RBS 2003 Annual Report Download - page 88

Operating and financial review continued
86
Central items
2003 2002 2001
£m £m £m
Funding costs 215 215 211
Departmental and corporate costs 414 372 275
Total Central items 629 587 486
2003 compared with 2002
Total Central items increased by £42 million to £629 million.
Funding costs at £215 million, were unchanged. Increased
income from higher shareholders’ funds was offset by the
funding costs associated with the acquisition of Churchill in
September 2003 and the £1.5 billion AVS dividend paid in
December 2003.
Central departmental costs and other corporate items at £414
million were £42 million or 11% higher than 2002. This is partly
due to staff costs and other costs relating to certain departments
such as Customer Relations which have been centralised and
additional resources devoted to Group wide projects such as
preparations for the implementation of Basel II and International
Accounting Standards.
2002 compared with 2001
Total Central items increased by £101 million to £587 million.
Funding costs, which include interest on the perpetual
regulatory tier one securities issued in August 2001 of £60
million (2001 – £23 million) were similar to the previous year.
This reflected the benefit of retained earnings and lower
interest rates.
Central departmental costs and other corporate items
increased to £372 million compared with £275 million in 2001,
which benefited from certain one off items.
Operating and financial review