RBS 2010 Annual Report Download - page 24

RBS Group 2010
22
UK Retail
Brian Hartzer
Chief Executive, UK Retail,
Wealth and Ulster Bank
MFor biographies
see pages 226-229
2010 was another challenging year for our
customers and for UK Retail, against a
backdrop of slow economic recovery, but our
results reflect solid progress. We are open for
business and we are here to help. Customer
lending is up and we are on course to achieve
our £8 billion mortgage net lending target for the
period to February 2011. Mortgage balances
increased by 9% during the year. At the same
time, our impairments are down substantially
because of our commitment to responsible
lending. Customer deposits grew by 10%, faster
than the market average, and savings balances
grew by 13%. We have lowered our cost to
serve by helping our customers understand and
make better use of direct channels, as well as
addressing inefficiencies through the roll-out of
Lean techniques in our branches.
Changing how we work so that we serve our customers better
As part of our determination to become Britain’s most helpful bank, in
2010 we changed the way we work:
•we created a single Consumer Distribution business, reflecting the
importance we place on delivering a great multi-channel experience
to our customers;
•we reorganised our Retail Centre so it’s now better set up to support
the people serving our customers; and
•we reshaped our Private Banking business so that we can meet
better the needs of our affluent customers.
Listening to our customers and being clear about our commitments
to them: our Customer Charter
Our customer satisfaction already compares well with our competitors’
but we know we can do more. In June, we launched our Customer
Charter setting out our commitment to delivering helpful banking.
The views of more than 30,000 customers contributed to the Charter,
consisting of 14 long-term customer promises. We are now working
hard to deliver on the commitments we have made. This won't happen
overnight but our Customer Charter is our pledge that we will be held to
account against the progress we make, publishing an independently-
assured report on our performance every six months.
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.
Key business highlights
• Operating profit recovered strongly
• Net interest income increased by 18%
• Non-interest income decreased by 11%
• Expenses decreased by 5%
• Impairment losses decreased by 31%
• Risk-weighted assets decreased by 5%
2010 2009
Performance highlights £m £m
Net interest income 4,078 3,452
Non-interest income 1,327 1,495
Total income 5,405 4,947
Expenses (2,873) (3,039)
Operating profit before impairment losses 2,532 1,908
Impairment losses (1,160) (1,679)
Operating profit 1,372 229
Risk-weighted assets (£bn) 48.8 51.3
Return on equity 18.0% 3.0%
Net interest margin 3.91% 3.59%
Cost:income ratio 52% 60%
Loan:deposit ratio 110% 115%
Return on equity (%) Cost:income (%) Loan:deposit ratio (%)
2010 18 52 110
2013 >15 c.50 <105
target
10%
growth in customer
deposits
£1,372m
operating profit