LONDON (dpa-AFX) - Royal Bank of Scotland Group Plc (RBS, RBS.L) detailed on the changes to the RBS structure announced in February 2014 and includes restated financial results for the year 2013 on the basis of the new segments. The British lender is now structured to deliver its goals by organizing itself around the needs of its customers, so as to combine customer groups with similar needs into franchises able to deliver co-ordinated services.
As a result, the reorganized bank would be a UK-focused retail and corporate bank with an international footprint to drive its corporate business. The earlier reported operating segments are currently realigned into 3 franchises namely Personal & Business Banking or PBB, Commercial & Private Banking or CPB and Corporate & Institutional Banking or CIB.
In addition to these divisions, RBS would continue managing and reporting Citizens Financial Group (CFG) and RBS Capital Resolution (RCR) separately until disposal or wind-down. Residual unallocated costs would continue to be reported within Central items. The company said this realignment of prior reported operating divisions does not impact RCR. In the new reporting structure, US Retail & Commercial (US R&C) is now referred to as CFG and Wealth is now referred to as Private Banking.
Further, RBS has implemented certain reporting changes to present a more complete picture of funding, operational and business costs of the franchises and operating segments.
In order to enhance the transparency of the operating performance of the reporting units, numerous previously centrally reported items (Payment Protection Insurance costs, Interest Rate Hedging Products redress and related costs, regulatory and legal actions, Restructuring costs, amortisation of purchased intangible assets and bank levy) have now been allocated to the reporting segments. Accordingly, one-off and other items like own credit adjustments; Gain/(loss) on redemption of own debt; Write-down of goodwill; Strategic disposals and RFS Holdings minority interest would be now reported as central items.
As part of its internal reorganisation, RBS has centralised all services and functions. The costs pertaining to Services and Functions previously reported as direct expenses in the divisions are currently reallocated to businesses using appropriate drivers and reported as indirect expenses in the segmental income statements.
Additionally, the basis of allocation of Treasury costs has been amended to align the recovery of funding and hedging costs across RBS and for the transfer of certain assets and their associated costs out of Treasury.
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