RBS 2008 Annual Report Download - page 15

RBS Group Annual Report and Accounts 200814
Divisional review continued
manage payments from a new, user-friendly interface. Early
2008 saw the launch of E-Z Deposit. This service enables
business owners to scan deposits and to deliver the images
electronically to the bank via a secure internet connection from
their own premises. This eliminates the need to visit a branch,
as well as reducing the time before deposits reach accounts.
Strategic review
Citizens has a high quality retail and commercial banking
franchise in the north eastern US. New England and the Mid
Atlantic are attractive banking markets, and Citizens is well
positioned in them in terms of market share and key local
market coverage. The business intends to invest in this core
business through increased marketing activity and targeted
technology investments, whilst reducing activity in its out-of-
footprint national businesses in consumer and commercial
finance. This strategy will allow Citizens to be become fully
funded from its own customer deposits over time, and will
support a low risk profile.
Europe & Middle East Retail & Commercial Banking
Europe & Middle East Retail & Commercial Banking
comprises Ulster Bank and the Group’s combined
retail and commercial businesses in Europe and the
Middle East.
Ulster Bank provides a comprehensive range of financial services
across the island of Ireland. Its retail banking arm has a network
of branches and operates in the personal, commercial and wealth
management sectors, while its corporate markets operations
provide services in the corporate and institutional markets.
In weakened economic conditions, operating profit after
Manufacturing costs fell by 85% to £70 million. Total income
reached £1,518 million, an increase of 6% in sterling terms,
although reflecting a drop of 5% when stated on a constant
currency basis. Direct expenses rose by 12% in sterling terms,
although were flat when viewed on a constant currency basis,
reflecting disciplined management of the cost base, particularly
in the second half of 2008. The main impact on performance in
the division was a significant increase in impairment losses, albeit
from a low base, particularly in Ulster Bank, where impairments
rose to £394 million. This reflects the impact on credit quality of
the slowdown in the Irish economy and the increased flow of
cases into the problem debt management process.
Average loans and advances to customers increased by
25% versus prior year, or 12% when stated on a constant
currency basis.
Average deposit balances in the E&ME division were 13% higher
in sterling terms and largely flat at constant exchange rates
reflecting particularly the highly competitive market for resources
in Ireland in 2008. Deposit flows in Ulster Bank were strong in
the latter part of the year and into the early months of 2009.
Over 119,000 personal current accounts were opened by Ulster
Bank across the island of Ireland in 2008, up 17% on 2007. In
the UAE, RBS issued 170,000 credit cards in 2008, taking the
total number in circulation over 430,000.
External recognition of the Division’s achievements in 2008
included Ulster Bank winning the KPMG Business Banking
Excellence Award for an unprecedented fourth successive year,
while RBS UAE won the Best Premium/Priority Banking Service
Award at the 2008 Banker Middle East Product Awards.