RBS.L Regulatory News (RBS)

●

Strength and sustainability - CET1 ratio of 13% and a return on tangible equity of 12% or above;

●

Customer experience - number one for service, trust and advocacy;

●

Simplifying the bank - cost:income ratio of less than 50%;

●

Supporting sustainable growth - leading market positions in every franchise; and

●

Employee engagement - employee engagement in upper quartile of Global Financial Services norm.

●

RBS reported a profit before tax of £871 million and an attributable profit(1) of £392 million for Q3 2017, the third successive quarter of profit, and an attributable profit of £1,331 million for the year to date.

●

Return on tangible equity was 4.5% for the quarter, and 5.2% for the year to date, with a core(2) adjusted return on equity of 15.0% in Q3 2017.

●

RBS delivered positive operating JAWS(3) of 19.9% for the year to date.

●

Net interest margin (NIM) reduced by 1 basis point to 2.12% compared with Q2 2017. Excluding various one-off interest income releases impacting Capital Resolution and Centre, NIM reduced by 7 basis points with 4 basis points driven by a build up in liquidity and the remainder due to continued structural hedge roll-off and ongoing margin pressure associated with mortgage balance growth.

●

RBS remains on track to achieve all of its 2017 financial targets.

●

Grow income: Across the core businesses, adjusted income has increased by 5.6% in Q3 2017 compared with Q3 2016 and has increased by 7.5% for the year to date.

●

Cut costs: Excluding VAT recoveries, adjusted operating expenses have reduced by £708 million for the year to date, with 33% delivered by the core businesses, and we remain on track to meet our full year £750 million cost reduction target.

●

Reduce capital usage: Excluding volume growth, core RWAs have reduced £10.2 billion for the year to date.

●

Resolve legacy issues: Capital Resolution RWAs reduced by a further £3.5 billion in the quarter to £23.1 billion, or £16.1 billion excluding RBS's stake in Alawwal Bank. In addition, RBS has received formal approval from the European Commission for its alternative remedies package in respect of Williams & Glyn. This quarter is the last time we will report Capital Resolution and Williams & Glyn separately.

●

Across PBB and CPB, net loans and advances increased by 3.4% on an annualised basis for the year to date, largely driven by mortgage growth within UK PBB, and we remain on track to meet our 3% full year target.

●

A net impairment charge of £143 million, 17 basis points of gross customer loans, was reported in Q3 2017. Risk elements in lending (REIL) were £9.0 billion, representing 2.7% of gross customer loans compared with 2.8% at Q2 2017. Within UK PBB, LTV on the mortgage portfolio was 56%, in line with FY 2016, and LTV on new mortgage lending was 70% for the year to date.

●

RBS continued to strengthen its capital position; CET1 ratio increased by 70 basis points in the quarter to 15.5% reflecting continued RWA reduction, the attributable profit and a reduction in the prudential valuation capital deduction, broadly offsetting the Capital Resolution losses taken in the quarter.

●

Leverage ratio increased by 20 basis points in the quarter to 5.3%.

●

Fully diluted tangible net asset value per ordinary share was stable at 298p.

●

Employee engagement has improved by 7 points to 83 (1 point above GFS Norm) meeting our target for 2017.

●

RBSG's Commercial Banking franchise NPS is significantly ahead of its three biggest competitors, however more work is required to close the gap in some of our other target segments.

Summary consolidated income statement for the period ended 30 September 2017

Nine months ended

Quarter ended

30 September

30 September

30 September

30 June

30 September

2017 

2016 

2017 

2017 

2016 

£m

£m

£m

£m

£m

Net interest income

6,776 

6,500 

2,304 

2,238 

2,167 

Own credit adjustments

(78)

294 

(5)

(44)

(156)

(Loss)/gain on redemption of own debt

(7)

(127)

- 

(9)

3 

Strategic disposals

156 

164 

- 

156 

(31)

Other non-interest income

3,229 

2,543 

858 

1,366 

1,327 

Non-interest income

3,300 

2,874 

853 

1,469 

1,143 

Total income

10,076 

9,374 

3,157 

3,707 

3,310 

Litigation and conduct costs

(521)

(1,740)

(125)

(342)

(425)

Restructuring costs

(1,034)

(1,099)

(244)

(213)

(469)

Other expenses

(5,440)

(6,001)

(1,774)

(1,844)

(2,017)

Operating expenses

(6,995)

(8,840)

(2,143)

(2,399)

(2,911)

Profit before impairment losses

3,081 

534 

1,014 

1,308 

399 

Impairment losses

(259)

(553)

(143)

(70)

(144)

Operating profit/(loss) before tax

2,822 

(19)

871 

1,238 

255 

Tax charge

(992)

(922)

(265)

(400)

(582)

Profit/(loss) for the period

1,830 

(941)

606 

838 

(327)

Attributable to:

Non-controlling interests

21 

37 

(8)

18 

7 

Other owners

478 

343 

222 

140 

135 

Dividend access share

- 

1,193 

- 

- 

- 

Ordinary shareholders

1,331 

(2,514)

392 

680 

(469)

Memo items:

Total income - adjusted (4)

10,005 

9,043 

3,162 

3,604 

3,494 

Operating expenses - adjusted (5)

(5,440)

(6,001)

(1,774)

(1,844)

(2,017)

Operating profit - adjusted (6)

4,306 

2,489 

1,245 

1,690 

1,333 

Performance key metrics and ratios

Net interest margin

2.16%

2.18%

2.12%

2.13%

2.17%

Average interest earning assets

£419,450m

£398,943m

£430,962m

£421,981m

£397,345m

Cost:income ratio (7)

69.1%

94.2%

67.5%

64.4%

87.8%

Cost:income ratio - adjusted (4,5,7)

53.9%

65.9%

55.6%

50.7%

57.3%

Earnings/(loss) per share

- basic

11.2p

(21.5p)

3.3p

5.7p

(3.9p)

- basic fully diluted

11.2p

(21.5p)

3.3p

5.7p

(3.9p)

- adjusted basic (4,5)

22.3p

(1.6p)

5.9p

9.2p

3.9p

- adjusted fully diluted (4,5,8)

22.3p

(1.6p)

5.9p

9.2p

3.9p

Return on tangible equity (9,10)

5.2%

(8.5%)

4.5%

8.0%

(4.8%)

Return on tangible equity - adjusted (4,5,10)

10.4%

(0.6%)

8.2%

12.9%

4.6%

Average tangible equity (10)

£33,964m

£39,516m

£34,465m

£33,974m

£38,696m

Average number of ordinary shares

 outstanding during the period (millions)

- basic

11,840 

 11,668 

11,886 

 11,841 

 11,724 

- fully diluted (8)

11,913 

11,709 

11,943 

11,923 

11,764 

For notes to this table refer to the following page.

30 September

30 June

31 December

Balance sheet related key metrics and ratios

2017 

2017 

2016 

Total assets

£751.8bn

£782.7bn

£798.7bn

Funded assets (11)

£580.0bn

£589.1bn

£551.7bn

Loans and advances to customers (excludes reverse repos)

£324.7bn

£326.1bn

£323.0bn

Customer deposits (excludes repos)

£359.9bn

£359.9bn

£353.9bn

Liquidity coverage ratio (LCR) (12,13)

147%

145%

123%

Liquidity portfolio

£177bn

£178bn

£164bn

Net stable funding ratio (NSFR) (14)

126%

123%

121%

Loan:deposit ratio (15)

90%

91%

91%

Risk elements in lending

£9.0bn

£9.3bn

£10.3bn

Impairment provisions

£3.9bn

£3.9bn

£4.5bn

Short-term wholesale funding (15,16)

£21bn

£18bn

£14bn

Wholesale funding (15,16)

£69bn

£70bn

£59bn

Common Equity Tier 1 (CET1) ratio

15.5%

14.8%

13.4%

Total capital ratio

20.6%

20.0%

19.2%

Risk-weighted assets (RWAs)

£210.6bn

£215.4bn

£228.2bn

CRR leverage ratio (17)

5.3%

5.1%

5.1%

UK leverage ratio (18)

6.0%

5.8%

5.6%

Tangible net asset value (TNAV) per ordinary share (10)

299p

300p

296p

Tangible net asset value (TNAV) per ordinary share - fully diluted (10)

298p

298p

294p

Tangible equity (10)

£35,621m

£35,682m

£34,982m

Number of ordinary shares in issue (millions) (19)

11,905 

11,876 

11,823 

Number of ordinary shares in issue (millions) - fully diluted (8,19)

11,950 

11,956 

11,906 

(1)

Attributable to ordinary shareholders.

(2)

Core business comprises Personal & Business Banking (PBB), Commercial & Private Banking (CPB) and NatWest Markets.

(3)

JAWS represents the combined net growth / reduction in income and costs over the period.

(4)

Excluding own credit adjustments, (loss)/gain on redemption of own debt and strategic disposals.

(5)

Excluding restructuring costs and litigation and conduct costs.

(6)

Operating profit before tax excluding own credit adjustments, (loss)/gain on redemption of own debt, strategic disposals, restructuring, litigation and conduct costs.

(7)

Operating lease depreciation included in income (nine months ended 30 September 2017 - £107 million; Q3 2017 - £35 million; nine months ended 30 September 2016 - £115 million; Q2 2017 - £36 million, Q3 2016 - £39 million).

(8)

Includes the effect of dilutive share options and convertible securities. Dilutive shares on an average basis for Q3 2017 were 57 million shares and for the nine months ended 30 September 2017 were 73 million (Q2 2017 - 82 million; Q3 2016 - 40 million; nine months ended 30 September 2016 - 41 million) and as at 30 September 2017 were 45 million (30 June 2017 - 80 million; 31 December 2016 - 83 million).

(9)

Calculated using profit/(loss) for the period attributable to ordinary shareholders.

(10)

Tangible equity is equity attributable to ordinary shareholders less intangible assets.

(11)

Total assets less derivatives.

(12)

On 1 October 2015 the LCR became the Prudential Regulation Authority's (PRA) primary regulatory liquidity standard; UK banks are required to meet a minimum standard of 90% from 1 January 2017, rising to 100% by 1 January 2018. The published LCR excludes Pillar 2 add-ons. RBS calculates the LCR using its own interpretation of the EU LCR Delegated Act, which may change over time and may not be fully comparable with those of other institutions.

(13)

The LCR of 145% at 30 June 2017 excludes the impact of the litigation settlement with the FHFA in respect of claims relating to RBS issuance and underwriting of RMBS in the US, as announced on 12 July 2017. The estimated impact of the settlement on the LCR was a 6% reduction to 139% as at 30 June 2017. The LCR of 147% at 30 September 2017 includes the impact of settling with the FHFA.

(14)

NSFR for all periods have been calculated using RBS's current interpretations of the revised BCBS guidance on NSFR issued in late 2014. Therefore, reported NSFR will change over time with regulatory developments. Due to differences in interpretation, RBS's ratio may not be comparable with those of other financial institutions.

(15)

Excludes repurchase agreements and stock lending.

(16)

Excludes derivative collateral.

(17)

Based on end-point Capital Requirements Regulation (CRR) Tier 1 capital and leverage exposure under the CRR Delegated Act.

(18)

Based on end-point CRR Tier 1 capital and UK leverage exposures reflecting the post EU referendum measures announced by the Bank of England in the third quarter of 2016.

(19)

Includes 17 million treasury shares (30 June 2017 - 17 million; 31 December 2016 - 39 million).

Nine months ended

Quarter ended

30 September

30 September

30 September

30 June

30 September

2017 

2016 

2017 

2017 

2016 

Operating profit/(loss) before tax

£m

£m

£m

£m

£m

Statutory operating profit/(loss)

2,822 

(19)

871 

1,238 

255 

Adjusted for

Own credit adjustments

78 

(294)

5 

44 

156 

Loss/(gain) on redemption of own debt

7 

127 

 - 

9 

(3)

Strategic disposals

(156)

(164)

 - 

(156)

31 

Litigation and conduct costs

521 

1,740 

125 

342 

425 

Restructuring costs

1,034 

1,099 

244 

213 

469 

Adjusted operating profit

4,306 

2,489 

1,245 

1,690 

1,333 

PBB, CPB & NWM - adjusted operating profit

4,072 

3,401 

1,394 

1,352 

1,331 

●

Adjusted operating profit reduced by 6.6% compared with Q3 2016 largely reflecting increased losses in Capital Resolution, up £248 million to £366 million.

●

Across the core businesses adjusted operating profit increased by 4.7%. UK PBB increased by 32.3%, benefiting from a £168 million debt sale gain. Partially offsetting this, lower income drove a £89 million reduction in NatWest Markets adjusted operating profit.

●

Compared with Q2 2017, adjusted operating profits were £445 million lower reflecting increased Capital Resolution losses, lower IFRS volatility gains (£21 million compared with £172 million in Q2 2017) and higher impairment losses in Commercial Banking, partially offset by the debt sale gain in UK PBB.

Nine months ended

Quarter ended

30 September

30 September

30 September

30 June

30 September

2017 

2016 

2017 

2017 

2016 

Total income

£m

£m

£m

£m

£m

Statutory total income

10,076 

9,374 

3,157 

3,707 

3,310 

Adjusted for

Own credit adjustments

78 

(294)

5 

44 

156 

Loss/(gain) on redemption of own debt

7 

127 

 - 

9 

(3)

Strategic disposals

(156)

(164)

 - 

(156)

31 

Adjusted total income

10,005 

9,043 

3,162 

3,604 

3,494 

PBB, CPB & NWM - adjusted total income

9,587 

8,916 

3,290 

3,143 

3,115 

Notable items within adjusted total income

IFRS volatility in Central items (1)

175 

(818)

21 

172 

(150)

UK PBB debt sale gain

176 

4 

168 

 - 

 - 

Commercial Banking disposal gain

52 

 - 

52 

 - 

 - 

FX reserve (loss)/gain in Central items

(37)

97 

(37)

 - 

97 

Unwind of securitisations in the property portfolio

(105)

 - 

 - 

 - 

 - 

FX (losses)/gains in Central items

(138)

209 

(30)

(56)

(44)

Capital Resolution disposal losses

and other adjustments

(549)

(166)

(446)

(53)

(113)

●

Excluding a £168 million debt sale gain, UK PBB adjusted income increased by 3.3% compared with Q3 2016 as increased mortgage lending has more than offset margin pressure. Excluding the impact of foreign exchange movements, Ulster Bank RoI adjusted income reduced by 2.9% due to lower income on free funds and one-off items in Q3 2016.

●

Commercial Banking adjusted income increased by 9.3% compared with Q3 2016 reflecting a £52 million asset disposal gain, increased deposit volumes and re-pricing benefits. RBS International increased by 4.3% whilst Private Banking income was stable at £166 million.

●

NatWest Markets adjusted income of £401 million was 23.8% lower than Q3 2016 which benefited from heightened customer activity and favourable market conditions following the EU referendum and central bank actions.

●

Compared with Q2 2017, adjusted income was £442 million lower reflecting increased Capital Resolution losses, reduced IFRS volatility gains and lower NatWest Markets income, partially offset by the debt sale gain in UK PBB.

Nine months ended

Quarter ended

30 September

30 September

30 September

30 June

30 September

2017 

2016 

2017 

2017 

2016 

Net interest margin

%

%

%

%

%

Net interest margin (NIM)

2.16%

2.18%

2.12%

2.13%

2.17%

●

NIM reduced by 5 basis points versus Q3 2016 principally reflecting increased liquidity requirements and asset margin pressure.

●

Compared with Q2 2017, NIM reduced by 1 basis point. Excluding various one-off interest income releases impacting Capital Resolution and Centre, NIM reduced by 7 basis points with 4 basis points driven by a build up in liquidity and the remainder due to continued structural hedge roll-off and ongoing margin pressure associated with mortgage balance growth.

●

The sensitivity of net interest earnings, over the next 12 months, to an immediate increase of 25 basis points to all interest rates is c.£175 million across all currencies.

Nine months ended

Quarter ended

30 September

30 September

30 September

30 June

30 September

2017 

2016 

2017 

2017 

2016 

Operating expenses

£m

£m

£m

£m

£m

Statutory operating expenses

6,995 

8,840 

2,143 

2,399 

2,911 

Adjusted for

Litigation and conduct costs

(521)

(1,740)

(125)

(342)

(425)

Restructuring costs

(1,034)

(1,099)

(244)

(213)

(469)

Adjusted operating expenses

5,440 

6,001 

1,774 

1,844 

2,017 

PBB, CPB & NWM - adjusted operating expenses

5,144 

5,375 

1,693 

1,702 

1,773 

Notable items within adjusted operating expenses

VAT recovery in Central items

(80)

(227)

(29)

 - 

 - 

Notable items within restructuring costs

Property exit costs

203 

 - 

(14)

(18)

 - 

Williams and Glyn restructuring costs

75 

646 

17 

46 

301 

●

UK PBB adjusted operating expenses reduced by 2.6% compared with Q3 2016 reflecting reduced headcount coupled with process and productivity improvements, partially offset by increased technology infrastructure costs. Excluding the impact of foreign exchange movements, Ulster Bank RoI adjusted operating expenses reduced by 5.8%.

●

Commercial Banking adjusted operating expenses reduced 6.0% compared with Q3 2016 reflecting cost efficiencies and a 15.5% reduction in headcount. Cost efficiencies also drove an 8.3% reduction in Private Banking adjusted operating expenses. RBSI increased 22.5% reflecting increased investment spend and regulatory expenses, in part associated with the creation of a bank outside the ring-fence.

●

NatWest Markets adjusted operating expenses were 10.5% lower than Q3 2016 principally due to the prior year including a one-off expense adjustment for investment spend that had previously been capitalised.

●

Capital Resolution adjusted operating expenses reduced by 64.7% to £61 million compared with Q3 2016.

●

Compared with Q2 2017, adjusted operating expenses of £1,774 million were £70 million lower and included a £29 million VAT recovery.

Nine months ended

Quarter ended

30 September

30 September

30 September

30 June

30 September

2017 

2016 

2017 

2017 

2016 

Impairment losses

£m

£m

£m

£m

£m

Impairment losses

259 

553 

143 

70 

144 

Notable items within impairment losses

Capital Resolution impairment (releases)/losses

(149)

383 

(71)

(33)

120 

Ulster Bank RoI impairment (releases)/losses

(21)

(66)

(10)

13 

(39)

Commercial Banking impairment losses

245 

123 

151 

33 

20 

●

UK PBB reported a net impairment loss of £67 million, 19 basis points of gross customer loans, £40 million higher than Q3 2016 primarily reflecting reduced provision releases. Defaults remain low across all portfolios.

●

Commercial Banking reported a net impairment loss of £151 million in the quarter.

●

Capital Resolution reported a net impairment release of £71 million compared with a charge of £120 million in Q3 2016, which included a £190 million charge in respect of the shipping portfolio.

●

Compared with Q2 2017, impairments increased by £73 million reflecting higher impairment losses in Commercial Banking.

End-point CRR basis (1)

30 September 

30 June 

31 December 

2017 

2017 

2016 

Risk asset ratios

% 

% 

% 

CET1

15.5 

14.8 

13.4 

Tier 1

17.4 

16.7 

15.2 

Total

20.6 

20.0 

19.2 

Capital

£m

£m

£m

Tangible equity

35,621 

35,682 

34,982 

Expected loss less impairment provisions

(1,197)

(1,226)

(1,371)

Prudential valuation adjustment

(459)

(854)

(532)

Deferred tax assets

(865)

(877)

(906)

Own credit adjustments

(110)

(142)

(304)

Pension fund assets

(185)

(186)

(208)

Cash flow hedging reserve

(298)

(575)

(1,030)

Other adjustments for regulatory purposes

51 

52 

(8)

Total deductions

(3,063)

(3,808)

(4,359)

CET1 capital

32,558 

31,874 

30,623 

AT1 capital

4,041 

4,041 

4,041 

Tier 1 capital

36,599 

35,915 

34,664 

Tier 2 capital

6,841 

7,107 

9,161 

Total regulatory capital

43,440 

43,022 

43,825 

Risk-weighted assets

Credit risk

- non-counterparty

154,400 

157,300 

162,200 

- counterparty

16,000 

17,800 

22,900 

Market risk

16,400 

16,500 

17,400 

Operational risk

23,800 

23,800 

25,700 

Total RWAs

210,600 

215,400 

228,200 

Leverage (2)

Cash and balances at central banks

88,200 

86,800 

74,200 

Derivatives

171,700 

193,500 

247,000 

Loans and advances

341,500 

346,800 

340,300 

Reverse repos

36,700 

40,000 

41,800 

Other assets

113,700 

115,600 

95,400 

Total assets

751,800 

782,700 

798,700 

Derivatives

- netting and variation margin

(169,500)

(193,400)

(241,700)

- potential future exposures

54,100 

56,700 

65,300 

Securities financing transactions gross up

2,300 

1,900 

2,300 

Undrawn commitments

52,600 

53,100 

58,600 

Regulatory deductions and other adjustments

200 

800 

100 

CRR Leverage exposure

691,500 

701,800 

683,300 

CRR leverage ratio%

5.3 

5.1 

5.1 

UK leverage exposure (3)

609,400 

618,700 

614,600 

UK leverage ratio% (3)

6.0 

5.8 

5.6 

(1)

CRR as implemented by the PRA in the UK, with effect from 1 January 2014. All regulatory adjustments and deductions to CET1 have been applied in full with the exception of unrealised gains on available-for-sale securities which have been included from 2015 under the PRA transitional basis.

(2)

Based on end-point CRR Tier 1 capital and leverage exposure under the CRR Delegated Act.

(3)

Based on end-point CRR Tier 1 capital and UK leverage exposures reflecting the post EU referendum measures announced by the Bank of England in the third quarter of 2016.

Nine months ended 30 September 2017

PBB

CPB

Central

Ulster

Commercial

Private

RBS

NatWest

Capital

Williams

 items &

Total

UK PBB

Bank RoI

Banking

Banking

International

Markets

Resolution

& Glyn (1)

other (2)

RBS

£m

£m

£m

£m

£m

£m

£m

£m

£m

£m

Income statement

Net interest income

3,359 

310 

1,711 

342 

244 

65 

100 

499 

146 

6,776 

Other non-interest income

944 

136 

967 

145 

48 

1,316 

(556)

127 

102 

3,229 

Total income - adjusted (3)

4,303 

446 

2,678 

487 

292 

1,381 

(456)

626 

248 

10,005 

Own credit adjustments

- 

(3)

- 

- 

- 

(55)

(20)

- 

- 

(78)

Loss on redemption of own debt

- 

- 

- 

- 

- 

- 

- 

- 

(7)

(7)

Strategic disposals

- 

- 

- 

- 

- 

- 

- 

- 

156 

156 

Total income

4,303 

443 

2,678 

487 

292 

1,326 

(476)

626 

397 

10,076 

Direct expenses - staff costs

(492)

(146)

(358)

(110)

(36)

(440)

(33)

(141)

(1,239)

(2,995)

- other costs

(172)

(41)

(166)

(18)

(10)

(149)

(38)

(29)

(1,822)

(2,445)

Indirect expenses

(1,448)

(149)

(771)

(190)

(93)

(355)

(123)

(60)

3,189 

- 

Operating expenses - adjusted (4)

(2,112)

(336)

(1,295)

(318)

(139)

(944)

(194)

(230)

128 

(5,440)

Restructuring costs - direct

(24)

(25)

(42)

(1)

(2)

(48)

(195)

- 

(697)

(1,034)

- indirect

(184)

(27)

(96)

(16)

(4)

(86)

35 

- 

378 

- 

Litigation and conduct costs

(13)

(34)

(6)

- 

(8)

(47)

(361)

- 

(52)

(521)

Operating expenses

(2,333)

(422)

(1,439)

(335)

(153)

(1,125)

(715)

(230)

(243)

(6,995)

Operating profit/(loss) before impairment (losses)/releases

1,970 

21 

1,239 

152 

139 

201 

(1,191)

396 

154 

3,081 

Impairment (losses)/releases

(139)

21 

(245)

(4)

(3)

(1)

149 

(36)

(1)

(259)

Operating profit/(loss)

1,831 

42 

994 

148 

136 

200 

(1,042)

360 

153 

2,822 

Operating profit/(loss) - adjusted (3,4)

2,052 

131 

1,138 

165 

150 

436 

(501)

360 

375 

4,306 

Additional information

Return on equity (5)

30.8%

2.1%

8.3%

9.5%

12.2%

1.8%

nm

23.0%

nm

5.2%

Return on equity - adjusted (3,4,5)

34.8%

6.5%

9.9%

10.8%

13.7%

6.1%

nm

23.0%

nm

10.4%

Cost:income ratio (6)

54.2%

95.3%

51.8%

68.8%

52.4%

84.8%

nm

36.7%

nm

69.1%

Cost:income ratio - adjusted (3,4,6)

49.1%

75.3%

46.2%

65.3%

47.6%

68.4%

nm

36.7%

nm

53.9%

Average interest earning assets (£bn)

153.0 

25.3 

131.2 

18.5 

23.9 

17.7 

15.1 

25.3 

nm

419.5 

Net interest margin

2.93%

1.64%

1.74%

2.48%

1.37%

0.49%

0.88%

2.63%

nm

2.16%

Total assets (£bn)

164.5 

25.1 

147.3 

19.9 

24.3 

215.7 

89.3 

25.6 

40.1 

751.8 

Funded assets (£bn) (7)

164.5 

25.1 

147.3 

19.9 

24.3 

112.7 

22.2 

25.6 

38.4 

580.0 

Net loans and advances to customers (£bn)

140.4 

19.5 

96.6 

13.3 

9.3 

16.7 

8.4 

20.4 

0.1 

324.7 

Risk elements in lending (£bn)

1.7 

3.4 

1.7 

0.1 

0.1 

-

1.6 

0.3 

0.1 

9.0 

Impairment provisions (£bn)

(1.1)

(1.1)

(0.8)

-

-

-

(0.5)

(0.2)

(0.2)

(3.9)

Customer deposits (£bn)

154.0 

17.3 

98.2 

27.0 

24.9 

7.1 

6.6 

24.6 

0.2 

359.9 

Risk-weighted assets (RWAs) (£bn)

34.0 

17.9 

74.6 

9.2 

9.6 

31.8 

23.1 

9.3 

1.1 

210.6 

RWA equivalent (£bn) (5)

37.2 

18.9 

77.4 

9.2 

9.6 

33.5 

25.6 

9.8 

1.3 

222.5 

Employee numbers (FTEs - thousands) (8)

17.4 

2.8 

4.9 

1.6 

0.8 

5.4 

0.1 

4.0 

36.6 

73.6 

For the notes to this table refer to page 10. nm = not meaningful

Quarter ended 30 September 2017

PBB

CPB

Central

Ulster

Commercial

Private

RBS

NatWest

Capital

Williams

 items &

Total

UK PBB

Bank RoI

Banking

Banking

International

Markets

Resolution

& Glyn (1)

other (2)

RBS

£m

£m

£m

£m

£m

£m

£m

£m

£m

£m

Income statement

Net interest income

1,128 

104 

570 

116 

83 

23 

76 

166 

38 

2,304 

Other non-interest income

420 

46 

358 

50 

14 

378 

(452)

43 

1 

858 

Total income adjusted (3)

1,548 

150 

928 

166 

97 

401 

(376)

209 

39 

3,162 

Own credit adjustments

- 

- 

- 

- 

- 

(7)

2 

- 

- 

(5)

Total income

1,548 

150 

928 

166 

97 

394 

(374)

209 

39 

3,157 

Direct expenses - staff costs

(163)

(50)

(113)

(36)

(13)

(143)

(7)

(45)

(384)

(954)

- other costs

(51)

(17)

(55)

(6)

(3)

(50)

(19)

(9)

(610)

(820)

Indirect expenses

(485)

(52)

(252)

(58)

(33)

(113)

(35)

(18)

1,046 

- 

Operating expenses - adjusted (4)

(699)

(119)

(420)

(100)

(49)

(306)

(61)

(72)

52 

(1,774)

Restructuring costs - direct

(1)

(1)

(2)

(1)

(2)

(18)

(65)

- 

(154)

(244)

- indirect

(47)

(8)

(19)

(2)

- 

(13)

39 

- 

50 

- 

Litigation and conduct costs

- 

(1)

(2)

- 

(8)

(13)

(89)

- 

(12)

(125)

Operating expenses

(747)

(129)

(443)

(103)

(59)

(350)

(176)

(72)

(64)

(2,143)

Operating profit/(loss) before impairment (losses)/releases

801 

21 

485 

63 

38 

44 

(550)

137 

(25)

1,014 

Impairment (losses)/releases

(67)

10 

(151)

3 

2 

- 

71 

(11)

- 

(143)

Operating profit/(loss)

734 

31 

334 

66 

40 

44 

(479)

126 

(25)

871 

Operating profit/(loss) - adjusted (3,4)

782 

41 

357 

69 

50 

95 

(366)

126 

91 

1,245 

Additional information

Return on equity (5)

36.8%

4.6%

8.6%

13.2%

10.4%

0.6%

nm

24.6%

nm

4.5%

Return on equity - adjusted (3,4,5)

39.3%

6.1%

9.3%

13.8%

13.6%

3.6%

nm

24.6%

nm

8.2%

Cost:income ratio (6)

48.3%

86.0%

45.7%

62.0%

60.8%

88.8%

nm

34.4%

nm

67.5%

Cost:income ratio - adjusted (3,4,6)

45.2%

79.3%

43.1%

60.2%

50.5%

76.3%

nm

34.4%

nm

55.6%

Average interest earning assets (£bn)

155.8 

26.1 

130.0 

19.2 

23.7