RBS 2005 Annual Report Download - page 78

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Operating and financial review
Operating and financial review continued
Wealth Management
Pro forma
2005 2004
£m £m
Net interest income 442 410
Non-interest income 372 328
Total income 814 738
Expenses
– staff costs 258 262
– other 135 136
393 398
Contribution before impairment losses 421 340
Impairment losses 13 16
Contribution 408 324
31 December 1 January
2005 2005
£bn £bn
Loans and advances to customers – gross 7.8 7.1
Investment management assets – excluding deposits 25.4 21.6
Customer deposits 25.5 22.3
Weighted risk assets 6.1 6.0
Total income rose by 10% to £814 million, reflecting good
growth across all our businesses, and contribution was 26%
higher at £408 million. Coutts UK and Adam & Co both gained
good numbers of customers, with Coutts up 7% and Adam up
11%. 2005 also saw the continuation of rapid growth in Asia,
where the number of private bankers increased by 20%, with
particular emphasis placed on recruitment for the Chinese and
Indian markets.
Average lending increased by 20% and customer deposits by
11%. This resulted in an 8% increase in net interest income to
£442 million, with net interest margin reduced by the mix of
business.
Non-interest income increased by 13% to £372 million, driven
by investment fees, with average assets under management up
9% to £23.1 billion as a result of good new business volumes
in Coutts UK and the rise in equity markets. Assets under
management at the year end were £25.4 billion, an increase of
18%.
Expenses decreased by 1% to £393 million, reflecting a
continued focus on efficiency. Despite continued investment in
growth markets in both the UK and overseas, staff costs were
2% lower than in 2004 which was affected by a number of
one-off costs. Other costs also decreased slightly.
Impairment losses amounted to £13 million, down £3 million.