RBS 2011 Annual Report Download - page 38

36 RBS Group 2011
Description of business
Introduction
The Royal Bank of Scotland Group plc is the holding company of a large
global banking and financial services group. Headquartered in Edinburgh,
the Group operates in the United Kingdom, the United States and
internationally through its principal subsidiaries, the Royal Bank and
NatWest. Both the Royal Bank and NatWest are major UK clearing
banks. In the United States, the Group's subsidiary Citizens is a large
commercial banking organisation. Globally, the Group has a diversified
customer base and provides a wide range of products and services to
personal, commercial and large corporate and institutional customers.
Following the placing and open offers in December 2008 and in April
2009, HM Treasury owned approximately 70.3% of the enlarged ordinary
share capital of the company. In December 2009, the company issued a
further £25.5 billion of new capital to HM Treasury. This new capital took
the form of B shares, which do not generally carry voting rights at general
meetings of ordinary shareholders but are convertible into ordinary
shares and qualify as Core Tier 1 capital. Following the issuance of the B
shares, HM Treasury's holding of ordinary shares of the company
remained at 70.3% although its economic interest rose to 84.4%.
At 31 December 2011, HM Treasury’s holding in the company’s ordinary
shares was 66.9% and its economic interest was 82.2%.
The Group had total assets of £1,506.9 billion and owners' equity of
£74.8 billion at 31 December 2011. The Group's risk asset ratios at 31
December 2011, were a Total capital ratio of 13.8%, a Core Tier 1 capital
ratio of 10.6% and a Tier 1 capital ratio of 13.0%.
Organisational structure and business overview
The Group’s activities are organised on a divisional basis as follows:
UK Retail offers a comprehensive range of banking products and related
financial services to the personal market. It serves customers through a
number of channels including: the RBS and NatWest network of
branches and ATMs in the United Kingdom, telephony, online and
mobile. UK Retail remains committed to delivering ‘Helpful and
Sustainable’ banking and to the commitments set out in its Customer
Charter - the results of which are externally assessed and published
every six months.
UK Corporate is a leading provider of banking, finance and risk
management services to the corporate and SME sector in the United
Kingdom. It offers a full range of banking products and related financial
services through a nationwide network of relationship managers, and also
through telephone and internet channels. The product range includes
asset finance through the Lombard brand.
Wealth provides private banking and investment services in the UK
through Coutts & Co and Adam & Company, offshore banking through
RBS International, NatWest Offshore and Isle of Man Bank, and
international private banking through Coutts & Co Ltd.
Global Transaction Services (GTS) ranks among the top tier of global
transaction banks, offering payments, cash and liquidity management,
trade finance and commercial card products and services. Through the
network and extensive partner bank agreements, GTS is able to support
and connect customers across 128 countries.
Ulster Bank is the leading retail and business bank in Northern Ireland
and the third largest banking group on the island of Ireland. It provides a
comprehensive range of financial services. The Retail Markets division
which has a network of 236 branches, operates in the personal and
financial planning sectors. The Corporate Markets division provides
services to SME business customers, corporates and institutional
markets.
US Retail & Commercial provides financial services primarily through the
Citizens and Charter One brands. US Retail & Commercial is engaged in
retail and corporate banking activities through its branch network in 12
states in the United States and through non-branch offices in other
states.
The divisions discussed above are collectively referred to as Retail &
Commercial.
Global Banking & Markets (GBM) is a leading banking partner to major
corporations and financial institutions around the world, providing an
extensive range of debt and equity financing, risk management and
investment services to its customers. The division is organised along six
principal business lines: money markets; rates flow trading; currencies;
equities; credit and mortgage markets; and portfolio management &
origination.
RBS Insurance provides a wide range of general insurance products to
consumers through a number of well known brands including; Direct Line,
Churchill and Privilege. It also provides insurance services for third party
brands, through its UKI Partnerships business. In the commercial sector,
its NIG and Direct Line for Business operations provide insurance
products for businesses via brokers or direct respectively. Through its
international division, RBS Insurance sells general insurance, mainly
motor, in Germany and Italy. In addition to insurance services, RBS
Insurance continues to provide support and reassurance to millions of UK
motorists through its Green Flag breakdown recovery service and
Tracker stolen vehicle recovery and telematics business. On 15 February
2012, a new corporate brand, Direct Line Group, was announced.
To comply with EC State Aid requirements, the Group has agreed to
dispose of RBS Insurance. It continues to be reported as a separate
operating segment rather than within the Non-Core division as its
business is distinct from the activities of the Non-Core division.
Central Functions comprises Group and corporate functions, such as
treasury, funding and finance, risk management, legal, communications
and human resources. The Centre manages the Group's capital
resources and Group-wide regulatory projects and provides services to
the operating divisions.
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