RBS International has published its annual results for 2020, which show that total income fell from £563m in 2019 to £461m, while pre-tax operating profit dropped from £335m to £82m.
The bank reported that sustained profitability had strengthened its capital reserves – its core tier one capital ratio finished the year at 18.6%.
The significant year-on-year decline in total profits was attributed to three factors:
• Lower interest rates charged to borrowers and exceptional support measures for borrowers during the pandemic
• Prudent accounting charges for potential bad debts as the economy deteriorated
• An exceptional charge for business restructuring as the bank accelerated its digital plans and reduced the number of office and branch properties.
Meanwhile, customer deposits grew by £1.3bn as a result of customer caution during the pandemic. That caution was also reflected in a reduction in borrowing of £0.8bn during the year.
RBS International CEO Andrew McLaughlin (pictured) commented: “Colleagues across our six jurisdictions pulled out all the stops to support customers, each other and the community in an exceptional year.
"The business model remained resilient and profitable despite an extreme shock to our economy and way of life. We took tough decisions to prepare the bank for a digital future and, combined with a strong capital position, it leaves us primed to help our customers thrive when the recovery comes.”
Key figures (2019 in brackets)
• Total income – £461m (£563m)
• Operating profit before tax – £82m (£335m)
• Loans and advances to customers – £13.3bn (£14.1bn)
• Customer deposits – £31.3bn (£30.0bn)
• Loan to deposit ratio – 42% (47%)
• Liquidity portfolio – £18.9bn (£15.7bn)
• Risk weighted assets – £7.3bn (£6.6bn)
• CET1 capital ratio – 18.6% (19.2%)
• T1 capital ratio – 22.7% (23.7%)
• Leverage ratio – 4.4% (4.3%)
• Liquidity coverage ratio – 137% (137%)
• Assets held in a fiduciary capacity – £3.1bn (£2.8bn)
Customer support figures
• The bank gave financial support for 622 business customers with working capital facilities, reflecting a value of £588m.
• There were 1,240 mortgage repayment breaks for retail customers, reflecting a mortgage value of £268m.
• RBS International continues to suspend a range of fees and charges for personal and business customers.
• There were 8,826 financial health check and business reviews to support customers during 2020 as they adjusted their business plans in the pandemic.
To view RBS International's full annual report click here