RBS 2013 Annual Report Download - page 108
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Business review
106
Competition
The Group faces strong competition in all the markets it serves. Banks’
balance sheets have strengthened whilst loan demand remains subdued
as many customers continue to deleverage even as the UK economy
begins to show signs of recovery. Competition for retail deposits has
eased somewhat as institutions have made progress towards building
strong and diverse funding platforms for their balance sheets.
Competition for corporate and institutional customers in the UK and
abroad is from UK banks and from large foreign universal banks that offer
combined investment and commercial banking capabilities. In addition,
the Group’s Markets division faces strong competition from dedicated
investment banks. In asset finance, the Group competes with banks and
specialist asset finance providers, both captive and non-captive. In
European and Asian corporate and institutional banking markets the
Group competes with the large domestic banks active in these markets
and with the major international banks.
In the small business banking market, the Group competes with other UK
clearing banks, specialist finance providers and building societies.
In the personal banking segment, the Group competes with UK clearing
banks and building societies, major retailers and life assurance
companies. In the mortgage market, the Group competes with UK
clearing banks and building societies. Increasingly, the ambitions of non-
traditional players in the UK market are gaining credibility, with new
entrants active and seeking to build their platforms by acquiring
businesses made available through restructuring of incumbents. The
Group distributes life assurance products to banking customers in
competition with independent advisors and life assurance companies.
In the UK credit card market large retailers and specialist card issuers are
active in addition to the UK banks. In addition to physical distribution
channels, providers compete through direct marketing activity and the
internet.
In Wealth Management, The Royal Bank of Scotland International
competes with other UK and international banks to offer offshore banking
services. Coutts and Adam & Company compete as private banks with
UK clearing and private banks, and with international private banks.
Competition in wealth management remains strong as banks maintain
their focus on competing for affluent and high net worth customers.
In Ireland, Ulster Bank competes in retail and commercial banking with
the major Irish banks and building societies, and with other UK and
international banks and building societies active in the market. The
challenging conditions in the Irish economy persist and many of the
domestic Irish banks have required State support and are engaged in
significant restructuring actions.
In the United States, RBS Citizens competes in the New England, Mid-
Atlantic and Mid-West retail and mid-corporate banking markets with local
and regional banks and other financial institutions. The Group also
competes in the US in large corporate lending and specialised finance
markets, and in fixed-income trading and sales. Competition is principally
with the large US commercial and investment banks and international
banks active in the US. The economic recovery in the US is proving
weaker than expected and loan demand is weak in Citizens’ markets.