Highlights 2017 targets As we works towards our long-term goals, we have set the following targets for 2017. Strategy goal Our long-term targets Our 2017 goals Strength and CET1 ratio of 13% Maintain bank CET1 ratio of 13% (1,2) ≥ 12% sustainability RoTE Customer Number 1 for service, trust and advocacy Significantly increase NPS or maintain No.1 in experience chosen customer segments Simplifying the Headline cost:income ratio <50% Reduce operating expenses by at least £750 bank million (3) Supporting Leading market positions in every Net 3% growth in total PBB and CPB loans to (4) growth franchise customers Employee Employee engagement in upper quartile Improve employee engagement engagement of Global Financial Services (GFS) norm Notes: (1) Calculated using (loss)/profit for the period attributable to ordinary shareholders. (2) Tangible equity is equity attributable to ordinary shareholders less intangible assets. (3) Cost saving target and progress 2017 calculated using operating expenses excluding restructuring costs, litigation and conduct costs, write down of goodwill and the 2016 VAT recovery. (4) Lending growth target is after including the impact of balance sheet reductions associated with the RWA reduction target across PBB, CPB and NatWest Markets as outlined in the outlook statement. 15 RBS – Annual results 2016