The wealth division of Royal Bank of Scotland (RBS), which includes Coutts, has posted an operating profit before impairments of £250 million (US$416.5 million) in 2013, a decline of 13% from £289 million a year ago.
The wealth division’s total assets under management (AuM) – excluding deposits – were £29.7 billion, an increase of 3% from £28.9 billion a year ago.
For the year ended 31 December 2013, the division’s operating profit declined to £221 million from £243 million in 2012. Interest margin narrowed to 3.56% from 3.73% at end of the year 2012.
The cost/income ratio was 75%, up from 68% in 2012. Return on equity was 10.9%, down from 16.7% a year ago.
The division’s expenses were 4% lower at £843 million as a result of reduced headcount, tight discretionary cost management and the non-recurrence of two regulator y fines totalling £26 million incurred during 2012, the bank said in a statement.
Client assets and liabilities managed by the division declined by 2%, with a £1.7 billion reduction in deposits following re-pricing initiatives in the UK in line with the wider group funding strategy.
Overall, RBS group reported a pre-tax loss of £8.24 billion for 2013, including regulatory and redress provisions of £3.84 billion, and impairments and other losses of £4.82 billion related to the establishment of RBS Capital Resolution (RCR).
Excluding the impact of the creation of RCR, RBS operating profit was £2.52 billion, down 15% from 2012.