RBS 2005 Annual Report Download - page 73

section
01
Operating and
financial review
71
Operating and financial review
Annual Report and Accounts 2005
Corporate Markets – Mid-Corporate and Commercial
Pro forma
2005 2004
£m £m
Net interest income 1,760 1,607
Non-interest income 1,257 1,171
Total income 3,017 2,778
Direct expenses
– staff costs 529 489
– other 132 123
– operating lease depreciation 335 322
996 934
Contribution before impairment losses 2,021 1,844
Impairment losses 218 277
Contribution 1,803 1,567
31 December 1 January
2005 2005
£bn £bn
Total assets* 70.4 61.6
Loans and advances to customers – gross* 67.9 59.4
Customer deposits* 60.0 51.8
Weighted risk assets 74.2 65.6
* excluding repos and reverse repos
Corporate Markets generated good results in the Mid-Corporate
& Commercial customer segment in 2005, building on the
strength of its UK franchise. We maintained our market-leading
positions in corporate and commercial banking, asset finance
and invoice finance. Total income rose by 9% to £3,017 million,
whilst contribution rose by 15% to £1,803 million.
Net interest income increased 10% to £1,760 million as a result
of strong growth in average lending, up £7.7 billion, or 16%
and in average customer deposits, up £5.1 billion, or 12%.
Average interest-bearing deposits grew particularly strongly.
Non-interest income rose by 7% to £1,257 million, reflecting
our success in cross-selling our full range of products and
services to customers. Our business has benefited from the
co-location of our Lombard and Invoice Finance managers
with our corporate and commercial banking operations.
Expense growth, excluding operating lease depreciation,
was 8% which included a further investment in customer-
facing staff.
Impairment losses were 21% lower than in 2004 at
£218 million, reflecting a further improvement in our strong
credit metrics.