RBS 2005 Annual Report Download - page 83

section
01
Operating and
financial review
81
Operating and financial review
Annual Report and Accounts 2005
Employee numbers at 31 December
2005 2004
Corporate Markets 15,700 16,800
Retail Banking 33,100 32,200
Retail Direct 6,800 7,000
Wealth Management 4,200 4,100
Ulster Bank 4,400 4,100
Citizens 24,400 24,000
RBS Insurance 19,400 19,500
Manufacturing 26,800 26,900
Centre 2,200 2,000
Group total 137,000 136,600
2005 compared with 2004
The number of employees increased by 400 to 137,000, with increases in Retail Banking, Citizens and Ulster Bank partly offset by a
reduction in Corporate Markets.
Central items
Pro forma
2005 2004
£m £m
Funding costs 810 615
Departmental and corporate costs 658 395
Total Central items 1,468 1,010
Total central items increased by £458 million to £1,468 million.
Funding costs at £810 million, were up £195 million largely
because of the full year funding cost of the acquisition of
Charter One in August 2004. The Group’s primary objective is
to hedge its economic risks. So as not to distort divisional
results, volatility attributable to derivatives in economic hedges
that do not meet the criteria in IFRS for hedge accounting is
transferred to the Group’s central treasury function. This
resulted in a charge of £45 million, in addition to a charge for
£14 million for hedge ineffectiveness under IFRS.
Central departmental costs and other corporate items at £658
million were £263 million higher than 2004. This was principally
due to higher pension costs and the centralisation of certain
functions, and includes ongoing expenditure on regulatory
projects such as Basel II and Sarbanes-Oxley Section 404.