TIDMRBS
RNS Number : 9002E
Royal Bank of Scotland Group PLC
11 May 2017
The Royal Bank of Scotland Group plc
Legal Entity Identifier: 2138005O9XJIJN4JPN90
Annual General Meeting Statements
11 May 2017
The Royal Bank of Scotland Group plc will hold its Annual
General Meeting at 2.00 pm today. The meeting will deal with the
proposed resolutions as set out in the Notice previously issued to
shareholders. The following is an extract from the remarks to be
made by Howard Davies, Chairman, Ross McEwan, Chief Executive,
Sandy Crombie, Senior Independent Director and Penny Hughes,
non-executive director at the meeting.
Howard Davies - Chairman
We have made considerable progress over the last year in putting
our past issues behind us and continuing to build a profitable core
bank. Ross McEwan, our Chief Executive, will provide more detail on
our financial performance and our strategy to make RBS a simple,
safe and more customer-focused bank. You will also hear from our
Senior Independent Director, Sandy Crombie, on the remuneration
resolutions we are asking you to vote on today and from Penny
Hughes, who leads our Sustainable Banking Committee.
Let me first of all introduce the Board. On my far right is one
of the new members, Frank Dangeard. Frank joined the Board in May
2016 and brings a wealth of expertise from senior roles across a
range of technology and financial services companies. Next to Frank
is Mark Seligman who joined in April 2017 bringing financial
services knowledge and substantial FTSE 100 Board experience. Next
to Mark is Morten Friis and next to him is Baroness Noakes, the
Chairman of the Board Risk Committee. We then have Brendan Nelson,
Chairman of our Group Audit Committee. Next to Brendan, is Ewen
Stevenson, our Chief Financial Officer. On my immediate right is
our Chief Executive, Ross McEwan, and on my immediate left is
Aileen Taylor, Company Secretary. Next to Aileen is Sandy Crombie,
the Chairman of the Group Performance and Remuneration Committee
and Senior Independent Director. Then we have Penny Hughes, the
Chairman of the Sustainable Banking Committee and next to her is
Robert Gillespie and then Alison Davis. Finally on my far left is
Mike Rogers. A number of our Executive Committee members are also
with us, seated in the auditorium.
I would like to thank each of my colleagues on the Board for
their continued dedication and determination over the last year.
This bank is in a much better position as a result of their
efforts, although there is still much to do.
I am pleased to confirm two further appointments today. John
Hughes, until recently, was Head of Banking Audits at KPMG. And
Yasmin Jetha who has had a range of jobs in the financial sector,
notably at Abbey National, and was a member of the shadow Board we
set up for Williams and Glyn, which has now been stood down. Our
Board, like those of other banks, is growing in size as we plan to
implement the government's ring-fencing scheme, which requires
additional layers of governance. After these appointments we will
be broadly in line with the Davies recommendation of at least 25%
women members. We have further changes in planning which would take
us to the Hampton Alexander recommended proportion of one third
during 2017.
Corporate governance in listed companies generally is changing,
and the outgoing government launched a consultation on further
reforms. We have responded to that consultation, which focuses on
efforts to strengthen the links between Boards and the company's
stakeholders. We do not know what mechanisms the new government
will propose. In the light of that, and having taken legal advice,
we took the decision not to bring forward a proposed resolution to
create a shareholder committee at RBS. We considered this proposal
to be inconsistent with both the law and the company's constitution
and of course it might prove not to be compatible with the
Government's reforms. We are committed to increasing stakeholder
engagement and Penny Hughes will talk more about our work in this
area in a few minutes. We will be running two shareholder events,
on 31 July in London and 30 October in Edinburgh. Anyone interested
in attending can leave their name at the desk in the foyer.
Turning to the bank's strategy, we were pleased to report a
profit of GBP259 million for Q1 2017. This was our first bottom
line profit since the third quarter of 2015 and represents a strong
start to the year. Over the year since I last stood before you, the
share price has risen from 216p to 263p, in what has been a
turbulent year for all banks. In fact over that period the RBS
share price has risen more than those of our peers.
But reporting large losses like the one we took for 2016 is
always difficult. Shareholders suffer most, but the bank's
management and employees also feel the pain. It is important to
bear in mind that this loss reflected GBP10 billion of one-off
provisions as we sought to conclude as many of our legacy issues as
possible, while continuing to restructure the bank in line with our
strategy.
Our underlying results demonstrate the progress we are making.
For the future, the Board remains strongly convinced that we are
pursuing the right strategy. The core bank performed strongly
despite the political and economic uncertainty and has now averaged
an adjusted core operating profit of over GBP1 billion for each of
the last nine quarters.
Unfortunately, we expect to take further significant one-offs in
2017 - particularly related to conduct and litigation charges and
restructuring - leading to a bottom line loss at the end of the
year, before targeting a return to profitability in 2018.
Reporting a bottom line profit for 2018 would be a huge
milestone for the bank, after what will, by then, have been ten
extremely tough years of losses.
As we move along this path to profitability, there are still a
number of issues we need to resolve, in particular Williams &
Glyn and Residential Mortgage Backed Securities.
On Williams & Glyn, it became clear following the EU
referendum that the stand-alone challenger bank we were creating
would struggle to secure a banking license from the PRA in a low
interest rate environment. As a result, we started to look at a
number of alternative options to meet our state aid obligations.
The Treasury and the European Commission are currently consulting
on a new plan which would achieve the same competition objectives
more quickly and with greater certainty. We now await the
conclusion of those consultations and a formal decision by the
European Commission. I hope that we can reach an agreed solution
later in the year.
On Residential Mortgage Backed Securities, we await resolution
of the US Department of Justice's investigation into
securitisations we sold in 2007. I regret to say that on that I
have nothing new to report. It is our strong intention to put this
behind us during 2017, but the timing is out of our hands.
There has, however, been progress on some of the other key
conduct and litigation issues facing the bank. We have reached
settlement with shareholders representing around 87% by value of
the total claim in the 2008 Rights Issue shareholder litigation.
The settlement does not constitute any admission of liability by
the bank, but allows us to minimise material litigation expense and
management distraction. If we do not reach settlement with the
remaining claimants, we will defend ourselves vigorously when the
trial starts on 22 May. The bank has been criticised for the cost
of defending itself and paying the legal costs of defending our
former directors, who have been named as co-defendants in the
action. The costs we are having to meet are high because of the
extraordinary breadth and complexity of the case. And it is normal
practice under company law, and indeed it is a legal obligation for
the bank, that directors should be indemnified in relation to any
third party civil legal action arising from their tenure at the
bank.
The FCA investigation into our former Global Restructuring Group
continues, although the regulator has published an update
summarising the conclusions reached by the Skilled Person appointed
to review the bank's actions. We have acknowledged shortcomings in
GRG and have taken two important steps - an automatic refund of
complex fees and the establishment of a new complaints process
overseen by a former High Court judge - to put things right for
customers who did not receive the level of service they should have
received, or would receive now. Importantly however, the FCA update
recognised that all businesses transferred to GRG were in financial
difficulty, that RBS did not inappropriately target businesses for
transfer and that, in a significant majority of cases, it is highly
unlikely customers suffered material financial distress as a result
of the bank's actions. We continue to co-operate with the FCA and
await the publication of its final report.
Turning briefly to wider economic issues, 2016 was for the UK a
year of solid growth with low inflation. The growth in our business
reflected that, though in Scotland the economy was broadly flat
which in part, reflected a slowdown in onshore oil activity
following the fall in the oil price. 2016 also saw the UK decide to
leave the European Union. The exit process has now been triggered
but it will be a while before we see the implications for future
financial regulation. Given the shape of our business, and its
largely domestic focus, RBS will be less impacted than many of its
peers. Our aim is to ensure continuity of service for our EU
customers and we are actively exploring options to allow us to do
so.
One potentially significant outcome of the vote to leave the EU
is that we might also be facing a second Scottish referendum.
Before the last referendum, we said that RBS would continue its
support for Scotland but would move its registered office to
London. If there is a second referendum we will keep you informed
of any contingency plans we might put in place.
Ross McEwan - Chief Executive
I know a GBP7 billion bottom line loss is extremely tough for
you to bear as shareholders, however this loss does reflect
significant progress in putting our legacy issues behind us.
Howard referenced the GBP10 billion of one-off charges:
-- Litigation and conduct costs of nearly GBP6 billion,
-- restructuring costs of just over GBP2.1 billion,
-- payment of the final DAS dividend to The Treasury of GBP1.2 billion,
-- Capital Resolution disposal losses and impairments of GBP825
million and GBP300 million deferred tax asset impairment.
It's a long list, but we said 2015 and 2016 would see the bulk
of the heavy lifting.
I stood here a year ago and said that by 2017 we would have
moved into the third phase of our strategy - where we increase our
focus on serving our customers better and returning this bank to
sustained profitability.
We announced at our Full Year Results that we are hoping to do
that in 2018, subject to resolving the two key issues that are
holding us back the most: Williams & Glyn and our RMBS
litigation in the US.
I'm sure this is welcome news to our shareholders.
I believe that we are finally shifting from the bank we were to
the bank we are becoming. We still have a lot more to do but we are
making progress and our strategy is working - as Howard said, we
averaged an adjusted core operating profit of over GBP1 billion for
the last nine quarters.
Our ambition absolutely remains to be #1 for customer service,
trust and advocacy by 2020 and our priorities also remain the same.
We believe that this ambition will create a very good bank for our
shareholders.
In 2016 we made solid progress against all of our financial
targets:
1) We ended the year with a strong CET1 ratio of 13.4%, this has
since moved to 14.1% after Q1 2017.
2) We took a further GBP985 million of operating costs out last
year (against a target of GBP800m). This is the third year running
we have exceeded our cost target and this brought our adjusted Cost
to Income ratio down from 72% to 66%.
3) The business is growing well in the markets we like: net
lending growth in our Personal & Business Banking, and
Commercial & Private Banking franchises was 10%, well ahead of
target with particularly strong growth in mortgages (up 12%),
personal unsecured loans (up 7%), and lending to small businesses
(up 6%) - that is despite not competing on price or changing our
risk appetite.
4) On our customer metrics: the March 2017 NatWest NPS score was
the highest seen since we started to track it in 2009 and
Commercial Banking is a market leader for customer advocacy. We
still have a lot to do to increase service in many other parts of
our business as we strive to become the number one bank for
customers.
5) 2016 was another tough year for our colleagues, as we
continue to reshape the bank. I am grateful for their determination
in serving our millions of customers, day-in, day-out, despite many
negative headlines, and the considerable restructuring we have done
to the business that affects their role.
We've had a good start to 2017 and you will have seen at our Q1
results announcement two weeks ago that we delivered a bottom line
profit of GBP259 million - our first since Q3 2015 - and an
adjusted core operating profit of GBP1.3 billion.
The plan we set out in 2014 is working. Our ambition and
priorities remain. This year we will continue to focus on:
-- Strengthening our capital position (maintaining a core capital ratio of over 13%),
-- Improving our Customer Promoter Scores and closing the gap to number one,
-- Taking out a further GBP750 million of operating costs in
2017 - In fact we're going to take out GBP2 billion over the next 4
years by removing complexity - and get this bank back in shape for
shareholders, customers and colleagues alike,
-- Growing our fantastic franchises, which are valued by our customers, in our chosen markets.
As Howard has already mentioned, we, along with the wider
industry, are facing a number of common political, economic and
regulatory challenges. In addition, one of the biggest changes we
need to respond to is the growing customer shift to digital, online
and mobile. Through all of these challenges we have to remain
focused on our customers, and be there for them, when they
want.
More customers than ever want to do their banking online or on
the move with their mobile. We interact with our customers over 20
times more through digital channels than physical ones. That's why
we're investing GBP1 billion this year in technology, innovation
and security.
For example, our award winning mobile banking app, as voted for
by customers, is updated regularly to give customers even greater
functionality. We've introduced 1,200 TechXperts to our branches to
help customers use our technology more effectively.
We've also made good advances in the lending process for small
business customers - they can now see their pre-approved lending
limit via online banking, and then apply in under 10 minutes, and
receive funds within two working days.
We've introduced video meetings with some of our specialist
advisors, allowing customers to connect with us from the comfort of
their own home. We've introduced a self-service investment platform
called 'NatWest Invest' for people who know what they want and who
don't need advice. For small business customers, we've introduced
Esme, an online lending platform for loans between GBP5k and
GBP150k that can process and fund loans within the hour.
This change in customer behaviour impacts how they want to be
served. With one of the largest branch networks of any UK bank, the
branch will continue to be part of our offering to customers -
alongside call centres, online banking, our app, mobile branch vans
which reach over 630 communities every week and the 11,500 post
office branches. But the nature of the branch will change. It will
be where people go to meet with our expert advisors, when they have
a more complex query or have a need for specialised advice.
You will be only too aware that this bank has been on a long and
challenging journey - and I am only too aware that this has tested
the patience of shareholders and colleagues alike.
This bank is now showing its potential:
-- the core bank is strong,
-- we have great franchises, supported by strong brands, and
-- we believe that by going further on cost reduction and faster
on digital transformation we will deliver a simple, safe and even
more customer-focused bank, with a compelling shareholder
investment case.
Sandy Crombie - Senior Independent Director
As Ross says, we are building a simple, safe bank that is truly
focused on customers. To do that, we need to ensure that
remuneration and incentives for our colleagues - regardless of
level - are aligned to our values and the culture of the bank we
are trying to build.
The current Directors' Remuneration Policy expires at today's
AGM.
As Chairman of the Remuneration Committee, I would like to
provide a summary of our new remuneration policy for Directors.
This is proposed for approval by shareholders under resolution 2 in
the Notice of Meeting.
The Committee has spent a great deal of time considering
evolving views on executive pay. This includes potential reforms by
the UK government and calls from investors for companies to develop
more tailored policies. We started the process over a year ago and
have taken great care in developing a construct that aligns with
our strategy, the long-term interests of shareholders and new
regulatory requirements, while still being sufficiently attractive
to executives.
Our current remuneration arrangements include a number of
adaptations to meet various challenges faced at RBS over recent
years. These have led to a degree of complexity and lack of
alignment with the bank RBS has become. The Committee believes the
time is right for a new, simpler approach, developed specifically
to align with RBS's culture and our thinking on pay.
We are therefore proposing a number of changes as part of our
new Directors' Remuneration Policy.
The Committee has been looking to develop a plan that aligns
executives with shareholders predominantly through long-term
shareholding. It also aims to discourage the potential for
excessive risk-taking through being built around more meaningful
and achievable performance tests.
Therefore the shareholding requirements for executive directors
will rise significantly, from 250% to 400% of salary for the Chief
Executive and from 125% to 250% of salary for the Chief Financial
Officer.
The maximum long-term incentive award will be reduced by up to
40%, in line with the growing consensus on the need to restrain
executive pay.
As now, there will be a single long-term incentive, with no
annual bonus. Performance tests are designed around factors more
within the control of management, encouraging safe and secure
growth within risk appetite. The plan incentivises executives to
deliver performance against targets in the year prior to grant,
over the three years prior to vesting, and then to continue
increasing the share price. Shares will be released between four
and eight years following grant.
While it is intended with the proposed construct to remove some
of the uncertainty and unpredictability inherent in traditional
LTIPs, the new variable element of pay is still subject to rigorous
performance assessment. Underperformance or risk failings would
lead to a proportionate reduction of awards, or cancellation in the
case of significant issues. Overall, we have removed a significant
degree of 'upside' through reduced award levels while the potential
for downwards adjustment remains in place.
Another change is that long-term incentive awards will not be
subject to pro-rating for good leavers. One factor in this decision
is the regulatory restriction which has the effect of preventing
long-term incentive awards being granted in the first year of
employment. In addition, RBS is unusual in having no annual bonus
for executive directors. Applying pro-rating where the construct is
solely based on long-term incentive awards means that no variable
pay can be awarded in respect of the final year of employment.
We believe the removal of pro-rating is appropriate in our
particular circumstances. It also ties in with the long-term aims
of our policy, helping to ensure individuals are motivated right up
to the point of departure as well as creating a higher level of
shareholding that persists for up to eight years post departure.
It's very important that executives can be held accountable for,
and are financially exposed to, the long-term consequences of their
actions.
The changes also ensure that executives can, on average, during
the entirety of their tenure, earn broadly what they could under
the previous policy. This is necessary to ensure that we can
continue to attract and retain high calibre executives.
Regulatory developments have also been taken into account. There
are longer deferral periods and clawback can be operated for up to
ten years if payments are not justified. Given that variable pay
for executive directors at RBS is delivered solely in long-term
incentive awards, our construct is much longer term than both
minimum regulatory requirements and the market norm.
A further change is that the pension allowance for new executive
directors will be reduced from 35% to 25% of salary. This brings
the rate closer to that of the wider employee population and more
in line with peers as well as FTSE100 companies.
A thorough consultation process has been undertaken during the
development of the proposed policy. And feedback from our major
shareholders has been taken into account in the final design.
I would like to thank shareholders who participated in the
consultation and my fellow Committee members for their constructive
comments and support while developing the new proposals.
You may be aware of the press commentary following the
publication of proxy advisor reports, in particular the
recommendations against the new remuneration policy by ISS and
PIRC. We disagree with the conclusions reached in these reports and
strongly challenged the view from ISS that the level of discount
was insufficient under the new construct.
We subsequently re-engaged with a number of our major
shareholders, and I am pleased to say that the vast majority
indicated their continued support for our proposals. In addition,
Norges Bank, one of our major shareholders, has recently issued a
public statement confirming support for the new policy highlighting
the simplified structure and reduced maximum award levels. They
also commended the Board's "willingness to challenge conventional
thinking on remuneration".
In summary, we believe that the policy encourages sustainable
long-term performance, is strongly aligned with shareholders both
during and after employment, and, while offering reduced maximum
pay, will be more highly valued by executives.
It is also aligned with some of the emerging guidance from
investors on pay. A number of investor guidelines now accept that,
in the right strategic context, long-term shareholding can be an
appropriate alternative to conventional long-term incentive
plans.
RBS has, since the financial crisis, been a market leader in
showing restraint in executive pay and in seeking to move away from
the unintended consequences of highly geared financial
incentives.
We believe we have designed a construct that builds on this
approach, delivering a remuneration structure that is simpler and
longer term, with significantly reduced maximum award levels.
I hope that all shareholders will support the new remuneration
policy at today's AGM.
Penny Hughes - non-executive director
Becoming the best bank for customers' means building a
sustainable bank. That means staying connected to our customers'
needs and the wider expectations of all of our stakeholders.
As chairman of the Sustainable Banking Committee, I wanted to
demonstrate the commitment we have to listening to the stakeholder
voice. This is not a new initiative - the Committee has run a
proactive engagement programme for several years, inviting over 50
external stakeholders to challenge the most senior decision makers
in RBS.
We believe this represents best practice amongst FTSE
Boards.
While there are established channels for engaging with
shareholders via our Investor relations programme and retail
shareholder events, the SBC has targeted a broader range of
stakeholders. Over the past couple of years our guests have
included: think-tanks, academics, investors, journalists,
charities, civil society groups, government bodies, consumer groups
and enterprise organisations.
It's a healthy dialogue - the purpose is to listen and
understand where RBS could do more. It supports our efforts to
create a simple, safe, more customer-focused Bank.
So what sorts of topics do we discuss at these sessions?
During 2016 we have covered a wide range of issues
including:
-- How to support successful start-up customers' scale-up to the
next level. To help generate ideas we've heard from Entrepreneurial
Spark, which supports start ups; Accelerate which helps small
companies expand; and the UK Crowd Funding Association, talking
about alternative sources of finance.
-- How to use technology to promote financial capability and
help customers with personal finances. We've had great input from
the Financial Inclusion Commission and Money Advice Trust who have
a real insight into the needs of vulnerable customers and Fintech
companies who have innovative tools to help customers analyse
spending patterns and improve creditworthiness.
-- How to drive a good culture so our people are focused on
sustainable customer outcomes. For this we've engaged with diverse
organisations including Tomorrow's Company, the Banking Standards
Board and Great Place to Work, as well as hearing from our own RBS
Future Leaders Group.
But it is more than dialogue. A number of actions have been
implemented as a direct result of listening to stakeholders.
You'll see behind me that RBS has been accredited by the Royal
National Institute for Blind People for having an accessible mobile
app for blind and partially sighted customers.
An "act now" text alert service has been introduced to help
customers manage their money.
There are over 400 accredited Women in Business specialists in
the UK who offer specialist expertise in supporting women in
business.
More recently RBS has launched Boost - a free advice and
expertise service for small businesses regardless of whether they
bank with us or not.
Of course interaction with stakeholders is much wider than
formal engagement sessions - it happens across the bank every
day.
I'm delighted to be able to highlight a couple of areas where
good progress has been made. Ross has already mentioned some of the
progress for customers let me briefly comment on other
stakeholders.
For our employees - being inclusive and valuing diversity is a
key focus. RBS has retained its position as a Times Top 50 employer
for women and achieved Top 5 ranking in the Bloomberg Global Gender
Equality Index. The wellbeing of our colleagues is really important
to us and great efforts are being made to create a great place to
work and build a healthy culture.
RBS supports a variety of employee groups - known as 'Employee
Led Networks'. The networks are made-up from volunteer employees
who play a key role in delivering, raising awareness of, and
influencing our bank-wide inclusion strategy.
The networks also provide an avenue for focused personal
development, as well as numerous networking opportunities for their
members.
For the environment - RBS is committed to reducing its
environmental impact and has already outperformed its 2020 targets
- reducing carbon by 20%, water by 5% and paper by 50%. I think
these are achievements to be proud of. But we can always go
further, at our last Sustainable Banking Committee meeting, we
reviewed our increased ambitions for this year.
Recognising the importance of getting engagement right, the
Sustainable Banking Committee's programme of engagement continues
to evolve. Plans for this year include front line customer
engagement and the opportunity to observe consumer panels, as well
as our topic focused engagement sessions.
We discussed this at the Sustainable Banking Committee just last
month, having consulted with a number of stakeholders to develop
our thinking. We plan to build on existing, good activity and
report on it more widely to demonstrate progress to you. We will
also be reviewing proposals which emerge from government and will
look to continue to demonstrate best practice on the stakeholder
front.
Important Information
Certain sections in this presentation contain 'forward-looking
statements' as that term is defined in the United States Private
Securities Litigation Reform Act of 1995, such as statements that
include the words 'expect', 'estimate', 'project', 'anticipate',
'believe', 'should', 'intend', 'plan', 'could', 'probability',
'risk', 'Value-at-Risk (VaR)', 'target', 'goal', 'objective',
'may', 'endeavour', 'outlook', 'optimistic', 'prospects' and
similar expressions or variations on these expressions.
In particular, this presentation includes forward-looking
statements relating, but not limited to: The Royal Bank of Scotland
Group's (RBS) restructuring which includes the separation and
divestment of Williams & Glyn, the proposed restructuring of
RBS's CIB business, the implementation of the UK ring-fencing
regime, the implementation of a major development program to update
RBS's IT infrastructure and the continuation of its balance sheet
reduction programme, as well as capital and strategic plans,
divestments, capitalisation, portfolios, net interest margin,
capital and leverage ratios and requirements liquidity,
risk-weighted assets (RWAs), RWA equivalents (RWAe), Pillar 2A,
return on equity (ROE), profitability, cost:income ratios,
loan:deposit ratios, AT1 and other funding plans, funding and
credit risk profile; litigation, government and regulatory
investigations RBS's future financial performance; the level and
extent of future impairments and write-downs; including with
respect to Goodwill; future pension contributions and RBS's
exposure to political risks, operational risk, conduct risk and
credit rating risk and to various types of market risks, such as
interest rate risk, foreign exchange rate risk and commodity and
equity price risk. These statements are based on current plans,
estimates, targets and projections, and are subject to inherent
risks, uncertainties and other factors which could cause actual
results to differ materially from the future results expressed or
implied by such forward-looking statements. For example, certain
market risk disclosures are dependent on choices relying on key
model characteristics and assumptions and are subject to various
limitations. By their nature, certain of the market risk
disclosures are only estimates and, as a result, actual future
gains and losses could differ materially from those that have been
estimated.
Other factors that could adversely affect our results and the
accuracy of forward-looking statements in this presentation include
the risk factors and other uncertainties discussed in the Annual
Report and Accounts 2016. These include the significant risks for
RBS presented by the outcomes of the legal, regulatory and
governmental actions and investigations that RBS is subject to
(including active civil and criminal investigations) and any
resulting material adverse effect on RBS of unfavourable outcomes
(including where resolved by settlement); the uncertainty relating
to the referendum on the UK's membership of the European Union and
the consequences of it; the separation and divestment of Williams
& Glyn; RBS's ability to successfully implement the various
initiatives that are comprised in its restructuring plan,
particularly the proposed restructuring of its CIB business and the
balance sheet reduction programme as well as the significant
restructuring required to be undertaken by RBS in order to
implement the UK ring fencing regime; the significant changes,
complexity and costs relating to the implementation of its
restructuring, the separation and divestment of Williams & Glyn
and the UK ring-fencing regime; whether RBS will emerge from its
restructuring and the UK ring-fencing regime as a viable,
competitive, customer focused and profitable bank; RBS's ability to
achieve its capital and leverage requirements or targets which will
depend on RBS's success in reducing the size of its business and
future profitability; ineffective management of capital or changes
to regulatory requirements relating to capital adequacy and
liquidity or failure to pass mandatory stress tests; the ability to
access sufficient sources of capital, liquidity and funding when
required; changes in the credit ratings of RBS or the UK
government; declining revenues resulting from lower customer
retention and revenue generation in light of RBS's strategic
refocus on the UK the impact of global economic and financial
market conditions (including low or negative interest rates) as
well as increasing competition. In addition, there are other risks
and uncertainties. These include operational risks that are
inherent to RBS's business and will increase as a result of RBS's
significant restructuring; the potential negative impact on RBS's
business of actual or perceived global economic and financial
market conditions and other global risks; the impact of
unanticipated turbulence in interest rates, yield curves, foreign
currency exchange rates, credit spreads, bond prices, commodity
prices, equity prices; basis, volatility and correlation risks;
heightened regulatory and governmental scrutiny and the
increasingly regulated environment in which RBS operates; the risk
of failure to realise the benefit of RBS's substantial investments
in its information technology and systems, the risk of failing to
preventing a failure of RBS's IT systems or to protect itself and
its customers against cyber threats, reputational risks; risks
relating to the failure to embed and maintain a robust conduct and
risk culture across the organisation or if its risk management
framework is ineffective; risks relating to increased pension
liabilities and the impact of pension risk on RBS's capital
position; increased competitive pressures resulting from new
incumbents and disruptive technologies; RBS's ability to attract
and retain qualified personnel; HM Treasury exercising influence
over the operations of RBS; limitations on, or additional
requirements imposed on, RBS's activities as a result of HM
Treasury's investment in RBS; the extent of future write-downs and
impairment charges caused by depressed asset valuations;
deteriorations in borrower and counterparty credit quality; the
value and effectiveness of any credit protection purchased by RBS;
risks relating to the reliance on valuation, capital and stress
test models and any inaccuracies resulting therefrom or failure to
accurately reflect changes in the micro and macroeconomic
environment in which RBS operates, risks relating to changes in
applicable accounting policies or rules which may impact the
preparation of RBS's financial statements; the impact of the
recovery and resolution framework and other prudential rules to
which RBS is subject the recoverability of deferred tax assets by
the Group; and the success of RBS in managing the risks involved in
the foregoing.
The forward-looking statements contained in this presentation
speak only as at the date hereof, and RBS does not assume or
undertake any obligation or responsibility to update any
forward-looking statement to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated
events.
The information, statements and opinions contained in this
presentation do not constitute a public offer under any applicable
legislation or an offer to sell or solicit of any offer to buy any
securities or financial instruments or any advice or recommendation
with respect to such securities or other financial instruments.
This information is provided by RNS
The company news service from the London Stock Exchange
END
AGMUASURBRAVAAR
(END) Dow Jones Newswires
May 11, 2017 08:55 ET (12:55 GMT)
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