RBS 2011 Annual Report Download - page 25

RBS Group 2011 23
Serving customers well
Global Transaction Services (GTS) enables
customers to make and receive payments,
manage their cash and liquidity, and to trade
internationally. We process around 4.3 billion
worldwide payments per year and deliver 3,800
global trade transactions daily. Our global
banking network is present in 36 countries.
We recognise the importance of international
trade in a strong global economy and we are
committed to helping our customers do more
business overseas. In 2011, we agreed a new
partnership with UK Trade & Investment
(UKTI), the government body that supports
exporting and inward investment. Together we
have worked hard to encourage and support
UK businesses to increase their exports.
An important part of serving our customers
well lies in product innovation.
Bankline is our internet banking service for
UK business customers. More than 110,000
customers use it, from small businesses to large
corporations. Since we launched Bankline in
2006 we have upgraded it every year to make
it easier to use it and more efficient, saving our
customers time and money.
We launched a number of products to meet
our customers’ evolving needs:
•Capital Import Finance, launched in
conjunction with our Lombard Asset Finance
arm, supports UK companies that want to
import capital equipment. It combines our
strengths in trade finance and asset finance
so that customers can take advantage of the
lowest global prices.
•FI Global Account allows financial
institutions to make payments in 132
currencies to 183 countries from a single
base currency. This simplifies clients'
transactions and can reduce the costs
associated with maintaining individual
accounts.
•Our Global Liquidity Solutions Portal helps
Corporate Treasurers to manage their global
cash positions. It gives our customers a view
of their operational and investment balances
and rates, enabling them to execute and
redeem investments.
We won awards that show the breadth of our
network, the quality of our service and the
strength our solutions. They included:
•In Asia: 'Best Trade Financing Award' from
CFO World, as well as 'Best Foreign Bank
on Cash Management Bank' from Treasury
China;
•In Europe: topping the survey for Domestic
Cash Managers in the Netherlands and Best
Bank for Liquidity Management in Western
Europe from Euromoney; and
•In the UK: Global Finance magazine named
us as Best Trade Finance Provider for the
second year running.
Building a sustainable risk profile
One way in which GTS is playing its part in
building a sustainable risk profile for the Group
is by gathering customer deposits, which grew
by 3% to £71.7 billion. Our loan:deposit ratio
increased slightly but remained at a low 22%.
Our success in boosting deposits reflected
product innovations such as a 95-day deposit
account; yield call deposit accounts; and
growth deposit accounts for our corporate and
financial institution clients.
Building sustainable value
In January 2012, we reaffirmed our
commitment to transaction banking. The
international elements of the existing GTS
business will form part of our International
Banking unit. Domestic corporate customers,
currently served by GTS, will be managed by
our domestic corporate banking businesses in
the UK, Ireland and the US.
Operating profit was down 32%, partly
reflecting the sale of Global Merchant Services
(GMS) on 30 November 2010. Adjusting for the
disposal, operating profit decreased 16%,
driven by provisions on a single name
impairment. Excluding GMS, income was 7%
higher driven by the success of deposit-
gathering initiatives and expenses increased
by 10%. Higher expenses reflected business
improvement initiatives and investments in
technology and support infrastructure.
Scott Barton
Chief Executive,
Global Transaction Services
Performance highlights 2011 2010
Operating profit before impairment losses (£m) 909 1,097
Impairment losses (£m) (166) (9)
Operating profit (£m) 743 1,088
Return on equity (%) 30.4 42.8
Divisional review
Global Transaction Services