RBS 2014 Annual Report Download - page 49

47
RBS – Interim Results 2015
Private Banking
Key points
Private Banking continued to focus on its UK strengths as the business is repositioned to enable sustainable
returns over the long run, and to meet its ambition to be the leading UK-based private bank and wealth
manager for wealthy individuals. A new Executive Committee was created with end-to-end accountabilities
around banking, credit and investments, to ensure the business delivers solutions to clients in a responsive,
rapid and efficient manner.
• Growth initiatives included working more closely with colleagues in RBS and NatWest, resulting in
hundreds of referrals of individuals potentially suitable for a private banking relationship with Coutts &
Co or Adam & Company.
• A series of client campaigns are underway to ensure client needs are proactively addressed which
have resulted in over a thousand clients starting to use online banking and the refinancing of over £1
billion of expiring credit facilities.
• The sale of most of the International Private Banking business to Union Bancaire Privée remains on
track for Q4 2015.
On 1 January 2015, the Private Banking RBSI business, accounting for £31 million of operating profit in the
half year was transferred to Commercial Banking. This transfer affects comparisons with prior periods(1).
H1 2015 compared with H1 2014
• Operating loss was £50 million compared with a profit of £145 million a year prior. Results were
affected by the transfer of the RBSI business, lower income, higher restructuring costs and increased
litigation and conduct costs. Private Banking Go-forward business reported an operating loss of £37
million, including £82 million write-down of an intangible asset, compared with a £117 million profit fo
r
H1 2014.
• Total income was £421 million, down from £545 million in H1 2014 with net interest income decreasing
26%. Underlying performance was adversely affected by lower income from hedging activities and
reduced investment and transactional income.
• Operating expenses increased £74 million to £474 million, reflecting an £80 million increase in
restructuring costs, arising from the write-down of an intangible asset of £82 million and litigation and
conduct costs of £28 million, principally incurred in Q2 2015, offsetting a reduction in direct and indirec
t
costs.
• Assets under management were £27.1 billion, down £1.6 billion year-on-year and £1.2 billion from 31
December 2014, with the Greek financial crisis adversely impacting European stock market indices and
reducing portfolio values. Private Banking Go-forward business assets under management were £13.5
billion, down £0.3 billion year-on-year and down £0.2 billion from 31 December 2014.
Note:
(1) The business transfer included: total income of £76 million (H1 2014 - £69 million; Q2 2015 - £37 million; Q1 2015 - £38 million; Q2 2014 - £37 million); operating expenses
of £44 million (H1 2014 - £53 million; Q2 2015 - £23 million; Q1 2015 - £20 million; Q2 2014 - £28 million); net loans and advances to customers of £2.4 billion (31 March
2015 - £2.4 billion; 31 December 2014 - £2.6 billion); customer deposits of £6.4 billion (31 March 2015 - £6.2 billion; 31 December 2014 - £6.5 billion); and RWAs of £1.5
billion (31 March 2015 - £1.5 billion; 31 December 2014 - £1.4 billion). Comparatives have not been restated.