RBS 2010 Annual Report Download - page 27

25RBS Group 2010
Divisional review
UK Corporate
Management team of over 500 experienced employees continued to
provide locally based, hands-on support where needed. In 2010, over
5,600 customers were successfully managed back to financial health.
Giving customers access to finance
Getting access to finance is a key concern for many of our customers.
We continue to be open for business. In 2010, we provided on average
over 5,000 loans to UK businesses each week. Our approval rate remains
high: we continue to accept over 85% of the credit applications we receive.
For the period from March 2010 to February 2011, RBS Group had agreed
to make £50 billion of gross new lending facilities available to customers
through its Business & Commercial, Corporate and Institutional Banking
and GBM businesses. We launched a number of initiatives to ensure firms
and their advisers know we are making lending available.
In January, we announced our Manufacturing Fund, pledging to make £1
billion of new loans available on competitive and flexible terms to UK
manufacturing businesses.
The Manufacturing Fund won the ‘Innovation in Product Design – Business
Banking’ category at the Financial World Financial Innovation Awards.
We also created £2.15 billion of specific lending programmes to support
infrastructure and public sector developments, including social housing,
local authorities and renewable energies.
We supported the creation of the Enterprise Finance Guarantee (EFG)
in 2008, which aims to improve the availability of working capital to SME
firms. Initially available until March 2010, it was extended to March 2011.
By December 2010, we led the field in taking applications for the EFG,
accounting for over 40% of all loans drawn under the scheme.
In 2008, we agreed a £250 million funding agreement with the European
Investment Bank, whereby funds were provided to eligible customers at
preferential borrowing rates. The success of the scheme led to a second
£300 million tranche being agreed in July 2010.
We remain a leader in helping UK corporate clients to raise funds from
the stock market, as well as a range of debt products. In 2010, we led
on the arrangements for two of the top three UK corporate equity deals.
Being fair and transparent in how we treat our customers
In our SME charter, we extended our committed overdraft and price
promises to cover 2010. This ensured that a customer’s overdraft facility
remained in place for the duration of their agreement, unless they
breached conditions or there was a significant deterioration in their risk
profile. Our price promise ensures that we will not increase overdraft
margins at renewal times, unless there is a significant change in the firm’s
risk profile. By October 2010, over nine out of 10 small businesses had
benefited from overdraft renewals at the same or a lower rate.
Meeting our customer needs
Our customers like the steps we have taken and the support we provide.
RBS Group is in the top three banks in the UK for business customer
satisfaction. The percentage of our corporate customers describing
themselves as ‘very satisfied’ has remained consistently high. In March,
Lombard won Best Leasing and Asset Finance Provider at the Business
Moneyfacts Awards for the second consecutive year. Our Invoice Finance
business works closely with customers providing products to meet their
changing needs. For example, in October, RBS Invoice Finance finalised
its first asset backed lending deal for the retail sector, with a flexible £9
million facility to DM London Limited trading under the brand ‘Time 2’.
However, we continue to look for ways to improve how we deliver services.
A major contribution to that is our transformation programme, which we
call Genesis. When we put it together, we spent over 4,000 hours listening
to our customers and people in developing the programme’s design. We
believe that Genesis will make our customers’ banking experience simpler,
more responsive and better suited to their needs.
Contributing towards the new RBS
The progress we made in 2010 contributes to the wider objectives of
making RBS a stronger and safer Bank. We increased our customer
deposits by 14%, helping to reduce the gap between loans and deposits
by 16%. We continued to enhance our risk control systems, including
implementing specific new guidance for Real Estate Finance.
We also took steps to deal with the legacy of the past. In line with the
EU’s divestment requirements, in August 2010 we announced a sale
agreement with Santander UK plc for 318 branches. This includes the
SME accounts attached to these branches, as well as our Direct SME
business and certain mid-sized corporate customers. Our plans for
separating and segregating this business are well advanced and we
expect the process to be completed by the end of March 2012. We will
try to keep any disruption for customers and staff to a minimum.
2010 was a year of delivering the commitments we have made to support
our customers. We are taking the necessary steps to restore the reputation
of the Bank, brick by brick, and putting our customers at the heart of
everything we do.
We are currently opening more than
2,200 start-up accounts per week.
To date, we have led the field in taking
applications for the Enterprise Finance
Guarantee, accounting for over 40%
of all loans drawn under the scheme.