RBS 2008 Annual Report Download - page 16

15RBS Group Annual Report and Accounts 2008
In Ireland, Ulster Bank has been pro-active in responding to the
challenging local and global market conditions through a
programme of initiatives, which includes the move to a single
brand strategy under the Ulster Bank brand. This will see the
merger of the operations of Ulster Bank and First Active in the
Republic of Ireland (‘RI’) by the end of 2009. A series of cost
management initiatives has also commenced across the business.
Steps to support customers through this difficult economic
period have also been initiated in Ireland. Ulster Bank
announced in February 2009 that it will be making available
significant funds for the Northern Ireland (‘NI’) SME sector, with
a similar support initiative soon to launch in RI. Ulster Bank has
also adopted the Group’s pledge regarding certainty of
overdraft limits for this segment.
To support personal customers, the Group’s MoneySense
financial education programme is being rolled out across the
island of Ireland with trained advisors being introduced to all
Ulster Bank branches. The Momentum and Secure Step
mortgages have been launched in NI and RI respectively to
support first time buyers.
Strategic review
Ulster Bank remains a core part of the Group’s global banking
operations. It has a strong franchise in Ireland and has the
product and distribution capability to grow profitably and well in
normal market conditions. The business plans to manage its
balance sheet over the medium term, with particular focus on
reducing risk concentrations as market conditions allow, whilst
increasing and diversifying its customer deposit base.
The E&ME Retail and Commercial franchises outside of Ireland
lack scale and breadth. They would require a very significant
investment of capital and management resource to be able to
achieve levels of shareholder return equivalent to those possible
from more established core franchises in the Group. We have
commenced a review to consider future options for these
businesses, including options for sale.
Asia Retail & Commercial Banking
Asia Retail & Commercial Banking is present in
markets including India, Pakistan, China, Taiwan,
Hong Kong, Indonesia, Malaysia and Singapore.
It provides financial services across four segments: affluent
banking, cards and consumer finance, business banking and
international wealth management, which offers private banking
and investment services to clients in selected markets through
the RBS Coutts brand.
Asia’s economies slowed sharply in 2008 and especially the
second half, ending a decade of consistent, widespread and often
rapid growth in the region. This was reflected in the performance
of Asia Retail & Commercial Banking, although comparisons with
the prior year are affected by the marked depreciation of sterling
during the year. While income increased by 12% to £781 million,
an operating loss after manufacturing costs of £113 million was
incurred, compared with a loss of £20 million in 2007.