RBS 2009 Annual Report Download - page 24

RBS Group Annual Report and Accounts 2009
22
UK Retail
Brian Hartzer
Chief Executive,
UK Retail, Wealth
and Ulster Bank
MFor biographies
see pages 8-11
Our NatWest and RBS brands serve more
than 15 million retail customers, making us the
number two player in the UK banking market.
We offer a full range of products, including
current accounts, mortgages, credit/charge
cards and deposit accounts. We also help our
customers with their financial planning.
The recession made 2009 a very difficult year for our customers and
for UK Retail. Although the bottom-line figures are disappointing, we
continued to make the kind of progress that we need to return to good
health. In Branch Banking, customer deposits grew 11% on 2008,
reflecting the strength of our franchises. Customers opened an extra 2.2
million savings accounts – a 20% rise – and savings balances were up
by 11%. The number of current accounts increased by 3%. In Private
Banking & Advice, we also saw resilient returns, with performance for
mortgages and savings particularly good. Overall investment sales
increased by 3% on the previous year and our Independent Financial
Services business experienced a similar trend. Our Financial Planning
business also performed robustly, with a market share of 14%.
We appreciate the support that the UK taxpayer continued to give RBS
Group. In return, the Group agreed with the Government to support the
mortgage market by lending, subject to demand, £9 billion – net –
in the 12 months to the end of February 2010. The Group is on track to
exceed this target on net lending by £3 billion. One result of our
commitment to keep the mortgage market moving is that our share of
gross mortgage lending nearly doubled, from 7% in 2008 to 12% in 2009.
As compensation for the state aid we received, we also reached an
agreement with the European Commission to divest some businesses,
including the RBS branches in England and Wales, and the NatWest
branches in Scotland. A distinct management team is in place to
manage the transition carefully. Their job is to look after the day-to-day
needs of these branches and the support functions that back them up
so that customers continue to receive the right standard of service.
We have worked hard to address the challenges we face. In July 2009,
Brian Hartzer became Chief Executive of the UK Retail, Wealth and
Ulster Bank Division. Brian joined from Australia and New Zealand
Banking Group Ltd (ANZ) where he was Chief Executive Australia for
all ANZ business lines.
UK Retail offers a comprehensive range
of banking products and related financial
services to the personal market. It serves
customers through the RBS and NatWest
networks of branches and ATMs, and also
through telephone and internet channels.
2009 2008
£m £m
Net interest income 3,452 3,187
Non-interest income 1,495 1,751
Total income 4,947 4,938
Expenses (3,039) (3,196)
Operating profit before impairment losses 1,908 1,742
Impairment losses (1,679) (1,019)
Operating profit 229 723
Risk-weighted assets (£bn) 51.3 45.7
Return on equity 4.2% 13.1%
Net interest margin 3.59% 3.58%
Cost:income ratio 59.8% 62.4%
Loan:deposit ratio (excluding repos) 115% 116%
11%
increase in customer deposits in the year
10%
increase in mortgage customers in the year
Target Return on equity (%) Cost:income (%) Loan:deposit (%)
2011 >1 <60 <120
2013 >15 c.50 <105