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Limstagården KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Mjälgen KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Mons AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Mons Investment AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordisk Renting AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordisk Renting Kapital AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordisk Specialinvest AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordiska Strategifastigheter Holding AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Pyrrhula 6,7 AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden SFK Kommunfastigheter AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Sjöklockan KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Skinnarängen KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Solbänken KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Strand European Holdings AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Svenskt Fastighetskapital AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Svenskt Fastighetskapital Holding AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Svenskt Energikapital AB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Tingsbrogården KB BF FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Tygverkstaden 1 KB BF DE c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Switzerland RBS Services (Switzerland) Ltd SC FC Lerchenstrasse 18, Zurich, CH 8022 Switzerland Coutts & Co Ltd CI FC Lerchenstrasse 18, Zurich, CH 8022 Switzerland Coutts & Co Trustees (Suisse) S.A. BF FC c/o Regus Rue du Rhône Sàrl, Geneva, CH-1204 USA Candlelight Acquisition LLC BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA Financial Asset Securities Corp. BF PC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 Country (1) Entity name Activity (2) Reg Acc (3) Address USA Greenwich Capital Derivatives, Inc. BF PC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA NatWest Group Holdings Corporation BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA Random Properties Acquisition Corp. III INV PC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA Random Properties Acquisition Corp. IV INV DE 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Holdings USA Inc. BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Americas Property Corp. SC FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Acceptance Inc. CI FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Commercial Funding Inc. BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Equity Corporation BF FC 340 Madison Avenue, New York, 10173 USA RBS Financial Products Inc. BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 USA RBS Securities Inc. BF FC 2711 Centerville Road, Suite 400, Wilmington, Delaware, DE 19808 The following table details an active related undertaking incorporated in the UK where the Group ownership is less than 100%. Entity name Activity (2) Accounting Treatment (4) Reg Acc (3) Group interest % Address Notes RBS Covered Bonds LLP BF FC DE 1 Princes Street, London, EC2R 8BP, England Jaguar Cars Finance Ltd BF FC FC 280 Bishopsgate, London, EC2M 4RB, England GWNW City Developments Ltd BF EAJV FC Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, England JCB Finance Ltd BF FC FC The Mill, High Street, Rocester, ST14 5JW, England JCB Finance (Leasing) Ltd BF FC FC The Mill, High Street, Rocester, ST14 5JW, England Landpower Leasing Ltd BF FC FC The Mill, High Street, Rocester, ST14 5JW, England The following table details active related undertakings incorporated outside the UK where the Group ownership is less than 100%. Country (1) Entity name Activity (2) Accounting Treatment (4) Reg Acc (3) Group Interest % Address Notes Cyprus Pharos Estates Ltd OTH EAA DE 24 Demostheni Severi, 1st Floor, Nicosia, 1080 Jersey Nightingale Securities 2017-1 Ltd BF FC DE 44 Esplanade, St Helier, JE4 9WG Poland Wiśniowy Management sp. z o.o. SC EAA FC Ilzecka 26 Street, Warsaw, 02-135 Sweden Optimus KB BF FC PC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Stora Kvarnen KB BF FC FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Förvaltningsbolaget Klöverbacken Skola KB BF FC FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm The following table details an active related undertaking which is 100% owned by the Group but is not consolidated for accounting purposes(4). Country (1) Entity Name Activity (2) Reg Acc (3) Address Notes USA West Granite Homes Inc. INV FC Bellevue Parkway, Suite 210, Wilmington, Delaware, DE 19809 (7) The following tables detail related undertakings that are not active. Actively being dissolved Country (1) Entity name Accounting treatment (4) Reg Acc (3) Group Interest % Address Notes Cayman Islands Equator Investments (Cayman) Ltd FC FC Maples Corporate Services Limited, P.O. Box 309, 121 South Church Street, George Town, Grand Cayman, KY1-1104 Germany West Register Prime Holding GmbH i. L. FC FC Emil-Riedl-Weg 6, Pullach i.Isartal, D-82049 Isle of Man Coutts & Co (Manx) Ltd FC FC 23/25 Broad Street, St Helier, JE4 8ND RoI The Royal Bank of Scotland Finance (Ireland) FC FC 24/26 City Quay, Dublin 2 UK CNW Group Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK Greenwich NatWest Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK NatWest (HMHP) Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK NatWest Finance Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK NatWest Nominees Ltd FC DE 1 Princes Street, London, EC2R 8PB, England UK Cala Campus Ltd EAJV DE Ledingham Chalmers, Johnstone House, 52-54 Rose Street, Aberdeen, AB10 1HA, Scotland UK Dixon Motors Developments Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Farming and Agricultural Finance Ltd FC FC 280 Bishopsgate, London, EC2M 4RB, England UK Lombard Corporate Finance (3) Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Lombard Venture Finance Ltd FC FC 280 Bishopsgate, London, EC2M 4RB, England UK Property Ventures (B&M) Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK WR (NI) Property Investments Ltd FC DE 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland UK WR (NI) Property Realisations Ltd FC DE 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland UK West Register (Northern Ireland) Property Ltd FC DE 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland UK RoyScot Ltd FC FC 280 Bishopsgate, London, EC2M 4RB, England UK Northants Developments Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Thrapston Triangle Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Emperor Holdings Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK Latam Directors Ltd NC FC Quartermile Two, 2 Lister Square, Edinburgh, Midlothian, EH3 9GL, Scotland Dormant Country (1) Entity name Accounting treatment (4) Reg Acc Group Interest Address Denmark Nordisk Renting A/S FC FC c/o Adv Jan-Erik Svensson, HC Andersens Boulevard 12, Kopenhaum V, 1553 Sweden Nordisk Renting Facilities Management AB FC FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm Sweden Nordisk Renting HB FC FC c/o Nordisk Renting AB, Box 14044, SE-104 40, Stockholm UK NatWest Aerospace Trust Company Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK NatWest FIS Nominees Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK NatWest PEP Nominees Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK NatWest Security Trustee Company Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK Lombard Bank FC FC Lee House, Baird Road, Enfield, Middlesex, EN1 1SJ, England UK Dunfly Trustee Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK National Westminster Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK RBS Secretarial Services Ltd FC FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland UK Syndicate Nominees Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK RBS Pension Trustee Ltd NC FC 1 Princes Street, London, EC2R 8PB, England UK HPUT A Ltd FC FC 250 Bishopsgate, London, EC2M 4RB, England UK HPUT B Ltd FC FC 250 Bishopsgate, London, EC2M 4RB, England UK Nextlinks Ltd FC FC 250 Bishopsgate, London, EC2M 4RB, England UK Dixon Vehicle Sales Ltd FC FC 1 Princes Street, London, EC2R 8PB, England UK NatWest Invoice Finance Ltd FC FC 250 Bishopsgate, London, EC2M 4AA, England UK Strand Nominees Ltd FC FC 440 Strand, London, WC2R 0QS, England UK RBSG Collective Investments Nominees Ltd FC FC 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland UK RBS Investment Executive Ltd NC DE 24/25 St Andrew Square, Edinburgh, EH2 1AF, Scotland UK JCB Finance Pension Ltd FC FC 11-16 Donegall Square East, Belfast, BT1 5UB, Northern Ireland UK RoyScot Leasing Ltd FC FC 280 Bishopsgate, London, EC2M 4RB, England Notes: (1) Country: UK – United Kingdom USA – United States of America RoI – Republic of Ireland (2) Activity: BF - Banking and Financial institution CI - Credit institution INV - Investment (shares or property) holding company SC - Service company TR - Trustee OTH – Other (3) Regulatory Accounting treatment: DE - Deconsolidated (for non financial or insurance undertakings) FC - Full consolidation PC - Pro-rata consolidation (based on percentage equity held by RBSG) (4) Accounting treatment: EAA - Equity accounting - Associate EAJV - Equity accounting - Joint Venture FC - Fully consolidated IA - Investment Accounting NC - Not consolidated (5) Related undertaking consolidated because the Group controls the company by virtue of contractual agreements (6) Related undertaking not consolidated as it is not controlled by the Group. (7) Related undertaking owned for the benefit of Group pension schemes. Group overseas branches The company’s related undertakings have branches in the following countries. Subsidiary Geographic location of branches Coutts & Co Ltd Hong Kong National Westminster Bank Plc Finland, France, Germany, Italy, Jersey, Netherlands, Norway, Spain, Sweden |
Accounting policies (Details)
Accounting policies (Details) £ in Millions | 12 Months Ended | |
Dec. 31, 2017GBP (£)item | Dec. 31, 2016GBP (£) | |
Reclassifications | ||
Holding period for loans and receivables | 12 months | |
Derivatives and hedging | ||
Number of types of hedges | item | 3 | |
Provisions for liabilities | ||
Provisions for liabilities | £ 1,398 | £ 6,659 |
Deferred tax | ||
Deferred tax | 1,079 | 1,391 |
Unrecognised deferred tax | £ 1,886 | 2,665 |
Loan impairment provisions | ||
Number of components | item | 2 | |
Payment protection insurance | ||
Provisions for liabilities | ||
Provisions for liabilities | £ 632 | 753 |
Other customer redress | ||
Provisions for liabilities | ||
Provisions for liabilities | 386 | 562 |
Residential mortgage backed securities | ||
Provisions for liabilities | ||
Provisions for liabilities | 0 | 4,966 |
Litigation and other regulatory proceedings | ||
Provisions for liabilities | ||
Provisions for liabilities | 65 | 86 |
Property and other | ||
Provisions for liabilities | ||
Provisions for liabilities | £ 315 | £ 292 |
Retail mortgages | Collectively assessed | ||
Financial assets carried at amortised cost | ||
Write off period | 5 years | |
Credit cards | Collectively assessed | ||
Financial assets carried at amortised cost | ||
Write off period | 12 months | |
Write off period of outstanding amount | 3 years | |
Overdrafts and other unsecured loans | Collectively assessed | ||
Financial assets carried at amortised cost | ||
Write off period | 6 years | |
Commercial loans | Collectively assessed | ||
Financial assets carried at amortised cost | ||
Write off period | 5 years | |
Freehold buildings | ||
Property, plant and equipment | ||
Estimated useful economic lives | 50 years | |
Long leasehold property | ||
Property, plant and equipment | ||
Estimated useful economic lives | 50 years | |
Minimum | Property adaptation costs | ||
Property, plant and equipment | ||
Estimated useful economic lives | 10 years | |
Minimum | Other equipment | ||
Property, plant and equipment | ||
Estimated useful economic lives | 4 years | |
Minimum | Computer software | ||
Intangible assets and goodwill | ||
Estimated useful economic lives | 3 years | |
Minimum | Other acquired intangibles | ||
Intangible assets and goodwill | ||
Estimated useful economic lives | 5 years | |
Maximum | Business | Collectively assessed | ||
Financial assets carried at amortised cost | ||
Write off period | 5 years | |
Maximum | Property adaptation costs | ||
Property, plant and equipment | ||
Estimated useful economic lives | 15 years | |
Maximum | Computer equipment | ||
Property, plant and equipment | ||
Estimated useful economic lives | 5 years | |
Maximum | Other equipment | ||
Property, plant and equipment | ||
Estimated useful economic lives | 15 years | |
Maximum | Computer software | ||
Intangible assets and goodwill | ||
Estimated useful economic lives | 12 years | |
Maximum | Other acquired intangibles | ||
Intangible assets and goodwill | ||
Estimated useful economic lives | 10 years |
Accounting policies - Accountin
Accounting policies - Accounting developments (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting developments | |||
Equity | £ (16,367) | £ (16,000) | £ (15,167) |
Right of Use asset | 596 | ||
Bank | |||
Accounting developments | |||
Equity | (15,355) | £ (15,297) | £ (11,282) |
Effect of transition to IFRSs | |||
Accounting developments | |||
Equity | 271 | ||
Pre tax increase in equity on reclassification of financial instruments due to transition | 7 | ||
Pre tax decrease in equity on change in impairment methodology due to transition | 364 | ||
Net tax impact | 100 | ||
Effect of transition to IFRSs | Bank | |||
Accounting developments | |||
Equity | 270 | ||
Pre tax increase in equity on reclassification of financial instruments due to transition | 46 | ||
Pre tax decrease in equity on change in impairment methodology due to transition | 314 | ||
Net tax impact | 90 | ||
IFRS 16 | |||
Accounting developments | |||
Right of Use asset | 1,400 | ||
Retained earnings | £ 300 |
Net interest income (Details)
Net interest income (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net interest income | |||
Loans and advances to customers | £ 5,866 | £ 5,282 | £ 5,132 |
Loans and advances to banks | 393 | 496 | 649 |
Debt securities | 12 | 6 | 11 |
Interest receivable | 6,271 | 5,784 | 5,792 |
Customer accounts: demand deposits | 123 | 266 | 405 |
Customer accounts: savings deposits | 217 | 226 | 272 |
Customer accounts: other time deposits | 78 | 196 | 278 |
Balances with banks | 144 | 83 | 53 |
Debt securities in issue | 5 | ||
Subordinated liabilities | 218 | 234 | 243 |
Internal funding of trading businesses | 5 | 7 | 2 |
Interest payable | 790 | 1,012 | 1,253 |
Net interest income | £ 5,481 | £ 4,772 | £ 4,539 |
Non-interest income (Details)
Non-interest income (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fees and commissions receivable | |||
Payment Services | £ 593 | £ 613 | £ 640 |
Credit and debit card fees | 475 | 466 | 430 |
Lending (credit facilities) | 537 | 517 | 441 |
Brokerage | 52 | 46 | 30 |
Investment management | 218 | 172 | 227 |
Trade finance | 136 | 19 | 22 |
Other | 43 | 57 | 110 |
Total fee and commission income | 2,054 | 1,890 | 1,900 |
Fees and commissions payable | (499) | (444) | (473) |
Income from trading activities | |||
Foreign exchange | 40 | (155) | 56 |
Interest rate | (38) | (286) | (112) |
Credit | 22 | 16 | (14) |
Equities and other | 1 | (3) | |
Total trading income (expense) | 25 | (425) | (73) |
Operating lease and other rental income | 248 | 15 | 1 |
Changes in the fair value of financial assets and liabilities designated at fair value through profit or loss and related derivatives | 2 | (4) | 34 |
Changes in the fair value of investment properties | (18) | 1 | 9 |
Profit on sale of securities | 440 | 25 | 3 |
Profit on sale of property, plant and equipment | 68 | 4 | 4 |
Profit/(loss) on sale of subsidiaries and associates | 285 | 189 | (84) |
Profit/(loss) on disposal or settlement of loans and receivables | 54 | 5 | (98) |
Dividend income | 1 | 1 | 41 |
Share of profits of associated entities | 1 | ||
Other income | 6 | 9 | (177) |
Other operating income | 1,086 | £ 246 | £ (267) |
Profit on sale of securities in RBSI | £ 444 |
Operating expenses (Details)
Operating expenses (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses | |||
Wages, salaries and other staff costs | £ 647 | £ 582 | £ 750 |
Social security costs | 52 | 53 | 50 |
Pension cost - defined benefit schemes (see Note 4) | 131 | 60 | 239 |
Pension cost - gains on curtailments or settlements (see Note 4) | (57) | ||
Pension cost - defined contribution schemes | 14 | 18 | 18 |
Staff Costs | 844 | 713 | 1,000 |
Premises and equipment | 273 | 233 | 442 |
Other administrative expenses | 2,921 | 3,326 | 3,306 |
Property, plant and equipment, depreciation and write down (see Note 17) | 213 | 79 | 75 |
Intangible assets amortisation (see Note 16) | 69 | 48 | 61 |
Depreciation and amortisation expense | 282 | 127 | 136 |
Write down of goodwill and other intangible assets (see Note 16) | 16 | 85 | |
Operating expenses | £ 4,320 | £ 4,415 | £ 4,969 |
Operating expenses - Restructur
Operating expenses - Restructuring (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses | |||
Staff costs | £ 83 | £ 44 | £ 81 |
Premises and depreciation | 104 | (3) | 523 |
Other | 31 | 29 | 112 |
Restructuring costs | £ 218 | £ 70 | £ 716 |
Operating expenses - Employee (
Operating expenses - Employee (Details) - employee | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Continuing operations | |||
Average number of persons employed | |||
Average number of employees | 14,700 | 20,200 | 25,600 |
Number of employees | 14,400 | 14,900 | 25,400 |
Continuing operations | UK | |||
Average number of persons employed | |||
Number of employees | 12,800 | 14,500 | 16,300 |
Continuing operations | Europe | |||
Average number of persons employed | |||
Number of employees | 1,600 | 400 | 500 |
Continuing operations | Rest Of the World | |||
Average number of persons employed | |||
Number of employees | 8,600 | ||
Continuing operations | UK Personal & Business Banking | |||
Average number of persons employed | |||
Number of employees | 10,200 | 11,000 | 13,300 |
Continuing operations | Commercial Banking | |||
Average number of persons employed | |||
Number of employees | 300 | 200 | 100 |
Continuing operations | Private Banking | |||
Average number of persons employed | |||
Number of employees | 1,400 | 1,600 | 1,700 |
Continuing operations | Commercial & Private Banking | |||
Average number of persons employed | |||
Number of employees | 1,700 | 1,800 | 1,800 |
Continuing operations | Central items & other | |||
Average number of persons employed | |||
Number of employees | 2,500 | 2,100 | 10,300 |
Discontinued Operations | |||
Average number of persons employed | |||
Average number of employees | 2,100 | 3,600 | 4,200 |
Number of employees | 800 | 3,400 | 3,800 |
Pensions (Details)
Pensions (Details) | 12 Months Ended |
Dec. 31, 2017trustee | |
Pensions | |
Percentage of pensionable salary | 1.667% |
Pensionable salary payment period | 40 years |
Salary inflation (in percent) | 2.00% |
Main Scheme | |
Pensions | |
Number of nominated trustee directors | 4 |
Number of appointed trustee directors | 6 |
Pensions - Major classes of pla
Pensions - Major classes of plan assets as a percentage of total plan assets (Details) - Main Scheme | Dec. 31, 2017 | Dec. 31, 2016 |
Pensions | ||
Consumer industry | 6.70% | 4.60% |
Manufacturing industry | 1.80% | 1.80% |
Energy and utilities | 3.60% | 2.70% |
Financial institutions | 7.80% | 8.30% |
Technology and telecommunications | 1.90% | 2.30% |
Other | 0.10% | 0.80% |
Private equity | 4.00% | 3.40% |
Index-linked bonds | 30.60% | 31.40% |
Government fixed interest bonds | 9.20% | 5.90% |
Corporate fixed interest bonds | 15.80% | 17.90% |
Corporate and other bonds | 1.00% | 1.80% |
Hedge funds | 0.20% | |
Real estate | 5.20% | 5.20% |
Derivatives | 8.10% | 10.20% |
Cash and other assets | 4.20% | 3.40% |
Equity exposure of equity futures | (3.60%) | (1.80%) |
Cash exposure of equity futures | 3.60% | 1.90% |
Total | 100.00% | 100.00% |
Percentage of total plan assets | 97.00% | 97.00% |
Pensions - Main scheme's holdin
Pensions - Main scheme's holding of derivative instruments (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Pensions | ||
Fair value of assets | £ 2,315 | £ 3,904 |
Fair value of liabilities | 3,178 | 4,654 |
Main Scheme | ||
Pensions | ||
Collateral | 3,436 | 3,991 |
Swap | Main Scheme | ||
Pensions | ||
Notional amount | 57 | 56 |
Fair value of assets | 3,045 | 3,629 |
Inflation rate swaps | Main Scheme | ||
Pensions | ||
Notional amount | 11,000 | 12,000 |
Fair value of assets | 310 | 299 |
Fair value of liabilities | 555 | 549 |
Interest rate swaps | Main Scheme | ||
Pensions | ||
Notional amount | 44,000 | 41,000 |
Fair value of assets | 8,161 | 9,440 |
Fair value of liabilities | 4,779 | 5,442 |
Currency forwards | Main Scheme | ||
Pensions | ||
Notional amount | 12,000 | 15,000 |
Fair value of assets | 160 | 191 |
Fair value of liabilities | 34 | 136 |
Equity and bond call options | Main Scheme | ||
Pensions | ||
Notional amount | 2,000 | 2,000 |
Fair value of assets | 428 | 799 |
Fair value of liabilities | 1 | |
Equity and bond put options | Main Scheme | ||
Pensions | ||
Notional amount | 3,000 | 2,000 |
Fair value of assets | 3 | |
Fair value of liabilities | 1 | 2 |
Other | Main Scheme | ||
Pensions | ||
Notional amount | 4,000 | 4,000 |
Fair value of assets | 327 | 1,719 |
Fair value of liabilities | £ 444 | £ 1,816 |
Pensions - Amounts recognised o
Pensions - Amounts recognised on the balance sheet (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Net pension (liability)/asset | |||||
Fund assets at fair value | £ 46,199 | £ 45,311 | £ 32,485 | £ 32,132 | £ 26,065 |
Present value of fund liabilities | 39,120 | 40,010 | 32,896 | 34,261 | 28,964 |
Funded status | 7,079 | 5,301 | (411) | £ (2,129) | £ (2,899) |
Retirement benefit liability | (9) | (14) | (3,531) | ||
Asset ceiling/minimum funding | |||||
Net pension (liability)/asset | |||||
Retirement benefit liability | £ (7,088) | £ (5,315) | £ (3,120) |
Pensions - Net pension (liabili
Pensions - Net pension (liability)/asset (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net pension (liability)/asset | |||
Net assets surplus of schemes in surplus (included in Prepayments, accrued income and other assets, Note 18) | £ 22 | £ 15 | |
Net liabilities of schemes in deficit | (31) | (29) | |
Net pension Deficit | (9) | (14) | £ (3,531) |
Income statement charge | 131 | 97 | 231 |
Continuing operations | |||
Net pension (liability)/asset | |||
Income statement charge | 131 | 60 | 182 |
Discontinued Operations | |||
Net pension (liability)/asset | |||
Income statement charge | 37 | 49 | |
Bank | |||
Net pension (liability)/asset | |||
Net assets surplus of schemes in surplus (included in Prepayments, accrued income and other assets, Note 18) | 16 | 15 | |
Net liabilities of schemes in deficit | (15) | (12) | |
Net pension Deficit | 1 | 3 | £ (3,242) |
Income statement charge | £ 110 | £ 46 |
Pensions - Changes in value of
Pensions - Changes in value of net pension liability/(asset) (Details) - GBP (£) £ in Millions | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Pensions | ||||||
Balance at beginning of year | £ 9 | £ 14 | £ 3,531 | |||
Currency translation and other adjustments | 4 | 47 | ||||
Net interest expense | (3) | |||||
Current service cost | 243 | 243 | ||||
Less direct contributions from other scheme members | (131) | (171) | ||||
Past service cost | 19 | 28 | ||||
Total | 131 | 97 | £ 231 | |||
Return on plan assets above recognised interest income | (1,602) | (8,824) | 427 | £ (4,848) | £ (1,022) | |
Experience gains and losses | 107 | (766) | (276) | (25) | (154) | |
Effect of changes in actuarial financial assumptions | 695 | 9,019 | ||||
Effect of changes in actuarial demographic assumptions | (806) | (472) | ||||
Asset ceiling/minimum funding adjustments | 1,628 | 2,073 | ||||
Total | 22 | 1,030 | ||||
Contributions by employer | (157) | (4,473) | ||||
Liabilities extinguished upon settlement | (20) | |||||
Transfer to/from fellow subsidiaries | (5) | 11 | ||||
Transfer to disposal groups | (209) | |||||
Balance at end of year | 9 | 14 | 3,531 | |||
Main Scheme | Forecast | ||||||
Pensions | ||||||
Contributions | 190 | |||||
Bank | ||||||
Pensions | ||||||
Balance at beginning of year | (1) | (3) | 3,242 | |||
Net interest expense | (10) | |||||
Current service cost | 226 | 199 | ||||
Less direct contributions from other scheme members | (135) | (171) | ||||
Past service cost | 19 | 28 | ||||
Total | 110 | 46 | ||||
Return on plan assets above recognised interest income | (1,580) | (8,562) | 415 | (4,629) | (986) | |
Experience gains and losses | 108 | (658) | (233) | £ (3) | £ (102) | |
Effect of changes in actuarial financial assumptions | 678 | 8,804 | ||||
Effect of changes in actuarial demographic assumptions | (795) | (402) | ||||
Asset ceiling/minimum funding adjustments | 1,608 | 1,876 | ||||
Total | 19 | 1,058 | ||||
Contributions by employer | (127) | (4,349) | ||||
Balance at end of year | (1) | (3) | 3,242 | |||
Fair value of plan assets | ||||||
Pensions | ||||||
Balance at beginning of year | (46,199) | (45,311) | (32,485) | |||
Currency translation and other adjustments | 2 | (422) | ||||
Net interest expense | (1,188) | (1,374) | ||||
Total | (1,188) | (1,374) | ||||
Return on plan assets above recognised interest income | (1,602) | (8,824) | ||||
Total | (1,602) | (8,824) | ||||
Contributions by employer | (157) | (4,473) | ||||
Contributions by plan participants and other scheme members | (140) | (174) | ||||
Benefits paid | 2,233 | 1,374 | ||||
Transfer to/from fellow subsidiaries | (36) | 93 | ||||
Transfer to disposal groups | 1,160 | |||||
Balance at end of year | (46,199) | (45,311) | (32,485) | |||
Fair value of plan assets | Bank | ||||||
Pensions | ||||||
Balance at beginning of year | (44,653) | (43,824) | (30,703) | |||
Net interest expense | (1,155) | (1,310) | ||||
Total | (1,155) | (1,310) | ||||
Return on plan assets above recognised interest income | (1,580) | (8,562) | ||||
Total | (1,580) | (8,562) | ||||
Contributions by employer | (127) | (4,349) | ||||
Contributions by plan participants and other scheme members | (141) | (169) | ||||
Benefits paid | 2,175 | 1,269 | ||||
Transfer to/from fellow subsidiaries | (1) | |||||
Balance at end of year | (44,653) | (43,824) | (30,703) | |||
Present value of defined benefit obligation | ||||||
Pensions | ||||||
Balance at beginning of year | 39,120 | 40,010 | 32,896 | |||
Currency translation and other adjustments | (1) | 469 | ||||
Net interest expense | 1,046 | 1,249 | ||||
Current service cost | 243 | 243 | ||||
Less direct contributions from other scheme members | (131) | (171) | ||||
Past service cost | 19 | 28 | ||||
Total | 1,177 | 1,349 | ||||
Experience gains and losses | 107 | (766) | ||||
Effect of changes in actuarial financial assumptions | 695 | 9,019 | ||||
Effect of changes in actuarial demographic assumptions | (806) | (472) | ||||
Total | (4) | 7,781 | ||||
Contributions by plan participants and other scheme members | 140 | 174 | ||||
Liabilities extinguished upon settlement | (20) | |||||
Benefits paid | (2,233) | (1,374) | ||||
Transfer to/from fellow subsidiaries | 31 | 104 | ||||
Transfer to disposal groups | (1,369) | |||||
Balance at end of year | 39,120 | 40,010 | 32,896 | |||
Present value of defined benefit obligation | Bank | ||||||
Pensions | ||||||
Balance at beginning of year | 37,937 | 38,848 | 30,964 | |||
Net interest expense | 1,021 | 1,184 | ||||
Current service cost | 226 | 199 | ||||
Less direct contributions from other scheme members | (135) | (171) | ||||
Past service cost | 19 | 28 | ||||
Total | 1,131 | 1,240 | ||||
Experience gains and losses | 108 | (658) | ||||
Effect of changes in actuarial financial assumptions | 678 | 8,804 | ||||
Effect of changes in actuarial demographic assumptions | (795) | (402) | ||||
Total | (9) | 7,744 | ||||
Contributions by plan participants and other scheme members | 141 | 169 | ||||
Benefits paid | (2,175) | (1,269) | ||||
Transfer to/from fellow subsidiaries | 1 | |||||
Balance at end of year | 37,937 | 38,848 | 30,964 | |||
Asset ceiling/minimum funding | ||||||
Pensions | ||||||
Balance at beginning of year | 7,088 | 5,315 | 3,120 | |||
Currency translation and other adjustments | 3 | |||||
Net interest expense | 142 | 122 | ||||
Total | 142 | 122 | ||||
Asset ceiling/minimum funding adjustments | 1,628 | 2,073 | ||||
Total | 1,628 | 2,073 | ||||
Balance at end of year | 7,088 | 5,315 | 3,120 | |||
Asset ceiling/minimum funding | Bank | ||||||
Pensions | ||||||
Balance at beginning of year | £ 6,715 | 4,973 | 2,981 | |||
Net interest expense | 134 | 116 | ||||
Total | 134 | 116 | ||||
Asset ceiling/minimum funding adjustments | 1,608 | 1,876 | ||||
Total | 1,608 | 1,876 | ||||
Balance at end of year | £ 6,715 | £ 4,973 | £ 2,981 |
Pensions - Assumptions (Details
Pensions - Assumptions (Details) - Main Scheme £ in Billions | 12 Months Ended | ||
Dec. 31, 2017Y | Dec. 31, 2016Y | Dec. 31, 2015GBP (£) | |
Pensions | |||
Funding level, as percent | 84.00% | ||
Pension liabilities | £ 37 | ||
Deficit | 5.8 | ||
Settlement of the future contributions | £ 4.2 | ||
Investment return period | 10 years | ||
Remaining deficit | £ 1.6 | ||
Average cost | 35.00% | ||
Discount rate | 2.60% | 2.70% | |
Inflation assumption (RPI) | 3.10% | 3.20% | |
Rate of increase in salaries | 1.80% | 1.80% | |
Rate of increase in deferred pensions | 3.00% | 3.20% | |
Rate of increase in pensions in payment | 2.90% | 3.00% | |
Proportion of pension converted to a cash lump sum at retirement | 21.00% | 21.00% | |
Longevity at age 60 for current pensioners, Males (years) | 27 years 2 months 12 days | 27 years 4 months 24 days | |
Longevity at age 60 for current pensioners, Females (years) | 28 years 8 months 12 days | 29 years 1 month 6 days | |
Longevity at age 60 for future pensioners currently aged 40, Males (years) | 28 years 7 months 6 days | 29 years | |
Longevity at age 60 for future pensioners currently aged 40, Females (years) | 30 years 4 months 24 days | 31 years 2 months 12 days | |
Weighted average duration of defined benefit obligation | Y | 21 | 20.9 | |
2015 triennial valuations | |||
Pensions | |||
Discount rate | 1.50% | ||
Proportion of pension converted to a cash lump sum at retirement | 21.00% | ||
Inflation assumption, RPI floor | 0.00% | ||
Inflation assumption, RPI cap | 5.00% | ||
Inflation assumption, LPI floor | (5.00%) | ||
Longevity at age 60 for current pensioners, Males (years) | 28 years 4 months 24 days | ||
Longevity at age 60 for current pensioners, Females (years) | 30 years 2 months 12 days | ||
Longevity at age 60 for future pensioners currently aged 40, Males (years) | 29 years 10 months 24 days | ||
Longevity at age 60 for future pensioners currently aged 40, Females (years) | 32 years 4 months 24 days |
Pensions - Sensitivities of the
Pensions - Sensitivities of the present value of defined benefit obligation (Details) - Main Scheme - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Discount rate | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/Increase in obligation | £ (1,964) | £ (1,978) |
Inflation | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/Increase in obligation | £ 1,329 | £ 1,552 |
Pension increase | ||
Pensions | ||
Increase in actuarial assumption (as a percent) | 0.25% | 0.25% |
(Decrease)/Increase in obligation | £ 1,328 | £ 1,339 |
Longevity increase | ||
Pensions | ||
(Decrease)/Increase in obligation | £ 1,478 | £ 1,522 |
Longevity increase of one year | 1 year | 1 year |
Pensions - Membership category
Pensions - Membership category (Details) - Main Scheme | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net pension (liability)/asset | ||
Active members | 16.20% | 18.10% |
Deferred members | 47.30% | 45.90% |
Pensioners and dependants | 36.50% | 36.00% |
Total proportions to the different classes of scheme | 100.00% | 100.00% |
Pensions - History of defined b
Pensions - History of defined benefit schemes (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Pensions | |||||
Fair value of plan assets | £ 46,199 | £ 45,311 | £ 32,485 | £ 32,132 | £ 26,065 |
Present value of plan obligations | 39,120 | 40,010 | 32,896 | 34,261 | 28,964 |
Funded status | 7,079 | 5,301 | (411) | (2,129) | (2,899) |
Experience (losses)/gains on plan liabilities | (107) | 766 | 276 | 25 | 154 |
Experience gains/(losses) on plan assets | 1,602 | 8,824 | (427) | 4,848 | 1,022 |
Actual return on plan assets | £ 2,790 | £ 10,198 | £ 707 | £ 6,055 | £ 2,098 |
Actual return on plan assets - % | 6.20% | 31.40% | 2.20% | 23.20% | 8.70% |
Bank | |||||
Pensions | |||||
Fair value of plan assets | £ 44,653 | £ 43,824 | £ 30,703 | £ 30,077 | £ 24,272 |
Present value of plan obligations | 37,937 | 38,848 | 30,964 | 31,776 | 26,955 |
Funded status | 6,716 | 4,976 | (261) | (1,699) | (2,683) |
Experience (losses)/gains on plan liabilities | (108) | 658 | 233 | 3 | 102 |
Experience gains/(losses) on plan assets | 1,580 | 8,562 | (415) | 4,629 | 986 |
Actual return on plan assets | £ 2,735 | £ 9,872 | £ 703 | £ 5,766 | £ 1,997 |
Actual return on plan assets - % | 6.20% | 32.20% | 2.30% | 23.80% | 8.90% |
Auditor's remuneration (Details
Auditor's remuneration (Details) - EY - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Auditor's remuneration | ||
Fees payable for the audit of the Group's annual accounts | £ 1.2 | £ 1.2 |
Fees payable for the audit of the Bank's subsidiaries pursuant to legislation | 1.5 | 1.5 |
Total audit and audit-related assurance service fees | £ 2.7 | £ 2.7 |
Tax (Details)
Tax (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax | |||
Charge for the year | £ (781) | £ (639) | £ (98) |
Over/(under) provision in respect of prior years | 19 | (60) | (13) |
Total current tax | (762) | (699) | (111) |
Deferred tax | |||
(Charge)/credit for the year | (12) | 35 | (287) |
Reduction in the carrying value of deferred tax assets | (17) | ||
(Under)/over provision in respect of prior years | (38) | (2) | 25 |
Tax charge for the year | £ (812) | £ (683) | £ (373) |
Tax - Reconciliation (Details)
Tax - Reconciliation (Details) - GBP (£) £ in Millions | Apr. 01, 2015 | Dec. 31, 2020 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Geographical segments | |||||||
UK corporation tax | 20.00% | 19.00% | 19.25% | 20.00% | 20.25% | ||
Expected tax charge | £ (677) | £ (300) | £ (144) | ||||
Losses and temporary differences in year where no deferred tax asset recognised | (2) | (1) | (51) | ||||
Foreign profits taxed at other rates | (2) | 1 | (3) | ||||
UK tax rate change impact | (27) | (51) | |||||
Non-deductible goodwill impairment | (25) | ||||||
Losses on disposal and write-downs | (77) | (14) | (1) | ||||
UK bank levy | (3) | ||||||
Regulatory and legal actions | (29) | (119) | (106) | ||||
Other disallowable items | (31) | (45) | (45) | ||||
Non-taxable items | 228 | 65 | 39 | ||||
Taxable foreign exchange movements | 3 | (6) | 4 | ||||
Losses brought forward and utilised | 3 | 5 | 1 | ||||
Banking surcharge | (209) | (163) | |||||
Adjustments in respect of prior years | (19) | (62) | 12 | ||||
Tax charge for the year | £ (812) | (683) | £ (373) | ||||
Banking surcharge rate | 8.00% | ||||||
Forecast | |||||||
Geographical segments | |||||||
UK corporation tax | 17.00% | ||||||
UK | |||||||
Geographical segments | |||||||
Reduction in carrying value of deferred tax asset | £ (17) |
Financial instruments - clas113
Financial instruments - classification - Assets (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | |||
Assets | £ 340,843 | £ 316,476 | £ 302,430 |
Cash and balances at central banks | |||
Assets | |||
Assets | 35,799 | 2,567 | |
Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 77,926 | 94,686 | |
Loans and advances to banks - reverse repos | |||
Assets | |||
Assets | 774 | ||
Loans and advances to banks - other | |||
Assets | |||
Assets | 1,919 | 1,692 | |
Items in course of collection from other banks | 593 | 559 | |
Loans and advances to customers - amounts due from fellow subsidiaries | |||
Assets | |||
Assets | 3,223 | ||
Loans and advances to customers - reverse repos | |||
Assets | |||
Assets | 7,476 | ||
Loans and advances to customers - other | |||
Assets | |||
Assets | 191,889 | 166,366 | |
Debt securities | |||
Assets | |||
Assets | 1,612 | 4,463 | |
Equity shares | |||
Assets | |||
Assets | 43 | 87 | |
Settlement balances | |||
Assets | |||
Assets | 3 | 1,693 | |
Derivatives - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 1,709 | ||
Derivatives - amounts due from intermediate holding company | |||
Assets | |||
Assets | 2,929 | ||
Derivatives - other | |||
Assets | |||
Assets | 606 | 975 | |
Assets of disposal groups | |||
Assets | |||
Assets | 24,526 | 24,976 | |
Other assets | |||
Assets | |||
Assets | 4,811 | 4,569 | |
Held-for-trading | |||
Assets | |||
Assets | 2,344 | 27,707 | |
Held-for-trading | Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 22 | 7,815 | |
Held-for-trading | Loans and advances to banks - reverse repos | |||
Assets | |||
Assets | 774 | ||
Held-for-trading | Loans and advances to customers - amounts due from fellow subsidiaries | |||
Assets | |||
Assets | 3,170 | ||
Held-for-trading | Loans and advances to customers - reverse repos | |||
Assets | |||
Assets | 7,476 | ||
Held-for-trading | Loans and advances to customers - other | |||
Assets | |||
Assets | 7 | 459 | |
Held-for-trading | Debt securities | |||
Assets | |||
Assets | 4,102 | ||
Held-for-trading | Equity shares | |||
Assets | |||
Assets | 7 | ||
Held-for-trading | Derivatives - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 1,709 | ||
Held-for-trading | Derivatives - amounts due from intermediate holding company | |||
Assets | |||
Assets | 2,929 | ||
Held-for-trading | Derivatives - other | |||
Assets | |||
Assets | 606 | 975 | |
Designated as at fair value through profit or loss | |||
Assets | |||
Assets | 166 | 384 | |
Designated as at fair value through profit or loss | Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 132 | 340 | |
Designated as at fair value through profit or loss | Equity shares | |||
Assets | |||
Assets | 34 | 44 | |
Designated as at fair value through profit or loss | Settlement balances | |||
Assets | |||
Assets | (2) | ||
Available-for-sale | |||
Assets | |||
Assets | 562 | 397 | |
Available-for-sale | Debt securities | |||
Assets | |||
Assets | 553 | 361 | |
Available-for-sale | Equity shares | |||
Assets | |||
Assets | 9 | 36 | |
Loans and receivables | |||
Assets | |||
Assets | 308,434 | 258,443 | |
Loans and receivables | Cash and balances at central banks | |||
Assets | |||
Assets | 35,799 | 2,567 | |
Loans and receivables | Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 77,772 | 86,531 | |
Loans and receivables | Loans and advances to banks - other | |||
Assets | |||
Assets | 1,919 | 1,692 | |
Loans and receivables | Loans and advances to customers - amounts due from fellow subsidiaries | |||
Assets | |||
Assets | 53 | ||
Loans and receivables | Loans and advances to customers - other | |||
Assets | |||
Assets | 191,882 | 165,907 | |
Loans and receivables | Debt securities | |||
Assets | |||
Assets | 1,059 | ||
Loans and receivables | Settlement balances | |||
Assets | |||
Assets | 3 | 1,693 | |
Other assets | |||
Assets | |||
Assets | 29,337 | 29,545 | |
Other assets | Assets of disposal groups | |||
Assets | |||
Assets | 24,526 | 24,976 | |
Other assets | Other assets | |||
Assets | |||
Assets | 4,811 | 4,569 | |
Bank | |||
Assets | |||
Assets | 259,717 | 228,921 | |
Bank | Cash and balances at central banks | |||
Assets | |||
Assets | 34,763 | 1,198 | |
Bank | Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 54,153 | 63,427 | |
Bank | Loans and advances to banks - other | |||
Assets | |||
Assets | 1,635 | 1,176 | |
Items in course of collection from other banks | 562 | 531 | |
Bank | Loans and advances to customers - amounts due from fellow subsidiaries | |||
Assets | |||
Assets | 58 | 65 | |
Bank | Loans and advances to customers - other | |||
Assets | |||
Assets | 160,621 | 150,082 | |
Bank | Debt securities | |||
Assets | |||
Assets | 1,059 | ||
Bank | Equity shares | |||
Assets | |||
Assets | 7 | 11 | |
Bank | Investment in group undertakings | |||
Assets | |||
Assets | 2,546 | 6,931 | |
Bank | Settlement balances | |||
Assets | |||
Assets | 119 | ||
Bank | Derivatives - amounts due from intermediate holding company | |||
Assets | |||
Assets | 1,697 | 2,167 | |
Bank | Derivatives - other | |||
Assets | |||
Assets | 580 | 915 | |
Bank | Other assets | |||
Assets | |||
Assets | 2,598 | 2,830 | |
Bank | Held-for-trading | |||
Assets | |||
Assets | 2,306 | 3,227 | |
Bank | Held-for-trading | Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 22 | 19 | |
Bank | Held-for-trading | Loans and advances to customers - other | |||
Assets | |||
Assets | 7 | 119 | |
Bank | Held-for-trading | Equity shares | |||
Assets | |||
Assets | 7 | ||
Bank | Held-for-trading | Derivatives - amounts due from intermediate holding company | |||
Assets | |||
Assets | 1,697 | 2,167 | |
Bank | Held-for-trading | Derivatives - other | |||
Assets | |||
Assets | 580 | 915 | |
Bank | Designated as at fair value through profit or loss | |||
Assets | |||
Assets | 130 | 311 | |
Bank | Designated as at fair value through profit or loss | Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 130 | 311 | |
Bank | Available-for-sale | |||
Assets | |||
Assets | 7 | 4 | |
Bank | Available-for-sale | Equity shares | |||
Assets | |||
Assets | 7 | 4 | |
Bank | Loans and receivables | |||
Assets | |||
Assets | 252,130 | 215,618 | |
Bank | Loans and receivables | Cash and balances at central banks | |||
Assets | |||
Assets | 34,763 | 1,198 | |
Bank | Loans and receivables | Loans and advances to banks - amounts due from intermediate holding company and fellow subsidiaries | |||
Assets | |||
Assets | 54,001 | 63,097 | |
Bank | Loans and receivables | Loans and advances to banks - other | |||
Assets | |||
Assets | 1,635 | 1,176 | |
Bank | Loans and receivables | Loans and advances to customers - amounts due from fellow subsidiaries | |||
Assets | |||
Assets | 58 | 65 | |
Bank | Loans and receivables | Loans and advances to customers - other | |||
Assets | |||
Assets | 160,614 | 149,963 | |
Bank | Loans and receivables | Debt securities | |||
Assets | |||
Assets | 1,059 | ||
Bank | Loans and receivables | Settlement balances | |||
Assets | |||
Assets | 119 | ||
Bank | Other assets | |||
Assets | |||
Assets | 5,144 | 9,761 | |
Bank | Other assets | Investment in group undertakings | |||
Assets | |||
Assets | 2,546 | 6,931 | |
Bank | Other assets | Other assets | |||
Assets | |||
Assets | £ 2,598 | £ 2,830 |
Financial instruments - clas114
Financial instruments - classification - Liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Liabilities | |||
Liabilities | £ 324,476 | £ 300,476 | £ 287,263 |
Deposits - amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 33,303 | 14,845 | |
Deposits - repos | |||
Liabilities | |||
Liabilities | 1,744 | ||
Deposits - other | |||
Liabilities | |||
Liabilities | 20,544 | 3,456 | |
Items in course of transmission to other banks | 198 | 211 | |
Customer accounts - amounts due to fellow subsidiaries | |||
Liabilities | |||
Liabilities | 6,774 | 4,859 | |
Customer accounts - repos | |||
Liabilities | |||
Liabilities | 11,312 | ||
Customer accounts- other | |||
Liabilities | |||
Liabilities | 226,598 | 217,768 | |
Increase of carrying amount of other customer accounts designated as at fair value through profit or loss | 26 | 54 | |
Debt securities in issue | |||
Liabilities | |||
Liabilities | 396 | 301 | |
Settlement balances | |||
Liabilities | |||
Liabilities | 4 | 1,753 | |
Short Positions | |||
Liabilities | |||
Liabilities | 4,591 | ||
Derivatives- amounts due to intermediate holding company | |||
Liabilities | |||
Liabilities | 4,294 | ||
Derivatives- amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 2,966 | ||
Derivatives - other | |||
Liabilities | |||
Liabilities | 212 | 360 | |
Subordinated liabilities - amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 4,515 | 5,806 | |
Subordinated liabilities - other | |||
Liabilities | |||
Liabilities | 1,240 | 1,489 | |
Liabilities of disposal groups | |||
Liabilities | |||
Liabilities | 23,849 | 19,313 | |
Other liabilities | |||
Liabilities | |||
Liabilities | 4,075 | 8,585 | |
Held -for-trading | |||
Liabilities | |||
Liabilities | 3,795 | 24,466 | |
Held -for-trading | Deposits - amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 608 | 2,146 | |
Held -for-trading | Deposits - repos | |||
Liabilities | |||
Liabilities | 1,744 | ||
Held -for-trading | Deposits - other | |||
Liabilities | |||
Liabilities | 1 | ||
Held -for-trading | Customer accounts - amounts due to fellow subsidiaries | |||
Liabilities | |||
Liabilities | 8 | ||
Held -for-trading | Customer accounts - repos | |||
Liabilities | |||
Liabilities | 11,312 | ||
Held -for-trading | Customer accounts- other | |||
Liabilities | |||
Liabilities | 9 | 10 | |
Held -for-trading | Short Positions | |||
Liabilities | |||
Liabilities | 4,591 | ||
Held -for-trading | Derivatives- amounts due to intermediate holding company | |||
Liabilities | |||
Liabilities | 4,294 | ||
Held -for-trading | Derivatives- amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 2,966 | ||
Held -for-trading | Derivatives - other | |||
Liabilities | |||
Liabilities | 212 | 360 | |
Designated as at fair value through profit or loss | |||
Liabilities | |||
Liabilities | 166 | 431 | |
Designated as at fair value through profit or loss | Customer accounts- other | |||
Liabilities | |||
Liabilities | 166 | 431 | |
Amortised cost | |||
Liabilities | |||
Liabilities | 293,399 | 248,438 | |
Amortised cost | Deposits - amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 32,695 | 12,699 | |
Amortised cost | Deposits - other | |||
Liabilities | |||
Liabilities | 20,544 | 3,455 | |
Amortised cost | Customer accounts - amounts due to fellow subsidiaries | |||
Liabilities | |||
Liabilities | 6,774 | 4,851 | |
Amortised cost | Customer accounts- other | |||
Liabilities | |||
Liabilities | 226,423 | 217,327 | |
Amortised cost | Debt securities in issue | |||
Liabilities | |||
Liabilities | 396 | 301 | |
Amortised cost | Settlement balances | |||
Liabilities | |||
Liabilities | 4 | 1,753 | |
Amortised cost | Subordinated liabilities - amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 4,515 | 5,806 | |
Amortised cost | Subordinated liabilities - other | |||
Liabilities | |||
Liabilities | 1,240 | 1,489 | |
Amortised cost | Other liabilities | |||
Liabilities | |||
Liabilities | 808 | 757 | |
Other liabilities | |||
Liabilities | |||
Liabilities | 27,116 | 27,141 | |
Other liabilities | Liabilities of disposal groups | |||
Liabilities | |||
Liabilities | 23,849 | 19,313 | |
Other liabilities | Other liabilities | |||
Liabilities | |||
Liabilities | 3,267 | 7,828 | |
Bank | |||
Liabilities | |||
Liabilities | 244,362 | 213,624 | |
Bank | Deposits - amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 11,937 | 5,773 | |
Bank | Deposits - other | |||
Liabilities | |||
Liabilities | 20,528 | 3,435 | |
Items in course of transmission to other banks | 192 | 204 | |
Bank | Customer accounts - amounts due to fellow subsidiaries | |||
Liabilities | |||
Liabilities | 6,956 | 4,829 | |
Bank | Customer accounts- other | |||
Liabilities | |||
Liabilities | 194,194 | 187,661 | |
Increase of carrying amount of other customer accounts designated as at fair value through profit or loss | 27 | 57 | |
Bank | Settlement balances | |||
Liabilities | |||
Liabilities | 86 | ||
Bank | Derivatives- amounts due to intermediate holding company | |||
Liabilities | |||
Liabilities | 2,908 | 3,604 | |
Bank | Derivatives - other | |||
Liabilities | |||
Liabilities | 209 | 334 | |
Bank | Subordinated liabilities - amounts due to intermediate holding company | |||
Liabilities | |||
Liabilities | 4,409 | 4,409 | |
Bank | Subordinated liabilities - other | |||
Liabilities | |||
Liabilities | 1,231 | 1,481 | |
Bank | Other liabilities | |||
Liabilities | |||
Liabilities | 1,990 | 2,012 | |
Bank | Held -for-trading | |||
Liabilities | |||
Liabilities | 3,734 | 4,425 | |
Bank | Held -for-trading | Deposits - amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 608 | 476 | |
Bank | Held -for-trading | Deposits - other | |||
Liabilities | |||
Liabilities | 1 | ||
Bank | Held -for-trading | Customer accounts- other | |||
Liabilities | |||
Liabilities | 9 | 10 | |
Bank | Held -for-trading | Derivatives- amounts due to intermediate holding company | |||
Liabilities | |||
Liabilities | 2,908 | 3,604 | |
Bank | Held -for-trading | Derivatives - other | |||
Liabilities | |||
Liabilities | 209 | 334 | |
Bank | Designated as at fair value through profit or loss | |||
Liabilities | |||
Liabilities | 130 | 311 | |
Bank | Designated as at fair value through profit or loss | Customer accounts- other | |||
Liabilities | |||
Liabilities | 130 | 311 | |
Bank | Amortised cost | |||
Liabilities | |||
Liabilities | 238,508 | 206,876 | |
Bank | Amortised cost | Deposits - amounts due to intermediate holding company and fellow subsidiaries | |||
Liabilities | |||
Liabilities | 11,329 | 5,297 | |
Bank | Amortised cost | Deposits - other | |||
Liabilities | |||
Liabilities | 20,528 | 3,434 | |
Bank | Amortised cost | Customer accounts - amounts due to fellow subsidiaries | |||
Liabilities | |||
Liabilities | 6,956 | 4,829 | |
Bank | Amortised cost | Customer accounts- other | |||
Liabilities | |||
Liabilities | 194,055 | 187,340 | |
Bank | Amortised cost | Settlement balances | |||
Liabilities | |||
Liabilities | 86 | ||
Bank | Amortised cost | Subordinated liabilities - amounts due to intermediate holding company | |||
Liabilities | |||
Liabilities | 4,409 | 4,409 | |
Bank | Amortised cost | Subordinated liabilities - other | |||
Liabilities | |||
Liabilities | 1,231 | 1,481 | |
Bank | Other liabilities | |||
Liabilities | |||
Liabilities | 1,990 | 2,012 | |
Bank | Other liabilities | Other liabilities | |||
Liabilities | |||
Liabilities | 1,990 | 2,012 | |
Bonds and Medium Term Notes | Debt securities in issue | |||
Liabilities | |||
Liabilities | 396 | 301 | |
Certificates of Deposit and Other Commercial Paper | Debt securities in issue | |||
Liabilities | |||
Liabilities | £ 0 | £ 0 |
Financial instruments - clas115
Financial instruments - classification - Amount due to or from (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | |||
Assets | £ 340,843 | £ 316,476 | £ 302,430 |
Liabilities | |||
Liabilities | 324,476 | 300,476 | £ 287,263 |
Fellow subsidiaries | |||
Assets | |||
Assets | 3,223 | ||
Deposits by banks | |||
Liabilities | |||
Liabilities | 53,847 | 20,045 | |
Deposits by banks | RBS Group | |||
Liabilities | |||
Liabilities | 32,523 | 14,337 | |
Deposits by banks | Fellow subsidiaries | |||
Liabilities | |||
Liabilities | 780 | 508 | |
Customer accounts | |||
Liabilities | |||
Liabilities | 233,372 | 233,939 | |
Customer accounts | Fellow subsidiaries | |||
Liabilities | |||
Liabilities | 6,774 | 4,859 | |
Derivatives | |||
Liabilities | |||
Liabilities | 3,178 | 4,654 | |
Derivatives | RBS Group | |||
Liabilities | |||
Liabilities | 2,951 | 4,294 | |
Derivatives | Fellow subsidiaries | |||
Liabilities | |||
Liabilities | 15 | ||
Loans and advances to banks | |||
Assets | |||
Assets | 79,845 | 97,152 | |
Loans and advances to banks | RBS Group | |||
Assets | |||
Assets | 77,669 | 94,578 | |
Loans and advances to banks | Fellow subsidiaries | |||
Assets | |||
Assets | 257 | 108 | |
Loans and advances to customers | |||
Assets | |||
Assets | 191,889 | 177,065 | |
Derivatives | |||
Assets | |||
Assets | 2,315 | 3,904 | |
Derivatives | RBS Group | |||
Assets | |||
Assets | 1,703 | 2,929 | |
Derivatives | Fellow subsidiaries | |||
Assets | |||
Assets | 6 | ||
Bank | |||
Assets | |||
Assets | 259,717 | 228,921 | |
Liabilities | |||
Liabilities | 244,362 | 213,624 | |
Bank | Deposits by banks | |||
Liabilities | |||
Liabilities | 32,465 | 9,208 | |
Bank | Deposits by banks | RBS Group | |||
Liabilities | |||
Liabilities | 11,036 | 5,061 | |
Bank | Deposits by banks | Fellow subsidiaries | |||
Liabilities | |||
Liabilities | 740 | 506 | |
Bank | Deposits by banks | Subsidiaries | |||
Liabilities | |||
Liabilities | 161 | 206 | |
Bank | Customer accounts | |||
Liabilities | |||
Liabilities | 201,150 | 192,490 | |
Bank | Customer accounts | Fellow subsidiaries | |||
Liabilities | |||
Liabilities | 6,754 | 4,803 | |
Bank | Customer accounts | Subsidiaries | |||
Liabilities | |||
Liabilities | 202 | 26 | |
Bank | Derivatives | |||
Liabilities | |||
Liabilities | 3,117 | 3,938 | |
Bank | Derivatives | RBS Group | |||
Liabilities | |||
Liabilities | 2,908 | 3,604 | |
Bank | Loans and advances to banks | |||
Assets | |||
Assets | 55,788 | 64,603 | |
Bank | Loans and advances to banks | RBS Group | |||
Assets | |||
Assets | 53,824 | 63,357 | |
Bank | Loans and advances to banks | Fellow subsidiaries | |||
Assets | |||
Assets | 95 | 6 | |
Bank | Loans and advances to banks | Subsidiaries | |||
Assets | |||
Assets | 234 | 64 | |
Bank | Loans and advances to customers | |||
Assets | |||
Assets | 160,679 | 150,147 | |
Bank | Loans and advances to customers | Fellow subsidiaries | |||
Assets | |||
Assets | 5 | 45 | |
Bank | Loans and advances to customers | Subsidiaries | |||
Assets | |||
Assets | 53 | 20 | |
Bank | Derivatives | |||
Assets | |||
Assets | 2,277 | 3,082 | |
Bank | Derivatives | RBS Group | |||
Assets | |||
Assets | £ 1,697 | £ 2,167 |
Financial instruments - clas116
Financial instruments - classification - Gains and losses (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Profit (loss) | |||
Gains/(losses) on financial assets/liabilities designated as at fair value through profit or loss | £ 2 | £ (4) | £ 34 |
Gains/(losses) on disposal or settlement of loans and receivables | 54 | 5 | (98) |
Gains on financial assets/liabilities designated as at fair value through profit or loss - discontinued operations | 0 | 0 | 43 |
Gains/(losses) on disposal or settlement of loans and receivables - discontinued operations | £ 0 | £ 5 | £ (61) |
Financial instruments - clas117
Financial instruments - classification - Offsetable assets (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Offsetable instruments | ||
Gross | £ 2,740 | £ 27,815 |
IFRS offset | (9) | (15,980) |
Balance sheet | 2,731 | 11,835 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (1,806) | (2,932) |
Cash collateral | (8) | (9) |
Other financial collateral | (144) | (7,652) |
Net amount after the effect of netting arrangements and related collateral | 773 | 1,242 |
Instruments outside netting arrangements | 79,432 | 2,012 |
Balance sheet total | 82,163 | 13,847 |
Derivatives | ||
Offsetable instruments | ||
Gross | 2,054 | 3,585 |
Balance sheet | 2,054 | 3,585 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (1,806) | (2,318) |
Cash collateral | (8) | (9) |
Other financial collateral | (144) | (97) |
Net amount after the effect of netting arrangements and related collateral | 96 | 1,161 |
Instruments outside netting arrangements | 261 | 319 |
Balance sheet total | 2,315 | 3,904 |
Reverse repurchase agreements | ||
Offsetable instruments | ||
Gross | 22,725 | |
IFRS offset | (14,475) | |
Balance sheet | 8,250 | |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (614) | |
Other financial collateral | (7,555) | |
Net amount after the effect of netting arrangements and related collateral | 81 | |
Balance sheet total | 8,250 | |
Loans and advances to banks | ||
Offsetable instruments | ||
Gross | 686 | |
IFRS offset | (9) | |
Balance sheet | 677 | |
Offsetable potential not recognised by IFRS | ||
Net amount after the effect of netting arrangements and related collateral | 677 | |
Instruments outside netting arrangements | 79,168 | |
Balance sheet total | 79,845 | |
Settlement balances | ||
Offsetable instruments | ||
Gross | 1,505 | |
IFRS offset | (1,505) | |
Offsetable potential not recognised by IFRS | ||
Instruments outside netting arrangements | 3 | 1,693 |
Balance sheet total | 3 | 1,693 |
Bank | Derivatives | ||
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | £ (1,804) | £ (2,120) |
Financial instruments - clas118
Financial instruments - classification - Offsetable liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Offsetable instruments | ||
Gross | £ 3,770 | £ 33,275 |
IFRS offset | (9) | (15,980) |
Balance sheet | 3,761 | 17,295 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (1,806) | (2,932) |
Cash collateral | (8) | |
Other financial collateral | (12,442) | |
Net amount after the effect of netting arrangements and related collateral | 1,955 | 1,913 |
Instruments outside netting arrangements | 53,268 | 2,168 |
Balance sheet total | 57,029 | 19,463 |
Derivatives | ||
Offsetable instruments | ||
Gross | 3,051 | 4,095 |
Balance sheet | 3,051 | 4,095 |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (1,806) | (2,318) |
Cash collateral | (8) | |
Net amount after the effect of netting arrangements and related collateral | 1,245 | 1,769 |
Instruments outside netting arrangements | 127 | 559 |
Balance sheet total | 3,178 | 4,654 |
Deposits by banks | ||
Offsetable instruments | ||
Gross | 719 | |
IFRS offset | (9) | |
Balance sheet | 710 | |
Offsetable potential not recognised by IFRS | ||
Net amount after the effect of netting arrangements and related collateral | 710 | |
Instruments outside netting arrangements | 53,137 | |
Balance sheet total | 53,847 | |
Repurchase agreements | ||
Offsetable instruments | ||
Gross | 27,531 | |
IFRS offset | (14,475) | |
Balance sheet | 13,056 | |
Offsetable potential not recognised by IFRS | ||
Effect of master netting agreement and similar agreements | (614) | |
Other financial collateral | (12,442) | |
Balance sheet total | 13,056 | |
Settlement balances | ||
Offsetable instruments | ||
Gross | 1,649 | |
IFRS offset | (1,505) | |
Balance sheet | 144 | |
Offsetable potential not recognised by IFRS | ||
Net amount after the effect of netting arrangements and related collateral | 144 | |
Instruments outside netting arrangements | 4 | 1,609 |
Balance sheet total | £ 4 | £ 1,753 |
Financial instruments - valu119
Financial instruments - valuation - FV of Assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair value of assets | |||
CVA reserve | £ 11 | £ 26 | |
Assets | 340,843 | 316,476 | £ 302,430 |
Available-for-sale | |||
Fair value of assets | |||
Assets | 562 | 397 | |
Debt securities | |||
Fair value of assets | |||
Assets | 1,612 | 4,463 | |
Debt securities | Available-for-sale | |||
Fair value of assets | |||
Assets | 553 | 361 | |
Equity shares | |||
Fair value of assets | |||
Assets | 43 | 87 | |
Equity shares | Available-for-sale | |||
Fair value of assets | |||
Assets | 9 | 36 | |
Derivatives | |||
Fair value of assets | |||
Assets | 2,315 | 3,904 | |
Recurring | |||
Fair value of assets | |||
Assets | £ 3,100 | £ 28,500 | |
Proportion (as a percent) | 100.00% | 100.00% | |
Recurring | Loans and Advances | |||
Fair value of assets | |||
Assets | £ 200 | £ 20,000 | |
Recurring | Debt securities | |||
Fair value of assets | |||
Assets | 600 | 4,500 | |
Recurring | Debt securities | Available-for-sale | |||
Fair value of assets | |||
Assets | 600 | 400 | |
Recurring | Equity shares | |||
Fair value of assets | |||
Assets | 100 | ||
Recurring | Derivatives | |||
Fair value of assets | |||
Assets | 2,300 | 3,900 | |
Recurring | Level 1 | |||
Fair value of assets | |||
Assets | £ 400 | £ 4,200 | |
Proportion (as a percent) | 12.90% | 14.70% | |
Recurring | Level 1 | Debt securities | |||
Fair value of assets | |||
Assets | £ 400 | £ 4,200 | |
Recurring | Level 1 | Debt securities | Available-for-sale | |||
Fair value of assets | |||
Assets | 400 | 300 | |
Recurring | Level 2 | |||
Fair value of assets | |||
Assets | £ 2,700 | £ 23,900 | |
Proportion (as a percent) | 87.10% | 83.90% | |
Recurring | Level 2 | Loans and Advances | |||
Fair value of assets | |||
Assets | £ 200 | £ 19,600 | |
Recurring | Level 2 | Debt securities | |||
Fair value of assets | |||
Assets | 200 | 300 | |
Recurring | Level 2 | Debt securities | Available-for-sale | |||
Fair value of assets | |||
Assets | 200 | 100 | |
Recurring | Level 2 | Equity shares | |||
Fair value of assets | |||
Assets | 100 | ||
Recurring | Level 2 | Derivatives | |||
Fair value of assets | |||
Assets | 2,300 | 3,900 | |
Recurring | Level 3 | |||
Fair value of assets | |||
Assets | £ 400 | ||
Proportion (as a percent) | 1.40% | ||
Recurring | Level 3 | Loans and Advances | |||
Fair value of assets | |||
Assets | 0 | £ 400 | |
Sensitivity increase | 40 | ||
Sensitivity decrease | £ 30 | ||
Recurring | Level 3 | Loans and Advances | Maximum | |||
Fair value of assets | |||
Significant unobservable input trading rate | 95.00% | ||
Recurring | Level 3 | Loans and Advances | Minimum | |||
Fair value of assets | |||
Significant unobservable input trading rate | 85.00% |
Financial instruments - valu120
Financial instruments - valuation - FV of Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | £ 324,476 | £ 300,476 | £ 287,263 |
Short Positions | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | 4,591 | ||
Derivatives | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | 3,178 | 4,654 | |
Recurring | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | £ 4,000 | £ 24,900 | |
Proportion (as a percent) | 100.00% | 100.00% | |
Recurring | Deposits | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | £ 800 | £ 15,700 | |
Recurring | Short Positions | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | 4,600 | ||
Recurring | Derivatives | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | 3,200 | 4,600 | |
Recurring | Level 1 | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | £ 4,600 | ||
Proportion (as a percent) | 18.50% | ||
Recurring | Level 1 | Short Positions | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | £ 4,600 | ||
Recurring | Level 2 | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | £ 4,000 | £ 20,300 | |
Proportion (as a percent) | 100.00% | 81.50% | |
Recurring | Level 2 | Deposits | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | £ 800 | £ 15,700 | |
Recurring | Level 2 | Derivatives | |||
Disclosure of fair value measurement of liabilities [line items] | |||
Liabilities | £ 3,200 | £ 4,600 |
Financial instruments - valu121
Financial instruments - valuation - Assets at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair value of assets | |||
Assets | £ 340,843 | £ 316,476 | £ 302,430 |
Bank | |||
Fair value of assets | |||
Assets | 259,717 | 228,921 | |
Cash and balances at central banks | |||
Fair value of assets | |||
Assets | 35,799 | 2,567 | |
Cash and balances at central banks | Bank | |||
Fair value of assets | |||
Assets | 34,763 | 1,198 | |
Cash and balances at central banks | Items where fair values approximates carrying value | |||
Fair value of assets | |||
Assets | 35,800 | 2,600 | |
Cash and balances at central banks | Items where fair values approximates carrying value | Bank | |||
Fair value of assets | |||
Assets | 34,800 | 1,200 | |
Loans and advances to banks | |||
Fair value of assets | |||
Assets | 79,845 | 97,152 | |
Loans and advances to banks | Bank | |||
Fair value of assets | |||
Assets | 55,788 | 64,603 | |
Loans and advances to banks | At fair value | |||
Fair value of assets | |||
Assets | 79,500 | 88,100 | |
Loans and advances to banks | At fair value | Bank | |||
Fair value of assets | |||
Assets | 55,500 | 64,200 | |
Loans and advances to banks | At fair value | Level 2 | |||
Fair value of assets | |||
Assets | 1,000 | 3,600 | |
Loans and advances to banks | At fair value | Level 2 | Bank | |||
Fair value of assets | |||
Assets | 1,100 | 3,300 | |
Loans and advances to banks | At fair value | Level 3 | |||
Fair value of assets | |||
Assets | 78,500 | 84,500 | |
Loans and advances to banks | At fair value | Level 3 | Bank | |||
Fair value of assets | |||
Assets | 54,400 | 60,900 | |
Loans and advances to banks | Items where fair values approximates carrying value | |||
Fair value of assets | |||
Assets | 600 | 600 | |
Loans and advances to banks | Items where fair values approximates carrying value | Bank | |||
Fair value of assets | |||
Assets | 600 | 500 | |
Loans and advances to banks | Amortised cost | Not at fair value | |||
Fair value of assets | |||
Assets | 79,100 | 87,600 | |
Loans and advances to banks | Amortised cost | Not at fair value | Bank | |||
Fair value of assets | |||
Assets | 55,000 | 63,800 | |
Loans and advances to customers | |||
Fair value of assets | |||
Assets | 191,889 | 177,065 | |
Loans and advances to customers | Bank | |||
Fair value of assets | |||
Assets | 160,679 | 150,147 | |
Loans and advances to customers | At fair value | |||
Fair value of assets | |||
Assets | 191,300 | 166,000 | |
Loans and advances to customers | At fair value | Bank | |||
Fair value of assets | |||
Assets | 160,100 | 150,000 | |
Loans and advances to customers | At fair value | Level 2 | |||
Fair value of assets | |||
Assets | 200 | 900 | |
Loans and advances to customers | At fair value | Level 3 | |||
Fair value of assets | |||
Assets | 191,100 | 165,100 | |
Loans and advances to customers | At fair value | Level 3 | Bank | |||
Fair value of assets | |||
Assets | 160,100 | 150,000 | |
Loans and advances to customers | Amortised cost | Not at fair value | |||
Fair value of assets | |||
Assets | 191,900 | 166,000 | |
Loans and advances to customers | Amortised cost | Not at fair value | Bank | |||
Fair value of assets | |||
Assets | 160,700 | 150,000 | |
Debt securities | |||
Fair value of assets | |||
Assets | 1,612 | 4,463 | |
Debt securities | Bank | |||
Fair value of assets | |||
Assets | 1,059 | ||
Debt securities | Not at fair value | |||
Fair value of assets | |||
Assets | 1,100 | ||
Debt securities | Not at fair value | Bank | |||
Fair value of assets | |||
Assets | 1,100 | ||
Debt securities | At fair value | |||
Fair value of assets | |||
Assets | 1,100 | ||
Debt securities | At fair value | Bank | |||
Fair value of assets | |||
Assets | 1,100 | ||
Debt securities | At fair value | Level 3 | |||
Fair value of assets | |||
Assets | 1,100 | ||
Debt securities | At fair value | Level 3 | Bank | |||
Fair value of assets | |||
Assets | 1,100 | ||
Settlement balances | |||
Fair value of assets | |||
Assets | £ 3 | 1,693 | |
Settlement balances | Bank | |||
Fair value of assets | |||
Assets | 119 | ||
Settlement balances | Items where fair values approximates carrying value | |||
Fair value of assets | |||
Assets | 1,700 | ||
Settlement balances | Items where fair values approximates carrying value | Bank | |||
Fair value of assets | |||
Assets | £ 100 |
Financial instruments - valu122
Financial instruments - valuation - Liabilities at Amortised Cost (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair value of liabilities | |||
Liabilities | £ 324,476 | £ 300,476 | £ 287,263 |
Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 53,847 | 20,045 | |
Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 233,372 | 233,939 | |
Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 396 | 301 | |
Settlement balances | |||
Fair value of liabilities | |||
Liabilities | 4 | 1,753 | |
Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 5,755 | 7,295 | |
Bank | |||
Fair value of liabilities | |||
Liabilities | 244,362 | 213,624 | |
Bank | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 32,465 | 9,208 | |
Bank | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 201,150 | 192,490 | |
Bank | Settlement balances | |||
Fair value of liabilities | |||
Liabilities | 86 | ||
Bank | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 5,640 | 5,890 | |
Not at fair value | Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 400 | ||
At fair value | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 35,600 | 12,100 | |
At fair value | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 26,900 | 24,900 | |
At fair value | Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 400 | 300 | |
At fair value | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 6,000 | 7,000 | |
At fair value | Bank | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 28,500 | 5,200 | |
At fair value | Bank | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 13,800 | 12,100 | |
At fair value | Bank | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 5,900 | 5,700 | |
At fair value | Level 2 | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 17,000 | 900 | |
At fair value | Level 2 | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 4,900 | 5,700 | |
At fair value | Level 2 | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 5,900 | 1,600 | |
At fair value | Level 2 | Bank | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 17,000 | ||
At fair value | Level 2 | Bank | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 4,900 | 5,700 | |
At fair value | Level 2 | Bank | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 5,900 | 1,300 | |
At fair value | Level 3 | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 18,600 | 11,200 | |
At fair value | Level 3 | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 22,000 | 19,200 | |
At fair value | Level 3 | Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 400 | 300 | |
At fair value | Level 3 | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 100 | 5,400 | |
At fair value | Level 3 | Bank | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 11,500 | 5,200 | |
At fair value | Level 3 | Bank | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 8,900 | 6,400 | |
At fair value | Level 3 | Bank | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 4,400 | ||
Items where fair values approximates carrying value | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 18,800 | 5,100 | |
Items where fair values approximates carrying value | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 206,300 | 197,300 | |
Items where fair values approximates carrying value | Settlement balances | |||
Fair value of liabilities | |||
Liabilities | 1,800 | ||
Items where fair values approximates carrying value | Notes in circulation | |||
Fair value of liabilities | |||
Liabilities | 800 | 800 | |
Items where fair values approximates carrying value | Bank | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 4,500 | 4,500 | |
Items where fair values approximates carrying value | Bank | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 187,200 | 180,100 | |
Items where fair values approximates carrying value | Bank | Settlement balances | |||
Fair value of liabilities | |||
Liabilities | 100 | ||
Amortised cost | |||
Fair value of liabilities | |||
Liabilities | 293,399 | 248,438 | |
Amortised cost | Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 396 | 301 | |
Amortised cost | Settlement balances | |||
Fair value of liabilities | |||
Liabilities | 4 | 1,753 | |
Amortised cost | Bank | |||
Fair value of liabilities | |||
Liabilities | 238,508 | 206,876 | |
Amortised cost | Bank | Settlement balances | |||
Fair value of liabilities | |||
Liabilities | 86 | ||
Amortised cost | Not at fair value | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 34,400 | 11,100 | |
Amortised cost | Not at fair value | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 301 | 24,900 | |
Amortised cost | Not at fair value | Debt securities in issue | |||
Fair value of liabilities | |||
Liabilities | 1,473 | ||
Amortised cost | Not at fair value | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | 5,800 | 7,300 | |
Amortised cost | Not at fair value | Bank | Deposits by banks | |||
Fair value of liabilities | |||
Liabilities | 27,400 | 4,200 | |
Amortised cost | Not at fair value | Bank | Customer accounts | |||
Fair value of liabilities | |||
Liabilities | 13,800 | 12,100 | |
Amortised cost | Not at fair value | Bank | Subordinated liabilities | |||
Fair value of liabilities | |||
Liabilities | £ 5,600 | £ 5,900 |
Financial instruments - matu123
Financial instruments - maturity analysis (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financial instruments | |||
Assets | £ 340,843 | £ 316,476 | £ 302,430 |
Liabilities | 324,476 | 300,476 | £ 287,263 |
Bank | |||
Financial instruments | |||
Assets | 259,717 | 228,921 | |
Liabilities | 244,362 | 213,624 | |
Cash and balances at central banks | |||
Financial instruments | |||
Assets | 35,799 | 2,567 | |
Cash and balances at central banks | Bank | |||
Financial instruments | |||
Assets | 34,763 | 1,198 | |
Loans and advances to banks | |||
Financial instruments | |||
Assets | 79,845 | 97,152 | |
Loans and advances to banks | Bank | |||
Financial instruments | |||
Assets | 55,788 | 64,603 | |
Loans and advances to customers | |||
Financial instruments | |||
Assets | 191,889 | 177,065 | |
Loans and advances to customers | Bank | |||
Financial instruments | |||
Assets | 160,679 | 150,147 | |
Debt securities | |||
Financial instruments | |||
Assets | 1,612 | 4,463 | |
Debt securities | Bank | |||
Financial instruments | |||
Assets | 1,059 | ||
Equity shares | |||
Financial instruments | |||
Assets | 43 | 87 | |
Equity shares | Bank | |||
Financial instruments | |||
Assets | 7 | 11 | |
Settlement balances | |||
Financial instruments | |||
Assets | 3 | 1,693 | |
Settlement balances | Bank | |||
Financial instruments | |||
Assets | 119 | ||
Derivatives | |||
Financial instruments | |||
Assets | 2,315 | 3,904 | |
Derivatives | Bank | |||
Financial instruments | |||
Assets | 2,277 | 3,082 | |
Deposits by banks | |||
Financial instruments | |||
Liabilities | 53,847 | 20,045 | |
Deposits by banks | Bank | |||
Financial instruments | |||
Liabilities | 32,465 | 9,208 | |
Customer accounts | |||
Financial instruments | |||
Liabilities | 233,372 | 233,939 | |
Customer accounts | Bank | |||
Financial instruments | |||
Liabilities | 201,150 | 192,490 | |
Debt securities in issue | |||
Financial instruments | |||
Liabilities | 396 | 301 | |
Settlement balances and short positions | |||
Financial instruments | |||
Liabilities | 4 | 6,344 | |
Settlement balances and short positions | Bank | |||
Financial instruments | |||
Liabilities | 86 | ||
Derivatives | |||
Financial instruments | |||
Liabilities | 3,178 | 4,654 | |
Derivatives | Bank | |||
Financial instruments | |||
Liabilities | 3,117 | 3,938 | |
Subordinated liabilities | |||
Financial instruments | |||
Liabilities | 5,755 | 7,295 | |
Subordinated liabilities | Bank | |||
Financial instruments | |||
Liabilities | 5,640 | 5,890 | |
Within 1 year | Cash and balances at central banks | |||
Financial instruments | |||
Assets | 35,799 | 2,567 | |
Within 1 year | Cash and balances at central banks | Bank | |||
Financial instruments | |||
Assets | 34,763 | 1,198 | |
Within 1 year | Loans and advances to banks | |||
Financial instruments | |||
Assets | 65,132 | 86,817 | |
Within 1 year | Loans and advances to banks | Bank | |||
Financial instruments | |||
Assets | 48,452 | 60,767 | |
Within 1 year | Loans and advances to customers | |||
Financial instruments | |||
Assets | 41,947 | 43,619 | |
Within 1 year | Loans and advances to customers | Bank | |||
Financial instruments | |||
Assets | 26,648 | 26,718 | |
Within 1 year | Debt securities | |||
Financial instruments | |||
Assets | 433 | 703 | |
Within 1 year | Settlement balances | |||
Financial instruments | |||
Assets | 3 | 1,693 | |
Within 1 year | Settlement balances | Bank | |||
Financial instruments | |||
Assets | 119 | ||
Within 1 year | Derivatives | |||
Financial instruments | |||
Assets | 217 | 597 | |
Within 1 year | Derivatives | Bank | |||
Financial instruments | |||
Assets | 209 | 436 | |
Within 1 year | Deposits by banks | |||
Financial instruments | |||
Liabilities | 31,634 | 15,792 | |
Within 1 year | Deposits by banks | Bank | |||
Financial instruments | |||
Liabilities | 13,882 | 7,620 | |
Within 1 year | Customer accounts | |||
Financial instruments | |||
Liabilities | 225,457 | 229,135 | |
Within 1 year | Customer accounts | Bank | |||
Financial instruments | |||
Liabilities | 193,274 | 187,750 | |
Within 1 year | Settlement balances and short positions | |||
Financial instruments | |||
Liabilities | 4 | 2,284 | |
Within 1 year | Settlement balances and short positions | Bank | |||
Financial instruments | |||
Liabilities | 86 | ||
Within 1 year | Derivatives | |||
Financial instruments | |||
Liabilities | 228 | 506 | |
Within 1 year | Derivatives | Bank | |||
Financial instruments | |||
Liabilities | 217 | 429 | |
Within 1 year | Subordinated liabilities | |||
Financial instruments | |||
Liabilities | 21 | 369 | |
Within 1 year | Subordinated liabilities | Bank | |||
Financial instruments | |||
Liabilities | 21 | 25 | |
More than 1 year | Loans and advances to banks | |||
Financial instruments | |||
Assets | 14,713 | 10,335 | |
More than 1 year | Loans and advances to banks | Bank | |||
Financial instruments | |||
Assets | 7,336 | 3,836 | |
More than 1 year | Loans and advances to customers | |||
Financial instruments | |||
Assets | 149,942 | 133,446 | |
More than 1 year | Loans and advances to customers | Bank | |||
Financial instruments | |||
Assets | 134,031 | 123,429 | |
More than 1 year | Debt securities | |||
Financial instruments | |||
Assets | 1,179 | 3,760 | |
More than 1 year | Debt securities | Bank | |||
Financial instruments | |||
Assets | 1,059 | ||
More than 1 year | Equity shares | |||
Financial instruments | |||
Assets | 43 | 87 | |
More than 1 year | Equity shares | Bank | |||
Financial instruments | |||
Assets | 7 | 11 | |
More than 1 year | Derivatives | |||
Financial instruments | |||
Assets | 2,098 | 3,307 | |
More than 1 year | Derivatives | Bank | |||
Financial instruments | |||
Assets | 2,068 | 2,646 | |
More than 1 year | Deposits by banks | |||
Financial instruments | |||
Liabilities | 22,213 | 4,253 | |
More than 1 year | Deposits by banks | Bank | |||
Financial instruments | |||
Liabilities | 18,583 | 1,588 | |
More than 1 year | Customer accounts | |||
Financial instruments | |||
Liabilities | 7,915 | 4,804 | |
More than 1 year | Customer accounts | Bank | |||
Financial instruments | |||
Liabilities | 7,876 | 4,740 | |
More than 1 year | Debt securities in issue | |||
Financial instruments | |||
Liabilities | 396 | 301 | |
More than 1 year | Settlement balances and short positions | |||
Financial instruments | |||
Liabilities | 4,060 | ||
More than 1 year | Derivatives | |||
Financial instruments | |||
Liabilities | 2,950 | 4,148 | |
More than 1 year | Derivatives | Bank | |||
Financial instruments | |||
Liabilities | 2,900 | 3,509 | |
More than 1 year | Subordinated liabilities | |||
Financial instruments | |||
Liabilities | 5,734 | 6,926 | |
More than 1 year | Subordinated liabilities | Bank | |||
Financial instruments | |||
Liabilities | £ 5,619 | £ 5,865 |
Financial instruments - matu124
Financial instruments - maturity analysis - Contractual maturity of undiscounted cash flows (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Contractual maturity of undiscounted cash flows payable | ||
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 | |
Held-for-trading liabilities excluded from contractual maturity for cash outflows payable | £ 3,800 | £ 24,500 |
Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Held-for-trading liabilities excluded from contractual maturity for cash outflows payable | 3,700 | 4,400 |
0-3 months | Financial liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 258,533 | 231,367 |
0-3 months | Financial liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 208,724 | 195,658 |
0-3 months | Deposits by banks | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 31,921 | 10,707 |
0-3 months | Deposits by banks | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 14,745 | 7,092 |
0-3 months | Customer accounts | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 225,745 | 218,100 |
0-3 months | Customer accounts | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 193,931 | 188,431 |
0-3 months | Debt securities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 8 | |
0-3 months | Subordinated liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 46 | 50 |
0-3 months | Subordinated liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 46 | 49 |
0-3 months | Settlement balances and other liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 813 | 2,510 |
0-3 months | Settlement balances | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 2 | 86 |
0-3 months | Guarantees and commitments | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 53,806 | 55,996 |
0-3 months | Guarantees and commitments | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 47,384 | 48,769 |
0-3 months | Guarantees | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 674 | 869 |
0-3 months | Guarantees | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 562 | 648 |
0-3 months | Commitments | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 53,132 | 55,127 |
0-3 months | Commitments | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 46,822 | 48,121 |
3-12 months | Financial liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 2,409 | 2,930 |
3-12 months | Financial liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,308 | 1,076 |
3-12 months | Deposits by banks | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 788 | 1,205 |
3-12 months | Deposits by banks | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 64 | 56 |
3-12 months | Customer accounts | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,414 | 1,196 |
3-12 months | Customer accounts | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,071 | 837 |
3-12 months | Debt securities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 33 | |
3-12 months | Subordinated liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 174 | 529 |
3-12 months | Subordinated liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 173 | 183 |
1- 3 years | Financial liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 7,592 | 4,835 |
1- 3 years | Financial liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 5,639 | 2,762 |
1- 3 years | Deposits by banks | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 4,960 | 2,200 |
1- 3 years | Deposits by banks | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 3,170 | 665 |
1- 3 years | Customer accounts | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,145 | 733 |
1- 3 years | Customer accounts | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,078 | 632 |
1- 3 years | Debt securities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 87 | |
1- 3 years | Subordinated liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,400 | 1,902 |
1- 3 years | Subordinated liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,391 | 1,465 |
3-5 years | Financial liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 16,955 | 2,606 |
3-5 years | Financial liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 15,651 | 1,665 |
3-5 years | Deposits by banks | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 15,240 | 1,298 |
3-5 years | Deposits by banks | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 14,024 | 512 |
3-5 years | Customer accounts | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,004 | 487 |
3-5 years | Customer accounts | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,004 | 487 |
3-5 years | Debt securities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 87 | |
3-5 years | Subordinated liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 624 | 821 |
3-5 years | Subordinated liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 623 | 666 |
5-10 years | Financial liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 6,082 | 4,767 |
5-10 years | Financial liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 4,975 | 4,191 |
5-10 years | Deposits by banks | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 619 | 692 |
5-10 years | Deposits by banks | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 132 | 406 |
5-10 years | Customer accounts | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 2,242 | 1,084 |
5-10 years | Customer accounts | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 2,242 | 1,084 |
5-10 years | Debt securities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 617 | |
5-10 years | Subordinated liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 2,604 | 2,991 |
5-10 years | Subordinated liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 2,601 | 2,701 |
10-20 years | Financial liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 4,437 | 3,235 |
10-20 years | Financial liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 4,344 | 2,835 |
10-20 years | Deposits by banks | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 88 | 93 |
10-20 years | Customer accounts | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 3,142 | 1,498 |
10-20 years | Customer accounts | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 3,142 | 1,498 |
10-20 years | Debt securities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 301 | |
10-20 years | Subordinated liabilities | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | 1,207 | 1,343 |
10-20 years | Subordinated liabilities | Bank | ||
Contractual maturity of undiscounted cash flows payable | ||
Undiscounted cash flow payable | £ 1,202 | £ 1,337 |
Financial assets - impairmen125
Financial assets - impairments - Provision for impairment losses (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in the provision for impairment losses on loans and advances | ||
At 1 January | £ 1,563 | £ 5,335 |
Transfers from fellow subsidiaries | 100 | |
Transfers to disposal groups | (1,200) | |
Currency translation and other adjustments | 368 | |
Amounts written-off | (577) | (2,946) |
Recoveries of amounts previously written-off | 73 | 61 |
At 31 December | 1,439 | 1,563 |
Continuing operations | ||
Movement in the provision for impairment losses on loans and advances | ||
Charge/(release) to income statement | 311 | 125 |
Unwind of discount (recognised in interest income) | (31) | (37) |
Discontinued Operations | ||
Movement in the provision for impairment losses on loans and advances | ||
Charge/(release) to income statement | (106) | |
Unwind of discount (recognised in interest income) | (37) | |
Bank | ||
Movement in the provision for impairment losses on loans and advances | ||
At 1 January | 1,372 | 1,692 |
Currency translation and other adjustments | 2 | 2 |
Amounts written-off | (508) | (468) |
Recoveries of amounts previously written-off | 67 | 26 |
Charge/(release) to income statement | 255 | 155 |
Unwind of discount (recognised in interest income) | (29) | (35) |
At 31 December | 1,159 | 1,372 |
Individually assessed | ||
Movement in the provision for impairment losses on loans and advances | ||
At 1 January | 249 | |
Transfers from fellow subsidiaries | 37 | |
Currency translation and other adjustments | (3) | |
Amounts written-off | (100) | |
Recoveries of amounts previously written-off | 7 | |
At 31 December | 285 | 249 |
Individually assessed | Continuing operations | ||
Movement in the provision for impairment losses on loans and advances | ||
Charge/(release) to income statement | 99 | |
Unwind of discount (recognised in interest income) | (4) | |
Individually assessed | Bank | ||
Movement in the provision for impairment losses on loans and advances | ||
At 1 January | 201 | |
Currency translation and other adjustments | (2) | |
Amounts written-off | (77) | |
Recoveries of amounts previously written-off | 4 | |
Charge/(release) to income statement | 59 | |
Unwind of discount (recognised in interest income) | (3) | |
At 31 December | 182 | 201 |
Collectively assessed | ||
Movement in the provision for impairment losses on loans and advances | ||
At 1 January | 1,127 | |
Transfers from fellow subsidiaries | 49 | |
Currency translation and other adjustments | 3 | |
Amounts written-off | (477) | |
Recoveries of amounts previously written-off | 66 | |
At 31 December | 944 | 1,127 |
Collectively assessed | Continuing operations | ||
Movement in the provision for impairment losses on loans and advances | ||
Charge/(release) to income statement | 203 | |
Unwind of discount (recognised in interest income) | (27) | |
Collectively assessed | Bank | ||
Movement in the provision for impairment losses on loans and advances | ||
At 1 January | 1,004 | |
Currency translation and other adjustments | 4 | |
Amounts written-off | (431) | |
Recoveries of amounts previously written-off | 63 | |
Charge/(release) to income statement | 187 | |
Unwind of discount (recognised in interest income) | (26) | |
At 31 December | 801 | 1,004 |
Latent | ||
Movement in the provision for impairment losses on loans and advances | ||
At 1 January | 187 | |
Transfers from fellow subsidiaries | 14 | |
At 31 December | 210 | 187 |
Latent | Continuing operations | ||
Movement in the provision for impairment losses on loans and advances | ||
Charge/(release) to income statement | 9 | |
Latent | Bank | ||
Movement in the provision for impairment losses on loans and advances | ||
At 1 January | 167 | |
Charge/(release) to income statement | 9 | |
At 31 December | £ 176 | £ 167 |
Financial assets - impairmen126
Financial assets - impairments -Impairment charge/(release) to income statement (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impairment charge/(release) to the income statement | |||
Charge/(release) to the income statement | £ 311 | £ 125 | £ (54) |
Continuing operations | |||
Impairment charge/(release) to the income statement | |||
Loans and advances to customers | 311 | 125 | |
Charge/(release) to the income statement | 311 | 125 | (54) |
Gross income not recognised but which would have been recognised under the original terms of the impaired loans | 146 | 162 | 203 |
Interest on impaired loans included in net interest income | 31 | 38 | 51 |
Continuing operations | Loans and advances to customers | |||
Impairment charge/(release) to the income statement | |||
Charge/(release) to the income statement | 311 | 125 | (54) |
Continuing operations | UK | |||
Impairment charge/(release) to the income statement | |||
Gross income not recognised but which would have been recognised under the original terms of the impaired loans | 145 | 161 | 202 |
Interest on impaired loans included in net interest income | 31 | 38 | 51 |
Continuing operations | Foreign | |||
Impairment charge/(release) to the income statement | |||
Gross income not recognised but which would have been recognised under the original terms of the impaired loans | 1 | 1 | 1 |
Discontinued Operations | |||
Impairment charge/(release) to the income statement | |||
Loans and advances to customers | (106) | ||
Gross income not recognised but which would have been recognised under the original terms of the impaired loans | 0 | 68 | 59 |
Interest on impaired loans included in net interest income | 0 | 37 | 46 |
Discontinued Operations | Loans and advances to customers | |||
Impairment charge/(release) to the income statement | |||
Charge/(release) to the income statement | £ 0 | £ 106 | £ 675 |
Financial assets - impairmen127
Financial assets - impairments - Impaired financial assets (Details) - Loans and advances to customers - Loans and receivables - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Impaired Financial Assets | ||
Financial assets - impairments | ||
Financial assets | £ 569 | £ 585 |
Impaired Financial Assets | Cost | ||
Financial assets - impairments | ||
Financial assets | 1,798 | 1,961 |
Impaired Financial Assets | Provision | ||
Financial assets - impairments | ||
Financial assets | 1,229 | 1,376 |
Individually assessed | Provision | ||
Financial assets - impairments | ||
Financial assets | 951 | 535 |
Bank | Impaired Financial Assets | ||
Financial assets - impairments | ||
Financial assets | 342 | 484 |
Bank | Impaired Financial Assets | Cost | ||
Financial assets - impairments | ||
Financial assets | 1,325 | 1,689 |
Bank | Impaired Financial Assets | Provision | ||
Financial assets - impairments | ||
Financial assets | 983 | 1,205 |
Bank | Individually assessed | Provision | ||
Financial assets - impairments | ||
Financial assets | £ 647 | £ 425 |
Financial assets - impairmen128
Financial assets - impairments - Carrying value of impaired financial assets (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of financial assets that are either past due or impaired [line items] | ||
Assets obtained by taking possession of collateral or calling on other credit enhancements | £ 20 | £ 21 |
Equity shares | Available-for-sale | Impaired Financial Assets | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Financial assets | 1 | 1 |
Bank | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Assets obtained by taking possession of collateral or calling on other credit enhancements | £ 20 | £ 21 |
Derivatives - Notional amount a
Derivatives - Notional amount and fair value (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Notional amount and fair value of the derivatives | ||
Derivative financial assets | £ 2,315 | £ 3,904 |
Derivative financial liabilities | 3,178 | 4,654 |
Equity and commodity contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 1 | |
Derivative financial assets | 93 | |
Spot, forwards and futures | Exchange rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 12,000 | 15 |
Derivative financial assets | 165 | 420 |
Derivative financial liabilities | 171 | 365 |
Inflation rate swaps | Exchange rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 3,000 | 4 |
Derivative financial assets | 76 | 238 |
Derivative financial liabilities | 75 | 279 |
Equity and bond call options | Exchange rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 1,000 | 1 |
Derivative financial assets | 44 | 55 |
Equity and bond call options | Interest rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 6,000 | 4 |
Derivative financial assets | 43 | 72 |
Equity and bond put options | Exchange rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 1,000 | 1 |
Derivative financial liabilities | 44 | 55 |
Equity and bond put options | Interest rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 6,000 | 4 |
Derivative financial liabilities | 20 | 37 |
Interest rate swaps | Interest rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 179,000 | 91 |
Derivative financial assets | 1,987 | 3,026 |
Derivative financial liabilities | 2,868 | 3,918 |
Futures and forwards | Interest rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 5 | |
Bank | ||
Notional amount and fair value of the derivatives | ||
Derivative financial assets | 2,277 | 3,082 |
Derivative financial liabilities | 3,117 | 3,938 |
Bank | Spot, forwards and futures | Exchange rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 11,000 | 13,000 |
Derivative financial assets | 162 | 371 |
Derivative financial liabilities | 166 | 343 |
Bank | Inflation rate swaps | Exchange rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 3,000 | 3,000 |
Derivative financial assets | 74 | 151 |
Derivative financial liabilities | 74 | 151 |
Bank | Equity and bond call options | Exchange rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 1,000 | 1,000 |
Derivative financial assets | 44 | 55 |
Bank | Equity and bond call options | Interest rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 6,000 | 4,000 |
Derivative financial assets | 43 | 72 |
Bank | Equity and bond put options | Exchange rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 1,000 | 1,000 |
Derivative financial liabilities | 44 | 55 |
Bank | Equity and bond put options | Interest rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 6,000 | 4,000 |
Derivative financial liabilities | 20 | 37 |
Bank | Interest rate swaps | Interest rate contracts | ||
Notional amount and fair value of the derivatives | ||
Notional amount | 170,000 | 45,000 |
Derivative financial assets | 1,954 | 2,433 |
Derivative financial liabilities | 2,813 | 3,352 |
Subsidiaries | ||
Notional amount and fair value of the derivatives | ||
Derivative financial assets | 6 | |
Derivative financial liabilities | 15 | |
Intermediate holding company | ||
Notional amount and fair value of the derivatives | ||
Derivative financial assets | 1,703 | 2,929 |
Derivative financial liabilities | 2,951 | 4,294 |
Intermediate holding company | Bank | ||
Notional amount and fair value of the derivatives | ||
Derivative financial assets | 1,697 | 2,167 |
Derivative financial liabilities | £ 2,908 | £ 3,604 |
Debt securities (Details)
Debt securities (Details) - GBP (£) £ in Millions | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Debt securities | |||
Debt instruments held | £ 1,612 | £ 4,463 | £ 1,612 |
Continuing operations | |||
Debt securities | |||
Gross unrealised gains | 5 | 0 | |
Gross unrealised losses | 0 | 0 | |
Discontinued Operations | |||
Debt securities | |||
Gross unrealised gains | 0 | 0 | |
Gross unrealised losses | 0 | ||
Debt securities | |||
Debt securities | |||
Debt instruments held | 1,612 | 4,463 | 1,612 |
Central and local Government | UK | |||
Debt securities | |||
Debt instruments held | 391 | 391 | |
Central and local Government | USA | |||
Debt securities | |||
Debt instruments held | 3,564 | ||
Central and local Government | Other Country | |||
Debt securities | |||
Debt instruments held | 2 | 27 | 2 |
Banks | |||
Debt securities | |||
Debt instruments held | 159 | 432 | 159 |
Other financial institutions | |||
Debt securities | |||
Debt instruments held | 1,060 | 439 | 1,060 |
Corporate | |||
Debt securities | |||
Debt instruments held | 1 | ||
ABS | |||
Debt securities | |||
Debt instruments held | 1,218 | 93 | 1,218 |
Held-for-trading | Debt securities | |||
Debt securities | |||
Debt instruments held | 4,102 | ||
Held-for-trading | Central and local Government | USA | |||
Debt securities | |||
Debt instruments held | 3,564 | ||
Held-for-trading | Banks | |||
Debt securities | |||
Debt instruments held | 98 | ||
Held-for-trading | Other financial institutions | |||
Debt securities | |||
Debt instruments held | 439 | ||
Held-for-trading | Corporate | |||
Debt securities | |||
Debt instruments held | 1 | ||
Held-for-trading | ABS | |||
Debt securities | |||
Debt instruments held | 9 | ||
Available-for-sale | |||
Debt securities | |||
Debt instruments held | £ 553 | £ 361 | 553 |
Related yield on available-for-sale debt securities | 0.20% | 0.10% | |
Available-for-sale | Within 1 year | |||
Debt securities | |||
Debt instruments held | £ 433 | £ 299 | 433 |
Related yield on available-for-sale debt securities | 0.10% | ||
Available-for-sale | After 1 year but within 5 years | |||
Debt securities | |||
Debt instruments held | £ 120 | £ 62 | 120 |
Related yield on available-for-sale debt securities | 0.70% | 0.60% | |
Available-for-sale | Debt securities | |||
Debt securities | |||
Debt instruments held | £ 553 | £ 361 | 553 |
Available-for-sale | Central and local Government | UK | |||
Debt securities | |||
Debt instruments held | £ 391 | 391 | |
Related yield on available-for-sale debt securities | 0.10% | ||
Available-for-sale | Central and local Government | UK | Within 1 year | |||
Debt securities | |||
Debt instruments held | £ 391 | 391 | |
Related yield on available-for-sale debt securities | 0.10% | ||
Available-for-sale | Central and local Government | Other Country | |||
Debt securities | |||
Debt instruments held | £ 2 | £ 27 | 2 |
Related yield on available-for-sale debt securities | 2.90% | 0.10% | |
Available-for-sale | Central and local Government | Other Country | Within 1 year | |||
Debt securities | |||
Debt instruments held | £ 2 | £ 24 | 2 |
Related yield on available-for-sale debt securities | 2.90% | ||
Available-for-sale | Central and local Government | Other Country | After 1 year but within 5 years | |||
Debt securities | |||
Debt instruments held | £ 3 | ||
Related yield on available-for-sale debt securities | 0.90% | ||
Available-for-sale | Banks | |||
Debt securities | |||
Debt instruments held | £ 159 | £ 334 | 159 |
Related yield on available-for-sale debt securities | 0.60% | 0.10% | |
Available-for-sale | Banks | Within 1 year | |||
Debt securities | |||
Debt instruments held | £ 40 | £ 275 | 40 |
Related yield on available-for-sale debt securities | 0.40% | 0.10% | |
Available-for-sale | Banks | After 1 year but within 5 years | |||
Debt securities | |||
Debt instruments held | £ 119 | £ 59 | 119 |
Related yield on available-for-sale debt securities | 0.70% | 0.60% | |
Available-for-sale | Other financial institutions | |||
Debt securities | |||
Debt instruments held | £ 1 | 1 | |
Available-for-sale | Other financial institutions | After 1 year but within 5 years | |||
Debt securities | |||
Debt instruments held | 1 | 1 | |
Available-for-sale | ABS | |||
Debt securities | |||
Debt instruments held | 159 | £ 84 | 159 |
Loans and receivables | Debt securities | |||
Debt securities | |||
Debt instruments held | 1,059 | 1,059 | |
Loans and receivables | Other financial institutions | |||
Debt securities | |||
Debt instruments held | 1,059 | 1,059 | |
Loans and receivables | ABS | |||
Debt securities | |||
Debt instruments held | £ 1,059 | £ 1,059 |
Equity shares (Details)
Equity shares (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Equity shares | ||
Equity shares | ||
Held-for-trading | £ 7 | |
Designated as at fair value through profit or loss | £ 34 | 43 |
Available-for-sale | 9 | 37 |
Total financial assets | 43 | 87 |
Gross unrealised gains | 1 | 6 |
Listed | ||
Equity shares | ||
Designated as at fair value through profit or loss | 3 | 3 |
Available-for-sale | 5 | |
Total financial assets | 3 | 8 |
Gross unrealised gains | 3 | |
Unlisted | ||
Equity shares | ||
Held-for-trading | 7 | |
Designated as at fair value through profit or loss | 31 | 40 |
Available-for-sale | 9 | 32 |
Total financial assets | 40 | 79 |
Gross unrealised gains | 1 | 3 |
Continuing operations | ||
Equity shares | ||
Gross unrealised gains | 435 | 26 |
Gross unrealised losses | 0 | 1 |
Dividends received | 0 | 1 |
Discontinued Operations | ||
Equity shares | ||
Gross unrealised gains | 0 | 0 |
Gross unrealised losses | 0 | 6 |
Dividends received | 4 | 7 |
Bank | ||
Equity shares | ||
Dividends received | 3,900 | |
Bank | Equity shares | ||
Equity shares | ||
Held-for-trading | 7 | |
Available-for-sale | 7 | 4 |
Total financial assets | 7 | 11 |
Gross unrealised gains | 1 | |
Bank | Unlisted | ||
Equity shares | ||
Held-for-trading | 7 | |
Available-for-sale | 7 | 4 |
Total financial assets | £ 7 | 11 |
Gross unrealised gains | £ 1 |
Investments in Group underta132
Investments in Group undertakings (Details) - Bank - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Acquisitions and disposals | |||
At 1 January | £ 6,931 | £ 6,554 | |
Currency translation and other adjustments | 2 | (3) | |
Additional investments in Group undertakings | 2,879 | 307 | £ 700 |
Acquisitions | 738 | 307 | |
Disposals | (166) | ||
(Impairment)/write back of investments | (7,838) | 73 | (2,001) |
At 31 December | 2,546 | £ 6,931 | £ 6,554 |
Dividends received | 3,900 | ||
Capital contributions | £ 2,500 |
Intangible assets (Details)
Intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible assets | |||
At 1 January | £ 484 | ||
Charge for the year | 69 | £ 48 | £ 61 |
Write down of goodwill and other intangible assets | 16 | 85 | |
At 31 December | 522 | 484 | |
Bank | |||
Intangible assets | |||
At 1 January | 477 | ||
At 31 December | 490 | 477 | |
Carrying value of goodwill | 490 | 477 | |
Cost | |||
Intangible assets | |||
At 1 January | 1,815 | 1,902 | |
Transfers to disposal groups | (46) | (62) | |
Transfer from/to fellow subsidiaries | 192 | (2) | |
Currency translation and other adjustments | (8) | 156 | |
Additions | 25 | 6 | |
Disposals and write-off of fully amortised assets | (20) | (185) | |
At 31 December | 1,958 | 1,815 | 1,902 |
Cost | Bank | |||
Intangible assets | |||
At 1 January | 1,235 | 1,237 | |
Transfer from/to fellow subsidiaries | 63 | (2) | |
Additions | 10 | ||
Disposals and write-off of fully amortised assets | (20) | ||
At 31 December | 1,288 | 1,235 | 1,237 |
Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
At 1 January | 1,331 | 1,385 | |
Transfers to disposal groups | (46) | (62) | |
Transfer from/to fellow subsidiaries | 109 | (26) | |
Currency translation and other adjustments | (8) | 152 | |
Disposals and write-off of fully amortised assets | (19) | (182) | |
At 31 December | 1,436 | 1,331 | 1,385 |
Accumulated impairment, depreciation and amortisation | Bank | |||
Intangible assets | |||
At 1 January | 758 | 739 | |
Transfer from/to fellow subsidiaries | (6) | (26) | |
Disposals and write-off of fully amortised assets | (20) | ||
Charge for the year | 66 | 45 | |
At 31 December | 798 | 758 | 739 |
Continuing operations | Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
Charge for the year | 69 | 48 | |
Write down of goodwill and other intangible assets | 16 | ||
Goodwill | |||
Intangible assets | |||
At 31 December | 10 | ||
Goodwill | Cost | |||
Intangible assets | |||
At 1 January | 510 | 446 | |
Transfers to disposal groups | (6) | ||
Transfer from/to fellow subsidiaries | 111 | ||
Currency translation and other adjustments | (3) | 70 | |
At 31 December | 618 | 510 | 446 |
Goodwill | Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
At 1 January | 510 | 446 | |
Transfers to disposal groups | (6) | ||
Transfer from/to fellow subsidiaries | 101 | ||
Currency translation and other adjustments | (3) | 70 | |
At 31 December | 608 | 510 | 446 |
Other | |||
Intangible assets | |||
At 1 January | 484 | ||
At 31 December | 512 | 484 | |
Other | Cost | |||
Intangible assets | |||
At 1 January | 1,305 | 1,456 | |
Transfers to disposal groups | (46) | (56) | |
Transfer from/to fellow subsidiaries | 81 | (2) | |
Currency translation and other adjustments | (5) | 86 | |
Additions | 25 | 6 | |
Disposals and write-off of fully amortised assets | (20) | (185) | |
At 31 December | 1,340 | 1,305 | 1,456 |
Other | Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
At 1 January | 821 | 939 | |
Transfers to disposal groups | (46) | (56) | |
Transfer from/to fellow subsidiaries | 8 | (26) | |
Currency translation and other adjustments | (5) | 82 | |
Disposals and write-off of fully amortised assets | (19) | (182) | |
At 31 December | 828 | 821 | £ 939 |
Other | Continuing operations | Accumulated impairment, depreciation and amortisation | |||
Intangible assets | |||
Charge for the year | £ 69 | 48 | |
Write down of goodwill and other intangible assets | £ 16 |
Property, plant and equipmen134
Property, plant and equipment (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, plant and equipment | |||
At 1 January | £ 2,160 | ||
Charge for the year | 213 | £ 79 | £ 75 |
At 31 December | 2,580 | 2,160 | |
Fair value of property | 183 | 196 | |
Rental income from investment property | 81 | 18 | |
Direct operating expenses of investment properties | 9 | 3 | |
Bank | |||
Property, plant and equipment | |||
At 1 January | 787 | ||
Transfers to disposal groups | (32) | ||
Transfers from/to fellow subsidiaries | 15 | ||
Charge for the year | 57 | ||
At 31 December | £ 692 | 787 | |
Level 3 | |||
Property, plant and equipment | |||
Fair value percentage of investment property classified | 5.00% | ||
Residual value | £ 40 | ||
Discontinued Operations | |||
Property, plant and equipment | |||
At 1 January | 67 | ||
At 31 December | 168 | 67 | |
Cost | |||
Property, plant and equipment | |||
At 1 January | 3,628 | 2,451 | |
Transfers to disposal groups | (697) | (176) | |
Currency translation and other adjustments | (40) | 245 | |
Purchase of Nordisk properties from intermediate holding company | 1,005 | ||
Transfers from/to fellow subsidiaries | 1,329 | 149 | |
Additions | 275 | 88 | |
Disposals and write-off of fully depreciated assets | (692) | (136) | |
At 31 December | 3,785 | 3,628 | 2,451 |
Cost | Bank | |||
Property, plant and equipment | |||
At 1 January | 1,533 | 1,506 | |
Transfers to disposal groups | (73) | ||
Transfers from/to fellow subsidiaries | 26 | ||
Additions | 57 | 61 | |
Disposals and write-off of fully depreciated assets | (224) | (34) | |
At 31 December | 1,319 | 1,533 | 1,506 |
Cost | Continuing operations | |||
Property, plant and equipment | |||
Change in fair value of investment properties - continuing operations | 18 | 2 | |
Accumulated impairment, depreciation and amortisation | |||
Property, plant and equipment | |||
At 1 January | 1,468 | 1,420 | |
Transfers to disposal groups | (529) | (109) | |
Currency translation and other adjustments | (47) | 168 | |
Transfers from/to fellow subsidiaries | 594 | (23) | |
Disposals and write-off of fully depreciated assets | (441) | (77) | |
At 31 December | 1,205 | 1,468 | 1,420 |
Accumulated impairment, depreciation and amortisation | Bank | |||
Property, plant and equipment | |||
At 1 January | 746 | 695 | |
Disposals and write-off of fully depreciated assets | (159) | (19) | |
Charge for the year | 70 | ||
At 31 December | 627 | 746 | 695 |
Accumulated impairment, depreciation and amortisation | Continuing operations | |||
Property, plant and equipment | |||
Charge for the year | 213 | 79 | |
Accumulated impairment, depreciation and amortisation | Discontinued Operations | |||
Property, plant and equipment | |||
Charge for the year | 2 | 8 | |
Write back of property, plant and equipment | (55) | 2 | |
Investment properties | |||
Property, plant and equipment | |||
At 1 January | 1,040 | ||
At 31 December | 1,048 | 1,040 | |
Investment properties | Cost | |||
Property, plant and equipment | |||
At 1 January | 1,040 | 27 | |
Currency translation and other adjustments | 18 | 35 | |
Purchase of Nordisk properties from intermediate holding company | 1,005 | ||
Additions | 8 | 3 | |
Disposals and write-off of fully depreciated assets | (32) | ||
At 31 December | 1,048 | 1,040 | 27 |
Investment properties | Cost | Continuing operations | |||
Property, plant and equipment | |||
Change in fair value of investment properties - continuing operations | 18 | 2 | |
Freehold premises | Bank | |||
Property, plant and equipment | |||
At 1 January | 513 | ||
Transfers to disposal groups | (27) | ||
Transfers from/to fellow subsidiaries | 6 | ||
Charge for the year | 25 | ||
At 31 December | 452 | 513 | |
Freehold premises | Cost | Bank | |||
Property, plant and equipment | |||
At 1 January | 864 | 878 | |
Transfers to disposal groups | (61) | ||
Transfers from/to fellow subsidiaries | 10 | ||
Additions | 22 | 8 | |
Disposals and write-off of fully depreciated assets | (46) | (22) | |
At 31 December | 789 | 864 | 878 |
Freehold premises | Accumulated impairment, depreciation and amortisation | Bank | |||
Property, plant and equipment | |||
At 1 January | 351 | 337 | |
Disposals and write-off of fully depreciated assets | (18) | (13) | |
Charge for the year | 27 | ||
At 31 December | 337 | 351 | 337 |
Long leasehold premises | |||
Property, plant and equipment | |||
At 1 January | 805 | ||
At 31 December | 662 | 805 | |
Long leasehold premises | Bank | |||
Property, plant and equipment | |||
At 1 January | 39 | ||
Transfers to disposal groups | (4) | ||
Charge for the year | 2 | ||
At 31 December | 36 | 39 | |
Long leasehold premises | Cost | |||
Property, plant and equipment | |||
At 1 January | 1,552 | 1,334 | |
Transfers to disposal groups | (472) | (55) | |
Currency translation and other adjustments | (37) | 83 | |
Transfers from/to fellow subsidiaries | 11 | 197 | |
Additions | 27 | 19 | |
Disposals and write-off of fully depreciated assets | (50) | (26) | |
At 31 December | 1,031 | 1,552 | 1,334 |
Long leasehold premises | Cost | Bank | |||
Property, plant and equipment | |||
At 1 January | 66 | 65 | |
Transfers to disposal groups | (8) | ||
Transfers from/to fellow subsidiaries | 2 | ||
Additions | 1 | 3 | |
Disposals and write-off of fully depreciated assets | (2) | (2) | |
At 31 December | 59 | 66 | 65 |
Long leasehold premises | Accumulated impairment, depreciation and amortisation | |||
Property, plant and equipment | |||
At 1 January | 747 | 716 | |
Transfers to disposal groups | (315) | (23) | |
Currency translation and other adjustments | (27) | 28 | |
Transfers from/to fellow subsidiaries | 6 | 9 | |
Disposals and write-off of fully depreciated assets | (20) | (16) | |
At 31 December | 369 | 747 | 716 |
Long leasehold premises | Accumulated impairment, depreciation and amortisation | Bank | |||
Property, plant and equipment | |||
At 1 January | 27 | 26 | |
Disposals and write-off of fully depreciated assets | (2) | (1) | |
Charge for the year | 2 | ||
At 31 December | 23 | 27 | 26 |
Long leasehold premises | Accumulated impairment, depreciation and amortisation | Continuing operations | |||
Property, plant and equipment | |||
Charge for the year | 32 | 29 | |
Long leasehold premises | Accumulated impairment, depreciation and amortisation | Discontinued Operations | |||
Property, plant and equipment | |||
Charge for the year | 1 | 2 | |
Write back of property, plant and equipment | (55) | 2 | |
Short leasehold premises | |||
Property, plant and equipment | |||
At 1 January | 53 | ||
At 31 December | 50 | 53 | |
Short leasehold premises | Bank | |||
Property, plant and equipment | |||
At 1 January | 136 | ||
Transfers to disposal groups | (1) | ||
Transfers from/to fellow subsidiaries | 2 | ||
Charge for the year | 21 | ||
At 31 December | 103 | 136 | |
Short leasehold premises | Cost | |||
Property, plant and equipment | |||
At 1 January | 85 | 98 | |
Transfers to disposal groups | (8) | (12) | |
Currency translation and other adjustments | 2 | ||
Transfers from/to fellow subsidiaries | 2 | ||
Additions | 3 | 3 | |
Disposals and write-off of fully depreciated assets | (4) | (6) | |
At 31 December | 78 | 85 | 98 |
Short leasehold premises | Cost | Bank | |||
Property, plant and equipment | |||
At 1 January | 496 | 496 | |
Transfers to disposal groups | (1) | ||
Transfers from/to fellow subsidiaries | 5 | ||
Additions | 19 | 9 | |
Disposals and write-off of fully depreciated assets | (173) | (9) | |
At 31 December | 346 | 496 | 496 |
Short leasehold premises | Accumulated impairment, depreciation and amortisation | |||
Property, plant and equipment | |||
At 1 January | 32 | 40 | |
Transfers to disposal groups | (4) | (8) | |
Currency translation and other adjustments | 1 | ||
Disposals and write-off of fully depreciated assets | (3) | (3) | |
At 31 December | 28 | 32 | 40 |
Short leasehold premises | Accumulated impairment, depreciation and amortisation | Bank | |||
Property, plant and equipment | |||
At 1 January | 360 | 331 | |
Disposals and write-off of fully depreciated assets | (139) | (5) | |
Charge for the year | 34 | ||
At 31 December | 243 | 360 | 331 |
Short leasehold premises | Accumulated impairment, depreciation and amortisation | Continuing operations | |||
Property, plant and equipment | |||
Charge for the year | 3 | 2 | |
Computers leasehold premises | |||
Property, plant and equipment | |||
At 1 January | 141 | ||
At 31 December | 106 | 141 | |
Computers leasehold premises | Bank | |||
Property, plant and equipment | |||
At 1 January | 99 | ||
Transfers from/to fellow subsidiaries | 7 | ||
Charge for the year | 9 | ||
At 31 December | 101 | 99 | |
Computers leasehold premises | Cost | |||
Property, plant and equipment | |||
At 1 January | 531 | 587 | |
Transfers to disposal groups | (12) | (55) | |
Currency translation and other adjustments | 55 | ||
Transfers from/to fellow subsidiaries | 8 | (18) | |
Additions | 19 | 11 | |
Disposals and write-off of fully depreciated assets | (180) | (49) | |
At 31 December | 366 | 531 | 587 |
Computers leasehold premises | Cost | Bank | |||
Property, plant and equipment | |||
At 1 January | 107 | 67 | |
Transfers to disposal groups | (3) | ||
Transfers from/to fellow subsidiaries | 9 | ||
Additions | 15 | 41 | |
Disposals and write-off of fully depreciated assets | (3) | (1) | |
At 31 December | 125 | 107 | 67 |
Computers leasehold premises | Accumulated impairment, depreciation and amortisation | |||
Property, plant and equipment | |||
At 1 January | 390 | 392 | |
Transfers to disposal groups | (11) | (33) | |
Currency translation and other adjustments | 37 | ||
Transfers from/to fellow subsidiaries | 4 | (8) | |
Disposals and write-off of fully depreciated assets | (146) | (38) | |
At 31 December | 260 | 390 | 392 |
Computers leasehold premises | Accumulated impairment, depreciation and amortisation | Bank | |||
Property, plant and equipment | |||
At 1 January | 8 | 1 | |
Charge for the year | 7 | ||
At 31 December | 24 | 8 | 1 |
Computers leasehold premises | Accumulated impairment, depreciation and amortisation | Continuing operations | |||
Property, plant and equipment | |||
Charge for the year | 23 | 36 | |
Computers leasehold premises | Accumulated impairment, depreciation and amortisation | Discontinued Operations | |||
Property, plant and equipment | |||
Charge for the year | 4 | ||
Other equipment | |||
Property, plant and equipment | |||
At 1 January | 121 | ||
At 31 December | 118 | 121 | |
Other equipment | Cost | |||
Property, plant and equipment | |||
At 1 January | 420 | 405 | |
Transfers to disposal groups | (205) | (54) | |
Currency translation and other adjustments | (21) | 70 | |
Transfers from/to fellow subsidiaries | 17 | (30) | |
Additions | 19 | 52 | |
Disposals and write-off of fully depreciated assets | (12) | (23) | |
At 31 December | 218 | 420 | 405 |
Other equipment | Accumulated impairment, depreciation and amortisation | |||
Property, plant and equipment | |||
At 1 January | 299 | 272 | |
Transfers to disposal groups | (199) | (45) | |
Currency translation and other adjustments | (20) | 102 | |
Transfers from/to fellow subsidiaries | 13 | (24) | |
Disposals and write-off of fully depreciated assets | (7) | (20) | |
At 31 December | 100 | 299 | £ 272 |
Other equipment | Accumulated impairment, depreciation and amortisation | Continuing operations | |||
Property, plant and equipment | |||
Charge for the year | 13 | 12 | |
Other equipment | Accumulated impairment, depreciation and amortisation | Discontinued Operations | |||
Property, plant and equipment | |||
Charge for the year | 1 | £ 2 | |
Operating lease assets | |||
Property, plant and equipment | |||
At 31 December | 596 | ||
Operating lease assets | Cost | |||
Property, plant and equipment | |||
Transfers from/to fellow subsidiaries | 1,291 | ||
Additions | 199 | ||
Disposals and write-off of fully depreciated assets | (446) | ||
At 31 December | 1,044 | ||
Operating lease assets | Accumulated impairment, depreciation and amortisation | |||
Property, plant and equipment | |||
Transfers from/to fellow subsidiaries | 571 | ||
Disposals and write-off of fully depreciated assets | (265) | ||
At 31 December | 448 | ||
Operating lease assets | Accumulated impairment, depreciation and amortisation | Continuing operations | |||
Property, plant and equipment | |||
Charge for the year | £ 142 |
Prepayments, accrued income 135
Prepayments, accrued income and other assets (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Acquisitions and disposals | ||
Prepayments | £ 47 | £ 40 |
Accrued income | 172 | 189 |
Tax recoverable | 2 | 3 |
Pension schemes in net surplus | 22 | 15 |
Interests in associates | 21 | 47 |
Other assets | 366 | 240 |
Total | 630 | 534 |
Bank | ||
Acquisitions and disposals | ||
Prepayments | 21 | 31 |
Accrued income | 117 | 104 |
Pension schemes in net surplus | 16 | 15 |
Interests in associates | 7 | |
Other assets | 161 | 44 |
Total | £ 315 | £ 201 |
Discontinued operations and 136
Discontinued operations and assets and liabilities of disposal groups - Profit from discontinued operations, net of tax (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Noncurrent assets or disposal groups classified as held for sale | |||
Operating profit before tax | £ (642) | £ (1,663) | £ (1,625) |
Profit from discontinued operations, net of tax | (635) | (1,683) | (1,544) |
Other comprehensive profit | 67 | ||
NWGH | |||
Noncurrent assets or disposal groups classified as held for sale | |||
Interest income | 1 | ||
Interest expense | (17) | (4) | (7) |
Net interest income | (17) | (4) | (6) |
Other income | 99 | 146 | 412 |
Total income | 82 | 142 | 406 |
Operating expenses | (724) | (1,859) | (2,868) |
(Loss)/profit before impairment losses | (642) | (1,717) | (2,462) |
Impairment losses | (6) | (2) | |
Operating profit before tax | (642) | (1,723) | (2,464) |
Tax credit/(charge) | 7 | (23) | 84 |
Profit from discontinued operations, net of tax | £ (635) | (1,746) | (2,380) |
UBIH | |||
Noncurrent assets or disposal groups classified as held for sale | |||
Interest income | 482 | 487 | |
Interest expense | (72) | (124) | |
Net interest income | 410 | 363 | |
Other income | 122 | 141 | |
Total income | 532 | 504 | |
Operating expenses | (584) | (341) | |
(Loss)/profit before impairment losses | (52) | 163 | |
Impairment losses | 112 | 676 | |
Operating profit before tax | 60 | 839 | |
Tax credit/(charge) | 3 | (3) | |
Profit from discontinued operations, net of tax | £ 63 | £ 836 |
Discontinued operations and 137
Discontinued operations and assets and liabilities of disposal groups - Operating cash flows attributable to discontinued operations (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Discontinued operations and assets and liabilities of disposal groups | |||
Net cash flows from operating activities | £ (795) | £ 2,560 | £ (2,724) |
Net cash flows from investing activities | 4 | 178 | 211 |
Net cash flows from financing activities | 502 | (1,802) | (5) |
Net increase/(decrease) in cash and cash equivalents | £ (361) | £ 1,675 | £ (2,463) |
Discontinued operations and 138
Discontinued operations and assets and liabilities of disposal groups - Assets and liabilities of disposal groups Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets of disposal groups | |||
Cash and balances at central banks | £ 35,799 | £ 2,567 | £ 1,690 |
Loans and advances to banks | 79,845 | 97,152 | |
Loans and advances to customers | 191,889 | 177,065 | |
Derivatives | 2,315 | 3,904 | |
Property, plant and equipment | 2,580 | 2,160 | |
Settlement balances | 3 | 1,693 | |
Other assets | 366 | 240 | |
Total assets | 340,843 | 316,476 | 302,430 |
Deposits by banks | 53,847 | 20,045 | |
Customer accounts | 233,372 | 233,939 | |
Derivatives | 3,178 | 4,654 | |
Debt securities in issue | 396 | 301 | |
Subordinated liabilities | 5,755 | 7,295 | |
Settlement balances | 4 | 1,753 | |
Short positions | 4,591 | ||
Provisions for liabilities and charges | 1,398 | 6,659 | |
Total liabilities | 324,476 | 300,476 | £ 287,263 |
Discontinued Operations | |||
Assets of disposal groups | |||
Cash and balances at central banks | 249 | ||
Loans and advances to banks | 10,381 | 2,418 | |
Loans and advances to customers | 8,838 | 18,922 | |
Debt securities and equity shares | 4,062 | 2,953 | |
Derivatives | 3 | 94 | |
Property, plant and equipment | 168 | 67 | |
Settlement balances | 1,011 | ||
Other assets | 63 | 273 | |
Total assets | 24,526 | 24,976 | |
Deposits by banks | 3,168 | 1,309 | |
Customer accounts | 13,976 | 16,113 | |
Derivatives | 2 | 126 | |
Debt securities in issue | 1,179 | ||
Subordinated liabilities | 804 | 76 | |
Settlement balances | 1,532 | ||
Short positions | 2,436 | ||
Provisions for liabilities and charges | 1,722 | 202 | |
Other liabilities | 209 | 308 | |
Total liabilities | £ 23,849 | £ 19,313 |
Short positions (Details)
Short positions (Details) £ in Millions | Dec. 31, 2016GBP (£) |
Short positions | |
Short positions | £ 4,591 |
Government | |
Short positions | |
Short positions | 4,497 |
Other issuers | |
Short positions | |
Short positions | £ 94 |
Provision for liabilities an140
Provision for liabilities and charges (Details) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Provisions for liabilities and charges | ||||
At 1 January 2016 | £ 6,659 | |||
Transfer to disposal groups | (1,722) | |||
Acquisition of business | 72 | |||
Currency translation and other movements | (373) | |||
Provision utilised | (4,134) | |||
At 31 December 2016 | 1,398 | £ 6,659 | ||
Continuing operations | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | 464 | |||
Releases to income statement | (126) | |||
Discontinued Operations | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 202 | |||
Charge to income statement | 608 | |||
Releases to income statement | (50) | |||
At 31 December 2016 | 1,722 | 202 | ||
Bank | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 1,533 | |||
Acquisition of business | 1 | |||
Currency translation and other movements | (2) | |||
Charge to income statement | 354 | |||
Releases to income statement | (119) | |||
Provision utilised | (575) | |||
At 31 December 2016 | 1,192 | 1,533 | ||
Payment protection insurance | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 753 | |||
Charge to income statement | 107 | |||
Provision utilised | (225) | |||
At 31 December 2016 | 632 | 753 | ||
Increase (decrease) in other provisions | 107 | 362 | £ 359 | £ 440 |
Payment protection insurance | Continuing operations | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | 107 | |||
Releases to income statement | (3) | |||
Payment protection insurance | Redress | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | 2,700 | |||
Provision utilised | £ (2,100) | |||
Percentage of provision paid | 70.00% | |||
Payment protection insurance | Administrative expenses | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | £ 300 | |||
Provision utilised | (300) | |||
Payment protection insurance | Bank | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 744 | |||
Charge to income statement | 107 | |||
Releases to income statement | (6) | |||
Provision utilised | (223) | |||
At 31 December 2016 | 622 | 744 | ||
Other customer redress | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 562 | |||
Acquisition of business | 55 | |||
Provision utilised | (219) | |||
At 31 December 2016 | 386 | 562 | ||
Other customer redress | Continuing operations | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | 31 | |||
Releases to income statement | (43) | |||
Other customer redress | Bank | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 538 | |||
Charge to income statement | 33 | |||
Releases to income statement | (47) | |||
Provision utilised | (198) | |||
At 31 December 2016 | 326 | 538 | ||
Residential mortgage backed securities | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 4,966 | |||
Transfer to disposal groups | (1,683) | |||
Currency translation and other movements | (386) | |||
Provision utilised | (3,447) | |||
At 31 December 2016 | 0 | 4,966 | ||
Residential mortgage backed securities | Discontinued Operations | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | 600 | |||
Releases to income statement | (50) | |||
Litigation and other regulatory proceedings | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 86 | |||
Transfer to disposal groups | (12) | |||
Acquisition of business | 4 | |||
Currency translation and other movements | (14) | |||
Provision utilised | (47) | |||
At 31 December 2016 | 65 | 86 | ||
Litigation and other regulatory proceedings | Continuing operations | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | 50 | |||
Releases to income statement | (2) | |||
Litigation and other regulatory proceedings | Bank | ||||
Provisions for liabilities and charges | ||||
Currency translation and other movements | (1) | |||
Charge to income statement | 5 | |||
Provision utilised | (2) | |||
At 31 December 2016 | 2 | |||
Property and other | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 292 | |||
Transfer to disposal groups | (27) | |||
Acquisition of business | 13 | |||
Currency translation and other movements | 27 | |||
Provision utilised | (196) | |||
At 31 December 2016 | 315 | 292 | ||
Property and other | Continuing operations | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | 276 | |||
Releases to income statement | (78) | |||
Property and other | Discontinued Operations | ||||
Provisions for liabilities and charges | ||||
Charge to income statement | 8 | |||
Property and other | Bank | ||||
Provisions for liabilities and charges | ||||
At 1 January 2016 | 251 | |||
Acquisition of business | 1 | |||
Currency translation and other movements | (1) | |||
Charge to income statement | 209 | |||
Releases to income statement | (66) | |||
Provision utilised | (152) | |||
At 31 December 2016 | £ 242 | £ 251 |
Provisions for liabilities and
Provisions for liabilities and charges - Sensitivity (Details) - Payment protection insurance complaint in Thousands | 12 Months Ended | |||
Dec. 31, 2017GBP (£)complaint | Dec. 31, 2016GBP (£) | Dec. 31, 2015GBP (£) | Dec. 31, 2014GBP (£) | |
Short positions | ||||
Change in provisions | £ 107,000,000 | £ 362,000,000 | £ 359,000,000 | £ 440,000,000 |
Single premium book past business review take-up rate | Estimated Change In Provision | Maximum | ||||
Short positions | ||||
Change in provisions | £ (18,000,000) | |||
Customer Initiated Complaints | ||||
Short positions | ||||
Number of customer initiated complaints | complaint | 1,423 | |||
Customer Initiated Complaints | Estimated Change In Provision | ||||
Short positions | ||||
Number of customer initiated complaints | complaint | 256 | |||
Customer Initiated Complaints | Estimated Change In Provision | Minimum | ||||
Short positions | ||||
Change in assumption (as a percent) | (5.00%) | |||
Change in provisions | £ (18,000,000) | |||
Customer Initiated Complaints | Estimated Change In Provision | Maximum | ||||
Short positions | ||||
Change in assumption (as a percent) | 5.00% | |||
Change in provisions | £ 18,000,000 | |||
Uphold rate | ||||
Short positions | ||||
Actual to date (as a percent) | 90.00% | |||
Uphold rate | Estimated Change In Provision | ||||
Short positions | ||||
Current assumptions (as a percent | 94.00% | |||
Uphold rate | Estimated Change In Provision | Minimum | ||||
Short positions | ||||
Change in assumption (as a percent) | (1.00%) | |||
Change in provisions | £ (4,000,000) | |||
Uphold rate | Estimated Change In Provision | Maximum | ||||
Short positions | ||||
Change in assumption (as a percent) | 1.00% | |||
Change in provisions | £ 4,000,000 | |||
Average redress | ||||
Short positions | ||||
Liabilities relating to provision | 1,681 | |||
Average redress | Estimated Change In Provision | ||||
Short positions | ||||
Liabilities relating to provision | £ 1,476 | |||
Average redress | Estimated Change In Provision | Minimum | ||||
Short positions | ||||
Change in assumption (as a percent) | (5.00%) | |||
Change in provisions | £ (18,000,000) | |||
Average redress | Estimated Change In Provision | Maximum | ||||
Short positions | ||||
Change in assumption (as a percent) | 5.00% | |||
Change in provisions | £ 18,000,000 | |||
Processing costs per claim | ||||
Short positions | ||||
Liabilities relating to provision | 160 | |||
Processing costs per claim | Estimated Change In Provision | ||||
Short positions | ||||
Liabilities relating to provision | £ 142 | |||
Processing costs per claim | Estimated Change In Provision | Minimum | ||||
Short positions | ||||
Change in assumption (as a percent) | (10.00%) | |||
Change in provisions | £ (1,000,000) | |||
Processing costs per claim | Estimated Change In Provision | Maximum | ||||
Short positions | ||||
Change in assumption (as a percent) | 10.00% | |||
Change in provisions | £ 1,000,000 |
Provision for liabilities an142
Provision for liabilities and charges - Other (Details) £ in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Jul. 31, 2017USD ($) | Jul. 31, 2017GBP (£) | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | Jun. 30, 2017USD ($) | Jun. 30, 2017GBP (£) | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2016GBP (£) | |
Short positions | |||||||||
Provisions for liabilities | £ 1,398 | £ 1,398 | £ 6,659 | ||||||
Provision utilised | 4,134 | ||||||||
FHFA | RBS Group | FHFA | |||||||||
Short positions | |||||||||
Provisions made | $ 196 | £ 151 | |||||||
Settlement amount | $ 32,000 | £ 25,000 | |||||||
Settlement amount paid | $ 5,500 | 4,200 | |||||||
Settlement amount reimbursed | 754 | 581 | |||||||
Provision utilised | 4,750 | 3,650 | |||||||
Payment protection insurance | |||||||||
Short positions | |||||||||
Cumulative charge of provision | 3,000 | 3,000 | |||||||
Provisions made | 107 | ||||||||
Provisions for liabilities | 632 | 632 | 753 | ||||||
Provision utilised | 225 | ||||||||
Other customer redress | |||||||||
Short positions | |||||||||
Provisions for liabilities | 386 | 386 | 562 | ||||||
Provision utilised | 219 | ||||||||
Residential mortgage backed securities | |||||||||
Short positions | |||||||||
Provisions for liabilities | 0 | 0 | 4,966 | ||||||
Provision utilised | 3,447 | ||||||||
Residential mortgage backed securities | RMBS and other securitised products investigations | |||||||||
Short positions | |||||||||
Provisions made | $ 333 | 258 | $ 92 | £ 71 | $ 774 | 600 | |||
Litigation and other regulatory proceedings | |||||||||
Short positions | |||||||||
Provisions for liabilities | 65 | 65 | 86 | ||||||
Provision utilised | 47 | ||||||||
Property and other | |||||||||
Short positions | |||||||||
Provisions for liabilities | 315 | 315 | £ 292 | ||||||
Provision utilised | 196 | ||||||||
Property and other | Restructuring provision | |||||||||
Short positions | |||||||||
Provisions for liabilities | £ 110 | £ 110 |
Accruals and other liabiliti143
Accruals and other liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accruals and other liabilities | ||
Notes in circulation | £ 803 | £ 752 |
Current tax | 378 | 94 |
Accruals | 280 | 401 |
Deferred income | 170 | 152 |
Deferred tax | 22 | 23 |
Other liabilities | 993 | 475 |
Accruals and other liabilities | 2,646 | 1,897 |
Bank | ||
Accruals and other liabilities | ||
Current tax | 335 | 47 |
Accruals | 193 | 191 |
Deferred income | 137 | 118 |
Other liabilities | 118 | 111 |
Accruals and other liabilities | £ 783 | £ 467 |
Deferred tax (Details)
Deferred tax (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax | |||
Deferred tax liability | £ 22 | £ 23 | |
Deferred tax asset | (1,079) | (1,391) | |
Net deferred tax asset | (1,057) | (1,368) | £ (1,788) |
Bank | |||
Deferred tax | |||
Deferred tax asset | (1,060) | (1,365) | |
Net deferred tax asset | £ (1,060) | £ (1,365) | £ (1,546) |
Deferred tax - Net deferred tax
Deferred tax - Net deferred tax asset (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | £ (1,368) | £ (1,788) |
Acquisitions and disposals of subsidiaries | 30 | 257 |
(Credit)/charge to income statement | 50 | |
Charge/(credit) to other comprehensive income | 229 | 202 |
Currency translation and other adjustments | 2 | (18) |
Deferred tax liability (asset) at end of period | (1,057) | (1,368) |
Pension | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | (715) | (873) |
Acquisitions and disposals of subsidiaries | 1 | |
(Credit)/charge to income statement | 3 | |
Charge/(credit) to other comprehensive income | 230 | 207 |
Currency translation and other adjustments | 3 | 1 |
Deferred tax liability (asset) at end of period | (479) | (715) |
Accelerated capital allowances | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | 6 | (6) |
Acquisitions and disposals of subsidiaries | 30 | |
(Credit)/charge to income statement | (32) | |
Currency translation and other adjustments | 16 | |
Deferred tax liability (asset) at end of period | 4 | 6 |
Provisions | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | (63) | (61) |
(Credit)/charge to income statement | 20 | |
Currency translation and other adjustments | (3) | |
Deferred tax liability (asset) at end of period | (46) | (63) |
Deferred gains | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | 17 | 18 |
Acquisitions and disposals of subsidiaries | 3 | |
(Credit)/charge to income statement | (5) | |
Charge/(credit) to other comprehensive income | (1) | |
Currency translation and other adjustments | 1 | (5) |
Deferred tax liability (asset) at end of period | 12 | 17 |
Available-for-sale financial assets | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | 1 | 7 |
Acquisitions and disposals of subsidiaries | 4 | |
Charge/(credit) to other comprehensive income | (5) | |
Deferred tax liability (asset) at end of period | 1 | 1 |
Cash flow hedging | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | 4 | |
Charge/(credit) to other comprehensive income | 1 | |
Total losses carried forward | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | (619) | (869) |
Acquisitions and disposals of subsidiaries | 249 | |
(Credit)/charge to income statement | 64 | |
Currency translation and other adjustments | (35) | |
Deferred tax liability (asset) at end of period | (555) | (619) |
Other | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | 5 | (8) |
Charge/(credit) to other comprehensive income | (1) | |
Currency translation and other adjustments | 1 | 5 |
Deferred tax liability (asset) at end of period | 6 | 5 |
Continuing operations | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | (16) | |
Continuing operations | Pension | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | (51) | |
Continuing operations | Accelerated capital allowances | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | (4) | |
Continuing operations | Provisions | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | (2) | |
Continuing operations | Deferred gains | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | 1 | |
Continuing operations | Available-for-sale financial assets | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | (5) | |
Continuing operations | Cash flow hedging | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | (5) | |
Continuing operations | Total losses carried forward | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | 41 | |
Continuing operations | Other | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | 9 | |
Discontinued Operations | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | (5) | |
Discontinued Operations | Total losses carried forward | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | (5) | |
Bank | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | (1,365) | (1,546) |
(Credit)/charge to income statement | 76 | (42) |
Charge/(credit) to other comprehensive income | 228 | 223 |
Currency translation and other adjustments | 1 | |
Deferred tax liability (asset) at end of period | (1,060) | (1,365) |
Bank | Pension | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | (712) | (877) |
(Credit)/charge to income statement | 6 | (58) |
Charge/(credit) to other comprehensive income | 229 | 223 |
Deferred tax liability (asset) at end of period | (477) | (712) |
Bank | Accelerated capital allowances | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | (10) | (9) |
(Credit)/charge to income statement | (6) | (1) |
Deferred tax liability (asset) at end of period | (16) | (10) |
Bank | Provisions | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | (51) | (47) |
(Credit)/charge to income statement | 14 | (3) |
Charge/(credit) to other comprehensive income | (1) | |
Deferred tax liability (asset) at end of period | (37) | (51) |
Bank | Deferred gains | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | 13 | 14 |
(Credit)/charge to income statement | (2) | (1) |
Charge/(credit) to other comprehensive income | (1) | |
Currency translation and other adjustments | 1 | |
Deferred tax liability (asset) at end of period | 11 | 13 |
Bank | Available-for-sale financial assets | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | 1 | |
(Credit)/charge to income statement | (1) | |
Bank | Cash flow hedging | ||
Reconciliation of net deferred tax asset | ||
(Credit)/charge to income statement | (1) | |
Charge/(credit) to other comprehensive income | 1 | |
Bank | Total losses carried forward | ||
Reconciliation of net deferred tax asset | ||
Deferred tax liability (asset) at beginning of period | (605) | (628) |
(Credit)/charge to income statement | 64 | 23 |
Deferred tax liability (asset) at end of period | £ (541) | £ (605) |
Deferred tax - Tax losses (Deta
Deferred tax - Tax losses (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Unused tax losses | ||
Deferred tax asset | £ 1,079 | £ 1,391 |
Total losses carried forward | Bank | ||
Unused tax losses | ||
Deferred tax asset | 541 | |
Total losses carried forward | UK | ||
Unused tax losses | ||
Deferred tax asset | 555 | 619 |
Total losses carried forward | UK | Bank | ||
Unused tax losses | ||
Deferred tax asset | 541 | 605 |
Total losses carried forward | UK | Ulster Bank | ||
Unused tax losses | ||
Deferred tax asset | £ 14 | £ 14 |
Deferred tax - Other (Details)
Deferred tax - Other (Details) - GBP (£) £ in Millions | Apr. 01, 2015 | Jun. 30, 2020 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax | |||||||||||
Corporation tax rate | 20.00% | 19.00% | 19.25% | 20.00% | 20.25% | ||||||
Banking Surcharge Rate | 8.00% | ||||||||||
Deferred tax assets | £ 1,079 | £ 1,079 | £ 1,391 | ||||||||
Profit/(loss) for the year | 2,069 | (867) | £ (1,206) | ||||||||
Deferred tax assets that have not been recognised | 1,886 | 1,886 | 2,665 | ||||||||
Tax losses and other temporary differences carried forward | 6,673 | 6,673 | 8,000 | ||||||||
Deferred tax liabilities that have not been recognised | 104 | 104 | 108 | ||||||||
After 5 years | |||||||||||
Deferred tax | |||||||||||
Deferred tax assets | 6,578 | £ 6,578 | |||||||||
UK | |||||||||||
Deferred tax | |||||||||||
Percentage of profits can be carried forward to offset the losses | 25.00% | 50.00% | |||||||||
Corporation tax rate | 17.00% | 19.00% | 20.00% | ||||||||
Banking Surcharge Rate | 8.00% | ||||||||||
UK | Total losses carried forward | |||||||||||
Deferred tax | |||||||||||
Deferred tax assets | 555 | £ 555 | 619 | ||||||||
Bank | |||||||||||
Deferred tax | |||||||||||
Tax losses carried forward | 3,092 | 3,092 | |||||||||
Reduction in annual profits | 120 | ||||||||||
Bank | Total losses carried forward | |||||||||||
Deferred tax | |||||||||||
Deferred tax assets | 541 | 541 | |||||||||
Bank | UK | Total losses carried forward | |||||||||||
Deferred tax | |||||||||||
Deferred tax assets | 541 | 541 | 605 | ||||||||
Ulster Bank | UK | Total losses carried forward | |||||||||||
Deferred tax | |||||||||||
Deferred tax assets | £ 14 | £ 14 | £ 14 |
Subordinated liabilities (Detai
Subordinated liabilities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Subordinated liabilities | ||
Dated loan capital | £ 3,321 | £ 4,626 |
Undated loan capital | 2,291 | 2,331 |
Preference shares | 143 | 338 |
Subordinated liabilities | 5,755 | 7,295 |
Bank | ||
Subordinated liabilities | ||
Dated loan capital | 3,313 | 3,324 |
Undated loan capital | 2,184 | 2,228 |
Preference shares | 143 | 338 |
Subordinated liabilities | £ 5,640 | £ 5,890 |
Subordinated liabilities - Cont
Subordinated liabilities - Contractual maturities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Subordinated liabilities | ||
Subordinated liabilities | £ 5,755 | £ 7,295 |
Final redemption | ||
Subordinated liabilities | ||
Subordinated liabilities | 5,755 | 7,295 |
Final redemption | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 21 | 369 |
Final redemption | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 1,000 | 325 |
Final redemption | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 299 | 1,562 |
Final redemption | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 1,998 | 2,373 |
Final redemption | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 2,437 | 2,666 |
Call date | ||
Subordinated liabilities | ||
Subordinated liabilities | 5,755 | 7,295 |
Call date | Currently | ||
Subordinated liabilities | ||
Subordinated liabilities | 701 | 2,967 |
Call date | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 4,402 | 361 |
Call date | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 17 | 2,700 |
Call date | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 387 | 562 |
Call date | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 415 | |
Call date | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 248 | 290 |
Sterling | Final redemption | ||
Subordinated liabilities | ||
Subordinated liabilities | 4,947 | 5,074 |
Sterling | Final redemption | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 18 | 19 |
Sterling | Final redemption | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 1,000 | |
Sterling | Final redemption | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 299 | 1,408 |
Sterling | Final redemption | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 1,998 | 2,030 |
Sterling | Final redemption | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 1,632 | 1,617 |
Sterling | Call date | ||
Subordinated liabilities | ||
Subordinated liabilities | 4,947 | 5,074 |
Sterling | Call date | Currently | ||
Subordinated liabilities | ||
Subordinated liabilities | 701 | 1,689 |
Sterling | Call date | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 3,718 | 18 |
Sterling | Call date | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 2,700 | |
Sterling | Call date | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 387 | 408 |
Sterling | Call date | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 89 | |
Sterling | Call date | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 141 | 170 |
US dollar | Final redemption | ||
Subordinated liabilities | ||
Subordinated liabilities | 526 | 1,108 |
US dollar | Final redemption | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 2 | 6 |
US dollar | Final redemption | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 325 | |
US dollar | Final redemption | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 524 | 777 |
US dollar | Call date | ||
Subordinated liabilities | ||
Subordinated liabilities | 526 | 1,108 |
US dollar | Call date | Currently | ||
Subordinated liabilities | ||
Subordinated liabilities | 1,108 | |
US dollar | Call date | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 526 | |
Euro | Final redemption | ||
Subordinated liabilities | ||
Subordinated liabilities | 274 | 1,105 |
Euro | Final redemption | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 1 | 344 |
Euro | Final redemption | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 154 | |
Euro | Final redemption | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 343 | |
Euro | Final redemption | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 273 | 264 |
Euro | Call date | ||
Subordinated liabilities | ||
Subordinated liabilities | 274 | 1,105 |
Euro | Call date | Currently | ||
Subordinated liabilities | ||
Subordinated liabilities | 162 | |
Euro | Call date | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 158 | 343 |
Euro | Call date | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 9 | |
Euro | Call date | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 154 | |
Euro | Call date | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 326 | |
Euro | Call date | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 107 | 120 |
Other | Final redemption | ||
Subordinated liabilities | ||
Subordinated liabilities | 8 | 8 |
Other | Final redemption | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 8 | 8 |
Other | Call date | ||
Subordinated liabilities | ||
Subordinated liabilities | 8 | 8 |
Other | Call date | Currently | ||
Subordinated liabilities | ||
Subordinated liabilities | 8 | |
Other | Call date | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 8 | |
Bank | ||
Subordinated liabilities | ||
Subordinated liabilities | 5,640 | 5,890 |
Bank | Final redemption | ||
Subordinated liabilities | ||
Subordinated liabilities | 5,640 | 5,890 |
Bank | Final redemption | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 21 | 25 |
Bank | Final redemption | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 1,000 | |
Bank | Final redemption | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 299 | 1,310 |
Bank | Final redemption | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 2,000 | 2,001 |
Bank | Final redemption | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 2,320 | 2,554 |
Bank | Call date | ||
Subordinated liabilities | ||
Subordinated liabilities | 5,640 | 5,890 |
Bank | Call date | Currently | ||
Subordinated liabilities | ||
Subordinated liabilities | 701 | 2,633 |
Bank | Call date | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 4,411 | 18 |
Bank | Call date | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 2,701 | |
Bank | Call date | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 388 | 309 |
Bank | Call date | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 89 | |
Bank | Call date | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 140 | 140 |
Bank | Sterling | Final redemption | ||
Subordinated liabilities | ||
Subordinated liabilities | 4,947 | 4,957 |
Bank | Sterling | Final redemption | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 18 | 18 |
Bank | Sterling | Final redemption | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 1,000 | |
Bank | Sterling | Final redemption | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 299 | 1,310 |
Bank | Sterling | Final redemption | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 2,000 | 2,001 |
Bank | Sterling | Final redemption | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 1,630 | 1,628 |
Bank | Sterling | Call date | ||
Subordinated liabilities | ||
Subordinated liabilities | 4,947 | 4,957 |
Bank | Sterling | Call date | Currently | ||
Subordinated liabilities | ||
Subordinated liabilities | 701 | 1,700 |
Bank | Sterling | Call date | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 3,718 | 18 |
Bank | Sterling | Call date | After 1 year but within 2 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 2,701 | |
Bank | Sterling | Call date | After 2 years but within 5 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 388 | 309 |
Bank | Sterling | Call date | 5-10 years | ||
Subordinated liabilities | ||
Subordinated liabilities | 89 | |
Bank | Sterling | Call date | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 140 | 140 |
Bank | US dollar | Final redemption | ||
Subordinated liabilities | ||
Subordinated liabilities | 526 | 771 |
Bank | US dollar | Final redemption | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 2 | 6 |
Bank | US dollar | Final redemption | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 524 | 765 |
Bank | US dollar | Call date | ||
Subordinated liabilities | ||
Subordinated liabilities | 526 | 771 |
Bank | US dollar | Call date | Currently | ||
Subordinated liabilities | ||
Subordinated liabilities | 771 | |
Bank | US dollar | Call date | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 526 | |
Bank | Euro | Final redemption | ||
Subordinated liabilities | ||
Subordinated liabilities | 167 | 162 |
Bank | Euro | Final redemption | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | 1 | 1 |
Bank | Euro | Final redemption | Perpetual | ||
Subordinated liabilities | ||
Subordinated liabilities | 166 | 161 |
Bank | Euro | Call date | ||
Subordinated liabilities | ||
Subordinated liabilities | 167 | 162 |
Bank | Euro | Call date | Currently | ||
Subordinated liabilities | ||
Subordinated liabilities | £ 162 | |
Bank | Euro | Call date | Within 1 year | ||
Subordinated liabilities | ||
Subordinated liabilities | £ 167 |
Subordinated liabilities - Rede
Subordinated liabilities - Redemption (Details) € / shares in Units, £ / shares in Units, $ / shares in Units, € in Millions, £ in Millions, kr in Millions, $ in Millions | 12 Months Ended | ||||||||||
Dec. 31, 2017GBP (£) | Dec. 31, 2016GBP (£) | Dec. 31, 2015GBP (£) | Dec. 31, 2017SEK (kr) | Dec. 31, 2017EUR (€)€ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2017GBP (£)£ / shares | Dec. 31, 2016SEK (kr) | Dec. 31, 2016EUR (€)€ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2016GBP (£)£ / shares | |
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | £ 936 | £ 387 | |||||||||
Dated loan capital | £ 3,321 | £ 4,626 | |||||||||
Undated loan capital | 2,291 | 2,331 | |||||||||
Preference shares | 143 | 338 | |||||||||
National Westminster Bank Plc, Coutts & Company and Ulster Bank Limited | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 1,114 | ||||||||||
Bank | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | £ 387 | ||||||||||
Dated loan capital | 3,313 | 3,324 | |||||||||
Undated loan capital | 2,184 | 2,228 | |||||||||
Preference shares | £ 143 | £ 338 | |||||||||
National Westminster Bank, Plc, SEK 3 million dated notes | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Transfers from fellow subsidiaries | £ 8 | ||||||||||
Notional amount | kr | kr 3 | kr 3 | |||||||||
National Westminster Bank Plc, US$ 300 million 8.6250% non-cumulative preference shares (callable) | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | $ | $ 300 | $ 300 | |||||||||
Interest rate | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | |||
National Westminster Bank Plc, US$ 300 million 8.6250% non-cumulative preference shares (callable) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 178 | ||||||||||
Coutts & Company, 20 million floating rate subordinated loan capital 2023 | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | € | € 20 | € 20 | |||||||||
Coutts & Company, 20 million floating rate subordinated loan capital 2023 | Coutts & Company | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 18 | ||||||||||
Coutts & Company, 30 million floating rate subordinated loan capital - 2023 | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | £ 30 | £ 30 | |||||||||
Coutts & Company, 30 million floating rate subordinated loan capital - 2023 | Coutts & Company | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 30 | ||||||||||
Coutts & Company, 13.3 million 0.7294% undated subordinated notes | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | £ 13.3 | £ 13.3 | |||||||||
Interest rate | 0.7294% | 0.7294% | 0.7294% | 0.7294% | 0.7294% | 0.7294% | 0.7294% | 0.7294% | |||
Coutts & Company, 13.3 million 0.7294% undated subordinated notes | Coutts & Company | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 13 | ||||||||||
Coutts & Company, US$ 15 million 0.4691% undated subordinated notes | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | $ | $ 15 | $ 15 | |||||||||
Interest rate | 0.4691% | 0.4691% | 0.4691% | 0.4691% | 0.4691% | 0.4691% | 0.4691% | 0.4691% | |||
Coutts & Company, US$ 15 million 0.4691% undated subordinated notes | Coutts & Company | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 11 | ||||||||||
Ulster Bank Limited, 100 million floating rate subordinated loan capital 2019 | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | £ 100 | £ 100 | |||||||||
Ulster Bank Limited, 100 million floating rate subordinated loan capital 2019 | Ulster Bank Limited | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 100 | ||||||||||
Ulster Bank Limited, 120 million perpetual floating rate notes 2020 | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | € | € 120 | € 120 | |||||||||
Ulster Bank Limited, 120 million perpetual floating rate notes 2020 | Ulster Bank Limited | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 107 | ||||||||||
Ulster Bank Limited, 60 million perpetual floating rate notes 2020 | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | € | 60 | 60 | |||||||||
Ulster Bank Limited, 60 million perpetual floating rate notes 2020 | Ulster Bank Limited | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 53 | ||||||||||
Ulster Bank Limited, 280 million subordinated loan capital December 2022 | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | € | 280 | 280 | |||||||||
Ulster Bank Limited, 280 million subordinated loan capital December 2022 | Ulster Bank Limited | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | 249 | ||||||||||
Ulster Bank Limited, 400 million subordinated loan December 2017 | |||||||||||
Subordinated liabilities | |||||||||||
Notional amount | € | € 400 | € 400 | |||||||||
Ulster Bank Limited, 400 million subordinated loan December 2017 | Ulster Bank Limited | |||||||||||
Subordinated liabilities | |||||||||||
Redemption of subordinated liabilities | £ 355 | ||||||||||
National Westminster Bank Plc, Pound Sterling 300 million 6.50% notes 2021 (not callable) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Dated loan capital | 305 | 315 | |||||||||
Notional amount | £ 300 | £ 300 | |||||||||
Interest rate | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% | |||
National Westminster Bank Plc, Pound Sterling 2,000 million floating rate notes 2023 (callable January 2018) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Dated loan capital | £ 2,008 | £ 2,009 | |||||||||
Notional amount | 2,000 | 2,000 | |||||||||
National Westminster Bank Plc, Pound Sterling 1,000 million floating rate notes 2019 (callable quarterly) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Dated loan capital | 1,000 | 1,000 | |||||||||
Notional amount | 1,000 | 1,000 | |||||||||
National Westminster Bank Plc, US$193 million floating rate notes (callable semi-annually) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Undated loan capital | 144 | 157 | |||||||||
Notional amount | $ | $ 193 | $ 193 | |||||||||
National Westminster Bank Plc, US$229 million floating rate notes (callable semi-annually) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Undated loan capital | 171 | 187 | |||||||||
Notional amount | $ | 229 | 229 | |||||||||
National Westminster Bank Plc, US$285 million floating rate notes (callable semi-annually) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Undated loan capital | 211 | 232 | |||||||||
Notional amount | $ | $ 285 | $ 285 | |||||||||
National Westminster Bank Plc, 178 million floating rate notes (callable quarterly) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Undated loan capital | 158 | 153 | |||||||||
Notional amount | € | € 178 | € 178 | |||||||||
National Westminster Bank Plc, 100 million floating rate notes (callable quarterly) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Undated loan capital | 9 | 9 | |||||||||
Notional amount | € | € 100 | € 100 | |||||||||
National Westminster Bank Plc, Pound Sterling 53 million 7.125% notes (callable every five years from October 2022) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Undated loan capital | 55 | 55 | |||||||||
Notional amount | £ 53 | £ 53 | |||||||||
Interest rate | 7.125% | 7.125% | 7.125% | 7.125% | 7.125% | 7.125% | 7.125% | 7.125% | |||
National Westminster Bank Plc, Pound Sterling 35 million 11.50% notes (callable December 2022) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Undated loan capital | £ 35 | £ 35 | |||||||||
Notional amount | £ 35 | £ 35 | |||||||||
Interest rate | 11.50% | 11.50% | 11.50% | 11.50% | 11.50% | 11.50% | 11.50% | 11.50% | |||
National Westminster Bank Plc, Pound Sterling 35 million 11.50% notes (callable December 2022) | Bank | Maximum | |||||||||||
Subordinated liabilities | |||||||||||
Percentage of gross exchangeable at the option of issuer | 8.392% | ||||||||||
National Westminster Bank Plc, Pound Sterling 700 million floating rate notes (callable every five years from January 2018) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Undated loan capital | £ 700 | £ 700 | |||||||||
Notional amount | 700 | 700 | |||||||||
National Westminster Bank Plc, Pound Sterling 700 million floating rate notes (callable quarterly from September 2016) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Undated loan capital | 701 | 700 | |||||||||
Notional amount | 700 | 700 | |||||||||
National Westminster Bank Plc, Pound Sterling 140 million 9.00% Series A non-cumulative preference shares of 1 (not callable) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Preference shares | 143 | 143 | |||||||||
Notional amount | £ 140 | £ 140 | |||||||||
Interest rate | 9.00% | 9.00% | 9.00% | 9.00% | 9.00% | 9.00% | 9.00% | 9.00% | |||
US$300 million 8.625% Series C non-cumulative preference shares of US$25 (callable quarterly) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Preference shares | £ 195 | ||||||||||
Notional amount | £ 300 | £ 300 | |||||||||
Interest rate | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | 8.625% | |||
Non-cumulative preference shares of 1 | |||||||||||
Subordinated liabilities | |||||||||||
Interest rate | 9.00% | 9.00% | 9.00% | 9.00% | |||||||
Par value | £ / shares | £ 1 | £ 1 | |||||||||
Non-cumulative preference shares of 1 | National Westminster Bank Plc, Pound Sterling 35 million 11.50% notes (callable December 2022) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Par value | £ / shares | £ 1 | ||||||||||
Non-cumulative preference shares of 1 | National Westminster Bank Plc, Pound Sterling 140 million 9.00% Series A non-cumulative preference shares of 1 (not callable) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Par value | € / shares | € 1 | € 1 | |||||||||
Non-cumulative preference shares of US$25 | |||||||||||
Subordinated liabilities | |||||||||||
Par value | $ / shares | $ 25 | $ 25 | |||||||||
Non-cumulative preference shares of US$25 | US$300 million 8.625% Series C non-cumulative preference shares of US$25 (callable quarterly) | Bank | |||||||||||
Subordinated liabilities | |||||||||||
Par value | $ / shares | $ 25 | $ 25 |
Share capital and reserves (Det
Share capital and reserves (Details) £ / shares in Units, £ in Millions, shares in Millions | 12 Months Ended | ||||||
Dec. 31, 2017GBP (£) | Dec. 31, 2016GBP (£) | Dec. 31, 2015GBP (£) | Dec. 31, 2017$ / shares | Dec. 31, 2017GBP (£)£ / sharesshares | Dec. 31, 2016$ / shares | Dec. 31, 2016GBP (£)£ / sharesshares | |
Share capital and reserves | |||||||
Value of shares | £ 15,167 | £ 16,367 | £ 16,000 | ||||
Capital redemption reserve | 459 | 608 | 459 | ||||
Capital contributions received | £ 51 | £ 1,300 | 800 | ||||
Additional share capital issued | 0 | 0 | 0 | ||||
Ordinary shares of 1 | |||||||
Share capital and reserves | |||||||
Value of shares | £ 1,678 | £ 1,678 | |||||
Number of shares | shares | 1,678 | 1,678 | |||||
Par value | £ / shares | £ 1 | £ 1 | |||||
Dividends paid | £ 0 | £ 0 | £ 0 | ||||
Non-cumulative preference shares of 1 | |||||||
Share capital and reserves | |||||||
Value of shares | £ 140 | £ 140 | |||||
Number of shares | shares | 140 | 140 | |||||
Par value | £ / shares | £ 1 | £ 1 | |||||
Interest rate | 9.00% | ||||||
Non-cumulative preference shares of US$25 | |||||||
Share capital and reserves | |||||||
Value of shares | £ 123 | ||||||
Number of shares | shares | 10 | ||||||
Par value | $ / shares | $ 25 | $ 25 |
Leases (Details)
Leases (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Minimum amounts receivable under non-cancellable leases | ||
Gross amounts | £ 7,020 | £ 509 |
Present value adjustments | (576) | (141) |
Other movements | (217) | (28) |
Future drawdowns | (70) | |
Present value | 6,157 | 340 |
Future minimum lease rentals | 401 | |
Within 1 year | ||
Minimum amounts receivable under non-cancellable leases | ||
Gross amounts | 2,817 | 111 |
Present value adjustments | (203) | (12) |
Other movements | (96) | (1) |
Future drawdowns | (70) | |
Present value | 2,448 | 98 |
Future minimum lease rentals | 129 | |
After 1 year but within 5 years | ||
Minimum amounts receivable under non-cancellable leases | ||
Gross amounts | 3,736 | 170 |
Present value adjustments | (261) | (45) |
Other movements | (94) | (8) |
Present value | 3,381 | 117 |
Future minimum lease rentals | 256 | |
After 5 years | ||
Minimum amounts receivable under non-cancellable leases | ||
Gross amounts | 467 | 228 |
Present value adjustments | (112) | (84) |
Other movements | (27) | (19) |
Present value | 328 | £ 125 |
Future minimum lease rentals | £ 16 |
Leases - Other (Details)
Leases - Other (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Leases | |||
Operating lease asset | £ 596 | ||
Finance lease contracts and hire purchase agreements | |||
Accumulated allowance for uncollectable minimum receivables | 63 | ||
Transportation | |||
Leases | |||
Operating lease asset | 280 | ||
Cars and light commercial vehicles | |||
Leases | |||
Operating lease asset | 45 | ||
Other | |||
Leases | |||
Operating lease asset | 271 | ||
Continuing operations | |||
Leases | |||
Amounts recognised as income and expense - Finance leases - contingent rental income | £ (3) | £ (3) | |
Amounts recognised as income and expense - Operating leases - minimum rentals payable | 80 | 97 | 78 |
Discontinued Operations | |||
Leases | |||
Amounts recognised as income and expense - Operating leases - minimum rentals payable | £ 0 | £ 11 | £ 11 |
Leases - Residual value exposur
Leases - Residual value exposures (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Residual value exposures | ||
Discounted unguaranteed residual value of assets subject to finance lease | £ 151 | £ 28 |
Unguaranteed residual values of hire purchase agreements | 67 | |
Unguaranteed residual values | 455 | 28 |
Transportation | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 134 | |
Cars and light commercial vehicles | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 19 | |
Other | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 84 | |
Within 1 year | ||
Residual value exposures | ||
Discounted unguaranteed residual value of assets subject to finance lease | 32 | 1 |
Unguaranteed residual values of hire purchase agreements | 64 | |
Unguaranteed residual values | 148 | 1 |
Within 1 year | Transportation | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 26 | |
Within 1 year | Cars and light commercial vehicles | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 5 | |
Within 1 year | Other | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 21 | |
After 1 year but within 2 years | ||
Residual value exposures | ||
Discounted unguaranteed residual value of assets subject to finance lease | 20 | 2 |
Unguaranteed residual values of hire purchase agreements | 2 | |
Unguaranteed residual values | 75 | 2 |
After 1 year but within 2 years | Transportation | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 22 | |
After 1 year but within 2 years | Cars and light commercial vehicles | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 7 | |
After 1 year but within 2 years | Other | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 24 | |
After 2 years but within 5 years | ||
Residual value exposures | ||
Discounted unguaranteed residual value of assets subject to finance lease | 72 | 6 |
Unguaranteed residual values of hire purchase agreements | 1 | |
Unguaranteed residual values | 179 | 6 |
After 2 years but within 5 years | Transportation | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 69 | |
After 2 years but within 5 years | Cars and light commercial vehicles | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 7 | |
After 2 years but within 5 years | Other | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 30 | |
After 5 years | ||
Residual value exposures | ||
Discounted unguaranteed residual value of assets subject to finance lease | 27 | 19 |
Unguaranteed residual values | 53 | £ 19 |
After 5 years | Transportation | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | 17 | |
After 5 years | Other | ||
Residual value exposures | ||
Unguaranteed residual values of operating leases | £ 9 |
Structured entities (Details)
Structured entities (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Acquisitions and disposals | ||
Debt securities in issue | £ 396 | £ 301 |
Loans and advances to customers | 191,889 | 177,065 |
Consolidated structured entities | Securitisations | ||
Acquisitions and disposals | ||
Assets excluding cash deposits | 8,610 | |
Cash deposits | 785 | |
Total assets | 9,395 | |
Debt securities in issue | 8,102 | |
Consolidated structured entities | Securitisations | UK mortgages | ||
Acquisitions and disposals | ||
Assets excluding cash deposits | 1,255 | |
Consolidated structured entities | Securitisations | Irish mortgages | ||
Acquisitions and disposals | ||
Assets excluding cash deposits | 7,054 | |
Debt securities in issue | 7,801 | |
Consolidated structured entities | Securitisations | US mortgages | ||
Acquisitions and disposals | ||
Assets excluding cash deposits | 301 | |
Debt securities in issue | 301 | |
Held by Third party | Securitisations | ||
Acquisitions and disposals | ||
Debt securities in issue | 1,481 | |
Held by Third party | Securitisations | Irish mortgages | ||
Acquisitions and disposals | ||
Debt securities in issue | 1,180 | |
Held by Third party | Securitisations | US mortgages | ||
Acquisitions and disposals | ||
Debt securities in issue | 301 | |
RBS Group | Securitisations | ||
Acquisitions and disposals | ||
Debt securities in issue | 6,621 | |
RBS Group | Securitisations | Irish mortgages | ||
Acquisitions and disposals | ||
Debt securities in issue | 6,621 | |
RBS Group | Covered Bond Programme | ||
Acquisitions and disposals | ||
Loans and advances to customers | £ 8,915 | £ 7,624 |
Structured entities - Unconsoli
Structured entities - Unconsolidated structured entities (Details) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Unconsolidated structured entities | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | £ 1,088 | £ 33 |
Liquidity facilities/loan commitments | 55 | |
Guarantees | 7 | |
Total exposure | 1,143 | 40 |
Assets transferred to sponsored entities | 0 | 0 |
Income arising from sponsored entities | 0 | 0 |
Unconsolidated structured entities | Derivatives | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (10) | |
Unconsolidated structured entities | Loans and advances to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 29 | 35 |
Unconsolidated structured entities | Derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 8 | |
Asset backed securitisation vehicles | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 1,059 | 34 |
Total exposure | 1,059 | 34 |
Asset backed securitisation vehicles | Derivatives | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | (9) | |
Asset backed securitisation vehicles | Loans and advances to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 35 | |
Asset backed securitisation vehicles | Derivatives | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 8 | |
Investment funds and other | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 29 | |
Liabilities recognised related to structured entities | (1) | |
Liquidity facilities/loan commitments | 55 | |
Guarantees | 7 | |
Total exposure | 84 | 6 |
Investment funds and other | Derivatives | ||
Unconsolidated structured entities | ||
Liabilities recognised related to structured entities | £ (1) | |
Investment funds and other | Loans and advances to customers | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 29 | |
Debt securities | Unconsolidated structured entities | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | 1,059 | |
Debt securities | Asset backed securitisation vehicles | ||
Unconsolidated structured entities | ||
Assets recognised related to structured entities | £ 1,059 |
Asset transfers (Details)
Asset transfers (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Bank | ||
Asset transfers | ||
Asset that entity continue to recognise | £ 8,915 | £ 8,879 |
Associated liability that entity continue to recognise | 8,904 | 8,866 |
Bank | Securitisations | UK mortgages | ||
Asset transfers | ||
Asset that entity continue to recognise | 1,255 | |
Bank | Covered Bond Programme | UK mortgages | ||
Asset transfers | ||
Asset that entity continue to recognise | 8,915 | 7,624 |
RBS Group | ||
Asset transfers | ||
Associated liability that entity continue to recognise | £ 0 | 2,891 |
Debt securities | Securities repurchase agreements or securities lending transactions | ||
Asset transfers | ||
Fair value of transferred financial asset not derecognised | £ 2,900 |
Capital resources (Details)
Capital resources (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Capital resources | ||
Shareholders' equity (excluding non-controlling interests) | £ 16,286 | £ 15,580 |
Qualifying Tier 2 capital | ||
Minimum pillar 1 capital ratio | 8.00% | |
Minimum tier 1 component ratio | 4.00% | |
Bank | ||
Capital resources | ||
Shareholders' equity (excluding non-controlling interests) | £ 15,355 | 15,297 |
Regulatory adjustments and deductions | ||
Defined benefit pension fund adjustment | (11) | (15) |
Deferred tax assets | (537) | (599) |
Prudential valuation adjustments | (1) | (1) |
Qualifying deductions exceeding AT1 capital | (41) | (199) |
Goodwill and other intangible assets | (490) | (477) |
Expected losses less impairments | (511) | (534) |
Instruments of financial sector entities where the institution has a significant investment | (456) | (3,019) |
Significant investments in excess of secondary capital | (80) | |
Other regulatory adjustments | (7) | 20 |
Total regulatory adjustments and deductions | (2,054) | (4,904) |
CET1 capital | 13,301 | 10,393 |
Additional Tier 1 (AT1) capital | ||
Qualifying instruments and related share premium subject to phase out | 140 | 175 |
Instruments of financial sector entities where the institution has a significant investment | (181) | (374) |
Qualifying deductions exceeding AT1 capital | 41 | 199 |
Total tier 1 deductions | (140) | (175) |
Tier 1 capital | 13,301 | 10,393 |
Qualifying Tier 2 capital | ||
Qualifying instruments and related share premium | 4,412 | 4,735 |
Instruments of financial sector entities where the institution has a significant investment | (177) | (112) |
Total adjustments to tier 2 capital | (177) | (112) |
Tier 2 capital | 4,235 | 4,623 |
Total regulatory capital | £ 17,536 | £ 15,016 |
Memorandum items (Details)
Memorandum items (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Memorandum items | |||
Standby facilities, credit lines and other commitments | £ 53,416 | £ 55,363 | |
Contingent liabilities and commitments | 54,961 | 57,454 | £ 51,888 |
Fee income on fiduciary activities | 213 | 168 | £ 230 |
Guarantees and assets pledged as collateral security | |||
Memorandum items | |||
Contingent liabilities | 674 | 869 | |
Other contingent liabilities | |||
Memorandum items | |||
Contingent liabilities | 871 | 1,222 | |
Bank | |||
Memorandum items | |||
Standby facilities, credit lines and other commitments | 47,095 | 48,325 | |
Contingent liabilities and commitments | 48,480 | 49,939 | |
Bank | Guarantees and assets pledged as collateral security | |||
Memorandum items | |||
Contingent liabilities | 562 | 648 | |
Bank | Other contingent liabilities | |||
Memorandum items | |||
Contingent liabilities | £ 823 | £ 966 |
Memorandum items - Financial Se
Memorandum items - Financial Services Compensation Scheme (Details) - The Financial Services Compensation Scheme - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Memorandum items | ||
Interest rate basis | 12 month LIBOR | |
Adjustment to interest rate basis | 1.11% | |
Total interest element levied on the industry | £ 202 | £ 337 |
Share of accrued estimated FSCS levies | £ 8.5 |
Memorandum items - Contractual
Memorandum items - Contractual Obligations (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Contractual obligation | ||
Minimum rentals payable under non-cancellable leases | £ 869 | £ 879 |
Contracts to purchase goods or services | 117 | 130 |
Total capital commitments | 986 | 1,009 |
Within 1 year | ||
Contractual obligation | ||
Minimum rentals payable under non-cancellable leases | 68 | 103 |
Contracts to purchase goods or services | 25 | 31 |
After 1 year but within 5 years | ||
Contractual obligation | ||
Minimum rentals payable under non-cancellable leases | 205 | 264 |
After 5 years | ||
Contractual obligation | ||
Minimum rentals payable under non-cancellable leases | 596 | 512 |
Bank | ||
Contractual obligation | ||
Minimum rentals payable under non-cancellable leases | 766 | 729 |
Total capital commitments | 766 | 729 |
Bank | Within 1 year | ||
Contractual obligation | ||
Minimum rentals payable under non-cancellable leases | 66 | 89 |
Bank | After 1 year but within 5 years | ||
Contractual obligation | ||
Minimum rentals payable under non-cancellable leases | 200 | 232 |
Bank | After 5 years | ||
Contractual obligation | ||
Minimum rentals payable under non-cancellable leases | £ 500 | £ 408 |
Memorandum items - Litigation,
Memorandum items - Litigation, investigations and reviews (Details) £ / shares in Units, £ in Millions, SFr in Millions, $ in Millions, $ in Millions, $ in Millions | Oct. 26, 2017GBP (£) | Oct. 05, 2017action | Jul. 10, 2017item | Feb. 03, 2017USD ($) | Feb. 02, 2017CHF (SFr)individual | May 11, 2016USD ($) | Dec. 23, 2015USD ($) | Dec. 15, 2015USD ($) | May 20, 2015USD ($) | Jan. 31, 2017CAD ($) | Dec. 31, 2016GBP (£)shareholder | Dec. 31, 2015item | Sep. 30, 2015item | Mar. 31, 2015item | Feb. 28, 2014action | Dec. 31, 2015complaint | Oct. 31, 2016GBP (£) | Dec. 31, 2017SGD ($)Institutionitem | Dec. 31, 2017USD ($)Institutionitemaction | Dec. 31, 2017GBP (£)Institutionitem£ / shares | Dec. 31, 2016GBP (£) | Dec. 31, 2015company | Dec. 31, 2012GBP (£) | Dec. 31, 2017GBP (£)action | Nov. 30, 2014USD ($) | Nov. 30, 2014GBP (£) |
Memorandum items | ||||||||||||||||||||||||||
Estimated costs associated with the complaints review process and the automatic refund of complex fees | £ 223 | |||||||||||||||||||||||||
Payment protection insurance | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Provisions made | £ 107 | |||||||||||||||||||||||||
Total aggregate provisions | £ 3,000 | |||||||||||||||||||||||||
Provision utilised | 2,400 | |||||||||||||||||||||||||
Interest rate hedging products (IRHP) redress programme | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Total aggregate provisions | 1,000 | |||||||||||||||||||||||||
Investment advice review | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Total aggregate provisions | 105 | |||||||||||||||||||||||||
Provision utilised | 71 | |||||||||||||||||||||||||
Packaged accounts | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Total aggregate provisions | 229 | |||||||||||||||||||||||||
Redress | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Provision utilised | 78 | |||||||||||||||||||||||||
Redress | Payment protection insurance | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Provisions made | 2,700 | |||||||||||||||||||||||||
Administrative expenses | Payment protection insurance | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Provisions made | £ 300 | |||||||||||||||||||||||||
FCA | Payment protection insurance | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Payment Protection Insurance policy term | 2 years | 2 years | 2 years | |||||||||||||||||||||||
UK 2008 rights issue shareholder litigation | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Value per share under loss contingency | £ / shares | £ 2 | |||||||||||||||||||||||||
Aggregate value of loss contingency | £ 4,000 | |||||||||||||||||||||||||
Number of shareholders to whom final settlement made | shareholder | 4 | |||||||||||||||||||||||||
Number of total shareholders under litigation | shareholder | 5 | |||||||||||||||||||||||||
Percentage of claims settlement amount | 78.00% | |||||||||||||||||||||||||
Percentage of claimants action concluded | 98.00% | |||||||||||||||||||||||||
Maximum settlement amount available to claims | £ 900 | |||||||||||||||||||||||||
Residential mortgage-backed securities (RMBS) litigation in the US | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Amount of liability on claims | £ 125 | |||||||||||||||||||||||||
Residential mortgage-backed securities (RMBS) litigation in the US | RMBS and other securitised products investigations | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Total aggregate provisions | $ 2,300 | £ 1,700 | ||||||||||||||||||||||||
Penalty payable | £ 35 | |||||||||||||||||||||||||
Residential mortgage-backed securities (RMBS) litigation in the US | District of Connecticut | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Number of former traders entered guilty | item | 2 | 2 | ||||||||||||||||||||||||
Number of securities fraud committed | item | 1 | 1 | ||||||||||||||||||||||||
NPA Term | 1 year | 1 year | 1 year | |||||||||||||||||||||||
Residential mortgage-backed securities (RMBS) litigation in the US, issued by Nomura Holding America Inc and subsidiaries | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Maximum settlement amount | $ | $ 636 | |||||||||||||||||||||||||
Estimated net exposure | $ | $ 318 | |||||||||||||||||||||||||
Number of RMBS | item | 4 | 4 | 4 | |||||||||||||||||||||||
Total settlement amount paid | $ | $ 55.3 | |||||||||||||||||||||||||
Legal Proceedings Federal Home Loan Banks and Other | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Maximum RMBS issued primarily from 2005 to 2007 | $ | $ 1,000 | |||||||||||||||||||||||||
London Interbank Offered Rate (LIBOR) | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Number of other USD LIBOR-related actions | action | 35 | 35 | ||||||||||||||||||||||||
Number of failed US banks | item | 39 | |||||||||||||||||||||||||
JPY LIBOR and Euroyen TIBOR | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Number of purported class actions | action | 2 | |||||||||||||||||||||||||
ISDAFIX antitrust litigation | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Amount of liability on claims | $ | $ 50 | |||||||||||||||||||||||||
ISDAFIX antitrust litigation | CFTC | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Penalty paid | $ | $ 85 | |||||||||||||||||||||||||
FX antitrust litigation | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Maximum settlement amount | $ | $ 13 | |||||||||||||||||||||||||
Total settlement amount paid | $ | $ 255 | |||||||||||||||||||||||||
Number of purported class actions | item | 2 | |||||||||||||||||||||||||
FX antitrust litigation | CFTC | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Penalty payable | $ | $ 290 | |||||||||||||||||||||||||
FX antitrust litigation | DOJ | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Penalty payable | $ | $ 395 | |||||||||||||||||||||||||
FX antitrust litigation | Federal reserve | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Penalty paid | $ | $ 274 | |||||||||||||||||||||||||
FX antitrust litigation | FCA | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Penalty payable | £ 217 | |||||||||||||||||||||||||
Interest rate swaps antitrust litigation | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Number of complaints filed | complaint | 2 | |||||||||||||||||||||||||
Property Alliance Group claim | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Aggregate value of loss contingency | £ 34.8 | |||||||||||||||||||||||||
Wall Claim | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Aggregate value of loss contingency | £ 446.7 | |||||||||||||||||||||||||
London Bridge Holdings Ltd and others | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Number of terrorist attacks claims dismissed by court | action | 2 | |||||||||||||||||||||||||
Number of terrorist attacks claims denied by company | action | 16 | |||||||||||||||||||||||||
Coutts & Co Ltd | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Penalty paid | $ 78.5 | $ 2.4 | ||||||||||||||||||||||||
Number of individuals investigating in connection with 1MBD | individual | 3 | |||||||||||||||||||||||||
NPA Term | 4 years | 4 years | 4 years | |||||||||||||||||||||||
Disgorge Profits | SFr | SFr 6.5 | |||||||||||||||||||||||||
Tax dispute | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Aggregate value of loss contingency | £ 80 | |||||||||||||||||||||||||
Value-added-tax | £ 86 | |||||||||||||||||||||||||
Number of claimants | company | 10 | |||||||||||||||||||||||||
Alleged money laundering scheme | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Number of financial institutions from UK | Institution | 16 | 16 | 16 | |||||||||||||||||||||||
Minimum | Residential mortgage-backed securities (RMBS) litigation in the US | RMBS and other securitised products investigations | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Amount reimburse customers | £ 9.1 | |||||||||||||||||||||||||
Maximum | SMEs | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Estimated net exposure | £ 20 | |||||||||||||||||||||||||
Maximum | Tax dispute | ||||||||||||||||||||||||||
Memorandum items | ||||||||||||||||||||||||||
Penalty as a percentage of VAT | 100.00% | 100.00% | 100.00% |
Net cash flow from operating163
Net cash flow from operating activities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net cash flow from operating activities | |||
Operating profit /(loss) before tax - continuing operations | £ 3,516 | £ 1,499 | £ 711 |
Loss before tax - discontinued operations | (642) | (1,663) | (1,625) |
Decrease/(increase) in prepayments and accrued income | 16 | (62) | 123 |
Interest on subordinated liabilities | 218 | 243 | 250 |
(Decrease)/increase in accruals and deferred income | (118) | (66) | (294) |
Impairment losses/(releases) | 311 | 19 | (728) |
Loans and advances written-off net of recoveries | (504) | (2,885) | (7,194) |
Unwind of discount on impairment losses | (31) | (75) | (96) |
(Profit)/loss on sale of property, plant and equipment | (68) | (5) | (3) |
Loss/(profit) on sale of subsidiaries and associates | 420 | (114) | 84 |
(Profit)/loss on sale of securities | (440) | (19) | (9) |
Charge for defined benefit pension schemes | 131 | 97 | 288 |
Pension scheme curtailments or settlements gain | (57) | ||
Cash contribution to defined benefit pension schemes | (157) | (4,473) | (807) |
Other provisions charged net of releases | 896 | 2,515 | 3,099 |
Other provisions utilised | (4,134) | (1,761) | (1,043) |
Depreciation and amortisation | 232 | 137 | 453 |
Write down of goodwill and other intangible assets | 16 | 107 | |
Elimination of foreign exchange differences | 22 | (969) | (404) |
Other non-cash items | (806) | (619) | 431 |
Net cash (outflow)/inflow from trading activities | (1,138) | (8,185) | (6,714) |
(Increase)/decrease in loans and advances to banks and customers | (16,894) | (19,552) | 10,879 |
Decrease/(increase) in securities | 4,112 | 1,874 | 4,488 |
(Increase)/decrease in other assets | (7,631) | 245 | (134) |
Decrease/(increase) in derivative assets | 1,586 | (1,360) | 1,260 |
Changes in operating assets | (18,827) | (18,793) | 16,493 |
Increase/(decrease) in deposits by banks and customers | 19,085 | 14,272 | (4,307) |
Increase/(decrease) in debt securities in issue | 95 | 7 | (234) |
Increase/(decrease) in other liabilities | 18,485 | 484 | 1,628 |
(Decrease)/increase in derivative liabilities | (1,474) | 2,059 | (1,788) |
(Decrease)/increase in settlement balances and short positions | (573) | 744 | (3,020) |
Changes in operating liabilities | 35,618 | 17,566 | (7,721) |
Income taxes (paid)/received | (190) | (77) | 169 |
Net cash flows from operating activities | 15,463 | (9,489) | 2,227 |
Bank | |||
Net cash flow from operating activities | |||
Operating profit /(loss) before tax - continuing operations | 665 | 4,060 | (1,105) |
Decrease/(increase) in prepayments and accrued income | (4) | (15) | 17 |
Interest on subordinated liabilities | 55 | 234 | 243 |
(Decrease)/increase in accruals and deferred income | 29 | 49 | (139) |
Impairment losses/(releases) | 255 | 155 | (12) |
Loans and advances written-off net of recoveries | (441) | (442) | (779) |
Unwind of discount on impairment losses | (29) | (35) | (47) |
(Profit)/loss on sale of property, plant and equipment | (16) | (2) | 8 |
Loss/(profit) on sale of subsidiaries and associates | 67 | 15 | |
Charge for defined benefit pension schemes | 110 | 46 | 181 |
Cash contribution to defined benefit pension schemes | (127) | (4,349) | (724) |
Other provisions charged net of releases | 235 | 681 | 914 |
Other provisions utilised | (575) | (488) | (638) |
Depreciation and amortisation | 123 | 115 | 111 |
Write back/(write down) of investment in subsidiaries | 7,838 | (73) | 2,001 |
Elimination of foreign exchange differences | 79 | (914) | 77 |
Other non-cash items | 40 | (8) | 352 |
Net cash (outflow)/inflow from trading activities | 8,304 | (986) | 475 |
(Increase)/decrease in loans and advances to banks and customers | (13,777) | (12,213) | (3,749) |
Decrease/(increase) in securities | 7 | (7) | 1 |
(Increase)/decrease in other assets | (162) | 224 | (214) |
Decrease/(increase) in derivative assets | 805 | (996) | 1,026 |
Changes in operating assets | (13,127) | (12,992) | (2,936) |
Increase/(decrease) in deposits by banks and customers | 31,916 | 5,623 | 4,317 |
Increase/(decrease) in other liabilities | 12 | 61 | (449) |
(Decrease)/increase in derivative liabilities | (821) | 1,643 | (1,461) |
(Decrease)/increase in settlement balances and short positions | 33 | (39) | (19) |
Changes in operating liabilities | 31,140 | 7,288 | 2,388 |
Income taxes (paid)/received | (35) | (131) | 62 |
Net cash flows from operating activities | £ 26,282 | £ (6,821) | £ (11) |
Analysis of the net investme164
Analysis of the net investment in business interests and intangible assets (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Acquisitions and disposals | |||
Value recognised for business transferred from fellow subsidiary | £ (439) | £ (307) | |
Fair value given for business acquired | (90) | ||
Net outflow of cash in respect of purchases | (529) | (307) | |
Other assets sold | 6,525 | (1,033) | £ (2,632) |
Non-cash consideration | (7) | (15) | |
(Loss)/profit on disposals | (420) | 114 | (84) |
Net inflow/(outflow) of cash in respect of disposals | 6,098 | (934) | (2,716) |
Dividends received from associates | (1) | ||
Net cash expenditure on intangible assets | (25) | (6) | |
Net inflow/(outflow) | 5,543 | (1,247) | (2,716) |
Bank | |||
Acquisitions and disposals | |||
Value recognised for business transferred from fellow subsidiary | (738) | ||
Additional investments in Group undertakings | (2,879) | (307) | (700) |
Net outflow of cash in respect of purchases | (3,617) | (307) | (700) |
Other assets sold | 7 | ||
Disposal of investment in group undertakings | 166 | ||
Non-cash consideration | (111) | ||
(Loss)/profit on disposals | (67) | (15) | |
Net inflow/(outflow) of cash in respect of disposals | (5) | (15) | |
Net inflow/(outflow) | £ (3,622) | £ (307) | £ (715) |
Interest received and paid (Det
Interest received and paid (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest received and paid | |||
Interest received | £ 6,263 | £ 6,270 | £ 6,313 |
Interest paid | (798) | (1,137) | (1,520) |
Interest received (paid) net | 5,465 | 5,133 | 4,793 |
Bank | |||
Interest received and paid | |||
Interest received | 5,154 | 5,133 | 5,084 |
Interest paid | (567) | (909) | (1,225) |
Interest received (paid) net | £ 4,587 | £ 4,224 | £ 3,859 |
Analysis of changes in finan166
Analysis of changes in financing during the year - Share capital and share premium (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Balance at beginning of the year | £ 16,000 | £ 15,167 | |
Net cash flows from financing activities | (1,129) | 1,055 | £ 151 |
Balance at end of the year | 16,367 | 16,000 | 15,167 |
Bank | |||
Balance at beginning of the year | 15,297 | 11,282 | |
Net cash flows from financing activities | (184) | 1,063 | 158 |
Balance at end of the year | 15,355 | 15,297 | 11,282 |
Share capital and share premium | |||
Balance at beginning of the year | 3,903 | 3,903 | 3,903 |
Balance at end of the year | 3,903 | 3,903 | 3,903 |
Share capital and share premium | Bank | |||
Balance at beginning of the year | 3,903 | 3,903 | 3,903 |
Balance at end of the year | £ 3,903 | £ 3,903 | £ 3,903 |
Analysis of changes in finan167
Analysis of changes in financing during the year - subordinated liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Subordinated liabilities | |||
Subordinated liabilities, beginning of period | £ 7,295 | ||
Issue of subordinated liabilities | 507 | ||
Redemption of subordinated liabilities | (936) | £ (387) | |
Net cash flows from financing activities | (1,129) | £ 1,055 | 151 |
Subordinated liabilities, end of period | 5,755 | 7,295 | |
Subordinated Liabilities | |||
Subordinated liabilities | |||
Subordinated liabilities, beginning of period | 7,295 | 7,016 | 7,436 |
Issue of subordinated liabilities | 507 | ||
Redemption of subordinated liabilities | (936) | (387) | |
Redemption of preference shares | (178) | ||
Net cash flows from financing activities | (607) | (387) | |
Currency translation and other adjustments | (933) | 279 | (33) |
Subordinated liabilities, end of period | 5,755 | 7,295 | 7,016 |
Bank | |||
Subordinated liabilities | |||
Subordinated liabilities, beginning of period | 5,890 | ||
Redemption of subordinated liabilities | (387) | ||
Net cash flows from financing activities | (184) | 1,063 | 158 |
Subordinated liabilities, end of period | 5,640 | 5,890 | |
Bank | Subordinated Liabilities | |||
Subordinated liabilities | |||
Subordinated liabilities, beginning of period | 5,890 | 5,741 | 6,122 |
Net cash flows from financing activities | (178) | (387) | |
Currency translation and other adjustments | (72) | 149 | 6 |
Subordinated liabilities, end of period | £ 5,640 | £ 5,890 | £ 5,741 |
Analysis of cash and cash eq168
Analysis of cash and cash equivalents (Details) - GBP (£) £ in Millions | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash and cash equivalents | |||||||
Cash | £ 59,474 | £ 57,380 | £ 10,937 | ||||
Cash equivalents | 20,290 | 29,163 | 74,814 | ||||
Cash and cash equivalents at beginning of the year | £ 79,764 | £ 86,543 | £ 85,751 | ||||
Net cash inflow/(outflow) | 18,176 | (6,779) | 792 | ||||
Cash and cash equivalents at end of the year | 97,940 | 79,764 | 86,543 | ||||
Cash and balances at central banks | £ 35,799 | 2,567 | 1,690 | ||||
Treasury bills and debt securities | 23 | ||||||
Loans and advances to banks | 62,141 | 77,174 | 84,853 | ||||
Total cash and cash equivalents | 79,764 | 86,543 | 85,751 | 97,940 | 79,764 | 86,543 | 85,751 |
Bank | |||||||
Cash and cash equivalents | |||||||
Cash | 51,732 | 51,379 | 3,857 | ||||
Cash equivalents | 9,419 | 14,808 | 62,321 | ||||
Cash and cash equivalents at beginning of the year | 61,151 | 66,187 | 66,178 | ||||
Net cash inflow/(outflow) | 21,293 | (5,036) | 9 | ||||
Cash and cash equivalents at end of the year | 82,444 | 61,151 | 66,187 | ||||
Cash and balances at central banks | 34,763 | 1,198 | 819 | ||||
Loans and advances to banks | 47,681 | 59,953 | 65,368 | ||||
Total cash and cash equivalents | £ 61,151 | £ 66,187 | £ 66,178 | £ 82,444 | £ 61,151 | £ 66,187 | £ 66,178 |
Analysis of cash and cash eq169
Analysis of cash and cash equivalents - collateral and reserve deposits (Details) - GBP (£) £ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Analysis of cash and cash equivalents | |||
Cash collateral posted with bank counterparties | £ 0 | £ 0 | £ 0 |
Mandatory reserve deposits at central banks | £ 231 | £ 231 | £ 198 |
Segmental analysis (Details)
Segmental analysis (Details) £ in Millions | 12 Months Ended |
Dec. 31, 2017GBP (£)segment | |
Personal and Business Banking (PBB) | |
Segmental analysis | |
Number of reportable segments | 1 |
Commercial and Private Banking (CPB) | |
Segmental analysis | |
Number of reportable segments | 2 |
Maximum | UK Personal & Business Banking | |
Segmental analysis | |
Turnover threshold | £ | £ 2 |
Segmental analysis - Segment ac
Segmental analysis - Segment activity (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segmental analysis | |||
Net interest income | £ 5,481 | £ 4,772 | £ 4,539 |
Non-interest income | 2,666 | 1,267 | 1,087 |
Total income | 8,147 | 6,039 | 5,626 |
Operating expenses, excluding depreciation and amortisation | (4,038) | (4,288) | (4,833) |
Depreciation and amortisation | (282) | (127) | (136) |
Impairment (losses)/releases | (311) | (125) | 54 |
Operating profit/(loss) before tax from continuing operations | 3,516 | 1,499 | 711 |
UK Personal & Business Banking | |||
Segmental analysis | |||
Net interest income | 3,721 | 3,517 | 3,366 |
Non-interest income | 774 | 819 | 733 |
Total income | 4,495 | 4,336 | 4,099 |
Operating expenses, excluding depreciation and amortisation | (2,490) | (2,782) | (2,900) |
Impairment (losses)/releases | (186) | (105) | (20) |
Operating profit/(loss) before tax from continuing operations | 1,819 | 1,449 | 1,179 |
Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Net interest income | 1,952 | 1,542 | 1,510 |
Non-interest income | 1,015 | 641 | 594 |
Total income | 2,967 | 2,183 | 2,104 |
Operating expenses, excluding depreciation and amortisation | (1,276) | (1,407) | (1,198) |
Depreciation and amortisation | (152) | ||
Impairment (losses)/releases | (124) | (13) | (15) |
Operating profit/(loss) before tax from continuing operations | 1,415 | 763 | 891 |
Commercial Banking | |||
Segmental analysis | |||
Net interest income | 1,566 | 1,162 | 1,125 |
Non-interest income | 831 | 450 | 402 |
Total income | 2,397 | 1,612 | 1,527 |
Operating expenses, excluding depreciation and amortisation | (888) | (975) | (692) |
Depreciation and amortisation | (152) | ||
Impairment (losses)/releases | (119) | (14) | (3) |
Operating profit/(loss) before tax from continuing operations | 1,238 | 623 | 832 |
Private Banking | |||
Segmental analysis | |||
Net interest income | 386 | 380 | 385 |
Non-interest income | 184 | 191 | 192 |
Total income | 570 | 571 | 577 |
Operating expenses, excluding depreciation and amortisation | (388) | (432) | (506) |
Impairment (losses)/releases | (5) | 1 | (12) |
Operating profit/(loss) before tax from continuing operations | 177 | 140 | 59 |
Central Items and other | |||
Segmental analysis | |||
Net interest income | (192) | (287) | (337) |
Non-interest income | 877 | (193) | (240) |
Total income | 685 | (480) | (577) |
Operating expenses, excluding depreciation and amortisation | (272) | (99) | (735) |
Depreciation and amortisation | (130) | (127) | (136) |
Impairment (losses)/releases | (1) | (7) | 89 |
Operating profit/(loss) before tax from continuing operations | £ 282 | £ (713) | £ (1,359) |
Segmental analysis - Total reve
Segmental analysis - Total revenue (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segmental analysis | |||
Total revenue | £ 9,436 | £ 7,495 | £ 7,352 |
Operating segment | |||
Segmental analysis | |||
Total revenue | 9,436 | 7,495 | 7,352 |
UK Personal & Business Banking | |||
Segmental analysis | |||
Total revenue | 5,291 | 5,210 | 4,934 |
UK Personal & Business Banking | Operating segment | |||
Segmental analysis | |||
Total revenue | 5,291 | 5,214 | 4,949 |
UK Personal & Business Banking | Inter segment | |||
Segmental analysis | |||
Total revenue | (4) | (15) | |
Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Total revenue | 3,004 | 2,180 | 2,123 |
Commercial and Private Banking (CPB) | Operating segment | |||
Segmental analysis | |||
Total revenue | 2,960 | 2,134 | 2,069 |
Commercial and Private Banking (CPB) | Inter segment | |||
Segmental analysis | |||
Total revenue | 44 | 46 | 54 |
Commercial Banking | |||
Segmental analysis | |||
Total revenue | 2,337 | 1,490 | 1,405 |
Commercial Banking | Operating segment | |||
Segmental analysis | |||
Total revenue | 2,313 | 1,474 | 1,393 |
Commercial Banking | Inter segment | |||
Segmental analysis | |||
Total revenue | 24 | 16 | 12 |
Private Banking | |||
Segmental analysis | |||
Total revenue | 667 | 690 | 718 |
Private Banking | Operating segment | |||
Segmental analysis | |||
Total revenue | 647 | 660 | 676 |
Private Banking | Inter segment | |||
Segmental analysis | |||
Total revenue | 20 | 30 | 42 |
Central Items and other | |||
Segmental analysis | |||
Total revenue | 1,141 | 105 | 295 |
Central Items and other | Operating segment | |||
Segmental analysis | |||
Total revenue | 1,185 | 147 | 334 |
Central Items and other | Inter segment | |||
Segmental analysis | |||
Total revenue | £ (44) | £ (42) | £ (39) |
Segmental analysis - Total inco
Segmental analysis - Total income (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segmental analysis | |||
Total income | £ 8,147 | £ 6,039 | £ 5,626 |
Operating segment | |||
Segmental analysis | |||
Total income | 8,147 | 6,039 | 5,626 |
UK Personal & Business Banking | |||
Segmental analysis | |||
Total income | 4,495 | 4,336 | 4,099 |
UK Personal & Business Banking | Operating segment | |||
Segmental analysis | |||
Total income | 4,493 | 4,332 | 4,063 |
UK Personal & Business Banking | Inter segment | |||
Segmental analysis | |||
Total income | 2 | 4 | 36 |
Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Total income | 2,967 | 2,183 | 2,104 |
Commercial and Private Banking (CPB) | Operating segment | |||
Segmental analysis | |||
Total income | 3,028 | 2,271 | 2,195 |
Commercial and Private Banking (CPB) | Inter segment | |||
Segmental analysis | |||
Total income | (61) | (88) | (91) |
Commercial Banking | |||
Segmental analysis | |||
Total income | 2,397 | 1,612 | 1,527 |
Commercial Banking | Operating segment | |||
Segmental analysis | |||
Total income | 2,455 | 1,699 | 1,613 |
Commercial Banking | Inter segment | |||
Segmental analysis | |||
Total income | (58) | (87) | (86) |
Private Banking | |||
Segmental analysis | |||
Total income | 570 | 571 | 577 |
Private Banking | Operating segment | |||
Segmental analysis | |||
Total income | 573 | 572 | 582 |
Private Banking | Inter segment | |||
Segmental analysis | |||
Total income | (3) | (1) | (5) |
Central Items and other | |||
Segmental analysis | |||
Total income | 685 | (480) | (577) |
Central Items and other | Operating segment | |||
Segmental analysis | |||
Total income | 626 | (564) | (632) |
Central Items and other | Inter segment | |||
Segmental analysis | |||
Total income | £ 59 | £ 84 | £ 55 |
Segmental analysis - Assets and
Segmental analysis - Assets and Liabilities (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segmental analysis | |||
Assets | £ 340,843 | £ 316,476 | £ 302,430 |
Liabilities | 324,476 | 300,476 | 287,263 |
Cost to acquire fixed assets and intangible assets | 300 | 94 | 272 |
UK Personal & Business Banking | |||
Segmental analysis | |||
Assets | 133,688 | 120,903 | 108,008 |
Liabilities | 140,505 | 132,152 | 126,362 |
Commercial and Private Banking (CPB) | |||
Segmental analysis | |||
Assets | 89,114 | 72,043 | 65,776 |
Liabilities | 115,902 | 100,558 | 89,384 |
Cost to acquire fixed assets and intangible assets | 208 | 3 | |
Commercial Banking | |||
Segmental analysis | |||
Assets | 59,870 | 43,815 | 40,472 |
Liabilities | 87,787 | 73,378 | 65,075 |
Cost to acquire fixed assets and intangible assets | 208 | 3 | |
Private Banking | |||
Segmental analysis | |||
Assets | 29,244 | 28,228 | 25,304 |
Liabilities | 28,115 | 27,180 | 24,309 |
Central Items and other | |||
Segmental analysis | |||
Assets | 118,041 | 123,530 | 128,646 |
Liabilities | 68,069 | 67,766 | 71,517 |
Cost to acquire fixed assets and intangible assets | £ 92 | £ 91 | £ 272 |
Segmental analysis - Geographic
Segmental analysis - Geographical (Details) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Geographical segments | |||
Total revenue | £ 9,436 | £ 7,495 | £ 7,352 |
Net interest income | 5,481 | 4,772 | 4,539 |
Net fees and commissions | 1,555 | 1,446 | 1,427 |
Income from trading activities | 25 | (425) | (73) |
Other operating income | 1,086 | 246 | (267) |
Total income | 8,147 | 6,039 | 5,626 |
Operating profit/(loss) before tax from continuing operations | 3,516 | 1,499 | 711 |
Total assets | 340,843 | 316,476 | 302,430 |
Of which total assets held for sale | 24,526 | 24,976 | |
Total liabilities | 324,476 | 300,476 | 287,263 |
Of which total liabilities held for sale | 23,849 | 19,313 | |
Net assets attributable to equity owners and non-controlling interests | 16,367 | 16,000 | 15,167 |
Contingent liabilities and commitments | 54,961 | 57,454 | 51,888 |
Cost to acquire property, plant and equipment and intangible assets | 300 | 94 | 272 |
UK | |||
Geographical segments | |||
Total revenue | 9,320 | 7,357 | 7,678 |
Net interest income | 5,502 | 4,759 | 4,484 |
Net fees and commissions | 1,554 | 1,445 | 1,343 |
Income from trading activities | 24 | (437) | (57) |
Other operating income | 977 | 160 | 219 |
Total income | 8,057 | 5,927 | 5,989 |
Operating profit/(loss) before tax from continuing operations | 3,564 | 1,385 | 1,047 |
Total assets | 312,818 | 262,767 | 252,036 |
Total liabilities | 299,486 | 251,583 | 243,638 |
Net assets attributable to equity owners and non-controlling interests | 13,332 | 11,184 | 8,398 |
Contingent liabilities and commitments | 54,958 | 54,095 | 49,258 |
Cost to acquire property, plant and equipment and intangible assets | 290 | 85 | 173 |
USA | |||
Geographical segments | |||
Total revenue | (1) | (208) | |
Net interest income | (1) | ||
Other operating income | (1) | (208) | |
Total income | (1) | (209) | |
Operating profit/(loss) before tax from continuing operations | 113 | 42 | |
Total assets | 25,696 | 27,702 | 25,319 |
Of which total assets held for sale | 24,526 | ||
Total liabilities | 23,850 | 27,815 | 23,922 |
Of which total liabilities held for sale | 23,849 | ||
Net assets attributable to equity owners and non-controlling interests | 1,846 | (113) | 1,397 |
Contingent liabilities and commitments | 1 | ||
Cost to acquire property, plant and equipment and intangible assets | 3 | 69 | |
Europe | |||
Geographical segments | |||
Total revenue | 116 | 45 | (187) |
Net interest income | (21) | 6 | 34 |
Net fees and commissions | 1 | (4) | 56 |
Income from trading activities | 1 | 11 | (20) |
Other operating income | 109 | 10 | (276) |
Total income | 90 | 23 | (206) |
Operating profit/(loss) before tax from continuing operations | (36) | (64) | (360) |
Total assets | 2,308 | 25,848 | 22,702 |
Of which total assets held for sale | 24,976 | ||
Total liabilities | 1,132 | 21,005 | 17,359 |
Of which total liabilities held for sale | 19,313 | ||
Net assets attributable to equity owners and non-controlling interests | 1,176 | 4,843 | 5,343 |
Contingent liabilities and commitments | 3 | 3,359 | 2,610 |
Cost to acquire property, plant and equipment and intangible assets | 10 | 5 | 7 |
RoW | |||
Geographical segments | |||
Total revenue | 94 | 69 | |
Net interest income | 7 | 22 | |
Net fees and commissions | 5 | 28 | |
Income from trading activities | 1 | 4 | |
Other operating income | 77 | (2) | |
Total income | 90 | 52 | |
Operating profit/(loss) before tax from continuing operations | (12) | 65 | (18) |
Total assets | 21 | 159 | 2,373 |
Total liabilities | 8 | 73 | 2,344 |
Net assets attributable to equity owners and non-controlling interests | £ 13 | 86 | 29 |
Contingent liabilities and commitments | 19 | ||
Cost to acquire property, plant and equipment and intangible assets | £ 1 | £ 23 |
Directors and key management176
Directors and key management remuneration - Directors' remuneration (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Transactions between related parties | ||
Amounts receivable under long-term incentive plans and share option plans | £ 1,225 | £ 993 |
Total Directors' remuneration | 8,271 | 8,260 |
Accrued benefits to directors | 0 | 0 |
Non-executive directors | ||
Transactions between related parties | ||
Director emoluments before amounts receivable under long-term incentive plans and share option plans | 1,747 | 1,466 |
Chairman and executive directors | ||
Transactions between related parties | ||
Director emoluments before amounts receivable under long-term incentive plans and share option plans | £ 5,299 | £ 5,801 |
Directors and key management177
Directors and key management remuneration - Compensation of key management (Details) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Directors' and key management remuneration | ||
Short-term benefits | £ 19,019 | £ 20,350 |
Post-employment benefits | 434 | 471 |
Share-based payments | 3,558 | 2,606 |
Total compensation of key management | £ 23,011 | £ 23,427 |
Transactions with directors 178
Transactions with directors and key management (Details) | Dec. 31, 2017GBP (£)director | Dec. 31, 2016GBP (£) |
Disclosure of transactions between related parties [line items] | ||
Loans and advances to customers | £ 191,889,000,000 | £ 177,065,000,000 |
Deposits from customers | 233,372,000,000 | 233,939,000,000 |
Key management personnel | ||
Disclosure of transactions between related parties [line items] | ||
Loans to directors | £ 6,265 | |
Number of directors with outstanding loans | director | 4 | |
Loans and advances to customers | £ 3,897,000 | 3,917,000 |
Deposits from customers | £ 20,749,000 | £ 14,288,000 |
Related parties (Details)
Related parties (Details) - GBP (£) £ / shares in Units, £ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Transactions between related parties | |||
Conversion price per share | £ 1 | ||
Cash ratio deposits | 0.18% | ||
Threshold eligible liabilities | £ 600 | ||
Interest receivable | 6,271 | £ 5,784 | £ 5,792 |
Interest payable | (790) | (1,012) | (1,253) |
Fees and commissions receivable | 2,054 | 1,890 | 1,900 |
Fees and commissions payable | (499) | (444) | (473) |
Profit/(loss) for the year | 2,069 | (867) | (1,206) |
Subsidiaries | |||
Transactions between related parties | |||
Interest receivable | 363 | 491 | 646 |
Interest payable | (396) | (427) | (531) |
Fees and commissions receivable | 11 | 24 | 76 |
Fees and commissions payable | (2) | (1) | (62) |
Other administrative expenses | (2,358) | (2,288) | (2,222) |
Profit/(loss) for the year | (2,382) | (2,201) | (2,093) |
Subsidiaries | Discontinued Operations | |||
Transactions between related parties | |||
Net expenses | (29) | (8) | (19) |
Other administrative expenses | (81) | (27) | |
Profit/(loss) for the year | £ (29) | £ (89) | £ (46) |
Ultimate holding company (Detai
Ultimate holding company (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Uk government | The Royal Bank of Scotland plc | |
Transactions between related parties | |
Percentage of share capital owned | 70.50% |
Related undertakings (Details)
Related undertakings (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Pharos Estates Ltd | Foreign | |
Related undertakings | |
Ownership interest in associate | 49.00% |
Winiowy Management sp. z o.o. | Foreign | |
Related undertakings | |
Ownership interest in associate | 25.00% |
GWNW City Developments Ltd | UK | |
Related undertakings | |
Ownership interest in joint venture | 50.00% |
Cala Campus Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in joint venture | 50.00% |
RBS Covered Bonds LLP | UK | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 73.00% |
Jaguar Cars Finance Ltd | UK | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 50.00% |
JCB Finance Ltd | UK | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 75.00% |
JCB Finance (Leasing) Ltd | UK | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 75.00% |
Landpower Leasing Ltd | UK | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 75.00% |
Optimus KB | Foreign | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 51.00% |
Stora Kvarnen KB | Foreign | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 51.00% |
Frvaltningsbolaget Klverbacken Skola KB | Foreign | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 51.00% |
Equator Investments (Cayman) Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
West Register Prime Holding GmbH i. L. | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Coutts & Co (Manx) Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
The Royal Bank of Scotland Finance (Ireland) | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
CNW Group Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Greenwich NatWest Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
NatWest (HMHP) Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
NatWest Finance Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
NatWest Nominees Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Dixon Motors Developments Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Farming and Agricultural Finance Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Lombard Corporate Finance (3) Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Lombard Venture Finance Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Property Ventures (B&M) Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
WR (NI) Property Investments Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
WR (NI) Property Realisations Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
West Register (Northern Ireland) Property Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
RoyScot Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Northants Developments Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Thrapston Triangle Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Emperor Holdings Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Latam Directors Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Not consoldiated | 100.00% |
Nordisk Renting A/S | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Nordisk Renting Facilities Management AB | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Nordisk Renting HB | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
NatWest Aerospace Trust Company Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
NatWest FIS Nominees Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
NatWest PEP Nominees Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
NatWest Security Trustee Company Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Lombard Bank | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Dunfly Trustee Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
National Westminster Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
RBS Secretarial Services Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Syndicate Nominees Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
RBS Pension Trustee Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Not consoldiated | 100.00% |
HPUT A Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
HPUT B Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Nextlinks Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Dixon Vehicle Sales Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
NatWest Invoice Finance Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
Strand Nominees Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
RBSG Collective Investments Nominees Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |
RBS Investment Executive Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Not consoldiated | 100.00% |
JCB Finance Pension Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 88.00% |
RoyScot Leasing Ltd | Discontinued Operations | |
Related undertakings | |
Ownership interest in subsidiary - Fully consoldiated | 100.00% |