RBS 2012 final Results

DividendMax Ltd.

RBS 2012 final Results

Highlights

Rebuilding financial resilience

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RBS has made good progress on the safety and soundness agenda at the heart of its five year recovery plan:

 

Funded assets were down £107 billion in 2012 to £870 billion, driven by Non-Core and Markets.

 

Risk-weighted assets decreased by £48 billion to £460 billion, with £21 billion Q4 reduction.

 

Core Tier 1 ratio of 10.3%, up from 9.7% in 2011(2).

 

Strong and liquid balance sheet, with loan book now 100% funded by customer deposits.

 

Short-term wholesale funding down a further £60 billion in 2012 to £42 billion, covered 3.5 times by the Group's high quality liquid asset portfolio.



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RBS's strengthening credit profile has been recognised in traded debt markets, with CDS spreads more than halving over the course of 2012 and secondary bond spreads tightening by more than 340 basis points. This strengthening resulted in a 2012 accounting charge for improved own credit of £4,649 million, compared with a credit of £1,914 million in 2011.



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Loan impairment provision balances were raised to £21.3 billion, increasing coverage of risk elements in lending to 52%, compared with 49% in 2011.



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Risk-weighted assets were 53% of funded assets at 31 December 2012, above the average of peers in the UK and Europe. The Group absorbed £44 billion of regulatory RWA increases in 2012. 

 

Significant improvement in operating performance in 2012

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Group operating profit in 2012 was £3,462 million, almost double 2011's result, with a steady improvement in Core and a 32% reduction in Non-Core losses.



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Core operating profit totalled £6,341 million, up 5% from 2011, with Retail & Commercial down 6%, reflecting weaker income, but Markets improving by 68%.

 

Income was down 4%, driven by UK Retail and International Banking.


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