profit attributable to ordinary and B shareholders divided by average tangible shareholders’ equity as a percentage. Tangible common shareholders’ equity equals total shareholders’ equity less preferred stock, goodwill, and identifiable intangible assets.
the statutory body responsible, from 1 April 2013, for the prudential supervision of banks, building societies, insurers and a small number of significant investment firms in the UK. The PRA is a subsidiary of the Bank of England.
the highest quality form of regulatory capital under Basel III comprising common shares issued and related share premium, retained earnings and other reserves excluding the cash flow hedging reserve, less specified regulatory adjustments.
assets adjusted for their associated risks using weightings established in accordance with the Basel Capital Accord as implemented by the PRA. Certain assets are not weighted but deducted from capital.
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Our investment case

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Our Investment Case

Chief Executive Ross McEwan outlines the RBS Journey
 

Our Plan

Our plan is to deliver attractive, balanced and sustainable returns over the medium-to-long term. To do that we must become Stronger, Simpler and Fairer.

  • Our core bank continued to deliver solid results in Q3 with an adjusted RoE across PBB, CPB and CIB of 14%
  • RBS is progressing with its plan to build a strong, simple, fair bank for customers and shareholders
  • The fundamentals of our plan remain unchanged. However, we are now operating in a more uncertain environment
  • We maintain strong positions in our target markets, supported by product and service improvements
  • RBS continued to deliver strong support for both household and business customers
  • Addressing conduct and litigation issues as quickly and prudently as we can
Stronger

We are working to ensure that our market leading positions in the UK and Ireland are underpinned by capital strength and a resilient technology platform.

Simpler

We are focusing on our strength in the UK and Ireland with ambitious targets to reduce costs, improve efficiency and be much simpler for our customers to do business with.

Fairer

Our ambition is to be the best bank for customers. A bank that can help small businesses grow. A bank that is clear and upfront. A bank that supports customers from all walks of life.

Stronger

We are working to ensure that our market leading positions in the UK and Ireland are underpinned by capital strength and a resilient technology platform.

Simpler

We are focusing on our strength in the UK and Ireland with ambitious targets to reduce costs, improve efficiency and be much simpler for our customers to do business with.

Fairer

Our ambition is to be the best bank for customers. A bank that can help small businesses grow. A bank that is clear and upfront. A bank that supports customers from all walks of life.

Stronger

We are laying the foundations for sustainable, attractive returns
Play the video
Reducing risk

We have significantly reduced the amount of non-performing loans on our balance sheet in the last two years.

Non Performing Loans £bn

-68%

color x y actual prefix postfix
#3f4444 1 Jan 2014 39.4 39.4  
#2b6dac Q3 2016 12.6 12.6  
Building capital

With a Common Equity Tier 1 ratio target of 13% or above we are making RBS safer.

Common Equity Tier 1 ratio %
X-axis
Bar Color #2b6dac
Font Color #FFFFFF
2013 8.6
Q3 2016 15
Focused balance sheet

By 2019, we are targeting 85% of assets to be in Retail and Commercial Banking.

Risk Weighted Assets
color x y actual prefix postfix
#003481 2013 429 429 £ bn
#2b6dac Q3 2016 235 235 £ bn
Investing in technology

We are investing in a resilient technology platform to provide a secure foundation for our customers. At the same time we are improving efficiency and investing in capabilities to simplify and improve our services.

System Availability
 

Simpler

We are making it easier for customers to do business with us
Play the video
long-term cost:income ratio target
<50%

RBS is aiming to be a bank centred in the UK and Ireland with a focused international capability and a planned cost:income ratio of <50%.

We simplified the range of products and services we offer.
All fees and charges are explained on one A4 page.
On track to achieve cost reduction of £800m in 2016.
Customers can open their personal current account entirely online.
40% of logins to our app are now biometric.
We have improved our account opening process from 5 days to 1 day.
 

Fairer

Fairer

Accessible bank cards
Play the video

Fairer

eSpark business hubs
Play the video
We are doing what is right for our customers and aim to be No1 for service, trust and advocacy by 2020.
Our best deals are available to new and existing customers.
We are clear and upfront with no more teaser rates.
We are the largest supporter of SMEs in the UK.

First UK Bank to have products accredited by the Royal National Institute for the Blind (RNIB)

73 Business Growth Enablers introduced, linking SMEs, experts, and helping local business networks

Electronic signatures reduced mortgage switching process from 7days to <2days

Launched £1bn NatWest Lending fund to support small business

9 Business Accelerator hubs, 3 more opening in H2 2016

 

Building long-term shareholder value

Aiming to be a bank centred in the UK and Ireland targeting a 12%+ Return on Tangible Equity from a lower risk franchise
Phase 1 - 2014
Building financial strength
Phase 2
Improve our core businesses and deal with Citizens, Capital Resolution, and Williams & Glyn
Phase 3
Becoming Number 1
  • Rebuilt our capital strength; our Core Equity Tier 1 ratio rose 260bps during 2014
  • De-risked our balance sheet
  • Improved resilience in our systems
  • Began our cost reduction plan – costs reduced by £1.1bn during 2014 (2)
  • Simplified our organisational structure – moved from 7 divisions to 3 customer businesses
  • Accelerate the transformation of our core businesses
  • Achieve material RWA reduction from our Capital Resolution exit
  • Address other material remaining issues
  • Work through remaining conduct and litigation issues
  • Cement customer-centric positioning - #1 for customer service, trust and advocacy by 2020
  • Achieve attractive, balance and sustainable financial returns - target 12+% RoTE
  • The timing of returning excess capital to shareholders through dividends or buybacks remains uncertain
Phase 1 - 2014
Building financial strength
  • Rebuilt our capital strength; our Core Equity Tier 1 ratio rose 260bps during 2014
  • De-risked our balance sheet
  • Improved resilience in our systems
  • Began our cost reduction plan – costs reduced by £1.1bn during 2014 (2)
  • Simplified our organisational structure – moved from 7 divisions to 3 customer businesses
Phase 2
Improve our core businesses and deal with Citizens, Capital Resolution, and Williams & Glyn
  • Accelerate the transformation of our core businesses
  • Achieve material RWA reduction from our Capital Resolution exit
  • Address other material remaining issues
  • Work through remaining conduct and litigation issues
Phase 3
Becoming Number 1
  • Cement customer-centric positioning - #1 for customer service, trust and advocacy by 2020
  • Achieve attractive, balance and sustainable financial returns - target 12+% RoTE
  • The timing of returning excess capital to shareholders through dividends or buybacks remains uncertain
Footnotes:
  1. we do not expect to achieve these targets by 2019
  2. excluding restructuring costs and litigation and conduct costs

This page contains forward looking statements and is just a snapshot of our business. For full details please view our results announcements

‘Understanding the RBS Journey’ - transcript

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