Royal Bank of Scotland has reduced its exposure to commercial real estate by around a quarter in the two years to 31 December.
In its full-year results released today, the part-nationalised bank said that most of the decrease is in its non-core portfolio as a result of runoff and assets sales.
The non-core portfolio totalled £34.3bn, or 46% of its total portfolio, as at 31 December 2011 – down from 52% a year earlier – and includes the bank’s “challenging” Ulster Bank exposure.
The bank said that with the exception of exposure in Spain and in Ireland, it has minimal commercial real estate exposure to other eurozone periphery countries.
Breaking its total £74.8bn portfolio down by geography reveals that its UK exposure, excluding Northern Ireland, is £42.7bn, followed by the Republic of Ireland and Northern Ireland on £15.2bn.
In Western Europe it has £8.6bn, in the US it has £6.9bn and rest of the world, £1.2bn.
RBS said its UK portfolio is focused on London and the South East (44%), with the remainder spread across the UK regions.
Exposure in Spain is predominantly in the non-core portfolio and totals £2.3bn. The remainder of the Spanish portfolio has already been subject to material write-off and provision levels have been assessed based on re-appraised values.
It said there were significant differences in values based on geographic location and asset type.
bridget.oconnell@estatesgazette.com
