REG - Royal Bk Scot.Grp. - Final Results - Part 1 <Origin Href="QuoteRef">RBS.L</Origin> - Part 2

NatwestAnnouncement

26/02/2015 07:13

- Part 2: For the preceding part double click  ID:nRSZ9135Fa 

likely is it that you would recommend (brand) to a relative, friend or colleague in the next 12 months for current account banking?"                                                                                                
 (2)  Source: Coyne Research 12 month rolling data. Question: "Please indicate to what extent you would be likely to recommend (brand) to your friends or family using a scale of 0 to 10 where 0 is not at all likely and 10 is extremely likely".                                                                                                                                
 (3)  Source: Charterhouse Research Business Banking Survey, based on interviews with businesses with an annual turnover up to £2 million. 12 month rolling data. Latest base sizes: NatWest England & Wales (529), RBS Scotland (399). Weighted by region and turnover to be representative of businesses in England & Wales/Scotland.                                            
 (4)  Source: PwC Business Banking Tracker. Question: "I would like you to continue thinking about your main business bank and the service they provide. Can you tell me how likely or unlikely would you be to do the following? Again please use a scale of 1 to 10, where 1 is very unlikely and 10 is very likely. How likely are you to recommend them to another business?"  
 (5)  Source: Charterhouse Research Business Banking Survey, based on interviews with businesses with annual turnover between £2 million and £1 billion.  Latest base size: RBSG Great Britain (972). Weighted by region and turnover to be representative of businesses in Great Britain.                                                                                         
 
 
Customer 
 
Customer trust 
 
We also use independent experts to measure our customers' trust in the bank. Each quarter we ask customers to what extent
they trust or distrust their bank to do the right thing. The score is a net measure of those customers that trust their
bank (a lot or somewhat) minus those that distrust their bank (a lot or somewhat). 
 
                                               Year end 2013  Year end 2014  Year end 2015 target  
 Customer Trust(6)  NatWest (England & Wales)  35%            41%            46%                   
 RBS (Scotland)     -16%                       2%             11%            
 
 
(6)Source: Populus (2014) and PSB (2013).  Latest quarter's data.  Measured as a net of those that trust RBS/NatWest to do
the right thing, less those that do not. Latest base sizes: NatWest England & Wales (927), RBS Scotland (206). 
 
The year-on-year improvement in RBS customer trust is largely a reversion to its longer-term trend: there were issues in
late 2013 that impacted the bank's reputation and customer trust. There are early signs that customer trust in RBS is
stabilising and starting to improve. NatWest has consistently performed competitively, and has shown early signs of
improvement. 
 
We will continue to aim for improvement through a secure, consistent and reliable service, and an unrelenting focus on our
customers. 
 
Improving Customer Service 
 
In February 2014, we made a series of commitments to our RBS and NatWest customers. 
 
Customer 
 
 Customer commitment                                                                                                                                                                          Progress                                                                                                                                                                                                                                                                                                                   
 We will stop offering deals to new customers that we are not prepared to offer to our existing customers.                                                                                    We now offer our best rates to new and existing customers across our product range. There is now no Personal Banking or Business Banking deal that is not available to existing customers.                                                                                                                                 
 We will also ban teaser rates, including zero per cent balance transfers in our credit card business.                                                                                        We have banned teaser rates. We run a fair and transparent credit card business for our customers.                                                                                                                                                                                                                         
 We will stop offering different rates to customers who apply online, in branch or by phoning our call centres.                                                                               Across our RBS and NatWest brands, pricing is consistent.                                                                                                                                                                                                                                                                  
 We will use simple language in our customer letters, on our websites and in our branches.                                                                                                    Customer letters and emails have been simplified for our personal and business customers so they are straightforward and transparent. We have reduced the number of pages on our personal banking website by over 60%. In branches we have fewer, shorter brochures making it easier for customers to find information.    
 By the end of 2014 we will cut in half the number of personal and SME products on offer.                                                                                                     We have reduced the number of Personal and SME products on offer by 50%. We are becoming a smaller, simpler bank to do business with.                                                                                                                                                                                      
 We will improve the clarity of our language to customers. By the end of 2014 we will be able to explain all of our personal and SME charges on one side of A4.                               Fees and charges are explained on one side of A4 for both our personal and business customers and will be communicated via our internet sites by the end of February 2015. We have a duty to our customers to provide a straightforward breakdown of all charges.                                                          
 We will speed up our account opening process for personal customers. We will cut how long it takes to open a personal current account from five days to next day.                            All customers applying for a personal current account who have the required ID and pass our fraud and credit checks can now open their account the next working day.                                                                                                                                                       
 We will also improve the process to open a personal current account online so customers can upload their identification, such as their passport, and open their entire account from home.    All customers applying for a personal current account who have the required ID and pass our fraud and credit checks can complete their application online and, where required, are able to upload key ID documents from home.                                                                                              
 
 
Customer 
 
 Customer commitment                                                                                                                                                                      Progress                                                                                                                                                                                                                                                                                                   
 By the end of 2014, customers will have access to Mobile Banking and Online Banking within one day.                                                                                      All Personal and Business Banking customers now have access to online banking by the next working day. Existing customers with a debit card now have access to mobile banking the next working day.                                                                                                        
 We will put Business Bankers back on the high street. We will have hundreds of Business Bankers help small business people open accounts, apply for loans and get the help they need.    82% of Business Banking frontline staff are immediately above/next to our branches. This equates to 1,335 Business Banking specialists in branch today. We are simplifying processes so that Business Bankers can spend more time with customers, providing help and advice in branch or via telephone.    
 We will start making small business lending decisions in five days.                                                                                                                      We are processing lending decisions quicker. In almost all cases, lending decisions are made and communicated to the customer in five days or less with two-thirds of business lending decisions made locally and/or by sector specialists.                                                                
 
 
Summary consolidated income statement 
 
for the period ended 31 December 2014 
 
                                                           Year ended                Quarter ended  
                                                           31 December  31 December                 31 December  30 September  31 December  
                                                           2014         2013                        2014         2014          2013         
                                                           £m           £m                          £m           £m            £m           
                                                                                                                                            
 Net interest income                                       11,274       10,992                      2,915        2,863         2,767        
 Non-interest income                                       6,923        8,450                       945          1,496         1,173        
                                                                                                                                            
 Total income                                              18,197       19,442                      3,860        4,359         3,940        
 Operating expenses                                        (15,849)     (18,510)                    (4,858)      (3,883)       (6,881)      
                                                                                                                                            
 Profit/(loss) before impairment losses                    2,348        932                         (998)        476           (2,941)      
 Impairment releases/(losses)                              1,155        (8,432)                     623          801           (5,112)      
                                                                                                                                            
 Operating profit/(loss) (1)                               3,503        (7,500)                     (375)        1,277         (8,053)      
 Own credit adjustments                                    (146)        (120)                       (144)        49            -            
 Gain on redemption of own debt                            20           175                         -            -             (29)         
 Write down of goodwill                                    (130)        (1,059)                     -            -             (1,059)      
 Strategic disposals                                       191          161                         -            -             168          
 Citizens discontinued operations                          (771)        (606)                       (175)        (170)         (104)        
 RFS Holdings minority interest                            (24)         100                         11           (56)          (10)         
                                                                                                                                            
 Operating profit/(loss) before tax                        2,643        (8,849)                     (683)        1,100         (9,087)      
 Tax (charge)/credit                                       (1,909)      (186)                       (1,040)      (277)         403          
                                                                                                                                            
 Profit/(loss) from continuing operations                  734          (9,035)                     (1,723)      823           (8,684)      
                                                                                                                                            
 (Loss)/profit from discontinued operations, net of tax                                                                                     
 - Citizens (2)                                            (3,486)      410                         (3,885)      114           78           
 - Other                                                   41           148                         3            3             15           
                                                                                                                                            
 (Loss)/profit from discontinued operations, net of tax    (3,445)      558                         (3,882)      117           93           
                                                                                                                                            
 (Loss)/profit for the period                              (2,711)      (8,477)                     (5,605)      940           (8,591)      
 Non-controlling interests                                 (60)         (120)                       (71)         53            3            
 Other owners' dividends                                   (379)        (398)                       (115)        (97)          (114)        
 Dividend access share                                     (320)        -                           -            -             -            
                                                                                                                                            
 (Loss)/profit attributable to ordinary                                                                                                     
 and B shareholders                                        (3,470)      (8,995)                     (5,791)      896           (8,702)      
                                                                                                                                            
 Memo:                                                                                                                                      
                                                                                                                                            
 Operating expenses - adjusted (3)                         (12,398)     (14,010)                    (3,131)      (2,923)       (3,826)      
 Operating profit/(loss) - adjusted (3)                    6,954        (3,000)                     1,352        2,237         (4,998)      
                                                                                                                                            
                                                           Year ended                Quarter ended  
                                                           31 December  31 December                 31 December  30 September  31 December  
 Key metrics and ratios                                    2014         2013                        2014         2014          2013         
                                                                                                                                            
 Net interest margin                                       2.23%        2.01%                       2.32%        2.26%         2.08%        
 Cost:income ratio                                         87%          95%                         126%         89%           175%         
 - adjusted (3)                                            68%          72%                         81%          67%           97%          
 Earnings/(loss) per share from continuing operations (4)                                                                                   
 - basic                                                   0.5p         (85.0p)                     (16.2p)      6.9p          (78.0p)      
 - adjusted (5)                                            0.8p         (77.7p)                     (15.1p)      6.5p          (69.9p)      
 Return on tangible equity (6)                             (8.0%)       (18.7%)                     (49.6%)      8.2%          (76.3%)      
 Average tangible equity (6)                               43,357       48,179                      46,720       43,536        45,640       
 Average number of ordinary shares and equivalent B                                                                                         
 shares outstanding during the period (millions)           11,356       11,196                      11,422       11,384        11,256       
                                                                                                                                                
 
 
Notes: 
 
 (1)  Operating profit/(loss) before tax, own credit adjustments, gain on redemption of own debt, write down of goodwill, strategic disposals and RFS MI, and includes the results of Citizens, which is classified as a discontinued operation.                                                 
 (2)  Included within Citizens discontinued operations are t