RBS 2003 Annual Report Download - page 75

73
Operating and financial review
Annual Report and Accounts 2003
Integration costs
2003 2002 2001
£m £m £m
Staff costs 125 530 598
Premises and equipment 31 127 64
Other administrative expenses 73 298 188
Depreciation of tangible fixed assets — 225
229 957 875
At 31 December Currency translation Charge to profit Utilised during At 31 December
2002 adjustments and loss account the year 2003
£m £m £m £m £m
Staff costs – redundancy 71 — 58 (110) 19
Staff costs – other 15 1 67 (56) 27
Premises and equipment — — 31 (29) 2
Other 66 (2) 73 (104) 33
152 (1) 229 (299) 81
All integration initiatives in relation to NatWest have been
implemented. The programme’s annualised benefits, comprising
£890 million revenue benefits and £1,440 million cost savings,
were fully implemented less than three years after the acquisition
of NatWest. Total costs for the integration programme were
£2.3 billion.
Integration costs in relation to NatWest were £143 million in
2003, £810 million in 2002 and £847 million in 2001.
Citizens incurred £63 million of integration costs in 2003 in
respect of completed acquisitions.
Expenditure of £134 million and £13 million was incurred in
2002 relating to the integration of Mellon Regional Franchise
and Medford respectively compared with £28 million in respect
of Mellon Regional Franchise in 2001. The transaction benefits
are being delivered more quickly than was planned.
Integration costs in 2003 relating to other acquisitions were
£23 million.
During 2002 and 2003, the Group committed to various
integration initiatives following the acquisition of Churchill
Insurance and various acquisitions by Citizens. Accruals in
relation to these integration costs, together with NatWest
related integration costs, are set out below.