RBS 2012 Annual Report Download - page 26

24
DIVISIONAL REVIEW
Making RBS safer
Our strategic priorities mean that we will
continue to contribute to making RBS safer.
One of these is our sharpened focus on
scalable markets following the introduction of
a refreshed strategy in 2011. During the year
we sold our Latin American, Caribbean and
African businesses to Royal Bank of Canada,
an important step in concentrating on
core geographies.
Together with RBS Group Risk, we introduced
the Coutts Conduct programme in order to
deliver new standards and frameworks by the
end of 2013. The intent of the programme is to
safeguard clients and the business from
breaches of regulatory rules or law.
Building a better bank that serves
customers well
We launched Coutts Mobile in October.
It means we can offer clients greater choice
and flexibility in the way they manage their
banking needs, providing them with the same
access and convenience of Coutts Online
on their smartphone or tablet.
The UK rollout of the Coutts global technology
platform was completed in early 2012, enabling
us to operate as an international organisation
on unified and common information technology,
transforming our ability to serve clients globally.
We introduced a new Sales Management
Framework for the International business
focusing on recruitment and induction,
coaching, training and development, target
setting, performance management
and monitoring.
Throughout 2012, our UK business prepared
to implement the Retail Distribution Review (RDR)
regulations. This resulted in the introduction of
the new advice model on 26 November, ahead
of the required implementation date.
We significantly enhanced our Lombard
lending programme in 2012, which will be
central to our success and a source of
important focus in 2013 and beyond. We set
higher lending values for Chinese H-shares
and Red Chips, and further increased lending
values on Russian bonds. China, India and
Russia were approved as ‘special emerging
markets’, with a corresponding removal of the
50% emerging market cap for each country.
The ruble and renminbi were added as
approved currencies and lending values were
also agreed for renminbi cash and bonds.
In the UK, we launched the Coutts multi-asset
funds comprising a range of seven UK and
global RDR-compliant funds. These aim to
deliver attractive long-term returns by investing
in a broad range of asset classes including
cash, bonds, equities, commodities and
property that allow each client’s individual
investment objectives to be matched to an
appropriate investment strategy based on four
separate asset allocation models.
We introduced a new client feedback
programme in the UK in 2012 in order to
improve the volume and quality of client
feedback and enable us to react swiftly to any
issues identified. We expect to roll out similar
programmes with Adam & Company and the
International business in 2013.
Changing our culture
During the year we began the journey towards
creating Coutts’ 'Crown Standard'. It reflects
our values as we strive for excellence in
everything we do. Whether our people serve
clients at the front line, or work in a functional
or support role, we must take pride in how we
go about our tasks and work to the highest
possible standards.
If we get this right for ourselves, we will get it
right for our clients and we will earn their trust
and loyalty for years to come. Each of us has
a hand to play in building our Crown Standard
and, as we continue with our transformation,
there is every opportunity for us to define what
this should look and feel like.
We held our first Diversity & Inclusion Week
in November. Led by our Diversity & Inclusion
Council, it recognises that at the heart of our
business are our people who represent a
variety of different cultures and beliefs.
We celebrate these differences and want to
embed Diversity and Inclusion in the DNA
of our people and our business.
Wealth
Rory Tapner
Chief Executive,
Wealth
Watch or listen to Rory Tapner
www.rbs.com/AnnualReview
Operating profit increased by £5 million,
or two per cent, to £253 million, driven
by higher income partially offset by
increased expenses and impairment
losses. Total income increased by
£66 million and expenses by £40 million.
Impairments were £21 million higher.
Return on equity increased to 13.7 per
cent. The loan to deposit ratio was stable
at 44 per cent.
Performance highlights 2012 2011
Operating profit before impairment losses (£m) 299 273
Impairment losses (£m) (46) (25)
Operating profit (£m) 253 248
Return on equity (%) 13.7 13.1
Assets under management, excluding deposits (£bn) 28.9 30.9