delivering on our promises/media/Files/R/RBS... · Slide 8 delivering on our promises Clear Business Plan Days 1 - 30 zApplication of new Group architecture − Clustering of business

delivering on our promises




Sir George MathewsonSir George MathewsonExecutive Deputy ChairmanExecutive Deputy Chairman

19 April 2000

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May RBS summary results6 months to 31 March 2000

August Enlarged RBS Group resultsPeriod to 30 June 2000

February Enlarged RBS Group resultsPeriod to 31 December 2000

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May RBS summary results6 months to 31 March 2000

August Enlarged RBS Group resultsPeriod to 30 June 2000Progress report

October Divisional presentation

November Divisional presentation

February Enlarged RBS Group resultsPeriod to 31 December 2000Progress Report

Slide 5


1999 Profit & Loss Accounts

RBSG Barclays Lloyds HSBC

£bn Proforma TSBNet interest income 5.2 4.6 4.8 7.4Non-interest income 5.9 3.7 3.2 5.9Total income 11.1 8.3 8.0 13.3Expenses 6.8 4.8 3.4 7.0Insurance claims 0.6 - 0.2 -Profit before bad debts 3.7 3.5 4.4 6.3Bad debts 0.5 0.6 0.6 1.4Profit before tax 3.2 2.9 3.8 4.9

Market Capitalisation 23.9 24.2 34.2 59.8RBSG Proforma based on RBSG Report & Accounts for year to September 1999, NatWest Ongoing Business Profit & Loss Account for year to December 1999 and annualised funding costs of transaction from Prospectus Supplement dated 31 January 2000


Sir George MathewsonSir George MathewsonExecutive Deputy ChairmanExecutive Deputy Chairman

19 April 2000


Fred GoodwinGroup Chief Executive

Fred GoodwinFred GoodwinGroup Chief ExecutiveGroup Chief Executive

19 April 2000

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Clear Business PlanDays 1 - 30

Application of new Group architecture− Clustering of business units− Creation of separate “manufacturing” division− Creation of single treasury function− Combination of head office functions

Confirmation of all key appointments and responsibilities− Make new appointments− Redeploy or remove surplus management

Alignment of internal control structure− Delegated authorities− Credit authorities− Board reporting

Finalisation of detailed 3 year operating plans for all units − Base case− Action plans

Alignment of bonuses and incentives to budgets

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Clear Business PlanBusiness Architecture

CUSTOMERS

MANUFACTURING

Citizens(USA)

WealthManagement

DirectLine

RetailDirect

RBS Corporate &Treasury

NatWest UlsterBank

•Coutts•Adam•Coutts Offshore / RBSI

•DLI•Privilege•Green Flag•Linea Directa

•RBS Advanta•RBS Cards•NatWest Cards•Joint Ventures•DLFS•Direct Bank

•Personal•Small Business•RSA

•Personal•Small Business•NW Life

•Personal•Business •Corporate

•Corporate - RBS & NW•Treasury - RBS & NW•Greenwich NW (UK)•Lombard•Specialist Businesses

•Personal•Business •Corporate

Operations•Mail•Payments•Cash•ATM•Call Centres•Mortgages•Card Processing

Services•HR Support•Finance Support•Purchasing•Property•Consultancy•Credit

Technology•Development•Service Delivery•Strategy & Architectures

Group Corporate Functions•Legal•Finance•Human Resources•Risk

•Strategy•Investor Relations•Corporate Affairs•Audit/Compliance

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Retention or Disposal?

Gartmore

NatWest Equity Partners

Greenwich NatWest UK

Greenwich NatWest US

Ulster Bank

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Gartmore

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Gartmore


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Gartmore




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Gartmore



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Gartmore




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Gartmore




Ulster Bank

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Corporate Banking & Financial Markets

Iain Robertson Chief Executive, Corporate Banking & Financial Markets

Johnny Cameron Deputy Chief Executive, Corporate Banking & Financial Markets

Brian Crowe Group Treasurer & Managing Director, Financial Markets

Stephan Harris Deputy Treasurer, Financial Markets

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Corporate Banking & Financial Markets

LargeCorporate

MidMarket

StructuredFinance

LeveragedFinance

AssetFinance

PrivateEquity

Payment,Trade &BankingServices

Johnny CameronCorporate Banking

FX, CurrencyOptions &

Equity IndexDerivatives

MoneyMarkets

InterestRate

Derivatives

SovereignTrading

Credit ProductsSecuritisation

& DebtStructuring

Sales andMarketing

Brian CroweFinancial Markets

Iain RobertsonChief Executive

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Retail Banking

Gordon Pell Chief Executive, Retail Banking

Benny Higgins Deputy Chief Executive, Retail Banking

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Retail Banking

NW RetailBanking

RBS RetailBanking

NetworkSupport

RoyalScottish

Assurance

NatWest Life

Benny HigginsDeputy Chief Executive

NatWestMarketing

RBSMarketing

RetailCredit

Strategy& Change

Management

Finance HumanResources

Gordon PellChief Executive

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Manufacturing

Mark Fisher Chief Executive, Manufacturing

Peter Hayes Director, Manufacturing Support

Martin Webb Director, IT Development and Services

John White Director, IT Integration

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Manufacturing

PaymentOperations

LendingOperations

AccountManagementOperations

TelephonyOperations

ManufacturingSupport

ITDevelopmentand Services

ITIntegration

PropertyServices

CentralServices

Mark FisherChief Executive

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Other Divisions

Norman McLuskie Chief Executive, Retail Direct

Cameron McPhail Chief Executive, Wealth Management

Ian Chippendale Chief Executive, Direct Line

Martin Wilson Chief Executive, Ulster Bank

Larry Fish Chairman, President & Chief Executive Officer, Citizens Financial Group

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Group Finance

Grahame Whitehead Group Chief Financial Officer

Bill Martin Head of Group Risk

Richard Gossage Head of Group Internal Audit

Finlay Williamson Head of Group Corporate Finance& acting Head of Investor Relations

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Group Finance

GroupFinancial Control

AccountingServices

GroupFinancial Systems

GroupFinancial

Integration

GroupCorporate Finance

GroupRisk

GroupInternal Audit

Grahame WhiteheadGroup Chief Financial Officer

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Other Central Functions

Miller McLean Group Director, Legal & Regulatory Affairs & Group Secretary

Iain Allan Group Director, Strategy

Howard Moody Group Director, Communications

Neil Roden Group Director, Human Resources

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Action Plans - Cost Savings

Annualised Number ofCost Savings Initiatives

£mBid document 1,180 111Improved initiatives 140 -Reduced initiatives (150) -Initiatives removed (70) (14)New initiatives 120 24Total 1,220 121Inflation 120 -Total plus inflation 1,340 121

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Cost SavingsAnnualised amount implemented in each period

550

350300

140

0

200

400

600

Dec-00 Dec-01 Dec-02 Mar-03

£m

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Cost SavingsImpact on Profit Before Tax

290

700

1050

1300

0

200

400

600

800

1,000

1,200

1,400

Dec-00 Dec-01 Dec-02 Dec-03

£m

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Staff Reductions Cumulative total

18,00016,000

14,000

9,000

0

5,000

10,000

15,000

20,000


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Integration Costs

650

500

200

50

0

200

400

600

800


£m

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Action Plans - Cost Savings

Annualised Number ofCost Savings Initiatives

£mBid document 1,180 111Improved initiatives 140 -Reduced initiatives (150) -Initiatives removed (70) (14)New initiatives 120 24Total 1,220 121Inflation 120 -Total plus inflation 1,340 121

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Action Plans - Revenue Benefits

Annualised Number of Revenue Benefits Initiatives

£mBid document 390 43Improved initiatives 95 -Reduced initiatives (30) -Initiatives removed (25) (5)New initiatives 125 11Total 555 49Inflation 40 -Total plus inflation 595 49

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Revenue BenefitsAnnualised amount implemented in each period

120

45

200230

0

100

200

300


£m

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Revenue Benefits Impact on Profit Before Tax

50

390

240

120

0

100

200

300

400

Dec-00 Dec-01 Dec-02 Dec-03

£m

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Alignment of bonuses and incentives to budgets

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Actual v Expected?Days 1 - 30

Good Surprises Bad Surprises

Co-operation

Bureaucracy

Greenwich NatWest

Internet

Budget

Property

Remuneration

Avoidance behaviour

• Wine cellar • Cricket sponsorship

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ObjectivesDays 30 - 120

Communication

Commence revitalisation of NatWest brand

London business and property strategy

Select IT platform

Complete sale of RSA, NatWest Life, UBIM, UBIS, NWEP

EGM - Additional Value Shares

Documents

delivering on our promises/media/Files/R/RBS... · Slide 8 delivering on our promises Clear Business Plan Days 1 - 30 zApplication of new Group architecture − Clustering of business