- ISIN NL0000723377
The Royal Bank of Scotland N.V.
Proposed transfers of a substantial part of the business activities of RBS N.V. to RBS plc
The Royal Bank of Scotland N.V.
19.04.2011 16:46
Dissemination of a Adhoc News, transmitted by DGAP - a company of
EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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19th April 2011
The Boards of The Royal Bank of Scotland Group plc (RBSG), The Royal Bank of
Scotland plc (RBS plc), RBS Holdings N.V. and The Royal Bank of Scotland N.V.
(RBS N.V.) have approved the proposed transfers of a substantial part of the
business activities of RBS N.V. to RBS plc (the 'Proposed Transfers'), subject,
amongst other matters, to regulatory and other approvals, further tax and other
analysis in respect of the assets and liabilities to be transferred and
employee consultation procedures. This follows a period of extensive dialogue
with key regulators and rating agencies. The Proposed Transfers will not
include the Consortium Shared Assets referred to below.
The Proposed Transfers will streamline the manner in which the Global Banking
& Markets (GBM) and Global Transaction Services (GTS) businesses of RBSG and
its subsidiaries and subsidiary undertakings (the 'RBS Group') interact with
clients with simplified access to the GBM and GTS product suites. They will
provide benefits to clients in effecting easier interaction with the RBS Group
including management of collateral. Clients will continue to deal, and conduct
business, with their local RBS teams as at present. There is no requirement for
clients to take any action now and any action required in connection with the
Proposed Transfers will be communicated in a timely way with a view to ensuring
a smooth transition.
The Proposed Transfers will not result in any change to the current business
strategy for any of the transferred RBS N.V. businesses and the way in which
the RBS Group commercially operates will remain unchanged.
The Proposed Transfers are consistent with RBS Group's efforts to simplify its
structure, thereby reducing risk, cost and complexity. In addition, the
Proposed Transfers are expected to result in a simplified management and
reporting framework for the RBS Group across the multiple jurisdictions in
which RBS plc and RBS N.V. operate.
RBS N.V.'s businesses include the following product areas: Equities &
Structured Retail Products, Emerging Markets, Lending, Global Transaction
Services (GTS), and Short Term Markets & Financing (STMF). RBS N.V. also
currently holds directly and indirectly certain other assets which are owned by
RBSG jointly with the Dutch State and Santander (the 'Consortium Shared
Assets'). As at 31 December 2010, RBS N.V. had consolidated total assets of
EUR200.4bn (£172.8bn), a Core Tier 1 Capital Ratio of 8.7% and a Tier 1 Capital
Ratio of 11.0%. As at the same date, RBSG had consolidated total assets of
£1.5tn, a Core Tier 1 Capital Ratio of 10.7% and a Tier 1 Capital Ratio of
12.9% and RBS plc, the receiving entity for the Proposed Transfers, had
consolidated total assets of £1.3tn, a Core Tier 1 Capital Ratio of 8.4% and a
Tier 1 Capital Ratio of 10.1%. The Proposed Transfers are not expected to have
any impact on RBSG's capital position.
It is expected that the Proposed Transfers will be implemented on a phased
basis over a period ending 31 December 2013. A large part of the Proposed
Transfers (including the transfers of certain securities issued by RBS N.V.) is
expected to have taken place by the end of 2012. This will be subject, amongst
other matters, to regulatory and other approvals, further tax and other
analysis in respect of the assets and liabilities to be transferred and
employee consultation procedures.
RBS plc and RBS N.V. have discussed the Proposed Transfers in detail with the
UK Financial Services Authority and De Nederlandsche Bank ('DNB') and they will
continue to be involved as the Proposed Transfers progress through to
completion. Approvals from these and other regulators will be required prior to
execution. Where available and practicable, statutory transfer schemes will be
used to implement the Proposed Transfers which may require court approval.
Due to legal constraints, securities and related guarantees which are governed
by New York, New South Wales, New Zealand and Hong Kong law (including the
three series of Trust Preferred Securities issued by RBS N.V. Capital Funding
Trusts V, VI and VII) are currently not expected to be transferred to RBS plc
pursuant to the statutory transfer schemes which are anticipated to be used to
implement the Proposed Transfers. Alternative steps will be considered in
relation to such securities and guarantees, where reasonably practicable in
RBS's opinion. In respect of securities and guarantees governed by other laws
which have been issued by RBS N.V., further analysis is ongoing to establish
whether they will or will not be transferred to RBS plc pursuant to the
Proposed Transfers and further announcements will be made in due course. In the
meantime, holders of RBS N.V. securities are not required to take any action in
connection with the Proposed Transfers. The proposed transfers of securities
from RBS N.V. to RBS plc are not, of themselves, expected to change the price
that RBS plc, as part of its normal market making activities, may bid for such
securities. However, RBS cannot guarantee the price at which such securities
may trade. The market prices for such securities may be impacted by a number of
factors, including the value of the assets underlying such securities and
prevailing market conditions, any of which may affect the value of the
securities.
For legal, tax and other reasons, there are expected to be certain operations,
assets and other liabilities in RBS N.V. which will not be transferred to RBS
plc. RBSG is committed to providing the necessary support to ensure that RBS
N.V. continues to meet its commitments during and after the Proposed Transfers.
Following completion of the Proposed Transfers, RBS N.V. will continue to be
authorised and regulated by DNB.
The RBS Group has held detailed discussions on the Proposed Transfers with the
three main rating agencies, Moody's, Standard & Poor's and Fitch. The plan for
the Proposed Transfers has been designed not to impact the ratings of RBS N.V.
or RBS plc. It is anticipated that the agencies will publish their credit
opinions following this announcement.
Certain unaudited pro forma condensed consolidated financial information
relating to RBS Holdings N.V. is set out in the Appendix to this announcement.
For Further Information Contact:
RBS Group Investor Relations RBS Group Media Relations
Emete Hassan, Head of Debt Investor Michael Strachan, Group Media
Relations Centre
+44 207 672 1758 +44 131 523 4414
Disclaimer
No person should place any reliance on the information in this announcement
concerning securities/guarantees which are expected to be retained by RBS N.V.
in connection with making an investment decision or for any other purpose and
should be aware that changes to the current proposals (including, without
limitation, to the identity of the securities/guarantees to be retained, the
eventual manner in which securities/guarantees are proposed to be transferred
and to the timing pursuant to which they are proposed to be transferred) may be
made if required, or if determined by RBS N.V. or RBS plc (in their absolute
discretion) to be desirable for commercial or other reasons. Accordingly,
nothing in this announcement should be taken as (or is) a representation that
any of the securities/guarantees of RBS N.V. will be transferred or retained,
whether in the manner described in this announcement, in accordance with the
timing set out in this announcement, or at all. For the avoidance of doubt,
this announcement has been prepared and circulated solely for information
purposes and does not constitute an offer to any person. If you are in any
doubt as to whether there is any tax or other impact on you as a result of the
Proposed Transfers, please discuss such matters with your advisers.
Cautionary Statement
Certain statements found in this document may constitute 'forward-looking
statements' as defined in the U.S. Private Securities Litigation Reform Act of
1995. Such 'forward-looking statements' reflect management's current views with
respect to certain future events and financial performance and include any
statement that does not directly relate to any historical or current fact.
Words such as 'anticipate,' 'believe,' 'expect,' 'estimate,' 'forecast,'
'intend,' 'plan,' 'project' and similar expressions which indicate future
events and trends may identify 'forward-looking statements'. In particular,
this document includes forward-looking statements relating, but not limited, to
the Proposed Transfers. Such statements are based on current plans, estimates
and projections and are subject to various risks, uncertainties and other
factors that could cause actual results to differ materially from those
projected or implied in the 'forward-looking statements'. Certain
'forward-looking statements' are based upon current assumptions of future
events which may not prove to be accurate. Other factors that could cause
actual results to differ materially from those estimated by the forward-looking
statements contained in this document include, but are not limited to: the
ability to complete restructurings on a timely basis; regulatory or legal
changes (including those requiring any restructuring of the operations of RBSG,
RBS plc, RBS Holdings N.V. or RBS N.V.) in the United Kingdom, the Netherlands,
the United States and other countries in which these entities operate; changes
in UK and foreign laws, regulations, accounting standards and taxes, including
changes in regulatory capital regulations and liquidity requirements; and the
success of RBSG, RBS plc, RBS Holdings N.V. or RBS N.V. in managing the risks
involved in the foregoing.
Undue reliance should not be placed on 'forward-looking statements' as such
statements speak only as of the date of this document. Neither RBSG, RBS plc,
RBS Holdings N.V. nor RBS N.V. undertake to update any forward-looking
statement contained herein to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
The information, statements and opinions contained in this document do not
constitute a public offer under any applicable legislation or an offer to sell
or solicitation of any offer to buy any securities or financial instruments or
any advice or recommendation with respect to such securities or other financial
instruments.
Background
This appendix provides pro forma financial information as at and for the year
ended 31 December 2010 for RBS Holdings N.V. The proposed transfers of a
substantial part of the business activities of RBS N.V. to RBS plc ('the
Proposed Transfers') collectively constitute a significant event and historical
financial information on a pro forma basis is provided to give investors a
better understanding of what the results of operations and financial position
of RBS N.V. might have looked like had the transfers to RBS plc occurred in
respect of the unaudited pro forma condensed consolidated Statement of
Financial Position as at 31 December 2010 and, in respect of the unaudited pro
forma condensed consolidated income statements on 1 January of the respective
years. The Proposed Transfers are expected to be implemented on a phased basis
over a period ending 31 December 2013.
For the purposes of the pro forma financial information, RBS Holdings N.V.
comprises RBS Holdings N.V. and its consolidated subsidiaries.
The pro forma financial information has been prepared for illustrative purposes
only on the basis of estimates and assumptions about which assets and
liabilities will be transferred. These assumptions are preliminary and subject
to ongoing analysis with respect to which specific assets and liabilities will
in fact be transferred and which will be retained in RBS N.V. The pro forma
information addresses a hypothetical situation and does not represent the
actual position or the results of RBS Holdings N.V. nor is it necessarily
indicative of the results of operations or financial position that may, or may
be expected to, be achieved in the future.
The pro forma financial information includes the following condensed
consolidated pro forma information for RBS Holdings N.V. (i) a pro forma
condensed consolidated statement of financial position as at 31 December 2010,
(ii) a pro forma condensed consolidated income statement for each of the years
ended 31 December 2010, 31 December 2009 and 31 December 2008, and (iii) Notes
to the pro forma financial information.
As at the date of this announcement, Management of RBS Holdings N.V. is not
aware of any matters that could impact the results and financial position as
presented in the pro forma financial information.
Unaudited pro forma Condensed Consolidated Statement of Financial Position as
at 31 December 2010
RBS Holdings Proposed Pro Forma
N.V.(1) Transfers Total
(2) (3)(4)
EURm EURm EURm
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
Cash and balances at central banks 8,323 8,142 181
Loans and advances to banks 26,705 25,246 1,459
Loans and advances to customers 44,496 37,476 7,020
Debt securities 52,260 23,294 28,966
Equity shares 22,634 21,131 1,503
Settlement balances 3,573 3,399 174
Derivatives 28,272 25,837 2,435
Other assets 14,119 10,481 3,638
--------------------------------------------------------------------------------
Total assets 200,382 155,006 45,376
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Liabilities
Deposits by banks 31,985 10,682 21,303
Customer accounts 54,905 50,258 4,647
Debt securities in issue 53,411 46,042 7,369
Settlement balances and short 5,202 4,936 266
positions
Derivatives 35,673 31,467 4,206
Other liabilities 14,234 9,049 5,185
--------------------------------------------------------------------------------
Total liabilities 195,410 152,434 42,976
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Equity
Non-controlling interests 24 10 14
Shareholders of the parent company 4,948 2,562 2,386
--------------------------------------------------------------------------------
Total equity 4,972 2,572 2,400
--------------------------------------------------------------------------------
Total equity and liabilities 200,382 155,006 45,376
Notes: (1) This financial information for RBS Holdings N.V. as at 31
December 2010 has been extracted from audited financial information contained
within the Annual Report and Accounts of RBS Holdings N.V. published on 29
March 2011.
(2) This represents the value of the assets, liabilities and equity as at 31
December 2010 proposed to be transferred to RBS plc over the period up until 31
December 2013. See 'Notes to the pro forma financial information relating to
RBS Holdings N.V.' for further information.
(3) This represents the value of the assets, liabilities and equity as at 31
December 2010 assuming the Proposed Transfers had occurred at that date.
(4) As part of the Proposed Transfers it is assumed that all intercompany
transactions are settled and that the retained business is refinanced according
to its funding needs.
Unaudited pro forma Condensed Consolidated Income Statement for the year ended
31 December 2010
RBS Holdings Proposed Pro Forma
N.V. (1) Transfers (2) Total (3)
EURm EURm EURm
--------------------------------------------------------------------------------
Net interest income 1,427 986 441
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Fees and commissions 1,152 1,019 133
receivable
--------------------------------------------------------------------------------
Fees and commissions payable 214 113 101
Income from trading activities 1,131 1,074 57
Other operating (loss)/income (52) 108 (160)
--------------------------------------------------------------------------------
Non-interest income 2,445 2,314 131
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Total income 3,872 3,300 572
--------------------------------------------------------------------------------
Operating expenses (3,380) (3,035) (345)
--------------------------------------------------------------------------------
Profit before impairment 492 265 227
losses
--------------------------------------------------------------------------------
Impairment losses (67) 93 (160)
--------------------------------------------------------------------------------
Operating profit before tax 425 358 67
--------------------------------------------------------------------------------
Tax (charge)/credit (302) (303) 1
--------------------------------------------------------------------------------
Profit for the year from 123 55 68
continuing operations
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Attributable to:
--------------------------------------------------------------------------------
Non-controlling interests (2) - (2)
--------------------------------------------------------------------------------
Shareholders of parent company 125 55 70
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For notes to this table refer to page 7.
Unaudited pro forma Condensed Consolidated Income Statement for the year ended
31 December 2009
RBS Holdings Proposed Pro Forma
N.V. (1) Transfers (2) Total (3)
EURm EURm EURm
--------------------------------------------------------------------------------
Net interest income 1,834 1,546 288
--------------------------------------------------------------------------------
Fees and commissions 1,506 1,297 209
receivable
--------------------------------------------------------------------------------
Fees and commissions payable (483) (455) (28)
(Loss)/income from trading (303) (634) 331
activities
Other operating loss (1,157) (724) (433)
--------------------------------------------------------------------------------
Non-interest (loss)/income (437) (516) 79
--------------------------------------------------------------------------------
Total income 1,397 1,030 367
--------------------------------------------------------------------------------
Operating expenses (4,621) (3,914) (707)
--------------------------------------------------------------------------------
Loss before impairment losses (3,224) (2,884) (340)
--------------------------------------------------------------------------------
Impairment losses (1,623) (1,055) (568)
--------------------------------------------------------------------------------
Operating loss before tax (4,847) (3,939) (908)
--------------------------------------------------------------------------------
Tax credit/(charge) 465 586 (121)
--------------------------------------------------------------------------------
Loss for the year from (4,382) (3,353) (1,029)
continuing operations
--------------------------------------------------------------------------------
Attributable to:
--------------------------------------------------------------------------------
Non-controlling interests (1) - (1)
--------------------------------------------------------------------------------
Shareholders of parent company (4,381) (3,353) (1,028)
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For notes to this table refer to page 7.
Unaudited pro forma Condensed Consolidated Income Statement for the year ended
31 December 2008
RBS Proposed Pro Forma
Holdings Transfers (2) Total (3)
N.V. (1)
EURm EURm EURm
--------------------------------------------------------------------------------
Net interest income 2,835 2,437 398
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Fees and commissions receivable 1,681 1,457 224
--------------------------------------------------------------------------------
Fees and commissions payable (374) (457) 83
Loss from trading activities (7,716) (5,494) (2,222)
Other operating loss (1,763) (1,816) 53
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Non-interest (loss)/income (8,172) (6,310) (1,862)
--------------------------------------------------------------------------------
Total income/(loss) (5,337) (3,873) (1,464)
--------------------------------------------------------------------------------
Operating expenses (7,844) (4,956) (2,888)
--------------------------------------------------------------------------------
Loss before impairment losses (13,181) (8,829) (4,352)
--------------------------------------------------------------------------------
Impairment losses (2,920) (1,973) (947)
--------------------------------------------------------------------------------
Operating loss before tax (16,101) (10,802) (5,299)
--------------------------------------------------------------------------------
Tax credit/(charge) 2,736 2,331 405
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Profit/(loss) for the year from (13,365) (8,471) (4,894)
continuing operations
--------------------------------------------------------------------------------
Attributable to:
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Non-controlling interests 15 - 15
--------------------------------------------------------------------------------
Shareholders of parent company (13,380) (8,471) (4,909)
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Notes:
(1) This financial information for RBS Holdings N.V. has been extracted from
audited financial information contained within the Annual Report and Accounts
of RBS Holdings N.V. published on 29 March 2011.
(2) This represents the income and expenses relating to the Proposed
Transfers for the years ended 31 December 2010, 2009 and 2008. See 'Notes to
the pro forma financial information relating to RBS Holdings N.V.' for further
information.
(3) This represents the income and expenses for the years ended 31 December
2010, 2009 and 2008 assuming the Proposed Transfers had occurred on 1 January
of the respective years.
1 Basis of preparation
The pro forma financial information for RBS Holdings N.V. as at 31 December
2010, and for the years ended 31 December 2010, 31 December 2009 and 31
December 2008 respectively, has been prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the IASB and adopted by the
European Union. The financial information has been extracted from audited
financial information for the year ended 31 December 2010 contained within the
Annual Report and Accounts of RBS Holdings N.V. published on 29 March 2011 and
does not reflect subsequent events.
The pro forma financial information has been prepared on the following basis:
-- The pro forma financial information has been prepared on the basis of
management's best estimate of the relevant third party assets and
liabilities of RBS N.V. that will be transferred to RBS plc.
-- The pro forma condensed consolidated statement of financial position of RBS
Holdings N.V. as at 31 December 2010 is presented to show the effect of the
Proposed Transfers as if the Proposed Transfers had occurred on 31 December
2010.
-- The pro forma condensed consolidated income statements of RBS Holdings N.V.
for the years ended 31 December 2010, 2009 and 2008 respectively, are
presented to show the effect of the Proposed Transfers as if the Proposed
Transfers had occurred on 1 January of the respective years.
-- Assets and liabilities to be transferred are presented based on their
carrying values determined under IFRS. The allocation of equity was
assessed on a global basis to reflect the expected level of capital support
required by the transferring and retained businesses. Pre-existing
intra-group funding was treated as settled upon transfer with new funding
allocated as needed to reflect the financing needs of the transferring and
retained businesses. Certain modifications were applied where, in the
opinion of management, material non-recurring profit and loss items could
be allocated more reliably on an individual basis.
-- The Proposed Transfers are subject, amongst other matters, to regulatory
and other approvals, further tax and other analysis in respect of the
assets and liabilities to be transferred and employee consultation
procedures, any of which may significantly change the pro forma information
from that presented.
The same accounting policies were followed in the pro forma financial
information as were applied in the preparation of RBS Holdings N.V. financial
statements for the year ended 31 December 2010.
2 Businesses to be transferred as part of the Proposed Transfers
RBS N.V.'s businesses include the following product areas: Equities &
Structured Retail Products, Emerging Markets, Lending, Global Transaction
Services (GTS), and Short Term Markets & Financing (STMF). The Proposed
Transfers comprise a number of subsidiary companies and specific product
portfolios together with associated hedging. RBS N.V. also currently holds
directly and indirectly certain other assets which are owned by RBSG jointly
with the Dutch State and Santander (the 'Consortium Shared Assets'); these are
part of the retained businesses.
It is expected that the Proposed Transfers will be implemented on a phased
basis over a period ending 31 December 2013. A large part of the Proposed
Transfers (including the transfers of certain securities issued by RBS N.V.) is
expected to have taken place by the end of 2012. This will be subject, amongst
other matters, to regulatory and other approvals, further tax and other
analysis in respect of the assets and liabilities to be transferred and
employee consultation procedures.
It is not certain whether such transfers (or any of them) will be effected at
the value used for the pro forma financial information. No person should place
any reliance on the pro forma financial information in connection with making
an investment decision or for any other purpose and should be aware that
changes to the current proposals (including, without limitation, to the assets
and liabilities to be transferred or retained, the eventual manner in which
such assets and liabilities are proposed to be transferred and to the timing
pursuant to which they are proposed to be transferred) may be made if required,
or if determined by RBS N.V. or RBS plc (in their absolute discretion) to be
desirable for commercial or other reasons. Accordingly, nothing in this pro
forma financial information should be taken as (or is) a representation that
any of the assets and liabilities referred to will be transferred or retained,
whether in a manner consistent with the figures contained in this pro forma
financial information, in accordance with the timing set out above, or at all.
For the avoidance of doubt, this pro forma financial information has been
prepared and circulated solely for information purposes and does not constitute
an offer to any person.
3 Overview of RBS Holdings N.V. after the Proposed Transfers
For legal, tax and other reasons, there are expected to be certain operations,
assets and liabilities in RBS N.V. which will not be transferred to RBS plc.
RBSG is committed to providing the necessary support to ensure that RBS N.V.
continues to meet its commitments during and after the Proposed Transfers.
Following completion of the Proposed Transfers, RBS N.V. will continue to be
authorised and regulated by DNB.
News Source: NASDAQ OMX
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Language: English
Company: The Royal Bank of Scotland N.V.
Netherlands
Phone:
Fax:
E-mail:
Internet:
ISIN: NL0000723377
WKN:
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