2008 Key points 

Strategic Review 

The Group is announcing a sweeping restructuring plan aimed at restoring standalone strength. We expect to: 

– Shift ~20% (£240 billion) of funded assets to Non-core Division for disposal/run down over 3-5 years 

– Deliver substantive change in all Core Division businesses each of which must meet 5 key tests1 

– Centre on UK with smaller, more focused global operations 

– Radically restructure GBM, taking out 45% of capital employed 

– Cut more than £2.5 billion out of the Group’s cost base 

– Have access to the Government Asset Protection Scheme 

– Drive major changes to management, processes and culture 

Key Financials – pro forma 

Our financial results verify the guidance we provided in our trading statement of 19 January 2009: 

Operating profit2 £80 million 

Loss attributable to ordinary shareholders3 £7.9 billion 

Total income4 £26.9 billion 

Impairment losses5 £7.0 billion 

Credit market losses6 £7.8 billion 

Write down of goodwill and other intangible assets7 £16.2 billion 

Total capital ratio 14.2% 

Core Tier 1 capital ratio8 7.0% 

Tier 1 capital ratio 9.9% 

Loss per ordinary share (61.0p) 

Commenting Stephen Hester, RBS Group Chief Executive, said: 

“We have moved purposefully to take major decisions that are necessary to restructure the Group. We are 

charting a path to standalone strength and with it the goal of justifying the support of the UK Government and all 

our shareholders.  

It is our job now to ensure that RBS moves forward. There are real and enduring strengths in the Group illustrated 

by good performances across a range of businesses in a very difficult year. The restoration of the company’s 

health will be based around these powerful customer franchises.  

We are, of course, in a privileged position to be able to restructure the Group with support from the UK 

Government. With that privilege come responsibilities that we mean to fulfil. We have many difficult decisions 

ahead of us and continued and major uncertainties in our markets. How we do business will be as important as 

the business we do as we navigate our way through these challenges. Everyone at RBS is now focused on the 

drive toward recovery”. 

(1) Strategic tests: Top tier competitive position in enduring customer franchise; 15%+ ROE in normal markets; Proportionate use of balance 

sheet, risk & funding; Capable of organic growth – but “market limited”; Connected to the Group – customers, products, people (2) Profit before 

tax, credit market write-downs and one-off items, purchased intangibles amortisation, write-down of goodwill and other intangible assets, 

integration costs, restructuring costs and share of shared assets (3) Before write-down of goodwill and other intangible assets (4) Excluding credit 

market write-downs and one-off items and share of shared assets. (5) Excluding impairment losses on reclassified assets. (6) Net of CDS hedging 

(7) net of tax (8) Pro forma for conversion of Preference Shares  

2008 Key points 

Key Financials – statutory 

Attributable loss £24.1 billion 

Loss before tax £40.7 billion 

Impairment losses £8.1 billion 

Total capital ratio 14.1% 

Core Tier 1 capital ratio 6.8