RBS 2013 Annual Report Download - page 488
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Notes on the consolidated accounts
486
38 Segmental analysis
(a) Divisions
The directors manage the Group primarily by class of business and
present the segmental analysis on that basis. This includes the review of
net interest income for each class of business - interest receivable and
payable for all reportable segments is therefore presented net. Segments
charge market prices for services rendered to other parts of the Group;
funding charges between segments are determined by Group Treasury,
having regard to commercial demands. The segment measure is
operating profit/(loss).
The ceding of control which resulted from the partial disposal of the
Group’s shareholding in Direct Line Group (DLG) has resulted in the
Group no longer treating DLG as an operating segment. Comparative
data have been restated.
The Group's reportable segments are on a divisional basis as follows:
UK Retail offers a comprehensive range of banking products and related
financial services to the personal market. It serves customers through a
number of channels including: the RBS and NatWest network of
branches and ATMs in the United Kingdom, telephony, online and
mobile.
UK Corporate is a leading provider of banking, finance and risk
management services to the corporate and SME sector in the United
Kingdom. It offers a full range of banking products and related financial
services through a nationwide network of relationship managers, and also
through telephone and internet channels. The product range includes
invoice finance through the RBSIF brand and asset finance through the
Lombard brand.
Wealth provides private banking and investment services in the UK
through Coutts & Co and Adam & Company, offshore banking through
RBS International, NatWest Offshore and Isle of Man Bank, and
international private banking through Coutts & Co Ltd.
International Banking serves the world’s largest companies with a leading
client proposition focused on financing, risk management and transaction
services. It serves as the delivery channel for Markets products to
international corporate clients. The division also serves international
subsidiaries of clients from other RBS Group divisions (e.g. UK
Corporate, Ulster Bank and US Retail & Commercial) through its
international network.
Ulster Bank is a leading retail and commercial bank in Northern Ireland
and the Republic of Ireland. It provides a comprehensive range of
financial services through both its Retail Banking division, which provides
loan and deposit products through a network of branches and direct
channels, and its Corporate Banking division, which provides services to
businesses and corporate customers.
US Retail & Commercial provides financial services primarily through the
Citizens and Charter One brands. US Retail & Commercial is engaged in
retail and corporate banking activities through its branch network in 12
states in the United States and through non-branch offices in other
states.
Markets is a leading origination, sales and trading business across debt
finance, fixed income and currencies. The division offers a unified service
to the Group’s corporate and institutional clients. The Markets’
origination, sales and research teams build strong ongoing client
partnerships, provide market perspective and access, and work with the
division’s trading and structuring teams to meet the client’s objectives
across financing, risk management, investment, securitisation and
liquidity.
A new strategy for the Markets division was announced in June 2013
enabling RBS to concentrate on its core customers’ needs where the
Markets business is strongest. Markets is now focused on our core fixed
income capabilities across rates, foreign exchange, asset backed
products, credit and debit capital markets, while de-emphasising some
more capital intensive structured product areas.
Central Functions comprises Group and corporate functions, such as
treasury, finance, risk management, legal, communications and human
resources. The Centre manages the Group's capital resources and
Group-wide regulatory projects and provides services to the operating
divisions.
Non-Core managed separately assets that the Group intended to run off
or dispose of. The division contained a range of businesses and asset
portfolios primarily from the legacy GBM businesses, higher risk profile
asset portfolios including excess risk concentrations, and other illiquid
portfolios. It also included a number of other portfolios and businesses
including regional markets businesses that the Group had concluded
were no longer strategic.