RBS 2003 Annual Report Download - page 84

Wealth Management
2003 2002* 2001*
£m £m £m
Net interest income 465 460 464
Non-interest income 414 447 469
Total income 879 907 933
Expenses
– staff costs 275 301 282
– other 157 163 175
432 464 457
Contribution before provisions 447 443 476
Provisions for bad and doubtful debts – charge/(release) 9 (11) (5)
Contribution 438 454 481
£bn £bn £bn
Total assets 15.2 13.4 12.5
Investment management assets – excluding deposits 27.3 20.5 21.4
Customer deposits 29.3 29.1 29.1
Weighted risk assets 9.1 8.4 7.8
* Prior periods have been restated following the transfer of certain activities to Manufacturing.
2003 compared with 2002
Contribution was £438 million, £16 million or 4% lower than 2002.
Excluding the acquisition and disposals, income was up 1%,
with contribution before provisions up 4%. The charge for
provisions for bad and doubtful debts was £9 million compared
with a net release of £11 million in 2002.
Total income was down by 3% or £28 million to £879 million.
Net interest income increased by 1% or £5 million to £465
million. The benefit from growth in lending volumes was partly
negated by the effect of lower interest rates which also caused
a tightening of deposit margins.
Non-interest income declined by 7% or £33 million to £414 million.
Excluding the acquisition and disposals the decrease was 1%.
This reflects the impact of lower equity markets adversely
affecting fees and commissions.
Investment management assets increased by £6.8 billion or
33% to £27.3 billion principally due to the acquisition of Bank
von Ernst in the year.
Expenses were down by 7% or £32 million to £432 million
reflecting tight cost control in difficult market conditions and
the 7% reduction in staff numbers since 31 December 2002.
Provisions for bad and doubtful debts were £9 million
compared with a net release of £11 million in 2002.
2002 compared with 2001
Contribution at £454 million was £27 million, 6% lower primarily
due to the effect of the fall in equity markets on the level of
activity and ad valorem fee income.
Total income was down 3% or £26 million to £907 million.
Net interest income declined by 1% or £4 million to £460 million,
as a result of a slight contraction in deposit margins due to
lower interest rates. Average customer deposits increased from
£28.5 billion to £28.7 billion.
Non-interest income was £22 million, 5% lower at £447 million.
This reflected lower equity markets which continued adversely
to affect fees and commissions. Investment management
assets at £20.5 billion were £0.9 billion, 4% lower as new
business inflow was more than offset by the significant decline
in equity markets.
Expenses were up 2% or £7 million to £464 million.
Releases and recoveries of provisions exceeded gross new
provisions required. As a result, there was a net release of
provisions of £11 million, against a net release of £5 million
in 2001.
Operating and financial review continued
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Operating and financial review