Statutory results Condensed consolidated statement of changes in equity for the period ended 31 December 2016 Year ended Quarter ended 31 December 31 December 31 December 30 September 31 December 2016 2015 2016 2016 2015 £m £m £m £m £m Called-up share capital At beginning of period 11,625 6,877 11,792 11,756 6,984 Ordinary shares issued 198 159 31 36 51 Conversion of B shares (1) - 4,590 - - 4,590 Preference shares redeemed (2) - (1) - - - At end of period 11,823 11,625 11,823 11,792 11,625 Paid-in equity At beginning of period 2,646 784 4,582 2,536 2,646 Redeemed/reclassified (3) (110) (150) - - - Additional Tier 1 capital notes issued (4) 2,046 2,012 - 2,046 - At end of period 4,582 2,646 4,582 4,582 2,646 Share premium account At beginning of period 25,425 25,052 25,663 25,628 25,315 Ordinary shares issued 268 373 30 35 110 At end of period 25,693 25,425 25,693 25,663 25,425 Merger reserve At beginning of period 10,881 13,222 10,881 10,881 13,222 Transfer to retained earnings - (2,341) - - (2,341) At end of period 10,881 10,881 10,881 10,881 10,881 Available-for-sale reserve At beginning of period 307 299 188 232 210 Unrealised gains 282 31 69 24 139 Realised (gains)/losses (376) 27 (1) (91) 2 Tax 25 (16) (18) 23 (44) Recycled to profit or loss on ceding control of Citizens (5) - 9 - - - Transfer to retained earnings - (43) - - - At end of period 238 307 238 188 307 Cash flow hedging reserve At beginning of period 458 1,029 1,565 1,603 810 Amount recognised in equity 1,867 712 (471) 199 (65) Amount transferred from equity to earnings (1,102) (1,354) (279) (265) (333) Tax (193) 98 215 28 46 Recycled to profit or loss on ceding control of Citizens (6) - (36) - - - Transfer to retained earnings - 9 - - - At end of period 1,030 458 1,030 1,565 458 Foreign exchange reserve At beginning of period 1,674 3,483 2,898 2,706 1,679 Retranslation of net assets 1,470 (22) (40) 278 17 Foreign currency (losses)/gains on hedges of net assets (278) (176) 35 (36) (26) Tax 62 (11) (6) 12 - Transfer to retained earnings - (642) - - - Recycled to profit or loss on disposal of businesses (7) (40) 4 1 (62) 4 Recycled to profit or loss on ceding control of Citizens (7) - (962) - - - At end of period 2,888 1,674 2,888 2,898 1,674 Capital redemption reserve At beginning of period 4,542 9,131 4,542 4,542 9,132 Conversion of B shares (1) - (4,590) - - (4,590) Preference shares redeemed (2) - 1 - - - At end of period 4,542 4,542 4,542 4,542 4,542 Refer to page 53 for footnotes. 51 RBS – Annual results 2016