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Parsys 1

Performance Measures

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Evolving our approach to measuring progress towards our strategic goals and delivering positive outcomes for all our stakeholders.

In line with our objective of delivering a simplified bank, focused on delivering long-term sustainable value for all our stakeholders through the strategic actions announced on 1 March 2016, we are now evolving our approach to performance measurement to reflect better the way in which management monitors the performance of the Group. The framework incorporates a balance of key financial performance metrics, while broadening our approach to strategic non-financial measures, and represents an evolution from the Balanced Scorecard that has been used since 2013.

Our revised approach retains a similar focus on achieving positive outcomes for our key stakeholders. However, rather than focusing on a few narrowly defined targets to measure our performance, the revised approach allows for a more holistic assessment, and provides a better reflection of our progress towards the strategic goals of the organisation.

Financial performance metrics

The financial metrics are aligned to our Group Financial Targets: Group Return on Tangible Equity (RoTE) to converge with Core RoTE; Cost: Income ratio below 60%; and CET1 ratio 15-200bps above the minimum regulatory level, and will be reported quarterly as part of our financial results. Achieving these three targets within a reasonable timeframe is consistent with our aim of generating long-term sustainable returns for our shareholders.

Strategic non-financial performance measures

Non-financial measures remain an important element of how we evaluate our strategic performance, in achieving our ambition of delivering a sustainable business for all our stakeholders. We focus on the impact we make on our customers and clients, colleagues, and the benefit we bring to society via our new citizenship strategy – our Shared Growth Ambition. These measures are underpinned by how we behave towards all our stakeholders, through our conduct and our culture.

To assess our performance, we draw on a broad range of information sources that are aligned to our management reporting framework, including internal management reports and external measures, ensuring a balanced view. As our management reporting framework develops, the sources may also evolve, but we will retain a consistent approach, with quantitative and qualitative evaluation to provide context to the performance assessment.

Revised Performance Measurement Framework

Financial performance metrics – to be delivered within a reasonable timeframe

  • Group RoTE to converge with Core RoTE
  • Group Cost: Income ratio below 60%
  • CET1 ratio 150-200bps above minimum regulatory level

Strategic non-financial performance measures
– delivering positive outcomes for our stakeholders

Customer and Client

  • Building trust with our customers and clients, such that they are happy to recommend us to others
  • Successfully innovating and developing products and services that meet their needs
  • Offering suitable products and services in an accessible way, ensuring excellent customer and client experience

Colleague

Promoting and maintaining:

  • A diverse and inclusive workforce in which employees of all backgrounds are treated equally and have the opportunity to be successful and achieve their potential
  • Engaged and enabled colleagues
  • A positive conduct and values-based environment

Citizenship

  • Making decisions and doing business that provides our clients, customers, shareholders, colleagues and the communities which we serve with access to a prosperous future, through our Shared Growth Ambition
  • Proactively managing the environmental and societal impacts of our business 

Underpinned by how we behave towards all our stakeholders through our conduct and culture

More on performance indicators (PDF 149KB)More on performance indicators (PDF 149KB)
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