Our Priorities

1. Overview
2. Financial Crime
3. Customer Service
4. Selling and Lending Practices
5. Employee Practices
6. Environmental Impact
7. Community Investment
8. Global Lending and Project Finance
9. Financial Education
10. Financial Inclusion
11. Small Business Support

Making the right decisions about who to lend to and how much to lend is core to our success or failure as a business. Our total impairment losses as a proportion of customer loans has fallen to 0.4%. This is equivalent to 1p for every £250 lent, amongst the best performances in the industry.

How we make lending decisions

We assess an individual's ability to repay carefully, using data from credit reference agencies and behavioural scoring techniques to help inform our assessment. We have replaced manual checking with an automatic validation where appropriate, which has led to a quicker, more robust system.

At Citizens we use FICO scores, a system that provides a gauge of the likelihood that customers who take out loan products will be able to pay their bills. We have tightened our policy for the minimum scores that customers must have before they will be offered credit. It is notable that Citizens has not been involved in the sub-prime mortgage lending market.

Working with customers in difficulty

We have an early warning system so customers showing signs of financial difficulty will receive a call from one of our trained advisers.

We actively support the independent money advice sector in a number of ways:

• We have committed to funding a position at the Citizens Advice Bureau www.citizensadvice.org.uk for the next two years
• More than 90% of the free money advice sector is trained using RBS funded materials
• We are the largest corporate sponsor for the Money Advice Trust www.moneyadvicetrust.org providing the funding for 5,000 Debt advisers to be trained
• We support the Consumer Credit Counselling Service www.cccs.co.uk

Our rates and charges

We have continued to work with the Government and regulators on industry reviews or initiatives. We are:

• Participating in the voluntary Personal Current Account Market Study being conducted by the Office of Fair Trading (OFT)
• Party to the test case on unarranged overdraft charges, which is aiming to provide certainty regarding the fairness of these charges
• A key participant in the voluntary industry initiative regarding the transparency of credit card interest calculation methods

As far as possible we aim to ensure that our customers need not incur charges and help them manage their account with:

• A text message service for mini statements and balance levels
• Easier ways for credit card customers to arrange to pay their balance by direct debit each month
• A new account with lower unarranged borrowing fees

Responsible selling

Our One Stop Clearance Shop checks that all our communication messages are clear and not misleading. All RBS Insurance materials are reviewed to ensure they are inline with FSA guidelines.

Our retail banking divisions evaluate employee performance on both sales and service with an equal weighting remuneration policy, to ensure we do not incentivise staff to sell inappropriate products.

Payment Protection Insurance policies are sold to help consumers keep up monthly repayments in the event that the policyholder can't work because of unemployment, accident or illness. We believe that PPI is a useful product which can give individuals protection from unforeseen circumstances. Our employees are trained to sell PPI in full compliance with FSA rules and in a way that respects the needs of the customer.

Our branch and call centre staff are trained using the FSA's Insurance Conduct of Business handbook.