Retail Markets
Retail Markets was established in June 2005 to strengthen co-ordination and delivery of our multi-brand retail strategy across our product range, and comprises Retail and Wealth Management.
| 2006 £m |
2005 £m |
|
| Net interest income | 4,711 | 4,510 |
| Non-interest income | 3,926 | 3,746 |
| Total income | 8,637 | 8,256 |
| Direct expenses | ||
| – staff costs | 1,648 | 1,565 |
| – other | 793 | 829 |
| 2,441 | 2,394 | |
| Insurance net claims | 488 | 486 |
| Contribution before impairment losses | 5,708 | 5,376 |
| Impairment losses | 1,344 | 1,185 |
| Contribution | 4,364 | 4,191 |
| Allocation of Manufacturing costs | 1,711 | 1,655 |
| Operating profit | 2,653 | 2,536 |
| £bn | £bn | |
| Total banking assets | 119.9 | 114.4 |
| Loans and advances to customers – gross | ||
| – mortgages | 69.8 | 64.6 |
| – personal | 21.0 | 21.5 |
| – cards | 9.1 | 9.6 |
| – business | 18.1 | 16.7 |
| Customer deposits* | 115.6 | 105.3 |
| Investment management assets – excluding deposits | 34.9 | 31.4 |
| Risk-weighted assets | 78.4 | 80.6 |
* customer deposits exclude bancassurance
Retail Markets achieved a good performance in 2006, with total income rising by 5% to £8,637 million. Contribution before impairment losses increased by 6% to £5,708 million, contribution by 4% to £4,364 million and operating profit by 5% to £2,653 million.
Responding to evolving demand from its customers, Retail Markets has added to its capabilities in deposits and investment products and has been rewarded by strong growth in these areas. Lending growth has been centred on high quality residential mortgages and small business loans, while personal unsecured lending was flat, as we limited our activity in the direct loans market and customer demand remained subdued. We have used our full range of brands to address markets flexibly, focusing on the most appropriate products and channels in the light of prevailing market conditions. Expenses have been kept under tight control, with additional investment in our business offset by efficiency gains and the benefits of combining Retail Banking and Direct Channels into a unified business.
Customer recruitment has been centred on our branch channels, where we have achieved good growth in savings accounts and are joint market leader for personal current accounts. Our commitment to customer service, through the largest network of branches and ATMs in the UK, is reflected in our industry-leading customer satisfaction ratings.
Average risk-weighted assets fell by 1%, reflecting a change in business mix toward mortgage lending as well as careful balance sheet management, including increased use of securitisations.
© 2007