RBS 2007 Annual Report Download - page 46

RBS Group • Annual Report and Accounts 2007
44
Business review continued
Business review
2007 compared with 2006
Operating expenses, excluding purchased intangibles
amortisation and integration costs, increased by 15%, £1,801
million to £14,053 million including £1,880 million relating to
ABN AMRO. Adjusting for this, operating expenses were down
£79 million, 1% reflecting tight cost management and the
benefits of the Group’s manufacturing platform. Further
improvements in productivity have supported growth in
business volumes, and allowed the Group to maintain high
levels of customer satisfaction.
The Group’s ratio of operating expenses (excluding purchased
intangibles amortisation and integration costs and after netting
operating lease depreciation against rental income) to total
income was 43.9% compared with 42.1% in 2006.
2006 compared with 2005
Operating expenses, excluding purchased intangibles
amortisation and integration costs, rose by 8% to £12,252
million to support the strong growth in business volumes.
Staff costs were up £803 million, 14% to £6,647 million
reflecting growth and expansion of activities in Corporate
Markets, where the number of staff increased by 1,600.
Premises and equipment expenses increased by £137 million,
11% to £1,411 million reflecting the continuation of our branch
network improvement programme and ongoing investment in
our major operational centres.
Other administrative expenses, up 1%, £34 million to £2,626
million reflected efficiency improvements whilst supporting
higher business volumes.
The Group’s ratio of operating expenses (excluding purchased
intangibles amortisation and integration costs and after netting
operating lease depreciation against rental income) to total
income was 42.1% compared with 42.4% in 2005.
Operating expenses (excluding purchased intangibles amortisation and integration costs)
2007 2006 2005
£m £m £m
Administrative expenses:
Staff costs 7,534 6,647 5,844
Premises and equipment 1,762 1,411 1,274
Other administrative expenses 3,081 2,626 2,592
Total administrative expenses 12,377 10,684 9,710
Depreciation and amortisation 1,676 1,568 1,588
14,053 12,252 11,298