RBS 2005 Annual Report Download - page 72

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Operating and financial review
Operating and financial review continued
Corporate Markets
Pro forma
2005 2004
£m £m
Net interest income 2,960 2,764
Non-interest income 5,855 4,758
Total income 8,815 7,522
Direct expenses
– staff costs 2,000 1,705
– other 523 459
– operating lease depreciation 733 680
3,256 2,844
Contribution before impairment losses 5,559 4,678
Impairment losses 335 482
Contribution 5,224 4,196
31 December 1 January
2005 2005
£bn £bn
Total assets* 409.2 359.4
Loans and advances to customers – gross*
– banking book 158.7 136.9
– trading book 11.8 10.1
Rental assets 13.2 11.5
Customer deposits* 111.1 100.8
Weighted risk assets 202.6 178.4
* excluding repos and reverse repos
Corporate Markets achieved excellent results in 2005, with total
income up 17% to £8,815 million and contribution up 24% to
£5,224 million, reflecting very good performances across our
businesses. We maintained a stable cost:income ratio and the
credit environment in all geographies remained benign.
RBS remains the number 1 corporate bank in the UK and we
have significantly expanded our franchise in Europe and North
America, where we are also focussing on the opportunities for
increased co-operation between Corporate Markets and
Citizens. In Asia, our profile has benefited from the
announcement of the Group’s strategic partnership with Bank
of China.
Our businesses continue to deliver good returns. Weighted
risk assets rose by 14% over the course of the year to
£202.6 billion, with much slower growth in the second half
following the above-trend spike in spot levels at mid-year.
The ratio of income, after deducting operating lease
depreciation, to average weighted risk assets for 2005 was
broadly stable at 4.1%, while the ratio of contribution to
average weighted risk assets improved slightly.