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  • Chairman’s statement – The Royal Bank of Scotland plc
    Comms Shareholder FAQs Events calendar 2014 at a glance 2014 performance Business review Progress in 2014 Chairman s statement Chief Executive s review Key economic indicators Governance at a glance Risk overview Sustainability Download centre Chairman s statement 2014 was a year of significant progress for RBS with a much improved operating profit and major achievements in terms of business reorganisation cost reduction capital build and improved IT capability Philip Hampton Chairman Read our Chairman s statement As Ross McEwan has set out in his letter the business continues to simplify and improve focusing on putting its customers at the heart of its activities The bank has delivered a good operating profit of 3 5 billion for 2014 but the costs associated with completing the restructuring of RBS mean we are still reporting a bottom line attributable loss Although the huge changes to the size shape and risk profile of the business since the financial crisis are largely complete or in hand the further substantial restructuring of our markets operations and international spread will require careful management in 2015 Of course your Board is pleased to see the improved operating performance which in our view reflects the underlying strength of the business Looking back however we must acknowledge that we did not fully recognise the scale of the challenge that awaited us in 2009 At the time we assumed that a Core Tier 1 capital ratio of more than 8 by 2013 would be sufficient to constitute undoubted financial strength in the minds of markets and regulators today we have increased our capital target to 13 We must also acknowledge that we did not anticipate the more than 9 billion of regulatory fines and customer redress we have borne so far as we paid and will continue to pay the price for our past conduct failings These conduct issues have delayed the re build of our capital and directly reduced shareholder value They have also caused continuing reputational damage I hope as we move beyond these issues we can fully rebuild the trust of our customers and by doing so win more of their business The need to continue to rebuild capital strength means it has taken longer than we had expected to reach a point at which the Government could be in a position to start selling down its stake in RBS The decision on timing rests with the Government through UK Financial Investments which manages its shareholding but our task is to create the conditions in which it can do so In working towards that end we are also furthering the interests of RBS s other shareholders as we believe that the beginning of the sell down will be welcomed by investors As announced previously I will be leaving RBS in 2015 The Board is pleased to announce that Howard Davies will succeed me as Chairman and we welcome him to RBS He will join the Board at the end of June and take over from me on

    Original URL path: http://www.investors.rbs.com/2014-at-a-glance/chairmans-statement.aspx (2016-02-13)
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  • Chief Executive’s review – The Royal Bank of Scotland plc
    overarching part of delivering sustainable returns is controlling operating costs When I announced our cost target last year it was described by some as the most ambitious cost target in Europe Well through our drive across the bank for greater simplicity we have over delivered and surpassed our target of 1 billion of operating cost savings for the bank With a cost income ratio for the year of 68 on an adjusted basis we are still behind our peers on cost efficiency and there is work to do to fulfil our desire to take it below 50 But we have a strong track record on delivery and there is resolve across this bank to get this done I am very pleased with the progress we have made in 2014 against our stated objectives While that progress is evident in the operating profit line of the results announced we are still posting an attributable loss to our shareholders This is an accounting consequence of one of our 2014 achievements the successful flotation of Citizens on the New York Stock Exchange Now the deconsolidation of Citizens is finally within sight accounting rules require us to write it down to its estimated disposal value This write down substantially represents the goodwill previously attached to Citizens While I realise that the headlines this generates are disappointing it is important to emphasise that this particular accounting loss does not change our regulatory capital or tangible net asset value Safety remains a cornerstone of our strategy A core question for any bank seeking the trust of its customers is whether it s safe and strong and focused and able to support customers and the economy The progress we have made should mean that it is no longer in any doubt The CET1 ratio has improved by 260 basis points to 11 2 over the course of the year up from 8 6 as at 31 December 2013 We reached our full year 2015 CET1 target of 11 one year ahead of schedule and we are on track to achieve a revised CET1 target of 13 which we have set in place for the period of the CIB restructuring We now have considerably more high quality capital than we had when the financial crisis hit and this bank was bailed out by the taxpayer But we need to meet and exceed the expectations of the Prudential Regulation Authority PRA and of our shareholders and bondholders Stress test results show it s not just how much capital you have but how your balance sheet behaves under extreme economic scenarios This year our team in RBS Capital Resolution has managed to accelerate the removal of some of our most capital intensive assets and we are on track to complete our 2014 2016 RCR run down targets by the end of 2015 one year ahead of the original target we set for ourselves Our capital strength will be bolstered further when Citizens Financial Group in the USA is deconsolidated from our balance sheet This is also expected in 2015 In 2015 we also plan to start a programme of issuing Basel III compliant Additional Tier 1 capital instruments Conduct It has taken far longer than anyone realised to root out all the past problems practices and related fines and we still have challenges on the horizon We are changing the culture of this bank our aim is that shareholders are not exposed to this scale of conduct risk again What you will have seen from me over the last year is the way I will be open and honest with you and our customers when dealing with these issues the way we continue to approach FX is a good example of this I will not hide I will talk openly about the hurt this wrongdoing causes me and the many thousands of people within this bank I will detail the things we are doing to put things right for our customers and the challenge and change we are driving through the culture and conduct of our staff We are determined to learn the lessons from the wrongdoings of the past and ensure that those responsible are held to account Building on our strengths I said this time last year that the days when global domination mattered more to RBS than great customer service are well and truly over Well we are not just talking about being a UK centred bank we are a UK centred bank 80 of our revenues are generated in the UK At the time of the 2008 financial crisis this number was 48 Seven years after the crisis we still have top 3 market positions in the following UK segments large corporates and financial institutions FIs Sterling provider in wholesale banking SME banking Private banking Financing for UK infrastructure projects and Personal banking We are building on this strength to manage value for shareholders and deliver the most resilient future returns In last year s letter I told you that where a business can t deliver value to our shareholders in a reasonable time period we will take decisive action We have put international private banking activities 1 up for sale and we are now going further faster in reshaping parts of our CIB business The investment bank was over stretched both in range of product and geography There was too much risk for too little return Given the increasing regulatory requirements on this business it was a strategy that now has little hope of delivering acceptable returns to shareholders To be a number 1 bank means providing a full service offering to UK and Western European corporate and financial institution clients It means providing a first class platform to process payments in the UK and Europe And it means having the expertise to help customers raise finance on the debt capital markets and manage the high level risks they face Serving customers in these areas is an undisputed area of strength for us they are

    Original URL path: http://www.investors.rbs.com/2014-at-a-glance/chief-executive-review.aspx (2016-02-13)
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  • Key economic indicators – The Royal Bank of Scotland plc
    at a glance 2014 performance Business review Progress in 2014 Chairman s statement Chief Executive s review Key economic indicators Governance at a glance Risk overview Sustainability Download centre Key economic indicators The key market in which RBS operates is the UK Lending in the UK is closely linked to GDP and growth in the housing market is highly dependent on the level of interest rates Falling unemployment may have a positive impact on lending as more people are able to afford loans The profitability of the banking sector is adversely impacted by low interest rates as they squeeze the margin between borrowing and lending The level of impairments is affected among other things by GDP growth movements of unemployment rates and interest rates The other key economies in which RBS operates are the US and the Republic of Ireland RoI UK GDP was up 2 6 on 2013 1 Ireland GDP growth is estimated to have improved to 4 8 from 0 2 in 2013 US GDP is estimated to have grown 2 4 The unemployment rate in October to December 2014 was 5 7 lower than for July September 2014 6 0 and lower than for a year earlier 7 2 The unemployment rate in October to December 2014 was 5 7 lower than for July September 2014 6 0 and lower than for a year earlier 7 2 Inflation measured by the CPI 12 month rate between December 2013 and December 2014 stood at 0 5 The food and motor fuels product groups in total reduced the CPI 12 month rate by approximately 0 6 percentage points in the year to December 2014 While UK Bank Rate and Fed Funds remained unchanged throughout 2013 and 2014 at 0 5 and 0 25 respectively the ECB cut the refinancing rate twice in 2014 to 0 05 UK house price inflation increased from 5 5 in December 2013 to 9 8 in December 2014 For October to December 2014 regular pay for employees in Great Britain was 1 7 higher than a year earlier and total pay for employees in Great Britain was 2 1 higher than a year earlier Summary The UK economy performed relatively well in 2014 with GDP expanding by 2 6 compared with the previous year By contrast the eurozone s modest recovery struggled to gain traction as growth of just 0 9 was realised In Q4 2014 UK GDP was estimated to be 3 4 higher than the pre crisis peak of Q1 2008 Inflation fell over the course of 2014 on the back of falling food and oil prices The Consumer Price Index rose just 0 5 in December 2014 compared with December 2013 The UK labour market performed strongly In October to December 2014 the number of unemployed people was 486 000 lower than a year earlier The unemployment rate was 5 7 the lowest level since the summer of 2008 Real wage growth turned positive in late 2014 after falling almost

    Original URL path: http://www.investors.rbs.com/2014-at-a-glance/key-economic-indicators.aspx (2016-02-13)
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  • Governance at a glance – The Royal Bank of Scotland plc
    The Board will continue to drive cultural change and it is essential that our governance framework continues to evolve to support this During 2015 the Board will continue to focus on our key priorities including customers conduct capital and funding risk and delivery of the strategic plan Philip Hampton Chairman of the Board of directors Our Board The Board has ten directors comprising the Chairman two executive directors and seven independent non executive directors one of whom is the Senior Independent Director Biographies for each director and details of which Board Committees they are members of can be found on pages 46 to 49 There were a number of changes to the Board s composition during 2014 details of which can be found in the Chairman s Statement on pages 6 and 7 The Board is collectively responsible for the long term success of RBS and delivery of sustainable shareholder value Its role is to provide leadership of RBS within a framework of prudent and effective controls which enables risks to be assessed and managed We conducted an internal evaluation of the effectiveness of the Board and its committees in 2014 led by the Chief Governance Officer and Board Counsel The evaluation has concluded that the Board is operating effectively but has identified some areas for improvement which we will focus on during 2015 Our Board Committees In order to provide effective oversight and leadership the Board has established a number of Board committees with particular responsibilities The work of the Board committees is discussed in their individual reports The terms of reference for each of these committees is available on rbs com and copies are also available on request from RBS Corporate Governance and Secretariat Group Nominations Committee Assists the Board in the selection and appointment of directors It reviews the structure size and composition of the Board and membership and chairmanship of Board committees The Group Nominations Committee report is set out on pages 55 and 56 Group Audit Committee Assists the Board in discharging its responsibilities for monitoring the quality of the financial statements of RBS It reviews the accounting policies financial reporting and regulatory compliance practices of RBS It also exercises oversight over systems and standards of internal controls and monitors RBS s processes for internal audit and external audit The Group Audit Committee report is set out on pages 57 to 61 Board Risk Committee Provides oversight and advice to the Board on current and potential future risk exposures of RBS and future risk strategy It reviews RBS s compliance with approved risk appetite and oversees the operation of the RBS Policy Framework and submissions to regulators The Board Risk Committee report is set out on pages 62 to 68 RBS Capital Resolution RCR Board Oversight Committee Provides oversight of RCR s progress against and compliance with its primary objective and asset management principles The RCR Board Oversight Committee report is set out on pages 69 and 70 Sustainable Banking Committee Responsible for overseeing and

    Original URL path: http://www.investors.rbs.com/2014-at-a-glance/governance-at-a-glance.aspx (2016-02-13)
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  • Risk overview – The Royal Bank of Scotland plc
    to cyber security programmes Liquidity A strong liquidity position was maintained with a liquidity portfolio of 151 billion at the end of 2014 covering short term and total wholesale funding by factors of over five and 1 5 respectively Liquidity coverage ratio was 112 and the net stable funding ratio was 121 at the end of 2014 Credit risk 2014 saw a net release of 1 2 billion of impairment provisions principally in RCR and Ulster Bank reflecting sustained improvements in economic and asset market conditions in the UK and Ireland RBS continued to reduce its risk concentrations notably in commercial real estate and eurozone periphery countries RBS still has substantial credit risk exposures with credit risk RWAs of 295 billion compared with 357 billion at the end of 2013 a 17 reduction Market risk RBS s traded market risk profile decreased significantly with market risk limits being reduced across all businesses Average trading VaR decreasing to 27 8 million 35 of the 2013 average Market risk RWAs also decreased by 6 3 billion to 24 billion Country risk RBS maintained a cautious stance as many clients continued to reduce debt levels Total eurozone periphery net balance sheet exposure decreased by 10 billion or 25 to 31 billion Total exposure to Greece was 0 4 billion but only 120 million after taking into account collateral and guarantees Pension risk The triennial actuarial funding valuation of the main scheme agreed in May 2014 showed the value of liabilities exceeded the value of assets by 5 6 billion at 31 March 2013 a ratio of assets to liabilities of 82 To eliminate this deficit RBS has agreed to pay additional contributions 650 million from 2014 to 2016 and 450 million indexed for inflation from 2017 to 2023 These contributions are in addition to regular annual contributions of around 270 million Top and emerging risk scenarios A number of top and emerging risk scenarios attracted particular attention Macro economic and other external risks Risks related to the macro economy A number of scenarios could have a significant negative impact on RBS s revenues and impairments including a recession in the UK or any of the other major markets in which RBS operates large falls in UK or Irish property prices oil prices a resumption of the eurozone crisis global deflation or major geopolitical instability To mitigate these risks capital liquidity and leverage ratios have been strengthened and some higher risk and capital intensive portfolios have been exited An increase in obligations to support pension schemes If economic growth stagnates and interest rates remain low the value of pension scheme assets may not be adequate to fund the pension schemes liabilities The deficit in RBS pension schemes as determined by the most recent triennial valuations has increased requiring RBS to increase its current and future cash contributions to the schemes as noted above Depending on the economic and monetary conditions and longevity of scheme members prevailing at that time the deficit may rise further

    Original URL path: http://www.investors.rbs.com/2014-at-a-glance/risk-overview.aspx (2016-02-13)
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  • Sustainability – The Royal Bank of Scotland plc
    emissions per FTE tonnes 4 7 4 5 4 2 4 5 5 8 Scope 3 CO 2 e emissions from business travel tonnes 141 254 94 993 132 307 97 791 31 26 Emissions of ozone depleting gases Emissions of ozone depleting gases tonnes 2 447 9 611 4 758 4 710 93 1 Incidents Total number of environment incidents fines and legal non compliance 0 0 0 0 0 0 Note on data Reported figures for previous years have changed in some instances These changes are due to calculation methodology changes in line with carbon management best practice and emission factor changes as recommended by the GHG protocol Scope 1 Emissions from fluorinated gas loss and fuel combustion in RBS premises vehicles Scope 2 Emissions from electricity district heating and district cooling used in RBS premises External commitments RBS is a signatory to a number of voluntary sustainability commitments and standards We understand that implementing commitments is an ongoing process and we are continuously working to integrate these into how we run our business We are a member of the Equator Principle EP Association Steering Committee The EPs are a voluntary set of standards adopted by banks for determining assessing and managing social and environmental responsibilities in project financing and project related corporate loans We will not provide project finance where the borrower will not or cannot comply with these principles of socially responsible investment We are also on the Steering Committee of the UK United Nations Global Compact UNGC network The UNGC is the leading platform for the development implementation and disclosure of responsible policies and practices in the areas of human rights labour environment and anti corruption Each year RBS receives ratings for its environmental and social performance by external indices RBS has been included in the Dow Jones Sustainability World Index DJSI every year since its launch in 1999 maintaining our best ever score of 82 for a second year in 2014 The DJSI ranks companies corporate sustainability performance based on analysis of economic environmental and social issues like corporate governance risk management branding and climate change CDP is an independent investor driven organisation which facilitates the measurement and disclosure of greenhouse gas emissions for 2 500 organisations in over 60 countries In 2014 RBS received a disclosure score of 98 and a performance score B The FTSE4Good Index Series measures the performance of companies that meet globally recognised corporate responsibility standards RBS has been included in the FTSE4Good since it was launched 11 years ago Transparency and disclosure At RBS we have a long way to go to rebuild trust after everything that the company has been through We are taking a very deliberate approach to be as open as possible about our business including on going challenges as well as progress We were therefore particularly pleased in 2014 to have been ranked as the leading UK company in Transparency International s report on transparency in corporate reporting In this Strategic Report we present

    Original URL path: http://www.investors.rbs.com/2014-at-a-glance/sustainability.aspx (2016-02-13)
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  • Download centre – The Royal Bank of Scotland plc
    centre Events calendar News and opinion Economic opinion RBS Blog Multimedia library Sustainability Sustainability at RBS Serving customers well Serving society Working at RBS Supporting communities External assurance Sustainability download Home Investors 2014 at a glance Download centre Investors Our investment case Results centre Results archive Annual report and subsidiary results 2015 2014 2013 2012 2011 2010 Archived 2014 at a glance 2014 performance Business review Progress in 2014 Chairman s statement Chief Executive s review Key economic indicators Governance at a glance Risk overview Sustainability Download centre Fixed income investors Fixed income factbook Issuance plan Fixed income presentations Credit ratings Securitisation Covered bonds Unsecured securities documentation Company legal structure Bearer shares RBS plc IPED business transfer to BNP Paribas Presentations Archived presentations Regulatory news Company announcements SEC filings Email alerts Share data Share price information Share price downloads Share price chart Ordinary share dividends Equity ownership statistics Shareholder centre Managing your shareholding Shareholder meetings Corporate actions NatWest shareholders Shareholder events Sign up for E Comms Shareholder FAQs Events calendar 2014 at a glance 2014 performance Business review Progress in 2014 Chairman s statement Chief Executive s review Key economic indicators Governance at a glance Risk overview Sustainability Download centre

    Original URL path: http://www.investors.rbs.com/2014-at-a-glance/download-centre.aspx (2016-02-13)
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  • Fixed income factbook – The Royal Bank of Scotland plc
    Economic opinion RBS Blog Multimedia library Sustainability Sustainability at RBS Serving customers well Serving society Working at RBS Supporting communities External assurance Sustainability download Home Investors Fixed income investors Fixed income factbook Investors Our investment case Results centre Results archive Annual report and subsidiary results 2015 2014 2013 2012 2011 2010 Archived 2014 at a glance 2014 performance Business review Progress in 2014 Chairman s statement Chief Executive s review Key economic indicators Governance at a glance Risk overview Sustainability Download centre Fixed income investors Fixed income factbook Issuance plan Fixed income presentations Credit ratings Securitisation Covered bonds Unsecured securities documentation Company legal structure Bearer shares RBS plc IPED business transfer to BNP Paribas Presentations Archived presentations Regulatory news Company announcements SEC filings Email alerts Share data Share price information Share price downloads Share price chart Ordinary share dividends Equity ownership statistics Shareholder centre Managing your shareholding Shareholder meetings Corporate actions NatWest shareholders Shareholder events Sign up for E Comms Shareholder FAQs Events calendar Fixed income investors Fixed income factbook Issuance plan Fixed income presentations Credit ratings Securitisation Covered bonds Unsecured securities documentation Company legal structure Bearer shares RBS plc IPED business transfer to BNP Paribas Fixed income factbook Download

    Original URL path: http://www.investors.rbs.com/fixed-income-investors/fixed-income-factbook.aspx (2016-02-13)
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