Banks everywhere have begun to consider the value of their retail operations -- yet one bank's CEO recently announced it would be aggressively charging into the retail business.

Ross McEwan, the newest head of the Royal Bank of Scotland (NWG 2.40%), was installed as CEO of the floundering bank, which is still 81% owned by the British government, on October 1 of this year. 

During his first day on the job, as reported by Dealbook, McEwan highlighted in a speech to employees that he wanted the bank to be "absolutely customer focused." In addition, he noted; "It is important to me that we rebuild the pride of this organization, we rebuild the connection with our customers and we repay the U.K. for the money and the faith they put in us. We are such a big part of this economy. We need to take our place in it."

That vision has already begun to come to fruition and was highlighted in a recent presentation at the Bank of America Merrill Lynch Banking & Insurance Conference. It was there the bank noted it had reallocated its assets in its commercial and retail banking unit from 44% in 2008 to 65% in 2012. In addition, the most recent quarter was the first quarter since 2008 in which the bank posted consecutive quarterly profits.

So the natural question becomes -- is RBS making the right move by charging into retail? One quick check of their most recent earnings reveals something rather staggering:

RBS Return on Equity by Business
 

Q2 2013

Q1 2013

Q2 2012

Total Company

7.2%

7.7%

8.7%

U.K. Retail

26.1%

25.5%

22.5%

U.K. Corporate

11.8%

10.7%

16.8%

Wealth Management

12.1%

12.1%

13.1%

International Banking

2.3%

5.2%

10.5%

Ulster Bank

-14.1%

-13.5%

-19.8%

U.S. Retail & Commercial

7.7%

8.2%

8.3%

Markets

2.8%

8%

6.8%

Source: Company Earnings Report.

As you can see in the chart above -- it is not simply an appeal to the national consciousness or some ill-planned ambition, but it is the move that makes the most business sense. It is plain to see that RBS aggressively pursuing its retail franchise should lead to strong returns for its overall business.

RBS saw its total income attributable to its retail business rise by 4.5% through the first six months of 2013, yet it is a little troubling when compared to Lloyds Banking Group (LYG 1.19%), which saw its retail income rise by 11%. However since it is delivering greater raw returns, that may not necessarily be a bad thing.

While RBS trails currently trails peers HSBC and Barclays, who have returns on equity of 12% and 7.8%, respectively, if it continues to pursue its U.K. retail franchise and deliver great results, investors could see the benefits from this stock.