deliveringdelivering onon ourour promisespromises

delivering on our promises SirSir GeorgeGeorge MathewsonMathewson ExecutiveExecutive DeputyDeputy ChairmanChairman

19 April 2000

delivering on our promises Slide 3

May RBS summary results 6 months to 31 March 2000 August Enlarged RBS Group results Period to 30 June 2000

February Enlarged RBS Group results Period to 31 December 2000

delivering on our promises Slide 4

May RBS summary results 6 months to 31 March 2000 August Enlarged RBS Group results Period to 30 June 2000 Progress report October Divisional presentation November Divisional presentation February Enlarged RBS Group results Period to 31 December 2000

Progress Report delivering on our promises Slide 5 1999 Profit & Loss Accounts

RBSG Barclays Lloyds HSBC £bn Proforma TSB Net interest income 5.2 4.6 4.8 7.4 Non-interest income 5.9 3.7 3.2 5.9 Total income 11.1 8.3 8.0 13.3 Expenses 6.8 4.8 3.4 7.0 Insurance claims 0.6 - 0.2 - Profit before bad debts 3.7 3.5 4.4 6.3 Bad debts 0.5 0.6 0.6 1.4 Profit before tax 3.2 2.9 3.8 4.9

RBSG ProformaMarket based Capitalisation on RBSG Report & Accounts23.9 for year to September24.2 1999, NatWest34.2 59.8 Ongoing Business Profit & Loss Account for year to December 1999 and annualised delivering on funding costs of transaction from Prospectus Supplement dated 31 January 2000 our promises SirSir GeorgeGeorge MathewsonMathewson ExecutiveExecutive DeputyDeputy ChairmanChairman

19 April 2000

delivering on our promises FredFred GoodwinGoodwin GroupGroup ChiefChief ExecutiveExecutive

19 April 2000

delivering on our promises Slide 8 Clear Business Plan Days 1 - 30

z Application of new Group architecture − Clustering of business units − Creation of separate “manufacturing” division − Creation of single treasury function − Combination of head office functions

z Confirmation of all key appointments and responsibilities − Make new appointments − Redeploy or remove surplus management

z Alignment of internal control structure − Delegated authorities − Credit authorities − Board reporting

z Finalisation of detailed 3 year operating plans for all units − Base case − Action plans delivering on z Alignment of bonuses and incentives to budgets our promises Slide 9 Clear Business Plan Days 1 - 30

z Application of new Group architecture − Clustering of business units − Creation of separate “manufacturing” division − Creation of single treasury function − Combination of head office functions

delivering on our promises Slide 10 Clear Business Plan Business Architecture

CUSTOMERS

• •DLI •RBS Advanta •Personal •Personal •Corporate - RBS & NW •Personal •Personal •Adam •Privilege •RBS Cards •Small Business •Small Business •Treasury - RBS & NW •Business •Business •Coutts Offshore / RBSI •Green Flag •NatWest Cards •RSA •NW Life •Greenwich NW (UK) •Corporate •Corporate •Linea Directa •Joint Ventures •Lombard •DLFS •Specialist Businesses •Direct Bank Wealth Direct Retail RBS NatWest Corporate & Ulster Citizens Management Line Direct Treasury Bank (USA)

MANUFACTURING

Operations Services Technology •Mail •HR Support •Development •Payments •Finance Support •Service Delivery •Cash •Purchasing •Strategy & Architectures •ATM •Property •Call Centres •Consultancy •Mortgages •Credit •Card Processing

Group Corporate Functions •Legal •Strategy •Finance •Investor Relations delivering on •Human Resources •Corporate Affairs our promises •Risk •Audit/Compliance Slide 11 Retention or Disposal?

z Gartmore

z NatWest Equity Partners

z Greenwich NatWest UK

z Greenwich NatWest US

z

delivering on our promises Slide 12 Retention or Disposal?

z Gartmore

delivering on our promises Slide 13 Retention or Disposal?

z Gartmore

z NatWest Equity Partners

delivering on our promises Slide 14 Retention or Disposal?

z Gartmore

z NatWest Equity Partners

z Greenwich NatWest UK

z Greenwich NatWest US

delivering on our promises Slide 15 Retention or Disposal?

z Gartmore

z NatWest Equity Partners

z Greenwich NatWest UK

delivering on our promises Slide 16 Retention or Disposal?

z Gartmore

z NatWest Equity Partners

z Greenwich NatWest UK

z Greenwich NatWest US

delivering on our promises Slide 17 Retention or Disposal?

z Gartmore

z NatWest Equity Partners

z Greenwich NatWest UK

z Greenwich NatWest US

z Ulster Bank

delivering on our promises Slide 18 Clear Business Plan Days 1 - 30

z Application of new Group architecture − Clustering of business units − Creation of separate “manufacturing” division − Creation of single treasury function − Combination of head office functions

z Confirmation of all key appointments and responsibilities − Make new appointments − Redeploy or remove surplus management

delivering on our promises Slide 19 Corporate Banking & Financial Markets

Iain Robertson Chief Executive, Corporate Banking & Financial Markets Johnny Cameron Deputy Chief Executive, Corporate Banking & Financial Markets Brian Crowe Group Treasurer & Managing Director, Financial Markets Stephan Harris Deputy Treasurer, Financial Markets

delivering on our promises Slide 20 Corporate Banking & Financial Markets

Iain Robertson Chief Executive

Johnny Cameron Brian Crowe Corporate Banking Financial Markets

Payment, FX, Currency Credit Products Large Mid Structured Leveraged Asset Private Trade & Options & Money Interest Sovereign Securitisation Sales and Corporate Market Finance Finance Finance Equity Banking Equity Index Markets Rate Trading & Debt Marketing Services Derivatives Derivatives Structuring

delivering on our promises Slide 21 Retail Banking

Gordon Pell Chief Executive, Retail Banking Benny Higgins Deputy Chief Executive, Retail Banking

delivering on our promises Slide 22 Retail Banking

Gordon Pell Chief Executive

Benny Higgins Deputy Chief Executive

NW Retail RBS Retail Network Royal NatWest NatWest RBS Retail Strategy Finance Human Banking Banking Support Scottish Life Marketing Marketing Credit & Change Resources Assurance Management

delivering on our promises Slide 23 Manufacturing

Mark Fisher Chief Executive, Manufacturing Peter Hayes Director, Manufacturing Support Martin Webb Director, IT Development and Services John White Director, IT Integration

delivering on our promises Slide 24 Manufacturing

Mark Fisher Chief Executive

Payment Lending Account Telephony Manufacturing IT IT Property Central Operations Operations Management Operations Support Development Integration Services Services Operations and Services

delivering on our promises Slide 25 Other Divisions

Norman McLuskie Chief Executive, Retail Direct Cameron McPhail Chief Executive, Wealth Management Ian Chippendale Chief Executive, Direct Line

Martin Wilson Chief Executive, Ulster Bank

Larry Fish Chairman, President & Chief Executive Officer,

delivering on our promises Slide 26 Group Finance

Grahame Whitehead Group Chief Financial Officer

Bill Martin Head of Group Risk

Richard Gossage Head of Group Internal Audit

Finlay Williamson Head of Group Corporate Finance & acting Head of Investor Relations

delivering on our promises Slide 27 Group Finance

Grahame Whitehead Group Chief Financial Officer

Group Accounting Group Group Group Group Group Financial Control Services Financial Systems Financial Corporate Finance Risk Internal Audit Integration

delivering on our promises Slide 28 Other Central Functions

Miller McLean Group Director, Legal & Regulatory Affairs & Group Secretary

Iain Allan Group Director, Strategy

Howard Moody Group Director, Communications

Neil Roden Group Director, Human Resources

delivering on our promises Slide 29 Clear Business Plan Days 1 - 30

z Application of new Group architecture − Clustering of business units − Creation of separate “manufacturing” division − Creation of single treasury function − Combination of head office functions

z Confirmation of all key appointments and responsibilities − Make new appointments − Redeploy or remove surplus management

delivering on our promises Slide 30 Clear Business Plan Days 1 - 30

z Application of new Group architecture − Clustering of business units − Creation of separate “manufacturing” division − Creation of single treasury function − Combination of head office functions

z Confirmation of all key appointments and responsibilities − Make new appointments − Redeploy or remove surplus management

z Alignment of internal control structure − Delegated authorities − Credit authorities − Board reporting

delivering on our promises Slide 31 Clear Business Plan Days 1 - 30

z Application of new Group architecture − Clustering of business units − Creation of separate “manufacturing” division − Creation of single treasury function − Combination of head office functions

z Confirmation of all key appointments and responsibilities − Make new appointments − Redeploy or remove surplus management

z Alignment of internal control structure − Delegated authorities − Credit authorities − Board reporting

z Finalisation of detailed 3 year operating plans for all units − Base case − Action plans delivering on our promises Slide 32 Action Plans - Cost Savings

Annualised Number of Cost Savings Initiatives £m Bid document 1,180 111 Improved initiatives 140 - Reduced initiatives (150) - Initiatives removed (70) (14) New initiatives 120 24 Total 1,220 121 Inflation 120 - Total plus inflation 1,340 121 delivering on our promises Slide 33 Cost Savings Annualised amount implemented in each period

£m 600 550

400 350 300

200 140

0

Dec-00 Dec-01 Dec-02 Mar-03 delivering on our promises Slide 34 Cost Savings Impact on Profit Before Tax

£m 1,400 1300

1,200 1050 1,000

800 700

600

400 290 200

0 delivering on Dec-00 Dec-01 Dec-02 Dec-03 our promises Slide 35 Staff Reductions Cumulative total

20,000 18,000 16,000 15,000 14,000

10,000 9,000

5,000

0

Dec-00 Dec-01 Dec-02 Mar-03 delivering on our promises Slide 36 Integration Costs

£m 800 650 600 500

400

200 200 50 0 Dec-00 Dec-01 Dec-02 Mar-03 delivering on our promises Slide 37 Action Plans - Cost Savings

Annualised Number of Cost Savings Initiatives £m Bid document 1,180 111 Improved initiatives 140 - Reduced initiatives (150) - Initiatives removed (70) (14) New initiatives 120 24 Total 1,220 121 Inflation 120 - Total plus inflation 1,340 121

delivering on our promises Slide 38 Action Plans - Revenue Benefits

Annualised Number of Revenue Benefits Initiatives £m Bid document 390 43 Improved initiatives 95 - Reduced initiatives (30) - Initiatives removed (25) (5) New initiatives 125 11 Total 555 49 Inflation 40 - Total plus inflation 595 49

delivering on our promises Slide 39 Revenue Benefits Annualised amount implemented in each period

£m 300

230 200 200

120 100 45

0 delivering on Dec-00 Dec-01 Dec-02 Mar-03 our promises Slide 40 Revenue Benefits Impact on Profit Before Tax

£m 400 390

300 240

200 120 100 50

0 Dec-00 Dec-01 Dec-02 Dec-03 delivering on our promises Slide 41 Clear Business Plan Days 1 - 30

z Application of new Group architecture − Clustering of business units − Creation of separate “manufacturing” division − Creation of single treasury function − Combination of head office functions

z Confirmation of all key appointments and responsibilities − Make new appointments − Redeploy or remove surplus management

z Alignment of internal control structure − Delegated authorities − Credit authorities − Board reporting

z Finalisation of detailed 3 year operating plans for all units − Base case − Action plans delivering on z Alignment of bonuses and incentives to budgets our promises Slide 42 Actual v Expected? Days 1 - 30

Good Surprises Bad Surprises

z Co-operation z Budget

z Bureaucracy z Property

z Greenwich NatWest z Remuneration

z Internet z Avoidance behaviour

• Wine cellar • Cricket sponsorship

delivering on our promises Slide 43 Objectives Days 30 - 120

z Communication

z Commence revitalisation of NatWest brand

z London business and property strategy

z Select IT platform

z Complete sale of RSA, NatWest Life, UBIM, UBIS, NWEP

z EGM - Additional Value Shares

delivering on our promises