RBS 2004 Annual Report Download - page 107

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Annual Report and Accounts 2004
Operating and financial review
Operating and
financial review
Customer accounts, excluding repo agreements, grew by
£32,986 million (16%), and represent 51% of the Group’s
funding excluding capital and other liabilities. Excluding the
Charter One acquisition the growth would have been £18,381
million (9%). The proportion of funding from wholesale sources
has increased reflecting the higher rate of growth in customer
loans and advances (excluding reverse repos), up £65,123
million (28%) – £48,405 million (21%) excluding Charter One.
Repo agreements with corporate and institutional customers
are undertaken primarily by RBS Greenwich Capital in the US
and by Financial Markets. Repo activity with customers
represented 9% of the Group’s funding excluding capital and
other liabilities at 31 December 2004.
Deposits by banks including repos increased by £31,758
million (£27,240 million excluding Charter One) to represent
21% of the Group’s funding, excluding capital and other
liabilities. Deposits by banks are taken from a wide range of
counterparties, with the largest single depositor continuing to
represent less than 1% of the Group’s total funding.
Debt securities in issue increased by £17,944 million to
represent 13% of the Group’s funding, excluding capital and
other liabilities, at 31 December 2004. Total debt securities in
issue at 31 December 2004 includes £9,589 million (2003 –
£9,187 million) with a maturity of over one year, reflecting the
activity of the Group in raising term funds through its Euro and
US Medium Term Note programmes and other term issues.
The Group remains well placed to access various wholesale
funding sources from a wide range of counterparties and
markets, and the changing mix evident between customer repos,
deposits by banks and debt securities in issue primarily reflects
comparative pricing, maturity considerations and investor/
counterparty demand rather than any material perceived trend.
Sources of funding
Excluding capital and other liabilities, customer accounts continue to provide a majority of the Group’s funding and
represent a well diversified and stable source of funds from a wide range of retail, corporate and non-bank institutional customers.
2004 2003 2002
£m % £m % £m %
Customer accounts (excluding repos):
Repayable on demand 170,032 36 141,560 39 127,320 39
Time deposits 72,896 15 68,382 19 66,781 21
Total customer accounts (excluding repos) 242,928 51 209,942 58 194,101 60
Repo agreements with customers 42,134 9 27,021 7 25,060 8
Deposits by banks (excluding repos) 55,739 12 40,279 11 34,623 11
Repo agreements with banks 43,342 9 27,044 8 20,097 6
Debt securities in issue 58,960 13 41,016 11 33,938 10
Short positions 28,923 6 19,128 5 16,381 5
Total 472,026 100 364,430 100 324,200 100