Natwest Group Plc · LSE:NWG
Natwest — The Royal Bank of Scotland Group — Investor Presentation (March 2008)
39 slides from Natwest's investor presentation, Mar 11, 2008
Slide 1: Citigroup: RBS Americas
Citigroup: RBS Americas 11th March 2008
Slide 2: Important Information
Important Information This presentation may contain forward looking statements, including such statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements concern or may affect future matters, such as the Grou
Slide 3: Welcome
Welcome Citigroup organized trip to RBS Americas 11th March 2008 Hosted by: Ellen Alemany, CEO RBS Americas & CEO, Citizens Financial Group & John Fawcett, CFO RBS Americas Slide 3
Slide 4: Agenda
Make it happen Agenda
Slide 5: Agenda
Agenda I. Introduction II. Organization III. 2007 Results IV. Economic Environment V. Integration of ABN AMRO North America VI. Summary Slide 5
Slide 6: Introduction
Make it happen aK RBS The Royal Bank af Scotland Group Introduction
Slide 7: Introduction – Citizens Key Facts
Introduction – Citizens Key Facts Dec 31st 2007 Assets $161bn Deposits $115bn Loans $114bn Employees (FTEs) 22,500 Branches 1,616 ATMs 3,561 Customers 7.5m Slide 7
Slide 8: Introduction – CFG Branch Map
Introduction – CFG Branch Map Slide 8
Slide 9: Organization
Make it happen aK RBS The Royal Bank af Scotland Group Organization
Slide 10: Group Structure
Group Structure CUSTOMERS ▮ Ulster Bank ▮ Direct Line ▮ RBS ▮ UK Corporate Banking ▮ Citizens ▮ First Active ▮ Churchill ▮ NatWest ▮ Global Banking & Markets ▮ Charter One ▮ Personal ▮ Privilege ▮ Coutts ▮ RBS Greenwich Capital ▮ Personal ▮ Business ▮ NIG ▮ Consumer Banking ▮ Commercial ▮ Business ▮
Slide 11: Group Structure
Group Structure CUSTOMERS Global Markets Regional Markets RBS Insurance • Global Banking & Markets • UK Retail and Commercial Banking • Direct Line • Global Transaction Services • US Retail and Commercial Banking • Churchill • Europe and Middle East • Privilege Retail and Commercial Banking • Asia R
Slide 12: RBS Americas: Functional Reporting Lines
RBS Americas: Functional Reporting Lines Sir Fred Goodwin CEO, RBS Gordon Pell Chairman, Ellen Alemany Regional Markets CEO, RBS Americas CEO, Citizens Financial Group Citizens Global Banking Global Financial Group and Markets* Transaction Services*** J. Connolly S. Drake Brockman N. DeLuca CFO** Co
Slide 13: Citizens Financial Group
Citizens Financial Group Ellen Alemany CEO, RBS Americas CEO, Citizens Financial Group Jim Connolly President, Citizens Financial Group Consumer & Commercial Commercial Consumer Commercial Business Real Estate Finance Finance Markets Banking Finance D. Drago N. Handy L. Boulden N. DeLuca R. Matthews
Slide 14: Citizens Financial Group – Delivery Model
Citizens Financial Group – Delivery Model Our Vision on a local level is to: Deliver world-class products and services that have the worldwide backing of RBS Group, through a community- based, local delivery model • Functional business model with State Presidents as key leaders to ensure “local” del
Slide 15: Commercial Banking Segmentation
Commercial Banking Segmentation Company Annual Revenue $M Business Banking $0-10 Middle Market $10-500 Regional Banking $10-25 Commercial Banking $25-500 Mid-Corporate $500-2,000 Commercial Real Estate All Commercial Finance ABL, Leasing, Dealer Finance All Slide 15
Slide 16: Consumer & Business Banking
Consumer & Business Banking • Overall cross sell focus • Continue to leverage industry leading position in supermarkets for customer acquisition • Improve service-to-sale opportunity in the call centers through increased training and incentives • Recently launched enhanced deposit application to imp
Slide 17: Middle Market Banking
Middle Market Banking • Improve market share through new client acquisition and deepen share of wallet • Leverage RBS / ABN product and service capabilities • Loan pricing and structure is returning to more reasonable levels • Many key competitors are inwardly focused, affording us opportunity to at
Slide 18: Mid-Corporate Banking
Mid-Corporate Banking • Leverage RBS brand as this resonates with larger, more sophisticated companies • Current market volatility creates opportunity in client risk management products (i.e. FX and Derivatives) • Loan pricing and structure is returning to more reasonable levels • Many key competito
Slide 19: Consumer Finance
Consumer Finance • Residential Lending – Consolidated the Mortgage Company, National Home Equity and Franchise Home Equity businesses into one operating platform • $12 billion in 2007 originations – Historically key product for customer acquisition – Offer integrated go-to-market strategy, product s
Slide 20: US Retail & Commercial Banking
US Retail & Commercial Banking Positive Outlook Supported by Greater Diversification Outlook Investment products 9 Personal lending 8 Credit and Debit cards 9 Mortgages and Home Equity 8 Retail deposits int bearing 9 Retail deposits non-int bearing 9 Commercial lending 99 Commercial deposits 9 0 200
Slide 21: 2007 Results
Make it happen aK RBS The Royal Bank af Scotland Group 2007 Results
Slide 22: Contribution by Division
Contribution by Division Pro Forma Underlying £m 2006 2007 Change % Global Markets – Global Banking & Markets 4,365 4,916 +13% – Global Transaction Services 1,561 1,632 +5% Regional Markets – UK Retail and Commercial Banking 5,722 6,250 +9% – US Retail and Commercial Banking 1,821 1,557 -14% – EME R
Slide 23: Citizens Results
Citizens Results $m % Total income 6,249 +2 • NIM +8bp Direct expenses 2,920 +2 • Net interest income +3% Impairment losses 682 +105 • Commercial lending +13% Operating profit 2,647 -9 • High quality portfolio • Building reserves $bn Loans & advances 114.3 +5 Customer deposits 115.0 +8 RWAs 114.4 +1
Slide 24: Citizens Results vs Peers
Citizens Results vs Peers Citizens Peer Average Operating Profit (9%) (21%) Net Interest Income 3% 3% Non Interest Income 1% 12% Total Income/Revenue 2% 7% Expenses 2% 8% Operating Profit pre Impairments 2% 5% Impairments 105% 109% Loans 4% 7% Deposits 1% 5% Net Interest Margin 8bps (5bps) The peer
Slide 25: US Retail & Commercial Banking
US Retail & Commercial Banking • Citizens continues to diversify from retail deposits • Double digit income growth in 2007 from – Commercial lending and deposits – Credit and debit cards – Sales of investment products • Deposit margins stabilized, normalizing yield curve • Total income growth 4%, ex
Slide 26: Treasury Portfolio
Treasury Portfolio As at 31st December 2007 Market Value $bn US Treasury/GNMA Securities 10.4 US Agency Debt & Regulatory Stock 12.9 AAA Private Label RMBS 3.6 AAA Private Label CMBS 0.8 Municipals/Other 0.1 Total 27.9 • High quality treasury portfolio • Interest rate hedges in place Slide 26
Slide 27: Economic Environment & Outlook
Make it happen Economic Environment & Outlook
Slide 28: Economic Environment & Outlook
Economic Environment & Outlook GDP Growth F’casts for 07 GDP Growth F’casts for 08 Jan 07 Feb 08 Jan 07 Jul 07 Feb 08 UK 2.5% 3.1% 2.4% 2.2% 1.7% US 2.4% 2.2% 3.0% 2.8% 1.6% Eurozone 2.0% 2.6% 2.1% 2.3% 1.6% Asia-Pacific 4.6% 5.6% 4.8% 5.0% 4.9% Consensus forecasts for 2007 and 2008 Slide 28
Slide 29: Economic Environment & Outlook
Economic Environment & Outlook Top 10 Contributors to Global Growth 2007 % Contribution to Total GDP Growth RBS FTEs China 1,187 • RBS has presence in 9 of top 10 economies United States 25,669 contributing to global GDP United Kingdom 104,281 growth in 2007 Germany 1,611 • RBS has presence in Franc
Slide 30: Economic Environment & Outlook
Economic Environment & Outlook US Economy – A tough year ahead • Leading indicators down 8.0 US Real GDP Growth (%) • Businesses cautious 7.0 QOQA • Weak housing market 6.0 YOY 5.0 • Citizens’ footprint tracks national average but 4.0 excludes areas hit hardest by the weak housing market – Florida &
Slide 31: Integration of ABN AMRO North America
Make it happen Integration of ABN AMRO North America
Slide 32: What does ABN AMRO bring?
What does ABN AMRO bring? • ABN’s U.S. operations + Citizens + RBS Greenwich = fifth largest U.S. bank holding company • More global clients • World-class global transaction banking business • Opportunity to build our commercial customer segment including subsidiaries • Presence in Latin America and
Slide 33: Global Transaction Services
Global Transaction Services What is it? • ABN AMRO’s world class capability in international payments • A combination of cash management, liquidity management, trade finance and merchant acquiring capabilities • Among the top 5 payments businesses in the world What it means for RBS Americas CFG • Cu
Slide 34: Opportunities
Opportunities • ABN's U.S. operations + Citizens + RBS Greenwich = fifth • Cross-sell opportunities largest U.S. bank holding company – GBM estimates that it generates 1.7x ABN’s average • Additional clients revenue/client – 150 global relationships – Product cross-sell of unique RBS capabilities to
Slide 35: North America Combined Presence
North America Combined Presence Toronto/ Burlington Vancouver Montreal Boston Chicago Providence Greenwich San Francisco New York Los Angeles Citizens / Charter One Retail Banking Houston Atlanta Slide 35
Slide 36: RBS Global Presence before ABN AMRO….
RBS Global Presence before ABN AMRO…. Slide 36
Slide 37: And after……50 Countries
And after……50 Countries Slide 37
Slide 38: Summary
Make it happen Summary
Slide 39: Summary
Summary Priorities for 2008: • Commitment to our local delivery model • Continued strong expense management • Focus on credit • New organizational structure • Integrate ABN AMRO North America • Continued investment in Commercial and Mid-Corporate • Building out GTS platforms • Continued commitment t
The Royal Bank of Scotland Group — Investor Presentation (March 2008) on 6ix