RBS 2007 Annual Report Download - page 65

63
RBS Group • Annual Report and Accounts 2007
Business review
Manufacturing
2007 2006 2005
£m £m £m
Staff costs 763 762 724
Other costs 2,151 2,110 2,052
Total Manufacturing costs 2,914 2,872 2,776
Allocated to divisions (2,914) (2,872) (2,776)
———
Analysis of Manufacturing costs:
Group Technology 984 974 959
Group Property 962 932 857
Customer Support and other operations 968 966 960
Total Manufacturing costs 2,914 2,872 2,776
2007 compared with 2006
Manufacturing costs increased by 1% to £2,914 million, as
further improvements in productivity enabled us to support
growth in business volumes and to maintain high levels of
customer satisfaction while continuing to invest in the further
development of our business. Staff costs were flat, as salary
inflation was offset by reduced headcount in Operations,
resulting from process efficiencies. Other costs increased by
2%, reflecting property investment and continued growth in the
volumes of transactions handled.
Group Technology costs remained under tight control,
increasing by only 1% to £984 million, as significant
improvements in productivity were balanced by investment in
software development.
Group Property costs rose by 3% to £962 million, reflecting
refurbishment and expansion of the Ulster Bank network and
continuing investment to support the strong growth of our
business in Europe and Asia, including the opening of a new
Corporate Markets office in Paris and further development of
our office portfolio in India and Singapore.
Customer Support and other operations costs remained
broadly flat at £968 million, with further significant
improvements in productivity enabling us to continue to absorb
significant increases in service volumes. At the same time we
maintained our focus on service quality, and our UK-based
telephony centres continued to record market-leading
customer satisfaction scores. Our investment in process
re-engineering across our operational centres under the ‘Work-
Out’ banner is expected to deliver further improvements in
efficiency.
2006 compared with 2005
Manufacturing costs increased by 3% to £2,872 million,
benefiting from investment in efficiency programmes while
supporting business growth and maintaining high levels of
customer satisfaction. Staff costs rose by 5%, with increases in
Group Technology partially offset by reduced headcount in
Operations.
Group Technology costs were 2% higher at £974 million, as we
achieved significant improvements in productivity balanced by
investment in software development. In the biggest integration
project undertaken since NatWest, we brought Ulster Bank
onto the RBS technology platform.
Group Property costs increased by 9% to £932 million,
reflecting the continuation of our branch improvement
programme and ongoing investment in major operational
centres, including Manchester, Birmingham and Glasgow.
Customer Support and other operations held costs virtually flat
at £966 million and, like Group Technology, achieved significant
improvements in productivity. At the same time we maintained
our focus on service quality, and our UK-based telephony
centres continued to record market-leading customer
satisfaction scores. Our investment in ‘lean manufacturing’
approaches across our operational centres is expected to
deliver further improvements in efficiency.