RBS 2003 Annual Report Download - page 5

Annual Report and Accounts 2003
03
Chairman’s statement
The highlight of 2003, the successful
completion of the integration of NatWest,
seems a long time ago. Our focus is now
on maintaining our income growth, using
the experience gained in integration to
improve our efficiency further, and
delivering the benefits of the various
acquisitions which we made during 2003.
By the time of completing the NatWest integration in 2003, the
annualised transaction benefits amounted to £2,030 million,
against the promised amount of £1,420 million in our bid for
NatWest, in December 1999.
Financial performance
In 2003, the Group profit before tax, goodwill amortisation and
integration costs increased by 11% to £7,151 million (2002 –
£6,451 million). Total income grew by 14% to £19,229 million
(2002 – £16,815 million), while operating expenses grew by
only 9% to £8,389 million (2002 – £7,669 million).
Dividends
The Board has recommended a final dividend for the year of
35.7p per share which, with the interim dividend of 14.6p per
share, makes a total for the year of 50.3p per share, an increase
of 15%. Our third and final Additional Value Share dividend of
55.0p per share was paid on 1 December 2003. The total
amount payable to shareholders in the form of ordinary and
AVS dividends in respect of 2003 was £2,953 million, against
£2,065 million for 2002.
Staff profit sharing
The staff profit share for the year has been set at 10% of basic
salaries, reflecting the strong financial performance of the Group.
Business developments
During 2003 we completed seven acquisitions and announced
two others which were completed in January 2004. These
acquisitions strengthened the international capabilities of the
Group. Four were in the United States, three were in Continental
Europe and one each in Ireland and the United Kingdom. The
total amount paid for these acquisitions was £3 billion.
In February 2004 we announced the acquisition of the credit
card portfolio of People’s Bank of Connecticut with 1.1 million
customers and £1.3 billion of receivables.
Board of directors
The Board is committed to high standards of corporate
governance and business integrity in all its activities. The Board
is also conscious of the Group’s impact on social issues and
during 2003 ratified the Group’s Corporate Responsibility Policy.
We were deeply saddened by the death of Bill Wilson on 25
December 2003. Bill had been a member of the Board since
1993, and his wise counsel in Board discussions and contribution
as Chairman of the Audit Committee will be greatly missed. We
are grateful to Colin Buchan for taking over as interim Chairman
of the Audit Committee.
Outlook
During 2003 there were signs of improving economic
conditions in the United States and Continental Europe, while
the United Kingdom economy maintained its positive trend. In
the United States, monetary and fiscal policies remain
expansive. Overall, while uncertainties remain, the economic
outlook seems brighter than it has for several years.
A key aspect of our strategy is to build and retain strategic
options. As a result, the future progress of the Group is not
dependent on any particular economic scenario, or market
development. We remain confident that the strength, diversity
and flexibility of the Group will enable us to continue to deliver
value for our customers, employees and shareholders.
Sir George Mathewson, Chairman