RBS 2011 Annual Report Download - page 413

RBS Group 2011 411
38 Segmental analysis
(a) Divisions
The directors manage the Group primarily by class of business and
present the segmental analysis on that basis. This includes the review of
net interest income for each class of business - interest receivable and
payable for all reportable segments is therefore presented net. Segments
charge market prices for services rendered to other parts of the Group;
funding charges between segments are determined by Group Treasury,
having regard to commercial demands. The segment measure is
operating profit/(loss) before tax.
The Group's reportable segments are 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 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 are 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.
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 and
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.
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
operating results are regularly reviewed by the Group’s Chief Executive
Officer and its business is distinct from the activities of the Non-Core
division.
Central items 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.
Non-Core Division manages separately assets that the Group intends to
run off or dispose of. The division contains a range of businesses and
asset portfolios primarily from the GBM division, linked to proprietary
trading, higher risk profile asset portfolios including excess risk
concentrations, and other illiquid portfolios. It also includes a number of
other portfolios and businesses, including regional markets businesses,
that the Group has concluded are no longer strategic.