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24
Personal &
Business Banking
Les Matheson
CEO,
Personal & Business Banking
38%
Contribution
to income
At the end of December
2014 we had c.3 million
active users of our
Personal Mobile App in
the UK.
£
Simple transactions can
be done in 11,500 Post
Offices across the UK.
For further
information
see pages
Personal & Business Banking (PBB) serves individual and mass
affluent customers together with small businesses (generally up to
£2 million turnover), with more business bankers moving back into
branches. PBB comprises two segments, UK Personal & Business
Banking, including Williams & Glyn, (UK PBB) and Ulster Bank.
Performance overview
• PBB recorded an operating profit of
£2,056 million, up £2,846 million.
• Net interest income increased by £210
million or 4% with strong improvements in
deposit margins and volume growth. This
was partly offset by lower asset margins
linked to the continued change in the mix
of loan book towards secured lending and
lower mortgage margins.
• Operating expenses decreased by £279
million or 5%, reflecting lower restructuring
and litigation and conduct costs.
• Mortgage balances increased by £2.4
billion or 2%, to £121 billion driven by strong
performance as advisor capacity increased.
Building a better bank that serves
customers well
The strategic goal of PBB is to become the
number one personal and business bank for
customer service, trust and advocacy in the
UK. Following completion of a strategic review,
Ulster Bank was confirmed as a core part of
RBS, offering a good strategic fit with RBS’s
retail and commercial strategy.
These included:
• extending services to the Post Office
network.
• removing 0% teaser deals from its offering
and introducing the new Clear Rate and
cash-back credit cards in 2014. RBS
became the first of the main high street
banks to ensure all of its savers get the
same or better deals as new customers.
• further developing online and mobile
banking services to support the upward
trend in digital transaction volumes.
Performance highlights
2014
2013
Return on equity (%)
17.5
(5.7)
Net interest margin (%)
3.42
3.21
Cost:income ratio (%)
71
78
Net loans and advances to customers (£bn)
149.2
150.8
Customer deposits (£bn)
169.3
166.6
88
91
66.6
81.9
Loan:deposit ratio (%)
129 - 135
Throughout 2014, the business has made
steady progress in making banking fairer and
simpler for its customers through a number
of fair banking initiatives and technology
investments.
Risk-weighted assets (£bn)
Note: RWAs at 31 December 2013 are on Basel 2.5 basis and on the end-point CRR basis at 31 December 2014.
Business review
Customer Case Study
Fairer Banking
We’ve made a conscious decision to be different from
other banks. In 2014, we made a series of customer
commitments which aimed to make banking simpler,
fairer and clearer for our customers.
In an industry leading move we stopped offering
teaser rates to attract new customers and offered our
customers the same rates online, through a branch
or over the phone. As part of this we became the first
bank on the high street to commit to giving all our
savers the same rates, including proactively moving
our loyal existing customers onto our best rates.
We’ve also simplified our products, so it’s easy for our
customers to find the right one for their needs – and
with all our charges explained on just one page.
In March we stopped offering 0% balance transfer
credit cards. This type of card was designed to make it
easier for customers to repay existing credit card debt,
but our research showed that debt tended to increase,
rather than reduce over the term. Stopping these cards
meant around 100,000 customers transferred to a low,
ongoing rate with no chance of being caught out by a
big jump in their interest rate down the line.
We’re making changes for business customers too
– 95% of business lending decisions are now made
within five days and gross business lending is up 30%
from 2013. Plus, we’ve committed an extra £1 billion
to support small businesses with fee-free, fixed
rate loans.
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