In 2008, we found out that the old RBS was not sustainable.
We didn’t hold enough capital, with just £4 of it for every £100 of risk-weighted lending. We lent more than £1.50 for every £1 of deposits customers gave us. That meant we relied on short-term funding that proved unreliable in a crisis. Some of our lending decisions had been poor; we hadn’t paid enough attention to a range of the risks which the financial crisis brought in to sharp relief. And some of our conduct had been wanting, which has led to a stream of redress costs.
By the end of 2015 much had changed. We had more than £15 of capital for every £100 of risk-weighted lending. Our deposits more than covered our loans. We held more than £150 billion of liquid assets that we could use in difficult conditions. We are clear about our risk appetite. Our conduct is guided by our values.
Most importantly, we have changed our focus to make customers our absolute priority. Our ambition is to be the number one bank for customer service, trust and advocacy. One way we are doing that is to become a simpler and safer bank. That makes us more sustainable.
We also believe that supporting growth in Britain is what a sustainable bank should do. That’s why we have invested to support entrepreneurs. Our venture with Entrepreneurial Spark has seen us open business accelerator hubs across the UK, with more to follow.
We know that we still have progress to make. But in all respects we are more sustainable now than in 2008.