rbs201205046k6.htm
 
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

 
 
Report of Foreign Private Issuer
 
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
 
For May 4, 2012
 
Commission File Number: 001-10306

 
The Royal Bank of Scotland Group plc

 
RBS, Gogarburn, PO Box 1000
Edinburgh EH12 1HQ

 
(Address of principal executive offices)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F X
  
Form 40-F ___
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):_________

 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):_________


Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


Yes
   ___
No X
 
 
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________

 
 
The following information was issued as a Company announcement in London, England and is furnished pursuant to General Instruction B to the General Instructions to Form 6-K:

 
 


Risk and balance sheet management (continued)
Market risk
Market risk arises from changes in interest rates, foreign currency, credit spreads, equity prices and risk related factors such as market volatilities. The Group manages market risk centrally within its trading and non-trading portfolios through a comprehensive market risk management framework. This control framework includes qualitative guidance in the form of comprehensive policy statements, dealing authorities, limits based on, but not limited to, value-at-risk (VaR), stress testing, positions and sensitivity analyses.
 
For a description of the Group's basis of measurement and methodologies, refer to pages 229 to 231 of the Group's 2011 Annual Report and Accounts.
 
Following the implementation of CRD III at 31 December 2011, the Group is required to calculate: (i) an additional capital charge based on a stressed calibration of the VaR model - Stressed VaR; (ii) an Incremental Risk Charge to capture the default and migration risk for credit risk positions in the trading book; and (iii) an All Price Risk measure for correlation trading positions, subject to a capital floor that is based on standardised securitisation charges. The CRD III capital charges at 31 March 2012 are shown in the table below:
 
 
 
31 March 
2012 
31 December 
2011 
 
£m 
£m 
     
Stressed VaR
1,793 
1,682 
Incremental Risk Charge
659 
469 
All Price Risk
262 
297 
 
The Group's US trading subsidiary was included in the internal models in March 2012 resulting in an increase in Incremental Risk Charge and Stressed VaR.
 
Daily distribution of Markets trading revenues
 
http://www.rns-pdf.londonstockexchange.com/rns/7230C_-2012-5-3.pdf
 
 
Note:
 
(1)
The effect of any month end adjustments, not attributable to a specific daily market move, is spread evenly over the days in the month in question.


 
Risk and balance sheet management (continued)
Market risk (continued)
 
Key points
 
·
Markets delivered higher trading revenues in Q1 2012 than in Q4 2011. This reflected the temporary improvement in global markets sentiment following the approval of Greece's bailout and debt restructuring and increased liquidity in Europe as a result of the European Central Bank's Long-Term Refinancing Operation programme.
   
·
A higher volume of client activity and normalised bid-offer spreads contributed to more stable and consistent revenues compared with Q4 2011, as seen by trends in average daily revenue and standard deviation. The average daily revenue in Q1 2012 was £27 million compared with £9 million in Q4 2011. The standard deviation of the daily revenues in Q1 2012 was £15 million, down from £18 million in Q4 2011.
   
·
The number of days with negative revenue decreased from 18 in Q4 2011 to two in Q1 2012, primarily reflecting the factors discussed above.
   
·
The two most frequent results were daily revenue of: (i) between £15 million and £20 million, and (ii) between £25 million and £30 million, each of which occurred 13 times in Q1 2012. In Q4 2011, the most frequent result was daily revenue of between zero and £5 million, which occurred 12 times.
 
 
VaR disclosures
Counterparty Exposure Management (CEM) manages the OTC derivative counterparty credit and funding risk on behalf of Markets, by actively controlling risk concentrations and reducing unwanted risk exposures. The hedging transactions CEM enters into are booked in the trading book, and therefore contribute to the market risk VaR exposure of the Group. The counterparty exposures themselves are not captured in VaR for regulatory capital. In the interest of transparency and to more properly represent the exposure, CEM exposure and total VaR excluding CEM are disclosed separately.
 
The table below details VaR for the Group's trading portfolios, analysed by type of market risk exposure, and between Core, Non-Core, CEM and the Group's total trading VaR excluding CEM.
 
 

 
 

 
 
Risk and balance sheet management (continued)
Market risk (continued)
 
 
Quarter ended
 
31 March 2012
  
31 December 2011
  
31 March 2011
 
Average 
Period end 
Maximum 
Minimum 
  
Average 
Period end 
Maximum 
Minimum 
  
Average 
Period end 
Maximum 
Minimum 
Trading VaR
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
£m 
                             
Interest rate
73.8 
68.3 
95.7 
51.2 
  
62.5 
68.1 
72.3 
50.8 
  
60.4 
60.2 
79.2 
42.1 
Credit spread
84.2 
88.5 
94.9 
72.6 
  
68.4 
74.3 
78.5 
57.4 
  
134.1 
97.7 
151.1 
97.7 
Currency
12.5 
11.1 
21.3 
8.2 
  
10.9 
16.2 
19.2 
5.7 
  
12.2 
10.5 
18.0 
8.1 
Equity
7.5 
6.3 
12.5 
4.7 
  
8.3 
8.0 
12.5 
5.0 
  
11.1 
10.7 
14.5 
8.0 
Commodity
2.5 
1.3 
6.0 
1.0 
  
4.3 
2.3 
7.0 
2.0 
  
0.2 
0.1 
0.7 
  
Diversification (1)
  
(69.0)
        
(52.3)
        
(71.1)
    
                             
Total
116.6 
106.5 
137.0 
97.2 
  
109.7 
116.6 
132.2 
83.5 
  
156.4 
108.1 
181.3 
108.1 
                             
Core
82.8 
74.5 
118.0 
63.6 
  
77.3 
89.1 
95.6 
57.7 
  
108.2 
72.2 
133.9 
72.2 
Non-Core
38.7 
39.3 
41.9 
34.2 
  
35.2 
34.6 
40.7 
30.0 
  
113.9 
109.4 
128.6 
104.1 
                             
CEM (2)
79.1 
78.5 
84.2 
73.3 
    
75.8 
        
43.9 
    
                             
Total (excluding CEM) (2)
53.5 
56.6 
76.4 
41.0 
    
49.7 
        
110.8 
    
 
Notes:
 
(1)
The Group benefits from diversification, which reflects the risk reduction achieved by allocating investments across various financial instrument types, industry counterparties, currencies and regions. The extent of diversification benefit depends on the correlation between the assets and risk factors in the portfolio at a particular time. Diversification has an inverse relationship with correlation. The diversification factor is the sum of the VaR on individual risk types less the total portfolio VaR.
(2)
CEM and total trading VaR excluding CEM for Q1 2012 have been presented on a minimum, maximum, average and period end basis. For comparative purposes, the period end VaR figures have been shown for Q4 2011 and Q1 2011.
 
Key points
 
·
The Group's average and maximum total trading VaR and interest rate trading VaR were slightly higher during Q1 2012 than Q4 2011. This was largely driven by pre-hedging activity ahead of UK Gilt and Japanese Government bond auctions in which RBS participated.
   
·
The eurozone sovereign crisis caused unrest in the credit markets over the quarter as France was downgraded and Greece's debt refinancing raised concerns over Italy and Spain's ability to refinance their debt. This caused credit spreads to widen over the majority of the quarter and impacted the Group's credit spread exposure, resulting in a higher average and maximum credit spread VaR in Q1 2012 than in Q4 2011.
   
·
Non-Core trading VaR showed a slight increase over Q1 2012 due to increased hedging activities in CEM as counterparty credit risks deteriorated.


 
Risk and balance sheet management (continued)
Market risk (continued)
The table below details VaR for the Group's non-trading portfolio, excluding the structured credit portfolio (SCP) and loans and receivables (LAR), analysed by type of market risk exposure and between Core, Non-Core CEM, and the Group's total non-trading VaR excluding CEM.
 
 
 
Quarter ended
 
31 March 2012
  
31 December 2011
  
31 March 2011
 
Average 
Period end 
Maximum 
Minimum 
  
Average 
Period end 
Maximum 
Minimum 
  
Average 
Period end 
Maximum 
Minimum 
Non-trading VaR
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
£m 
                             
Interest rate
9.6 
8.7 
10.7 
8.7 
  
9.7 
9.9 
10.9 
8.8 
  
7.8 
7.0 
10.8 
6.5 
Credit spread
13.9 
15.2 
15.4 
12.9 
  
13.9 
13.6 
15.7 
12.1 
  
23.8 
22.5 
39.3 
14.2 
Currency
3.7 
3.3 
4.5 
3.2 
  
3.5 
4.0 
5.1 
2.4 
  
0.6 
0.6 
1.8 
0.1 
Equity
1.9 
1.8 
1.9 
1.8 
  
1.9 
1.9 
2.0 
1.8 
  
2.5 
2.3 
3.1 
2.2 
Diversification (1)
  
(10.8)
        
(13.6)
        
(5.4)
    
                             
Total
15.7 
18.2 
18.3 
13.6 
  
16.3 
15.8 
20.0 
14.2 
  
26.5 
27.0 
41.6 
13.4 
                             
Core
15.7 
18.8 
19.0 
13.5 
  
16.0 
15.1 
18.9 
14.1 
  
25.5 
26.1 
38.9 
13.5 
Non-Core
2.5 
2.4 
2.6 
2.4 
  
3.4 
2.5 
3.9 
2.5 
  
2.6 
2.4 
3.4 
2.2 
                             
CEM (2)
1.0 
0.9 
1.0 
0.9 
    
0.9 
        
0.3 
    
Total excluding CEM (2)
15.7 
17.4 
17.8 
13.5 
    
15.5 
        
27.0 
    
 
Notes:
 
(1)
The Group benefits from diversification, which reflects the risk reduction achieved by allocating investments across various financial instrument types, industry counterparties, currencies and regions. The extent of diversification benefit depends on the correlation between the assets and risk factors in the portfolio at a particular time. Diversification has an inverse relationship with correlation. The diversification factor is the sum of the VaR on individual risk types less the total portfolio VaR.
(2)
CEM and total non-trading VaR excluding CEM for Q1 2012 have been presented on a minimum, maximum, average and period end basis. For comparative purposes, the period end VaR figures have been shown for Q4 2011 and Q1 2011.
 
 
 
 

 
 

 
 
Risk and balance sheet management (continued)
Market risk (continued)
 
Structured Credit Portfolio (SCP)
 
 
 
Drawn notional
  
Fair value
 
CDOs 
CLOs 
MBS (1)
Other 
 ABS 
Total 
  
CDOs 
CLOs 
MBS (1)
Other 
 ABS 
Total 
 
£m 
£m 
£m 
£m 
£m 
  
£m 
£m 
£m 
£m 
£m 
                       
31 March 2012
                      
1-2 years
- 
- 
- 
54 
54 
  
- 
- 
- 
48 
48 
2-3 years
- 
- 
9 
153 
162 
  
- 
- 
9 
143 
152 
4-5 years
- 
18 
30 
93 
141 
  
- 
17 
23 
86 
126 
5-10 years
- 
368 
254 
248 
870 
  
- 
334 
167 
210 
711 
>10 years
1,115 
432 
833 
557 
2,937 
  
202 
368 
569 
319 
1,458 
                       
 
1,115 
818 
1,126 
1,105 
4,164 
  
202 
719 
768 
806 
2,495 
                       
31 December 2011
                      
1-2 years
- 
- 
- 
27 
27 
  
- 
- 
- 
22 
22 
2-3 years
- 
- 
10 
196 
206 
  
- 
- 
9 
182 
191 
4-5 years
- 
37 
37 
95 
169 
  
- 
34 
30 
88 
152 
5-10 years
32 
503 
270 
268 
1,073 
  
30 
455 
184 
229 
898 
>10 years
2,180 
442 
464 
593 
3,679 
  
766 
371 
291 
347 
1,775 
                       
 
2,212 
982 
781 
1,179 
5,154 
  
796 
860 
514 
868 
3,038 
                       
31 March 2011
                      
1-2 years
- 
19 
- 
38 
57 
  
- 
18 
- 
34 
52 
2-3 years
12 
19 
43 
70 
144 
  
12 
17 
42 
64 
135 
3-4 years
- 
5 
11 
206 
222 
  
- 
5 
10 
194 
209 
4-5 years
15 
15 
- 
36 
66 
  
15 
14 
- 
33 
62 
5-10 years
96 
467 
313 
385 
1,261 
  
85 
435 
232 
342 
1,094 
>10 years
397 
624 
561 
530 
2,112 
  
154 
500 
400 
369 
1,423 
                       
 
520 
1,149 
928 
1,265 
3,862 
  
266 
989 
684 
1,036 
2,975 
 
Note:
 
(1)
MBS include sub-prime RMBS with a notional amount of £396 million (31 December 2011 - £401 million; 31 March 2011 - £455 million) and a fair value of £258 million (31 December 2011 - £252 million; 31 March 2011 - £330 million), all with residual maturities of greater than ten years.
 
The Structured Credit Portfolio is within Non-Core. The risk in this portfolio is not measured or disclosed using VaR, as the Group believes this is not an appropriate tool for the banking book portfolio, which comprises illiquid debt securities. These assets are reported on a drawn notional and fair value basis, and managed on a third party asset and RWA basis.
 
Key point
 
·
The CDO drawn notional was lower at 31 March 2012 than at 31 December 2011 due to the liquidation of legacy commercial real estate CDOs. Following the liquidation, the majority of the underlying assets were sold and the retained MBS assets were added to the MBS portfolio, increasing the drawn notional at 31 March 2012.
 


 
Additional information
 
 
 
31 March 
2012 
31 December 
2011 
     
Ordinary share price
£0.276 
£0.202 
     
Number of ordinary shares in issue
59,546m 
59,228m 
 
Statutory results
Financial information contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 ('the Act'). The statutory accounts for the year ended 31 December 2011 will be filed with the Registrar of Companies. The report of the auditor on those statutory accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Act.
 
These first quarter 2012 results have not been audited or reviewed by the auditors.
 
Financial calendar
 
   
2012 interim results
Friday 3 August 2012
   
2012 third quarter interim management statement
Friday 2 November 2012
 
 
 

 
 

 
 
 
 
 
 
 
Appendix 1
 
Income statement reconciliations
 
 
 
 
 

 
 

 
 
Appendix 1 Income statement reconciliations
 
 
Quarter ended
 
31 March 2012
  
31 December 2011
  
31 March 2011
 
Managed 
Reallocation 
of one-off 
 items 
Statutory 
  
Managed 
Reallocation 
of one-off 
 items 
Statutory 
  
Managed 
Reallocation 
of one-off 
 items 
Statutory 
 
£m 
£m 
£m 
  
£m 
£m 
£m 
  
£m 
£m 
£m 
                       
Interest receivable
5,017 
- 
5,017 
  
5,234 
- 
5,234 
  
5,402 
(1)
5,401 
Interest payable
(2,010)
(8)
(2,018)
  
(2,158)
(2)
(2,160)
  
(2,100)
- 
(2,100)
                       
Net interest income
3,007 
(8)
2,999 
  
3,076 
(2)
3,074 
  
3,302 
(1)
3,301 
                       
Fees and commissions receivable
1,487 
- 
1,487 
  
1,590 
- 
1,590 
  
1,642 
- 
1,642
Fees and commissions payable
(290)
- 
(290)
  
(573)
- 
(573)
  
(260)
- 
(260)
Income from trading activities
1,264 
(1,052)
212 
  
242 
(480)
(238)
  
1,570 
(735)
835 
Gain/(loss) on redemption of own debt
- 
577 
577 
  
- 
(1)
(1)
  
- 
- 
- 
Other operating income (excluding insurance net premium income)
725 
(1,472)
(747)
  
405 
(200)
205 
  
710 
(319)
391 
Insurance net premium income
938 
- 
938 
  
981 
- 
981 
  
1,149 
- 
1,149 
                       
Non-interest income
4,124 
(1,947)
2,177 
  
2,645 
(681)
1,964 
  
4,811 
(1,054)
3,757 
                       
Total income
7,131 
(1,955)
5,176 
  
5,721 
(683)
5,038 
  
8,113 
(1,055)
7,058 
                       
Staff costs
(2,221)
(349)
(2,570)
  
(1,781)
(212)
(1,993)
  
(2,320)
(79)
(2,399)
Premises and equipment
(550)
(13)
(563)
  
(575)
(99)
(674)
  
(556)
(15)
(571)
Other administrative expenses
(819)
(197)
(1,016)
  
(838)
(458)
(1,296)
  
(865)
(56)
(921)
Depreciation and amortisation
(394)
(74)
(468)
  
(450)
(63)
(513)
  
(380)
(44)
(424)
Write down of goodwill and other intangible assets
- 
- 
- 
  
- 
(91)
(91)
        
                       
Operating expenses
(3,984)
(633)
(4,617)
  
(3,644)
(923)
(4,567)
  
(4,121)
(194)
(4,315)
                       
Profit before other operating charges
3,147 
(2,588)
559 
  
2,077 
(1,606)
471 
  
3,992 
(1,249)
2,743 
Insurance net claims
(649)
- 
(649)
  
(529)
- 
(529)
  
(912)
- 
(912)
                       
Operating profit/(loss) before impairment losses
2,498 
(2,588)
(90)
  
1,548 
(1,606)
(58)
  
3,080 
(1,249)
1,831 
Impairment losses
(1,314)
- 
(1,314)
  
(1,692)
(226)
(1,918)
  
(1,947)
- 
(1,947)
                       
Operating profit/(loss)
1,184 
(2,588)
(1,404)
  
(144)
(1,832)
(1,976)
  
1,133 
(1,249)
(116)
 


 
Appendix 1 Income statement reconciliations (continued)
 
 
Quarter ended
 
31 March 2012
  
31 December 2011
  
31 March 2011
 
Managed 
Reallocation 
of one-off 
 items 
Statutory 
  
Managed 
Reallocation 
of one-off 
 items 
Statutory 
  
Managed 
Reallocation 
of one-off 
 items 
Statutory 
 
£m 
£m 
£m 
  
£m 
£m 
£m 
  
£m 
£m 
£m 
                       
Operating profit/(loss)
1,184 
(2,588)
(1,404)
  
(144)
(1,832)
(1,976)
  
1,133 
(1,249)
(116)
Own credit adjustments (1)
(2,456)
2,456 
- 
  
(472)
472 
- 
  
(560)
560 
- 
Asset Protection Scheme (2)
(43)
43 
- 
  
(209)
209 
- 
  
(469)
469 
- 
Payment protection Insurance costs
(125)
125 
- 
  
- 
- 
- 
  
- 
- 
- 
Sovereign debt impairment
- 
- 
- 
  
(224)
224 
- 
  
- 
- 
- 
Amortisation of purchased intangible assets
(48)
48 
- 
  
(53)
53 
- 
  
(44)
44 
- 
Integration and restructuring costs
(460)
460 
- 
  
(478)
478 
- 
  
(145)
145 
- 
Gain/(loss) on redemption of own debt
577 
(577)
- 
  
(1)
1 
- 
  
- 
- 
- 
Strategic disposals
(8)
8 
- 
  
(82)
82 
- 
  
(23)
23 
- 
Bank levy
- 
- 
- 
  
(300)
300 
- 
  
- 
- 
- 
Bonus tax
- 
- 
- 
  
- 
- 
- 
  
(11)
11 
- 
Write-down of goodwill and other intangible assets
- 
- 
- 
  
(11)
11 
- 
  
- 
- 
- 
RFS Holdings minority interest
(25)
25 
- 
  
(2)
2 
- 
  
3 
(3)
- 
                       
Loss before tax
(1,404)
- 
(1,404)
  
(1,976)
- 
(1,976)
  
(116)
- 
(116)
Tax (charge)/credit
(139)
- 
(139)
  
186 
- 
186 
  
(423)
- 
(423)
                       
Loss from continuing operations
(1,543)
- 
(1,543)
  
(1,790)
- 
(1,790)
  
(539)
- 
(539)
Profit from discontinued operations, net of tax
5 
- 
5 
  
10 
- 
10 
  
10 
- 
10 
                       
Loss for the period
(1,538)
- 
(1,538)
  
(1,780)
- 
(1,780)
  
(529)
- 
(529)
Non-controlling interests
14 
- 
14 
  
(18)
- 
(18)
  
1 
- 
1 
                       
Loss attributable to ordinary and B shareholders
(1,524)
- 
(1,524)
  
(1,798)
- 
(1,798)
  
(528)
- 
(528)
 
Notes:
 
(1)
Reallocation of £1,009 million loss (Q4 2011 - £272 million; Q1 2011 - £266 million) to income from trading activities and £1,447 million loss (Q4 2011 - £200 million; Q1 2011 - £294 million) to other operating income.
(2)
Reallocation to income from trading activities.
 
 
 

 
 

 
 
 
 
 
 
 
 
Appendix 2
 
 
Businesses outlined for
disposal
 
 
 

 
 

 
 
Appendix 2 Businesses outlined for disposal
To comply with EC State Aid requirements the Group agreed to make a series of divestments by the end of 2013: the disposal of Direct Line Group, Global Merchant Services and its interest in RBS Sempra Commodities JV. The Group also agreed to dispose of its RBS England and Wales and NatWest Scotland branch-based businesses, along with certain SME and corporate activities across the UK ('UK branch-based businesses'). The disposals of Global Merchant Services and RBS Sempra Commodities JV businesses have now effectively been completed.
 
The sale of the Group's UK branch-based businesses to Santander UK plc continues to make good progress.
 
The disposal of Direct Line Group, the base case plan for which is by way of a public flotation, is targeted to commence in the second half of 2012, subject to market conditions. External advisors have been appointed to assist the Group with the disposal and the process of separation is proceeding to plan. In the meantime, the business continues to be managed and reported as a separate core division.
 
The table below shows total income and operating profit of Direct Line Group and the UK branch-based businesses.
 
 
 
Total income
  
Operating profit
before impairments
  
Operating profit
 
Q1 2012 
FY 2011 
  
Q1 2012 
FY 2011 
  
Q1 2012 
FY 2011 
 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
                 
Direct Line Group (1)
966 
4,286 
  
84 
407 
  
84 
407 
UK branch-based businesses (2)
226 
959 
  
118 
518 
  
79 
319 
                 
Total
1,192 
5,245 
  
202 
925 
  
163 
726 
 
The table below shows the estimated risk-weighted assets, total assets and capital of the businesses identified for disposal.
 
 
 
RWAs
  
Total assets
  
Capital
 
31 March 
2012 
31 December 
2011 
  
31 March 
2012 
31 December 
2011 
  
31 March 
2012 
31 December 
2011 
 
£bn 
£bn 
  
£bn 
£bn 
  
£bn 
£bn 
                 
Direct Line Group (1)
n/m 
n/m 
  
13.3 
13.9 
  
4.1 
4.4 
UK branch-based businesses (2)
10.5 
11.1 
  
19.1 
19.3 
  
1.0 
1.0 
                 
Total
10.5 
11.1 
  
32.4 
33.2 
  
5.1 
5.4 
 
Notes:
 
(1)
Total income includes investment income of £90 million (FY 2011 - £302 million). Total assets and estimated capital include approximately £0.9 billion of goodwill, of which £0.7 billion is attributed to Direct Line Group by RBS Group.
(2)
Estimated notional equity based on 10% (2011 - 9%) of RWAs.


 
Appendix 2 Businesses outlined for disposal (continued)
Further information on the UK branch-based businesses by division is shown in the tables below:
 
 
 
Division
  
Total
 
UK 
Retail 
UK 
Corporate 
  
Q1 2012 
FY 2011 
 
£m 
£m 
  
£m 
£m 
           
Income statement
          
Net interest income
79 
82 
  
161 
689 
Non-interest income
24 
41 
  
65 
270 
           
Total income
103 
123 
  
226 
959 
           
Direct expenses
          
  - staff
(18)
(20)
  
(38)
(158)
  - other
(26)
(14)
  
(40)
(166)
Indirect expenses
(17)
(13)
  
(30)
(117)
           
 
(61)
(47)
  
(108)
(441)
           
Operating profit before impairment losses
42 
76 
  
118 
518 
Impairment losses
(14)
(25)
  
(39)
(199)
           
Operating profit
28 
51 
  
79 
319 
           
Analysis of income by product
          
Loans and advances
28 
71 
  
99 
436 
Deposits
22 
33 
  
55 
245 
Mortgages
33 
- 
  
33 
134 
Other
20 
19 
  
39 
144 
           
Total income
103 
123 
  
226 
959 
           
Net interest margin
4.66% 
2.88% 
  
3.55% 
3.57% 
Employee numbers (full time equivalents rounded to the
  nearest hundred)
2,800 
1,600 
  
4,400 
4,400 
 
 
 
Division
  
Total
 
UK 
Retail 
UK 
Corporate 
Markets 
  
31 March 
2012 
31 December 
2011 
 
£bn 
£bn 
£bn 
  
£bn 
£bn 
             
Capital and balance sheet
            
Total third party assets (excluding mark-to-
  market derivatives)
7.1 
11.6 
- 
  
18.7 
18.9 
Loans and advances to customers (gross)
7.3 
12.0 
- 
  
19.3 
19.5 
Customer deposits
8.7 
12.7 
- 
  
21.4 
21.8 
Derivative assets
- 
- 
0.4 
  
0.4 
0.4 
Derivative liabilities
- 
- 
- 
  
- 
0.1 
Risk elements in lending
0.5 
1.0 
- 
  
1.5 
1.5 
Loan:deposit ratio
80% 
91% 
- 
  
86% 
86% 
Risk-weighted assets
3.6 
6.9 
- 
  
10.5 
11.1 
 
 
 

 

 
 
 



 

 
 
Signatures


 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.







 
 
Date: 4 May 2012
 
 
THE ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
 
 
 
By:
/s/ Jan Cargill
 
 
Name:
Title:
Jan Cargill
Deputy Secretary