RBS 2004 Annual Report Download - page 88

86
Operating and financial review
Wealth Management
2004 2003* 2002*
£m £m £m
Net interest income 497 457 451
Non-interest income 451 352 370
Total income 948 809 821
Expenses
– staff costs 299 259 279
– other 164 139 146
463 398 425
Contribution before provisions 485 411 396
Provisions for bad and doubtful debts – charge/(release) 17 9 (11)
Contribution 468 402 407
£bn £bn £bn
Loans to customers 9.2 7.9 7.3
Investment management assets – excluding deposits 22.3 22.3 16.1
Customer deposits 31.7 29.1 28.9
Weighted risk assets 8.3 9.1 8.4
* prior periods have been restated to reflect the transfer of certain activities to Retail Banking and Manufacturing.
2004 compared with 2003
Contribution at £468 million was £66 million or 16% higher than
2003. Excluding the acquisition and adjusting for the disposal,
contribution was up 14%, £54 million.
Total income increased by 17% or £139 million to £948 million,
including a full year contribution from Bank von Ernst. Excluding
the acquisition and disposal, income was 12%, £94 million higher.
Net interest income increased by 9% or £40 million to £497
million. The increase reflects growth in both lending and
deposit volumes, combined with the benefit of higher average
interest rates.
Non-interest income increased by 28% or £99 million to £451
million, reflecting higher fee income as a result of the improved
equity markets and the acquisition of Bank von Ernst.
Investment management assets were stable at £22.3 billion.
Excluding the acquisition and disposal and at constant
exchange rates, investment assets increased 7%.
Expenses were up by 16% or £65 million to £463 million to
support the growth in income and reflecting the acquisition of
Bank von Ernst. Excluding the acquisition and disposal,
expenses were up 9%, £33 million.
The charge for provisions for bad and doubtful debts was
£17 million compared with £9 million in 2003, reflecting a
small number of specific cases.
2003 compared with 2002
Contribution was £402 million, £5 million or 1% 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 1% or £12 million to £809 million.
Net interest income increased by 1% or £6 million to £457
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 5% or £18 million to £352 million.
Excluding the acquisition and disposals the decrease was 1%.
This reflected the impact of lower equity markets adversely
affecting fees and commissions.
Investment management assets increased by £6.2 billion or
39% to £22.3 billion principally due to the acquisition of Bank
von Ernst in the year.
Expenses were down by 6% or £27 million to £398 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.
Operating and financial review continued