RBS 2012 Annual Report Download - page 28

26
DIVISIONAL REVIEW
It was another testing year. There were some
signs of improvement but the economy was
weak. Unemployment remained high, house
prices fell further and wages were flat.
We continued to deal with the legacy of the
past. Our review of how we operate confirmed
that Ulster Bank has a sustainable future if
we make the right changes.
Our systems failed in June. We are very sorry
for the effects that had on our customers.
We worked hard to support them and put
things right.
We extended normal opening hours at
83 branches and Saturday hours at 60.
We opened 22 branches on a Sunday.
Our call centre extended its hours to 10pm.
We were able to transfer funds via Western
Union for customers who were abroad.
Corporate customers were able to withdraw
up to £5,000 or €5,000 with the agreement
of their relationship manager.
We processed transactions manually
if corporate customers could not use
online banking.
In September, we announced how we were
going to make amends to customers who
were affected. We wrote to every Ulster Bank
customer to apologise.
Making RBS safer
Our appointment of a board-level Chief Risk
Officer and a new Risk Leadership Team show
how we are contributing to making RBS safer.
The Chief Risk Officer has led a Group-wide
review of risk as well as playing a central role
in our strategic review.
We moved most of our mortgage accounts to a
new system, which reduces operational risk.
Building a better bank that serves
customers well
We know that Ulster Bank has a sustainable
future. But that depends on us changing how
we work and dealing with the past so that we
focus on serving customers well. Our review
told us our business was too complicated
and our costs too high. We are making
changes that will reduce costs by £80 million
by the end of 2013.
The most significant action we took was
dealing with loans we sold before the crisis.
We gave more effort to managing unsecured
loans, mortgages, SME facilities and larger
corporate exposures. In particular, we are
supporting customers who are finding it hard
to pay their mortgage.
We improved our digital services. That makes
it easier for customers to do business with us.
With our apps for iPhone, BlackBerry and
Android handsets you can:
get an up-to-the-minute balance;
view a mini-statement with your last
six transactions;
make transfers between your Ulster Bank
accounts;
pay your friends, family, credit card,
or utility bills; and
locate your nearest Ulster Bank branch
or cash machine.
Customers used the service almost 18 million
times making 1.2 million payments worth £282
million.
Changing our culture
After the IT failure we ran Listening Groups with
our people. We wanted to make sure that their
views on what went well and what didn't could
be incorporated into our future strategy.
Through our Culture and Engagement Team
we listen to our people, take their feedback
and use it to drive improvement.
Ulster Bank
Jim Brown
Chief Executive,
Ulster Bank
Watch or listen to Jim Brown
www.rbs.com/AnnualReview
Operating loss of £1,040 million
was £56 million higher than in 2011.
This primarily reflected a reduction in
income driven by lower interest earning
asset volumes. Total expenses fell by
£26 million as a result of cost saving
initiatives. Impairment losses remained
high. Falling asset prices and high levels
of unemployment coupled with weak
domestic demand continued to depress
the property market. The loan to deposit
ratio improved and net interest margin
increased slightly. Retail and SME
deposits increased by eight per cent,
although this was partly offset by outflows
of wholesale balances.
Performance highlights 2012 2011
Operating profit before impairment losses (£m) 324 400
Impairment losses (£m) (1,364) (1,384)
Operating loss (£m) (1,040) (984)
Return on equity (%) (21.8) (22.8)