rbs201108056k10.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 August 5, 2011
 
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:

 
 
 
 
 
 
 
 
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 RBS Insurance, 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. Due to the complex nature of the process required to separate the divesting branches and associated assets, and the desire to minimise customer disruption, the transaction is now expected to complete in the second half of 2012, subject to regulatory approvals and other conditions.
 
Preparations for the disposal of RBS Insurance, by way of public flotation or a trade sale, targeted for the second half of 2012 continue. External advisors were appointed during Q4 2010 and the process of separation is proceeding on 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 RBS Insurance, and the UK branch-based businesses.
 
 
Total income
  
Operating profit/(loss)
before impairments
  
Operating profit/(loss)
 
H1 2011 
FY 2010 
  
H1 2011 
FY 2010 
  
H1 2011 
FY 2010 
 
£m 
£m 
  
£m 
£m 
  
£m 
£m 
                 
RBS Insurance (1)
2,116 
4,369 
  
206 
(295)
  
206 
(295)
UK branch-based businesses (2)
472 
902 
  
248 
439 
  
185 
160 
                 
Total
2,588 
5,271 
  
454 
144 
  
391 
(135)
 
The table below shows the estimated risk-weighted assets, total assets and capital of the businesses identified for disposal.
 
 
RWAs
  
Total assets
  
Capital
 
30 June 
2011 
31 December 
2010 
  
30 June 
2011 
31 December 
2010 
  
30 June 
2011 
31 December 
2010 
 
£bn 
£bn 
  
£bn 
£bn 
  
£bn 
£bn 
                 
RBS Insurance (1)
n/m 
n/m 
  
12.7 
12.4 
  
4.2 
4.0 
UK branch-based businesses (2)
11.5 
13.2 
  
19.6 
19.9 
  
1.0 
1.2 
                 
Total
11.5 
13.2 
  
32.3 
32.3 
  
5.2 
5.2 
 
Notes:
(1)
As reported in the Interim Results for the half year ended 30 June 2011 and Annual Results for the year ended 31 December 2010 and excluding non-core business. Estimated capital includes approximately £1.0 billion of goodwill.
(2)
Estimated notional equity based on 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 
  
H1 2011 
FY 2010 
 
£m 
£m 
  
£m 
£m 
           
Income statement
          
Net interest income
146 
200 
  
346 
656 
Non-interest income
50 
76 
  
126 
246 
           
Total income
196 
276 
  
472 
902 
           
Direct expenses
          
  - staff
(39)
(43)
  
(82)
(176)
  - other
(47)
(35)
  
(82)
(144)
Indirect expenses
(37)
(23)
  
(60)
(143)
           
 
(123)
(101)
  
(224)
(463)
           
Operating profit before impairment losses
73 
175 
  
248 
439 
Impairment losses (1)
(39)
(24)
  
(63)
(279)
           
Operating profit
34 
151 
  
185 
160 
           
Analysis of income by product
          
Loans and advances
69 
174 
  
243 
445 
Deposits
53 
77 
  
130 
261 
Mortgages
65 
- 
  
65 
120 
Other
9 
25 
  
34 
76 
           
Total income
196 
276 
  
472 
902 
           
Net interest margin
4.61% 
3.07% 
  
3.57% 
3.24% 
Employee numbers (full time equivalents rounded to the
  nearest hundred)
3,000 
1,600 
  
4,600 
4,400 
 
Note:
(1)
Q1 2011 impairment losses benefitted from £54 million of latent and other provision releases.
 
 
Division
  
Total
 
UK 
Retail 
UK 
Corporate 
Global 
Banking 
& Markets 
  
30 June 
2011 
31 December 
2010 
 
£bn 
£bn 
£bn 
  
£bn 
£bn 
             
Capital and balance sheet
            
Total third party assets
6.6 
13.0 
- 
  
19.6 
19.9 
Loans and advances to customers (gross)
6.9 
13.4 
- 
  
20.3 
20.7 
Customer deposits
8.8 
14.9 
- 
  
23.7 
24.0 
Derivative assets
- 
- 
0.4 
  
0.4 
n/a 
Derivative liabilities
- 
- 
0.1 
  
0.1 
n/a 
Risk elements in lending
0.5 
1.1 
- 
  
1.6 
1.7 
Loan:deposit ratio
79% 
90% 
- 
  
86% 
86% 
Risk-weighted assets
3.3 
8.2 
- 
  
11.5 
13.2 
 
 

 
 
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: 5 August 2011
 
 
THE ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
 
 
 
By:
/s/ Jan Cargill
 
 
Name:
Title:
Jan Cargill
Deputy Secretary