Coutts restructures for RDR as profits plunge

Coutts has reshaped its UK business to make sure it is prepared for the retail distribution review (RDR).

In a quarterly update from its parent RBS, the firm said further progress had been made in the implementation of the ‘refreshed’ Coutts divisional strategy across all jurisdictions.

This includes a major restructure in the UK.

‘Reshaping of the UK business progressed to the next phase with the restructure of key professionals in client servicing,' RBS said.

‘The restructure will enable the division to provide class leading banking and wealth management propositions and assists in the preparations for the implementation of retail distribution review regulations.’  

It added: ‘Revised private banker and wealth manager roles will ensure clients receive the best service and advice based on their specific needs.

On the international front the first quarter saw Coutts sell its Latin American, Caribbean and African business to RBC Wealth Management. The firm also continued to prepare the deployment of a single global technology platform, which was rolled out during the first three months of the year.

The news comes as a series of exceptional costs hit Coutts' earnings in the first quarter, offsetting a 4% rise in income, which was driven by improved deposit margins and strong treasury income.

Profit in the division fell from 38% to £45 million over the period with expenses up 21% largely due to Financial Services Compensation Scheme levies. 

The private bank was also hit by an £8.75 million fine from the Financial Services Authority relating to Anti-Money Laundering control processes between December 2007 and November 2010.

Overall assets under management at the division increased by 2% thanks to the recovery in market over the quarter.