The Royal Bank of Scotland Group (RBS) continues to deliver on its plan to build a strong, simple
and fair bank for both customers and shareholders. RBS delivered against its 2015 targets.
RBS reported a loss attributable to ordinary shareholders of £1,979 million, compared with a loss of
£3,470 million in 2014. This included elevated restructuring costs (£2,931 million), as the bank's
repositioning accelerated, particularly in the Corporate & Institutional Banking (CIB) business.
Litigation and conduct costs (£3,568 million) increased as further steps were taken to clear legacy
obstacles from RBS's path to normalisation.
RBS continues to strengthen and reshape the balance sheet, building on a strong track record of
delivery. Risk-weighted assets (RWAs) reduced 32%, or £113 billion, including £109 billion from the
disposal of Citizens Financial Group and the accelerated run-down of Capital Resolution.
RBS intends to pay a final dividend on the Dividend Access Share (DAS) during the first half of 2016
subject to final Board and PRA approval, further normalising the capital structure of the bank and
removing a constraint on the resumption of capital distributions.
2015 results included a charge for goodwill impairment of £498 million attributed to Private Banking; a loss
on redemption of own debt of £263 million; and a gain of £1,147 million on loss of control of Citizens largely
arising from the reclassification of foreign exchange reserves (£962 million).
Adjusted operating profit(1) totalled £4,405 million compared with an adjusted operating profit of £6,056
million in 2014, lower primarily due to income attrition and disposal losses in the Capital Resolution business.
- UK Personal & Business Banking (UK PBB)(2) recorded an adjusted operating profit of £2,169 million,
broadly stable compared with the prior year. There was a good performance in mortgages with net
new lending totalling £9.3 billion, RBS’s strongest performance since 2009, albeit at lower overall
margins as customers shift from standard variable rate to fixed rate products. Adjusted operating
costs(3) were 3% lower, while credit quality remained good, with modest net impairment releases.
- Commercial Banking(2) adjusted operating profit was down 6% at £1,384 million, driven by a marginal
fall in income reflecting margin pressure and included a Q4 2015 loss of £34 million on the sale of
non-strategic asset portfolios. Deposit and lending volumes (net new lending of £3.6 billion excluding
business transfers, run-off and disposals), contributed to a 1% rise in net interest income.
- Ulster Bank RoI(2) adjusted operating profit declined 45% to £264 million as net impairment releases,
though still substantial, were lower than in 2014. Private Banking adjusted operating profit was 41%
lower at £113 million, while RBS International (RBSI) recorded an adjusted operating profit of £211
million, down 14%.
- CIB(2) made an adjusted operating loss of £55 million, compared with an adjusted operating profit of
£233 million in 2014, driven by lower income in line with the business’s reduced scale and risk
appetite. Adjusted expenses were down 15% as CIB continues to move towards a more sustainable
- Capital Resolution(2) recorded an adjusted operating loss of £412 million, compared with a profit of
£1,115 million in 2014, reflecting increased disposal losses as it accelerated the run-down of its
portfolios, reducing RWAs by almost half to £49.0 billion.
Adjusted bank return on equity was 11.0% in 2015, compared with (1.5%) in 2014. Franchise return on
equity(4) was 11.2%.
Common Equity Tier 1 (CET1) ratio improved 430 basis points to 15.5% in 2015, as RWAs declined by £113
billion, partially offset by the attributable loss and the accelerated recognition of previously committed
contributions in relation to the The Royal Bank of Scotland Group Pension Fund following a change in
Tangible net asset value was 352p per ordinary share at 31 December 2015, down from 374p at 31
December 2014 post restatement for the accounting policy change. This was largely driven by the
attributable loss for the year less the impact of reclassified reserves on the deconsolidation of Citizens and
cash flow hedging reclassifications from equity arising as the hedged transactions occurred.