RBS 2012 Annual Report Download - page 8

06
ESSENTIAL READING
The job of creating the new RBS, a good company and a good bank, has three parts.
We need to put customers first and serve them well.
We have to make RBS safe and sound by restoring a sustainable and
conservative risk profile.
We have to rebuild sustainable value for all shareholders.
These goals are linked and each one supports the others. After four years of our Strategic Plan,
we have made progress in all three areas but there is more to do. In particular, we are intensifying
our efforts to become a bank that is known for the quality of service we give our customers.
Serving customers well
Serving customers well is what a really good
bank does. In the past the banking industry,
including RBS, has simply not been good
enough at it. Putting that right needs hard
work, determination and focus. It will not
happen overnight. But at RBS, we are
resolutely committed to making sure we
put customers first.
Examples of the steps we took in 2012 to
put customers first included:
strengthening our customer culture through
customer charters and commitments across
our businesses;
introducing a training and accreditation
programme for all of our front-line SME
bankers to ensure they are better
equipped to serve our customers; and
making sure we regularly and actively
monitor customer satisfaction levels,
customer complaints and customer
feedback across our divisions.
While we are encouraged by our progress,
we are not complacent. We understand the
need to keep improving, particularly in light of
the challenging and competitive environment in
which we operate. And we will not waver in our
commitment to embed serving customers well
into our DNA.
Restoring RBS to a sustainable and
conservative risk profile
We must operate safely and soundly if we are
to serve all those who rely on us. This aim has
underpinned our recovery plan. Our progress
can be measured by our capital, how we fund
ourselves and the reserves we hold in case of
emergencies.
In 2012:
we increased our Core Tier 1 capital ratio
to 10.3% and were able to exit the Asset
Protection Scheme (APS);
we have reached our target of sustainable
funding, with a loan to deposit ratio of 100%;
and
we now have an excess of liquidity which
we are keen to lend to our customers, if loan
demand picks up.
The focus is now on absorbing the upcoming
regulatory changes to emerge from our five-
year turnaround at the end of next year with
a Core Tier 1 capital ratio of at least 10%.
Rebuilding sustainable value
for all shareholders
Rebuilding a sustainably valuable business
is important not just from the conventional
perspective of delivering shareholder value
but in our case to enable the UK Government
to recover the taxpayers’ investment.
We took a first step by repaying the liquidity
and credit support that we needed from the
government at the start of the financial crisis.
Our exit from the APS in 2012, after paying
the Government £2.5 billion, was another
major milestone. The next step is to make RBS
attractive enough to allow the UK Government
to consider selling some of its shares in
the bank.
Building sustainable value requires us first and
foremost to demonstrate that we can operate
safely and soundly and that we are serving our
customers well. These are the cornerstones of
our strategy. Each of our businesses must add
value in its own right. They also provide a
stronger, more stable and valuable whole
because of the linkages between them.
Among the strategic actions we have
already taken to get to this position are:
reshaping our business portfolio to
concentrate on a select group of market-
leading customer franchises;
dramatically restructuring our investment
banking business to adapt our business mix
to the changing regulatory landscape;
focusing relentlessly on cost control
across all our businesses; and
investing in our Core UK Retail and
Commercial businesses to bring their
capabilities towards the levels our
customers expect.
We outline how each of our divisions are
performing together to deliver our Strategic
Plan on pages 16 to 17.
How we do business
We need to complete these three jobs if RBS
is to be a really good bank. Alongside this,
we have to be clear about how we want do
business. That is why we aspire to standards
of behaviour in six areas around our
customers, finances, people, reputation, risk
and security. These are summarised opposite.
Our approach
to business