RBS 2012 Annual Report Download - page 24

22
DIVISIONAL REVIEW
Making RBS safer
Our starting point in making UK Retail safer
was understanding and agreeing how much
risk we are prepared to take. We have done
that and abide by the disciplines that imposes.
We know we will be safer if we do business
properly. That is why we improved how we
manage conduct risk by putting the customer
at the heart of all we do, focusing on customer
outcomes through the advice we give, the
products we sell and the services we provide.
We built on the significant progress we have
made on credit risk over the last few years.
We live within the risk limits we have set and
we are confident that we would remain
profitable in a stressed environment.
We have improved our liquidity risk by reducing
our funding gap. We now hold £100 of deposits
for every £103 we lend. Large portions of our
mortgage portfolio are now available for use
in the event of a stress situation.
Despite our progress, in June, we let our
customers down when our IT systems failed.
We are sorry for that. We’ve investigated and
understand where we need to improve.
In the latter part of 2012, we welcomed
Ross McEwan, our new Chief Executive.
Coming from Commonwealth Bank with an
abundance of energy and experience, Ross
has listened to our customers and people and
has set a clear direction for 2013 with a focus
on making it simple and easy for our customers
to do business with us.
Building a better bank that serves
customers well
We want to put customers first and we made
changes that help us do that.
Our knowledgeable staff will put our
customers’ needs first. The Chartered
Banker Institute accredits our training to
help ensure our staff have the knowledge
to help customers.
Help when they need it most. Emergency
Cash allows customers to get cash if their
cards are lost or stolen. More than 80,000
people used the service in 2012.
Quick and convenient service. We cut
average branch queuing time from almost
five minutes to less than three and a
half minutes. We open 1,263 branches
on Saturdays and 254 open until 6pm on
weekdays. We upgraded and improved our
market-leading mobile app, growing our
regular user base from 1.4 million to 2
million. It used to take three weeks to open
an account with us, now it takes 24 hours.
Our mobile branches average 7,000 miles
each week to serve our customers in 347
remote communities.
In response to the Retail Distribution Review
we’re building a simpler, nimbler, more
customer focused advice business.
We made changes to our branches to make life
easier for customers and help us reduce costs.
We refurbished nine branches and refreshed
59 more. By introducing Banking Hall
Coordinators and more Cash and Deposit
Machines, we moved transactions away from
branch counters, giving our people more time
to talk to customers.
Changing our culture
Our people are vital in ensuring we become the
Helpful and Sustainable Bank we want to be.
We’re changing our culture to get the whole
organisation focused on the needs of our
customers. That starts when we recruit new
people who have a great approach to helping
customers. From day one, our Big Welcome
induction makes clear our commitment to
customers and how best to meet their needs.
A new incentive approach has been introduced
for our frontline people which is all about
meeting customer needs and encouraging
sustainable and profitable growth.
Every day, our people put our customers first,
and often go to heroic efforts to do so. And we
recognise them. Across our business our
people nominate their colleagues for Helpful
Banking Hero awards and winners are selected
by a panel of frontline employees. They are our
role models.
Our Helpful Leadership Academy gives
leaders the skills, understanding and
confidence to lead all of us towards becoming
the UK's most Helpful Bank. We reward leaders
for their contributions to service and risk
management but also by how they provide
leadership for their teams and how well they
manage customers’ complaints.
UK Retail
Ross McEwan
CEO
UK Retail
Watch or listen to Ross McEwan
www.rbs.com/AnnualReview
Operating profit of £1,891 million was six
per cent lower than in 2011. A ten per
cent decline in income was only partly
offset by lower costs, down six per cent,
and a 33 per cent fall in impairment
losses. Return on equity was broadly
stable at 24.4 per cent. Deposit growth of
six per cent contributed to a further
reduction in the loan to deposit ratio,
which improved to 103 per cent.
Performance highlights 2012 2011
Operating profit before impairment losses (£m) 2,420 2,809
Impairment losses (£m) (529) (788)
Operating profit (£m) 1,891 2,021
Return on equity (%) 24.4 24.5