Royal Bank of Scotland Group

Royal Bank of Scotland Group

Infobox Company
company_name = The Royal Bank of Scotland Group Public Limited Company
company_type = Public (lse|RBS)
foundation = 1727
location= Edinburgh, Scotland, UK
key_people = Sir Tom McKillop, Chairman
Sir Fred A. Goodwin, CEO
industry = Finance and Insurance
products = Financial Services
revenue = profit £31,115 million (2007)
operating_income = profit £9,900 million (2007)
net_income = profit £7,712 million (2007)
num_employees = 170,000 (2008) [ [ CFG Factsheet] .]
parent =
subsid = Royal Bank of Scotland
Ulster Bank
Direct Line
Citizens Financial Group
Adam and Company
Child & Co
RBS Greenwich Capital
slogan = Make It Happen.
homepage = []
footnotes =

The Royal Bank of Scotland Group Plc (lse|RBS) is a banking and insurance holding company in the United Kingdom based in Edinburgh, Scotland.

[ [ A Brief History of The Royal Bank of Scotland Group] .] It includes The Royal Bank of Scotland Plc [The Scottish Gaelic name ( _gd. Banca Rìoghail na h-Alba) is used by retail banking branches of the Royal Bank of Scotland plc in parts of Scotland, especially as signage and customer stationery.] founded in 1727 by a Royal Charter of King George I, National Westminster Bank Plc in England and Wales and Ulster Bank Limited in Ireland. [ [ - The Royal Bank of Scotland] ]

The RBS Group is the largest banking group in Scotland, the second largest in the UK and Europe (fifth in stock market value), and the fifth largest in the world by market capitalisation. According to Forbes Global 2000, it is currently the 10th largest company in the world. [DeCarlo, Scott (ed.) [ The World's 2,000 Largest Public Companies] Forbes Magazine, Special Report, 29 March 2007] Its shares have a primary listing on the London Stock Exchange. The registered head office of the group and the clearing bank is located at St Andrew Square. In 2005, Queen Elizabeth II opened the bank's new head office building in Gogarburn, Edinburgh.

The RBS Group operates a wide variety of banking brands offering personal and business banking, private banking, insurance and corporate finance throughout its operations located in Europe, North America and Asia. In the UK and Republic of Ireland, the main subsidiary companies are: The Royal Bank of Scotland; National Westminster Bank; Ulster Bank; Drummonds and Coutts & Co. In the United States, it owns Citizens Financial Group, the 8th largest bank in the country. Insurance companies include Churchill Insurance, Direct Line, Privilege, and NIG.

The group issues banknotes in Scotland and Northern Ireland, and Royal Bank of Scotland is the last bank in the UK to print a £1 note.


"For information on the history of the Royal Bank of Scotland PLC see the Royal Bank of Scotland article"

Takeover bids

During the late 1970s and early 1980s the Royal Bank was the subject of three separate takeover approaches. In 1979, Lloyds Bank, which had previously built up a 16.4% stake in the Bank, made a takeover approach for the remaining shares it did not own. The offer was rejected by the board of management on the basis it was detrimental to the Bank’s operations. However when the Standard Chartered Bank, proposed a merger with the Bank in 1980, the board of management responded favourably to the offer. Standard Chartered Bank was headquartered in London, although most of its operations were in the Far East, and the Royal Bank saw advantages in creating a truly international banking group. Approval was received from the Bank of England, and the two banks agreed a merger plan that would see the Standard Chartered acquire the Royal Bank and keep the UK operations based in Edinburgh. However the bid was scuppered by the Hongkong and Shanghai Banking Corporation (HSBC) which tabled a rival offer. The bid by HSBC was not backed by the Bank of England; and was subsequently rejected by the Royal Bank’s board of management. However the British government referred both bids to the Monopolies and Mergers Commission; and both were subsequently rejected as being against the public interest. [ [ Competition Commission - The Hongkong and Shanghai Banking Corporation Standard Chartered Bank Limited The Royal Bank of Scotland Group Limited ] ]

The Bank did obtain an international partnership with Banco Santander Central Hispano of Spain, each bank taking a 5% stake in the other. However this arrangement ended in 2005, when Banco Santander Central Hispano acquired UK bank, Abbey Nationalndash and both banks sold their respective shareholdings.

International expansion

The first international office of the bank was opened in New York in 1960. Subsequent international banks were opened in Chicago, Los Angeles, Houston and Hong Kong. In 1988 the bank acquired Citizens Financial Group, a bank based in Rhode Island, United States. Since then, Citizens has acquired several other American banks, and in 2004 acquired Charter One Bank to become the 8th largest bank in the United States.

The Royal Bank also opened offices in Europe and now has subsidiaries in: Austria, Switzerland, France, Italy, Germany, Greece, Spain, Portugal, Denmark, Norway, Sweden and Federation of Bosnia and Herzegovina In the Asia-Pacific region, the bank has offices in: Australia, China, Hong Kong, Japan and Singapore.

National Westminster Bank

The late 1990s saw a new wave of consolidation in the financial services sector. In 1999, the Bank of Scotland launched a hostile takeover bid for English rival, the NatWest. The Bank of Scotland intended to fund the deal by selling off many of the NatWest’s subsidiary companies, including Ulster Bank and Coutts. However, the Royal Bank subsequently tabled a counter-offer, sparking off the largest hostile takeover battle in UK corporate history. A key differentiation from the Bank of Scotland’s bid was the Royal Bank’s plan to retain all of NatWest’s subsidiaries. Although NatWest, one of the "Big 4" English clearing banks, was significantly larger than both Scottish banks, it had a history of poor financial performance, and plans to merge with insurance company Legal & General were not well received, prompting a 26% fall in share price [ [ BBC News | BUSINESS | NatWest takeover: a chronology ] ] .

On February 11, 2000, the Royal Bank of Scotland was declared the winner in the takeover battle, becoming the second largest banking group in the UK after HSBC Holdings. NatWest and the Royal Bank of Scotland became subsidiaries of the holding company; The Royal Bank of Scotland Group. NatWest as a distinct banking brand was retained, although many back office functions of the bank were merged with the Royal Bank's leading to over 18,000 job losses throughout the UK. [ [ NatWest merger's mixed fortunes] BBC News, 2000]

Recent history

In 1967, RBS became the first Scottish bank to install an Automated Teller Machine, and by 1980 the service, known as Cashline had become the busiest ATM network in the world. Today it is now the largest privately owned ATM network in the UK, it is also a member of the LINK ATM network. In 1997, RBS was the first bank in the world to make its ATMs available to all cardholders. The word "Cashline", in Scotland at least has become a generic term for an ATM.

In August 2004, the bank expanded into China, acquiring a 10% stake in the Bank of China for £1.7 billion [ [ BBC NEWS | Business | RBS leads $3.1bn China investment ] ] .

A new international headquarters was built at Gogarburn on the outskirts of Edinburgh, and was opened by Queen Elizabeth II and Prince Philip, Duke of Edinburgh in 2005. The St Andrew Square office still remains the official registered head office.

The bank was the 2005 recipient of the Wharton Infosys Business Transformation Award, an award given to enterprises and individuals who use information technology in a society-transforming way.

The Group is part of a consortium with Belgian bank Fortis and Spanish bank Banco Santander that acquired Dutch Bank ABN AMRO a on 10 October, 2007. Rivals speculated that RBS had overpaid for the Dutch bank [ [ Barclays boss: RBS overpaid for ABN Amro | Business | The Observer ] ] although the bank pointed out that of the £49bn paid for ABN Amro, RBS's share was only £10bn [ Does RBS’s acquisition of ABN Amro really do what it says on the tin? ] ] .

Coutts Bank's international businesses were renamed RBS Coutts on 01 January 2008.

2008 Rights Issue

After previous denials following press coverage, on the 22 April, 2008 RBS announced a rights issue which aimed to raise £12billion in new capital to offset a writedown of £5.9billion resulting from the bad investments and to shore up its' reserves following the purchase of ABN-Amro. This is the largest rights issue in British corporate history [ [ RBS okay for UK's biggest rights issue - ] ] . The bank also plans to divest some of its' subsidiaries to raise further funds, notably its insurance divisions Direct Line and Churchill [ [ BBC NEWS | Business | RBS sets out £12bn rights issue ] ] .

There are fears however that the bank may not receive the full asking price of £7bn and may be forced into seeking more funds from shareholders [ [ Shares slide at RBS as worries grow | This is Money ] ] .

Financial data

"Sources": OpesC [ [ OpesC] ]


The RBS Group uses branding developed for the Bank on its merger with the National Commercial Bank of Scotland in 1969 [ | About Us| Our History | Exhibition Feature | Building the Brand] ] . The Group's logo takes the form of an abstract symbol of four inward-pointing arrows known as the "Daisy Wheel" and is based on an arrangement of 36 piles of coins in a 6 by 6 square, representing "the accumulation and concentration of wealth by the Group".

Corporate Structure

The RBS Group is split into 8 operating areas. Each operating area has several subsidiary businesses.

Retail Banking

This is the group’s main UK business, offering personal and business banking services. Services are operated under both the Royal Bank of Scotland and NatWest brand names. Key subsidiaries include:

* Child & Co
* Drummonds Bank
* National Westminster Bank
* National Westminster Life Assurance
* Royal Bank of Scotland
* Royal Scottish Assurance

Wealth Management

This is the group’s private bank division providing services to wealthy individuals:
* Adam and Company
* Coutts & Co.
* RBS Coutts
* NatWest Offshore
* NatWest Stockbrokers
* Royal Bank of Scotland International
* Isle of Man Bank

Retail - Direct Channels

This division is responsible for the group’s credit card businesses in the UK and Europe; including internet and telephone based banking brands; and processing facilities for retailers. Key subsidiaries and brands include:
* Comfort Card
* Style Cards
* Direct Line
* Lombard Direct
* Tesco Personal Finance (50% joint venture with Tesco)
* The One account
* Streamline Merchant Services
* WorldPay

Corporate Markets

This division consists of UK Corporate Banking which provides financing, leasing services and transaction processing to corporate customers. The Global Banking and Markets division provides debt and risk management to corporate and institutional customers in markets around the world. Key subsidiaries include:
* Angel Trains
* Bibit
* Jamjarcars
* Lombard
* RBS Greenwich Capital
* RBS Nordisk Renting

RBS Insurance

RBS Insurance is the second largest general insurance provider in the UK, as well as a growing presence in Spain, Italy, and Germany. Key brands include:
* Churchill Insurance::Churchill Insurance also underwrites: Lloyds TSB, Nationwide, Prudential, Pearl, Help the Aged and Alliance & Leicester Car Insurance brands
* Direct Line::Direct Line also underwrites : Privilege (Privilege Direct, consumer side of the business)
* Devitt Insurance
* Green Flag
* Finsure
* Inter Group, with its brands Options and Medicover. The brand identifier Olly Options was created by Dirk Kelly.
* Intermediary and Broker
* Privilege
* UKI Partnerships::UK Insurance also underwrites : Tesco, Privilege Fleet, Egg, Mint, Mini, BMW, Peugeot, Suzuki, Vauxhall, NatWest, RBS Royalties, etc
* Tracker

Ulster Bank Group

Ulster Bank Group provides personal and business banking services in Northern Ireland and the Republic of Ireland under the Ulster Bank and First Active brands.


This division includes the Bank's businesses in the United States, Citizens Financial Group and Charter One Bank.


This 'invisible' 8th division provides centralised back-office services for much of RBS Group, ranging from Cash/Coin Management, Call Centres, to Desktop Support and general IT for the more visible banking & insurance brands like Royal Bank, Direct Line, NatWest, etc.


Fossil fuel financing

It is claimed by several pressure groups that the Royal Bank of Scotland is one of the world's primary financiers of oil and gas extraction projects. [ "The Oil and Gas Bank" report] ] They further allege that RBS is “opening the oil and gas frontier” by funding oil and gas extraction in politically and environmentally sensitive regions and entrenching our dependence on oil and gas. This has led to campaigns against this activity. [ [ Sunday Herald | RBS is accused of sponsoring global warming] ] Protests have taken place at some RBS and Natwest branches in the UK, with a number of student unions threatening to join a boycott against the bank after its 2009 annual general meeting. [ [ EUSA | Students pack-out George Square lecture theatre for Students’ Association AGM] ] [ [ LUU | Referendum Site] ] [ [ YUSU | Sustainable Banking] ] The NUS (who banks with Natwest) has also expressed concern over this issue. [ [ NUS banks with NatWest] ]

RBS also provides the financial means for companies to build coal-fired power stations and dig new coal mines at sites all over the world. RBS is accused of helping to provide an estimated £8bn over the last two years to energy corporation E.ON, and other companies utilising coal [ [ Climate change: High street banks face consumer boycott over investment in coal projects] ] .

Bank of China and Burma

The bank's 10% stake in Bank of China has led to accusations of investing in the Government of Burma. [ Sunday Herald | RBS "profits from Burma links"] ] The Group has defended its position by saying, "Bank of China is a highly respected international financial sets out its policies in its published accounts and we are happy with these policies and the way in which they are applied."

Huntingdon Life Sciences

In 2000 and 2001, the bank was the target of threats of violence over its provision of banking facilities for the animal testing company Huntingdon Life Sciences. The action resulted in RBS withdrawing the company's overdraft facility, causing the company to obtain alternative funding on a tight deadline. [ [ Animal Rights news in the UK | Animal testing lab faces ruin as bank cancels overdraft] ] [cite web|url=,4273,4120748,00.html|publisher=The Observer|title=Inside the labs where lives hang heavy in the balance|date=2001-1-21|accessdate=2008-04-27]


The group's pound sterling banknote issues are in wide circulation in Scotland and Northern Ireland. In Scotland, Royal Bank of Scotland banknotes include the UK's last £1 note. Ulster Bank is one of four issuers of Northern Ireland banknotes, though, like other private sector banks, it does not issue notes in the Republic of Ireland, where the official currency is the euro.


See also

* List of banks
* European Financial Services Roundtable
* Inter-Alpha Group of Banks

External links

* [ The Royal Bank of Scotland Group official site]

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