RBS 2003 Annual Report Download - page 116

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Report of the directors
Report of the directors
The directors have pleasure in presenting their report together
with the audited accounts for the year ended 31 December 2003.
Profit and dividends
The profit attributable to the ordinary shareholders of the
company for the year ended 31 December 2003 amounted to
£2,315 million (after preference dividends of £261 million and
the Additional Value Shares dividend of £1,463 million)
compared with £1,971 million for the year ended 31 December
2002, as set out in the consolidated profit and loss account on
page 141.
An interim dividend of 14.6p per ordinary share was paid on
10 October 2003 totalling £431 million (2002 – £368 million).
The directors now recommend that a final dividend of 35.7p
per ordinary share totalling £1,059 million (2002 – £899 million)
be paid on 4 June 2004 to members on the register at the
close of business on 12 March 2004. If this recommendation is
approved by shareholders at the annual general meeting on 29
April 2004, the retained profit for the year will amount to £825
million (2002 – £704 million). Subject to the approval of the
dividend by shareholders at the annual general meeting,
shareholders will be offered the choice of taking ordinary
shares in lieu of cash in respect of the final dividend.
The final dividend of 55p per share on the Additional Value
Shares issued in connection with the acquisition of NatWest
was paid on 1 December 2003, totalling £1.5 billion.
Activities and business review
The company is a holding company owning the entire issued
ordinary share capital of the Royal Bank, the principal direct
operating subsidiary undertaking of the company. The “Group”
comprises the company and all its subsidiary and associated
undertakings, including the Royal Bank and NatWest. The
Royal Bank and NatWest and their subsidiary undertakings are
engaged principally in providing a comprehensive range of
banking, insurance and other financial services. Details of the
principal subsidiary undertakings of the company are shown in
Note 17. A review of the business for the year to 31 December
2003, of recent events and of likely future developments is
contained in the operating and financial review.
Business developments
In January 2003, 49% of the Royal Bank’s economic interest in
Royal Bank of Scotland Unit Trust Management was sold to
Aviva plc.
In January 2003, the entire issued ordinary share capital of
NatWest was transferred from the company to the Royal Bank.
In January 2003, Citizens completed the acquisition of
Pennsylvania-based commercial bank, Commonwealth
Bancorp, Inc.
In June 2003, RBS completed the acquisition of Nordisk
Renting AB, a Swedish leasing company.
In July 2003, Citizens completed the acquisition of Port
Financial Corp., the holding company of the Massachusetts
savings bank, CambridgePort Bank.
In July 2003, RBS completed the purchase of the credit card
and personal loans portfolios of Frankfurt-based Santander
Direkt Bank.
In July 2003, RBS completed the sale of the Miami-based Latin
American private banking operations of Coutts Group.
In September 2003, RBS completed the acquisition of
Churchill Insurance Group PLC.
In September 2003, Citizens announced the acquisition of
Thistle Group Holdings, Co., the holding company of
Pennsylvania-based Roxborough Manayunk Bank. This
acquisition was completed in January 2004.
In October 2003, RBS announced that it had agreed terms for
a recommended acquisition for cash of First Active plc. This
acquisition was completed in January 2004.
In October 2003, Citizens completed the acquisition of
Community Bancorp, Inc., the holding company of
Massachusetts-based Community National Bank.
In November 2003, Coutts Bank (Switzerland) Limited
completed the acquisition of Zurich-based private bank, Bank
von Ernst & Cie AG.
Going concern
The directors are satisfied that the Group has adequate
resources to continue in business for the foreseeable future.
For this reason, they continue to adopt the ‘going concern’
basis for preparing the accounts.