RBS 2010 Annual Report Download - page 34

RBS Group 201032
US Retail & Commercial
In 2009, we set out our five-year plan to create
a stronger, more resilient business. 2010 saw
us take significant steps along this path, with
investments in products, customer service,
infrastructure and people.
We have seen a return to operating profitability and a substantial increase in
new accounts opened. We are better placed to respond to external factors,
such as regulatory changes and a subdued and uncertain US economic
recovery. Though we are still at the early stages of our plan, momentum
is building towards our aim of being a leading super-regional bank.
Strengthening customer relationships
In May, Citizens Bank and Charter One launched the “Good Banking is
Good Citizenship” brand platform. The initiative underscores our long-
standing heritage and helps to restore trust in the banking industry,
and has received a positive response from new and existing customers.
It brings to life our central and long-standing belief that a bank should
contribute to the growth and vibrancy of its communities, operating
through all of the channels in which the bank interacts with its customers
and the community.
US Retail & Commercial added more than 52,500 new customer accounts
and 12,500 small business accounts in the year to 30 September 2010.
Commercial Banking has expanded its reach into niche markets with
significant growth opportunities, including Commercial Enterprise
Banking, Health-Care Banking, Capital Markets/Debt Syndication and
Franchise Finance.
Our Home Lending Solutions first mortgage business is ranked nationally
among the top 20 retail originators by Inside Mortgage Finance, having
moved up the rankings in the past two years. In addition, we see well-
managed home-equity lending as a strategic product, attracting new
customers and serving as an anchor for stronger customer relationships.
Nearly 90% of home-equity customers also have deposit relationships
with us.
Good customer service is at the heart of our ability to attract and retain
customers. Citizens’ Contact Centers have made significant improvements
in the customer experience, reducing the average time to answer a
customer call by 50% over the last two years.
In September, we launched a new Mobile Banking application for the
iPhone. It allows retail customers to check account balances, transfer
funds, find ATM and branch locations, and make payments. We also
Ellen Alemany
Chief Executive,
Citizens and Head of
Americas
MFor biographies
see pages 226-229
US Retail & Commercial provides financial
services primarily through the Citizens Bank,
Charter One and RBS Citizens brands. It is
engaged in retail and corporate banking
activities through its 1,500 branch network in
12 states in the northeastern quadrant of the
United States and through non-branch offices
in other states. It ranks among the top five
banks in New England (based on deposit
market share).
Key business highlights
• Net interest income increased by 8%
• Non-interest income increased by 8%
• Expenses decreased by 1%
• Impairment losses decreased by 26%
• Operating profit increased by £419 million
2010 2009
Performance highlights £m £m
Net interest income 1,917 1,775
Non-interest income 1,029 949
Total income 2,946 2,724
Expenses (2,123) (2,135)
Operating profit before impairment losses 823 589
Impairment losses (517) (702)
Operating profit/(loss) 306 (113)
Risk-weighted assets (£bn) 57.0 59.7
Return on equity 3.6% (1.3%)
Net interest margin 2.85% 2.37%
Cost:income ratio 72% 78%
Loan:deposit ratio 81% 80%
Return on equity (%) Cost:income ratio (%) Loan:deposit ratio (%)
2010 4 72 81
2013 >15 <55 <90
target
50%
reduction in average time
to answer a customer call
over the last two years
81%
loan to deposit ratio