RBS 2011 Annual Report Download - page 22

20 RBS Group 2011
Serving customers well
In 2010, we made a public commitment to
become the UK’s most Helpful and
Sustainable Bank. As part of this, we launched
our Customer Charter – a set of specific
commitments based on what our customers
told us they wanted from their bank. We also
pledged to be open and honest about our
progress and to publish independently
assessed reports along the way.
The results have confirmed that we continued
to make strong progress in 2011, meeting 23
of the 25 goals we set ourselves.
•We served 88% of customers in our
branches in less than five minutes.
•By November, we had more than 1,200
branches open on Saturdays.
•We met our commitment to stay open in all
168 locations where NatWest or RBS is the
last bank in town.
Our commitment to Helpful Banking means
we are working to make our customers’ lives
easier.
•Our Emergency Cash service provides
customers who lose their debit card
immediate access to up to £300, simply
by phoning us.
•We launched a new iPhone banking app
in May, followed by an iPad app in July,
a BlackBerry app in September and an
Android app in October.
While improvements to our service processes
are important, we know that it is our people
who deliver Helpful Banking. Helpful
employees are professional, proactive and
caring. Their job is to make things simple for
their customers. As a result of changes we've
made in our hiring approach, we will now
specifically recruit people who behave
like this and reward them for being helpful.
We looked closely at how we run our local
branches and decided to restructure our
business to give more power back to people
in each local area. Our local CEOs can now
make decisions that they believe are right for
their customers and communities.
We had said that we would continue to
serve more than 300 communities with our
mobile banks. We beat our target. Our 19
mobile branches now serve more than 400
communities, and drove more than 7,000
miles each week to reach their customers.
In the Customer Charter, we said we will
actively support the local communities in
which we live and work. Through our
Community Force programme, we awarded
£3 million to over 470 local projects that our
customers voted as worthy of support. In
addition, we gave each of our retail banking
employees a day of paid leave to support local
projects, and our efforts totalled more than
16,000 volunteering days.
Building a sustainable risk profile
We continued to focus on building secured
lending. While overall loans and advances to
customers increased by 2%, mortgage
balances increased by 5% and unsecured
lending contracted by 11%. We won a 10%
share of gross mortgage lending, higher than
our 8% share of the stock of outstanding
mortgages. Customer deposits increased by
6%, outperforming market deposit growth of
only 3%. Savings balances grew by 9%, with
1.5 million accounts opened. Our loan:deposit
ratio was 106% compared with 110% in 2010.
Impairments fell by 32% to £788 million, in part
because of improvements we had made to our
risk profile.
Building sustainable value
Despite the difficult economic climate and
low interest rates, we delivered strong results.
Operating profit increased by £619 million,
45%, to £1,991 million. Net interest income
increased by 5%, driven by strong balance
sheet growth. Non-interest income fell by
10%, primarily because of lower investment
and protection income as a result of the
dissolution of the UK Retail bancassurance
joint venture.
Expenses declined by 6%. We began to
benefit from a clear management focus on
process re-engineering and operational
efficiency. As a result, our cost:income ratio
improved from 53% to 49%.
Brian Hartzer
Chief Executive,
UK Retail,
Wealth and Ulster Bank
Performance highlights 2011 2010
Operating profit before impairment losses (£m) 2,779 2,532
Impairment losses (£m) (788) (1,160)
Operating profit (£m) 1,991 1,372
Return on equity (%) 26.4 18.0
Divisional review
UK Retail