RBS 2013 Annual Report Download - page 20

18
For further
information
see page 150
Markets
Performance highlights 2013 2012
Return on equity (%) 5.0 9.6
Cost:income ratio (%) 79 66
Risk-weighted assets (£bn) 64.5 101.3
Peter Neilson Suneel Kamlani
Co-CEO Co-CEO
Contribution
to Core income
We provide financing, risk management and
advisory services to RBS corporate and
institutional clients.
Performance overview
• Operating profit fell by £889 million, 59%
to £620 million with income falling by 26%,
partly offset by significant cost reductions.
The de-risking of Markets resulted in a 36%
reduction in risk-weighted assets.
• Currencies income increased but returns
from the Rates business were subdued.
• Costs fell by 11%, reflecting a reduction in
headcount of 1,000 evenly split between
front and back office – and tightly controlled
discretionary expenses.
• Third party assets were reduced by £72 billion
(down 25%) and risk-weighted assets by
£37 billion (down 36%).
Building a better bank that serves
customers well
In 2013, Markets launched and executed a
strategy aimed at reducing risk, tightening
controls, consolidating the geographic footprint
and reducing complexity by refocusing on the
franchise’s core strengths. The division met
or exceeded all internal targets for reducing
controllable costs, risk-weighted assets and
the balance sheet, while meeting revenue
and income expectations. Lower income in
2013 compared with 2012 reflected both the
strategic scaling back of the balance sheet and
risk reduction in a difficult market environment
with client activity limited by uncertainty over
monetary policy in the US.
Customer story
Weighing anchor
Peel Ports Group, one of the UK’s biggest
port operators, handles over 65 million
tonnes of cargo a year. An RBS backed
refinancing programme has enabled the
development of Liverpool2, the new deep
sea container terminal in the Port of
Liverpool, costing in excess of £300
million.
The benefit of this investment
is hugely positive.
As one of their most important sites,
this investment in growth will assist the
UK’s shipping industry to remain globally
competitive as well as acting as a catalyst
for future development. It’s believed
Liverpool2 will help create around 5,000
jobs in Merseyside, including additional
apprenticeships – a great boost for the
local economy.
17%