- Significant year-on-year balance growth driven by increases across deposits, lending and investments.
- Deposits – increased £3.8bn (13%)
- Lending – increased £1.5bn (10%)
- AuMA increased by £1.7bn (6%) including Net New Money into our investment products – c.£0.8bn
- More than 1,600 new clients welcomed to Private Banking
- Costs decreased by £39m
- Full Year operating profit of £208m
On the headline figures for Coutts and Adam & Company, Peter Flavel CEO Coutts, commented:
““Our Private Banking financial results for 2020 reveal strong growth in deposits, lending and AuMA, as well as consistent new client acquisition figures year-on-year, and a pre-provision Return on Equity (ROE) of 15.8% and pre-provision profit of £308m.
The total AuMA figure has risen by £1.7bn (6%) to a total of £32.1bn and includes around £0.8bn in Net New Money into our investment products. This, coupled with our continued five-year top quartile investment performance in our main funds2 is perhaps the most pleasing figure of all.
The £3.8bn (13%) increase in deposits reflects an increase in commercial and personal inflows in both savings and current accounts. The £1.5bn lending increase (10%) has been driven mainly by strong mortgage flows, evidencing our natural strengths in flexible prime and super prime lending.
We also experienced new client growth of more than 1,600 and with around 19% of new clients coming from group wide referrals we can see the continuing benefit of our one bank strategy coming through.
As a result of a one-off conduct release, lower strategic costs and our ongoing cost discipline strategy, we have also reduced the overall cost figure by £39m, but did see the loan impairment figure rise by £106m – driven primarily by the deteriorating economic outlook caused by the outbreak of Covid-19. Lower deposit interest rates were the primary reason that our income figure was down by 2%, but we are proud to have achieved an £0.8bn increase in Risk Weighted Assets, especially given it was less than the lending growth which outlines the impact of capital savings delivered during the year from capital efficiency activities.
To have secured such strong client figures for another year is obviously great news and something we’re very proud of; but to have done so at the same time as hitting new record-high client-satisfaction scores in what has been one of most challenging last 12 months on record, is even more rewarding for everyone at the bank.
2020 was a testing year for every industry and ours was no different, which is why we can look back with great pride at everything we did for our clients despite operating under the cloud of the Covid-19 pandemic. We moved quickly to support our commercial clients with the government lending schemes and worked closely alongside our clients facing individual challenges with loan deferrals and other flexible support. Together with the very well attended, high profile interviews in our Coutts in Conversation series, virtual wine tasting events and cooking lessons, the bank has been a valuable source of interest and comfort in these difficult times with our ethos of being more than a bank to our client families.
Across the entire NatWest Group, despite facing unprecedented challenges, we still managed to launch a host of initiatives and achieve several targets that deliver on our purpose. Coutts launched, for instance, the UK Enterprise Fund alongside BGF which will importantly help address the equity funding gaps faced by private SMEs in the UK growth economy whilst providing support to entrepreneurs, with a specific focus on female led businesses. We’re doing what we can to improve our climate footprint too, and this year we managed to achieve a 25% carbon intensity reduction in equity on average across all funds. And as announced earlier in 2020, by bringing all of our wealth businesses together we are doing what we can to reduce the UK Savings Gap by making investing more accessible to a broader audience than ever before. Indeed, just this week we have hit £1bn in total Assets Under Management for our Personal Portfolio Funds (PPF), those which are accessible via our NatWest, Royal Bank and Coutts ‘Invest’ digital platforms, demonstrating that we’re moving in the right direction.
It is vital that we continue to deliver as a relationship bank that is digitally enabled through human technology and with a number of key innovations and announcements in the pipeline, coupled with hopefully a gradual return to ‘normality’ – 2021 we hope will be an even more positive year for our clients, and everyone.”