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Group Strategy

Our strategic goals and objectives are based on our aspiration to be recognised as a distinctive specialist bank and asset manager.

This distinction lies in our entrepreneurial culture, which is balanced by our strong risk management discipline, client-centric approach and ability to be nimble, flexible and innovative.

We don’t try to be all things to all people. Instead, we aim to build well-defined, value-added businesses that serve the needs of market niches where we can compete effectively.

"We will continue to build business depth in our attempt to enhance existing client relationships."

Financial Objectives

Financial objectives have been readjusted for changing landscape.


Target in £ 31 March 2013 31 March 2012
ROE**
12% - 16% over a rolling 5-year period
9.50% 7.80%
Cost to income ratio

< 65% 65.5% 64.70%
Adjusted EPS* growth

10% > UK RPI 16.40% -26.40%
Dividend cover range

1.7 - 3.5x 2.1x 1.9x
Capital adequacy ratio range^

15% - 18% plc: 16.9%
Ltd: 15.5%
plc: 17.5%
Ltd: 16.1%
Tier 1 capital adequacy ratio range 11% - 12% plc: 11.0%
Ltd: 10.8%
plc: 11.6%
Ltd: 11.6%

* Before goodwill and non-operating items, acquired intangibles, non-operating items and after non-controlling interests

** Previous target was greater than 20% over the medium to long term

^ Previous target range was 14% - 17%.

Strategic Focus

Client-focused approach

  • Clients are at the core of our business
  • We strive to build business depth by deepening existing client relationships
  • High level of service by being nimble, flexible and innovative.

Specialised strategy

  • Serving select market niches as a focused provider of tailored structured solutions
  • Enhancing our existing position in principal businesses and geographies through organic growth and select bolt-on acquisitions

Sustainable business

  • Contributing to society, macro-economic stability and the environment
  • Well established brand
  • Managing and positioning the group for the long term
  • Balancing operational risk with financial risk while creating value for shareholders
  • Cost and risk conscious.

Strong culture

  • Strong, entrepreneurial culture that stimulates extraordinary performance
  • Passionate and talented people who are empowered and committed
  • Depth of leadership
  • Strong risk awareness
  • Material employee ownership.

Our Strategy

Our strategy for the past 20 years has been to build a diversified portfolio of businesses and geographies to support clients through varying markets and economic cycles. Since inception we have expanded through a combination of organic growth and strategic acquisitions.

In order to create a meaningful and balanced portfolio we need proper foundations in place which gain traction over time.

Our current strategy

  • Maintain momentum in Asset Management
  • Internationalise our Wealth & Investment business
  • Simplify the Specialist Banking business model
  • Leverage our extensive client base through greater utilisation of our products and services across the group
  • Continue to attract new clients, extending the depth and breadth of the franchise.

Our long-term internationalisation strategy

  • Follow our customer base
  • Gain domestic competence and critical mass in our chosen geographies
  • Facilitate cross-border transactions and flow.

Our diversified and balanced business model supporting long-term strategy

Broadly defined, we operate across three areas of specialisation focused on well defined target clients:

We aim to maintain an appropriate balance between revenue earned from operational risk activities and revenue earned from financial risk activities.

This ensures that we are not over reliant on any one part of our businesses to sustain our activities and that we have a large recurring revenue base that enables us to navigate through varying cycles and supports our long-term strategy.